124 STAT. 119 PUBLIC LAW 111–148—MAR. 23, 2010 
Public Law 111–148 
111th Congress 
An Act 
Entitled The Patient Protection and Affordable Care Act. 
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) S HORT TITLE.—This Act may be cited as the ‘‘Patient Protec-
tion and Affordable Care Act’’. 
(b) T ABLE OF CONTENTS .—The table of contents of this Act 
is as follows:

is as follows: 
Sec. 1. Short title; table of contents. 
TITLE I—QUALITY, AFFORDABLE HEALTH CARE FOR ALL AMERICANS 
Subtitle A—Immediate Improvements in Health Care Coverage for All Americans 
Sec. 1001. Amendments to the Public Health Service Act. 
‘‘PART A—I NDIVIDUAL AND GROUP MARKET REFORMS  
‘‘SUBPART II —IMPROVING COVERAGE  
‘‘Sec. 2711. No lifetime or annual limits.

‘‘Sec. 2711. No lifetime or annual limits. 
‘‘Sec. 2712. Prohibition on rescissions. ‘‘Sec. 2713. Coverage of preventive health services. ‘‘Sec. 2714. Extension of dependent coverage. ‘‘Sec. 2715. Development and utilization of uniform explanation of coverage 
documents and standardized definitions. 
‘‘Sec. 2716. Prohibition of discrimination based on salary. ‘‘Sec. 2717. Ensuring the quality of care. ‘‘Sec. 2718. Bringing down the cost of health care coverage. ‘‘Sec. 2719. Appeals process.

Sec. 1002. Health insurance consumer information. Sec. 1003. Ensuring that consumers get value for their dollars. Sec. 1004. Effective dates. 
Subtitle B—Immediate Actions to Preserve and Expand Coverage 
Sec. 1101. Immediate access to insurance for uninsured individuals with a pre-
existing condition. 
Sec. 1102. Reinsurance for early retirees. Sec. 1103. Immediate information that allows consumers to identify affordable cov-
erage options.

erage options. 
Sec. 1104. Administrative simplification. Sec. 1105. Effective date. 
Subtitle C—Quality Health Insurance Coverage for All Americans 
PART I—H
EALTH INSURANCE MARKET REFORMS  
Sec. 1201. Amendment to the Public Health Service Act. 
‘‘SUBPART I —GENERAL REFORM  
‘‘Sec. 2704. Prohibition of preexisting condition exclusions or other discrimina-
tion based on health status.

tion based on health status. 
‘‘Sec. 2701. Fair health insurance premiums. ‘‘Sec. 2702. Guaranteed availability of coverage. 42 USC 18001 note. Patient 
Protection and Affordable Care Act. Mar. 23, 2010 
[H.R. 3590] 
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124 STAT. 120 PUBLIC LAW 111–148—MAR. 23, 2010 
‘‘Sec. 2703. Guaranteed renewability of coverage. 
‘‘Sec. 2705. Prohibiting discrimination against individual participants and 
beneficiaries based on health status. 
‘‘Sec. 2706. Non-discrimination in health care. ‘‘Sec. 2707. Comprehensive health insurance coverage. ‘‘Sec. 2708. Prohibition on excessive waiting periods. 
PART II—O
THER PROVISIONS  
Sec. 1251. Preservation of right to maintain existing coverage.

Sec. 1252. Rating reforms must apply uniformly to all health insurance issuers and 
group health plans. 
Sec. 1253. Effective dates. 
Subtitle D—Available Coverage Choices for All Americans 
PART I—E STABLISHMENT OF QUALIFIED HEALTH PLANS  
Sec. 1301. Qualified health plan defined. 
Sec. 1302. Essential health benefits requirements. Sec. 1303. Special rules. Sec. 1304. Related definitions. 
PART II—C
ONSUMER CHOICES AND INSURANCE COMPETITION THROUGH HEALTH  
BENEFIT EXCHANGES

BENEFIT EXCHANGES  
Sec. 1311. Affordable choices of health benefit plans. 
Sec. 1312. Consumer choice. Sec. 1313. Financial integrity. 
PART III—S
TATE FLEXIBILITY RELATING TO EXCHANGES  
Sec. 1321. State flexibility in operation and enforcement of Exchanges and related 
requirements. 
Sec. 1322. Federal program to assist establishment and operation of nonprofit, 
member-run health insurance issuers. 
Sec. 1323. Community health insurance option. Sec. 1324. Level playing field. 
PART IV—S

PART IV—S
TATE FLEXIBILITY TO ESTABLISH ALTERNATIVE PROGRAMS  
Sec. 1331. State flexibility to establish basic health programs for low-income indi-
viduals not eligible for Medicaid. 
Sec. 1332. Waiver for State innovation. Sec. 1333. Provisions relating to offering of plans in more than one State. 
PART V—R
EINSURANCE AND RISKADJUSTMENT  
Sec. 1341. Transitional reinsurance program for individual and small group mar-
kets in each State.

kets in each State. 
Sec. 1342. Establishment of risk corridors for plans in individual and small group 
markets. 
Sec. 1343. Risk adjustment. 
Subtitle E—Affordable Coverage Choices for All Americans 
PART I—P REMIUM TAXCREDITS AND COST-SHARING REDUCTIONS  
SUBPART A —PREMIUM TAX CREDITS AND COST -SHARING REDUCTIONS  
Sec. 1401. Refundable tax credit providing premium assistance for coverage under 
a qualified health plan.

a qualified health plan. 
Sec. 1402. Reduced cost-sharing for individuals enrolling in qualified health plans. 
SUBPART B —ELIGIBILITY DETERMINATIONS  
Sec. 1411. Procedures for determining eligibility for Exchange participation, pre-
mium tax credits and reduced cost-sharing, and individual responsibility exemptions. 
Sec. 1412. Advance determination and payment of premium tax credits and cost- 
sharing reductions. 
Sec. 1413. Streamlining of procedures for enrollment through an exchange and

State Medicaid, CHIP, and health subsidy programs. 
Sec. 1414. Disclosures to carry out eligibility requirements for certain programs. Sec. 1415. Premium tax credit and cost-sharing reduction payments disregarded for 
Federal and Federally-assisted programs. 
PART II—S
MALL BUSINESS TAXCREDIT  
Sec. 1421. Credit for employee health insurance expenses of small businesses.

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124 STAT. 121 PUBLIC LAW 111–148—MAR. 23, 2010 
Subtitle F—Shared Responsibility for Health Care 
PART I—I NDIVIDUAL RESPONSIBILITY  
Sec. 1501. Requirement to maintain minimum essential coverage. 
Sec. 1502. Reporting of health insurance coverage. 
PART II—E MPLOYER RESPONSIBILITIES  
Sec. 1511. Automatic enrollment for employees of large employers.

Sec. 1512. Employer requirement to inform employees of coverage options. Sec. 1513. Shared responsibility for employers. Sec. 1514. Reporting of employer health insurance coverage. 
Sec. 1515. Offering of Exchange-participating qualified health plans through cafe-
teria plans. 
Subtitle G—Miscellaneous Provisions 
Sec. 1551. Definitions.

Sec. 1552. Transparency in government. Sec. 1553. Prohibition against discrimination on assisted suicide. Sec. 1554. Access to therapies. Sec. 1555. Freedom not to participate in Federal health insurance programs. Sec. 1556. Equity for certain eligible survivors. Sec. 1557. Nondiscrimination. Sec. 1558. Protections for employees. Sec. 1559. Oversight. Sec. 1560. Rules of construction. Sec. 1561. Health information technology enrollment standards and protocols. Sec. 1562. Conforming amendments.

and protocols. Sec. 1562. Conforming amendments. Sec. 1563. Sense of the Senate promoting fiscal responsibility.

TITLE II—ROLE OF PUBLIC PROGRAMS 
Subtitle A—Improved Access to Medicaid 
Sec. 2001. Medicaid coverage for the lowest income populations. 
Sec. 2002. Income eligibility for nonelderly determined using modified gross in-
come. 
Sec. 2003. Requirement to offer premium assistance for employer-sponsored insur-
ance. 
Sec. 2004. Medicaid coverage for former foster care children. Sec. 2005. Payments to territories. Sec. 2006. Special adjustment to FMAP determination for certain States recovering

from a major disaster. 
Sec. 2007. Medicaid Improvement Fund rescission. 
Subtitle B—Enhanced Support for the Children’s Health Insurance Program 
Sec. 2101. Additional federal financial participation for CHIP. 
Sec. 2102. Technical corrections. 
Subtitle C—Medicaid and CHIP Enrollment Simplification 
Sec. 2201. Enrollment Simplification and coordination with State Health Insurance 
Exchanges. 
Sec. 2202. Permitting hospitals to make presumptive eligibility determinations for

all Medicaid eligible populations. 
Subtitle D—Improvements to Medicaid Services 
Sec. 2301. Coverage for freestanding birth center services. 
Sec. 2302. Concurrent care for children. Sec. 2303. State eligibility option for family planning services. Sec. 2304. Clarification of definition of medical assistance. 
Subtitle E—New Options for States to Provide Long-Term Services and Supports 
Sec. 2401. Community First Choice Option.

Sec. 2401. Community First Choice Option. 
Sec. 2402. Removal of barriers to providing home and community-based services. Sec. 2403. Money Follows the Person Rebalancing Demonstration. Sec. 2404. Protection for recipients of home and community-based services against 
spousal impoverishment. 
Sec. 2405. Funding to expand State Aging and Disability Resource Centers. Sec. 2406. Sense of the Senate regarding long-term care. 
Subtitle F—Medicaid Prescription Drug Coverage

Subtitle F—Medicaid Prescription Drug Coverage 
Sec. 2501. Prescription drug rebates. 
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124 STAT. 122 PUBLIC LAW 111–148—MAR. 23, 2010 
Sec. 2502. Elimination of exclusion of coverage of certain drugs. 
Sec. 2503. Providing adequate pharmacy reimbursement. 
Subtitle G—Medicaid Disproportionate Share Hospital (DSH) Payments 
Sec. 2551. Disproportionate share hospital payments. 
Subtitle H—Improved Coordination for Dual Eligible Beneficiaries 
Sec. 2601. 5-year period for demonstration projects. 
Sec. 2602. Providing Federal coverage and payment coordination for dual eligible

beneficiaries. 
Subtitle I—Improving the Quality of Medicaid for Patients and Providers 
Sec. 2701. Adult health quality measures. 
Sec. 2702. Payment Adjustment for Health Care-Acquired Conditions. Sec. 2703. State option to provide health homes for enrollees with chronic condi-
tions. 
Sec. 2704. Demonstration project to evaluate integrated care around a hospitaliza-
tion. 
Sec. 2705. Medicaid Global Payment System Demonstration Project.

Sec. 2706. Pediatric Accountable Care Organization Demonstration Project. Sec. 2707. Medicaid emergency psychiatric demonstration project. 
Subtitle J—Improvements to the Medicaid and CHIP Payment and Access 
Commission (MACPAC) 
Sec. 2801. MACPAC assessment of policies affecting all Medicaid beneficiaries. 
Subtitle K—Protections for American Indians and Alaska Natives 
Sec. 2901. Special rules relating to Indians.

Sec. 2901. Special rules relating to Indians. 
Sec. 2902. Elimination of sunset for reimbursement for all medicare part B services 
furnished by certain indian hospitals and clinics. 
Subtitle L—Maternal and Child Health Services 
Sec. 2951. Maternal, infant, and early childhood home visiting programs.

Sec. 2952. Support, education, and research for postpartum depression. Sec. 2953. Personal responsibility education. Sec. 2954. Restoration of funding for abstinence education. Sec. 2955. Inclusion of information about the importance of having a health care 
power of attorney in transition planning for children aging out of foster care and independent living programs. 
TITLE III—IMPROVING THE QUALITY AND EFFICIENCY OF HEALTH CARE 
Subtitle A—Transforming the Health Care Delivery System

PART I—L
INKING PAYMENT TO QUALITY OUTCOMES UNDER THE MEDICARE PROGRAM  
Sec. 3001. Hospital Value-Based purchasing program. 
Sec. 3002. Improvements to the physician quality reporting system. Sec. 3003. Improvements to the physician feedback program. Sec. 3004. Quality reporting for long-term care hospitals, inpatient rehabilitation 
hospitals, and hospice programs.

hospitals, and hospice programs. 
Sec. 3005. Quality reporting for PPS-exempt cancer hospitals. Sec. 3006. Plans for a Value-Based purchasing program for skilled nursing facilities 
and home health agencies. 
Sec. 3007. Value-based payment modifier under the physician fee schedule. Sec. 3008. Payment adjustment for conditions acquired in hospitals. 
PART II—N
ATIONAL STRATEGY TO IMPROVE HEALTH CAREQUALITY  
Sec. 3011. National strategy.

Sec. 3011. National strategy. 
Sec. 3012. Interagency Working Group on Health Care Quality. Sec. 3013. Quality measure development. Sec. 3014. Quality measurement. Sec. 3015. Data collection; public reporting. 
PART III—E
NCOURAGING DEVELOPMENT OF NEWPATIENT CAREMODELS  
Sec. 3021. Establishment of Center for Medicare and Medicaid Innovation within 
CMS.

CMS. 
Sec. 3022. Medicare shared savings program. Sec. 3023. National pilot program on payment bundling. Sec. 3024. Independence at home demonstration program. Sec. 3025. Hospital readmissions reduction program. 
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124 STAT. 123 PUBLIC LAW 111–148—MAR. 23, 2010 
Sec. 3026. Community-Based Care Transitions Program. 
Sec. 3027. Extension of gainsharing demonstration. 
Subtitle B—Improving Medicare for Patients and Providers 
PART I—E NSURING BENEFICIARY ACCESS TO PHYSICIAN CARE AND OTHER SERVICES  
Sec. 3101. Increase in the physician payment update. 
Sec. 3102. Extension of the work geographic index floor and revisions to the prac-

tice expense geographic adjustment under the Medicare physician fee schedule. 
Sec. 3103. Extension of exceptions process for Medicare therapy caps. Sec. 3104. Extension of payment for technical component of certain physician pa-
thology services. 
Sec. 3105. Extension of ambulance add-ons. Sec. 3106. Extension of certain payment rules for long-term care hospital services 
and of moratorium on the establishment of certain hospitals and facili-ties.

Sec. 3107. Extension of physician fee schedule mental health add-on. Sec. 3108. Permitting physician assistants to order post-Hospital extended care 
services.

services. 
Sec. 3109. Exemption of certain pharmacies from accreditation requirements. Sec. 3110. Part B special enrollment period for disabled TRICARE beneficiaries. Sec. 3111. Payment for bone density tests. Sec. 3112. Revision to the Medicare Improvement Fund. Sec. 3113. Treatment of certain complex diagnostic laboratory tests. Sec. 3114. Improved access for certified nurse-midwife services. 
PART II—R
URAL PROTECTIONS  
Sec. 3121. Extension of outpatient hold harmless provision.

Sec. 3122. Extension of Medicare reasonable costs payments for certain clinical di-
agnostic laboratory tests furnished to hospital patients in certain rural areas. 
Sec. 3123. Extension of the Rural Community Hospital Demonstration Program. Sec. 3124. Extension of the Medicare-dependent hospital (MDH) program. Sec. 3125. Temporary improvements to the Medicare inpatient hospital payment 
adjustment for low-volume hospitals.

adjustment for low-volume hospitals. 
Sec. 3126. Improvements to the demonstration project on community health inte-
gration models in certain rural counties. 
Sec. 3127. MedPAC study on adequacy of Medicare payments for health care pro-
viders serving in rural areas. 
Sec. 3128. Technical correction related to critical access hospital services. Sec. 3129. Extension of and revisions to Medicare rural hospital flexibility program. 
PART III—I
MPROVING PAYMENT ACCURACY

PART III—I
MPROVING PAYMENT ACCURACY  
Sec. 3131. Payment adjustments for home health care. 
Sec. 3132. Hospice reform. Sec. 3133. Improvement to medicare disproportionate share hospital (DSH) pay-
ments. 
Sec. 3134. Misvalued codes under the physician fee schedule. Sec. 3135. Modification of equipment utilization factor for advanced imaging serv-
ices.

ices. 
Sec. 3136. Revision of payment for power-driven wheelchairs. Sec. 3137. Hospital wage index improvement. Sec. 3138. Treatment of certain cancer hospitals. Sec. 3139. Payment for biosimilar biological products. Sec. 3140. Medicare hospice concurrent care demonstration program. Sec. 3141. Application of budget neutrality on a national basis in the calculation of 
the Medicare hospital wage index floor. 
Sec. 3142. HHS study on urban Medicare-dependent hospitals.

Sec. 3143. Protecting home health benefits. 
Subtitle C—Provisions Relating to Part C 
Sec. 3201. Medicare Advantage payment. 
Sec. 3202. Benefit protection and simplification. Sec. 3203. Application of coding intensity adjustment during MA payment transi-
tion.

tion. 
Sec. 3204. Simplification of annual beneficiary election periods. Sec. 3205. Extension for specialized MA plans for special needs individuals. Sec. 3206. Extension of reasonable cost contracts. Sec. 3207. Technical correction to MA private fee-for-service plans. Sec. 3208. Making senior housing facility demonstration permanent.

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124 STAT. 124 PUBLIC LAW 111–148—MAR. 23, 2010 
Sec. 3209. Authority to deny plan bids. 
Sec. 3210. Development of new standards for certain Medigap plans. 
Subtitle D—Medicare Part D Improvements for Prescription Drug Plans and MA– 
PD Plans 
Sec. 3301. Medicare coverage gap discount program. 
Sec. 3302. Improvement in determination of Medicare part D low-income bench-
mark premium. 
Sec. 3303. Voluntary de minimis policy for subsidy eligible individuals under pre-

scription drug plans and MA–PD plans. 
Sec. 3304. Special rule for widows and widowers regarding eligibility for low-in-
come assistance. 
Sec. 3305. Improved information for subsidy eligible individuals reassigned to pre-
Sec. 3306. Funding outreach and assistance for low-income programs. Sec. 3307. Improving formulary requirements for prescription drug plans and MA– 
PD plans with respect to certain categories or classes of drugs.

Sec. 3308. Reducing part D premium subsidy for high-income beneficiaries. Sec. 3309. Elimination of cost sharing for certain dual eligible individuals. Sec. 3310. Reducing wasteful dispensing of outpatient prescription drugs in long- 
term care facilities under prescription drug plans and MA–PD plans. 
Sec. 3311. Improved Medicare prescription drug plan and MA–PD plan complaint 
system. 
Sec. 3312. Uniform exceptions and appeals process for prescription drug plans and 
MA–PD plans.

MA–PD plans. 
Sec. 3313. Office of the Inspector General studies and reports. Sec. 3314. Including costs incurred by AIDS drug assistance programs and Indian 
Health Service in providing prescription drugs toward the annual out- of-pocket threshold under part D. 
Sec. 3315. Immediate reduction in coverage gap in 2010. 
Subtitle E—Ensuring Medicare Sustainability 
Sec. 3401. Revision of certain market basket updates and incorporation of produc-

tivity improvements into market basket updates that do not already in-corporate such improvements. 
Sec. 3402. Temporary adjustment to the calculation of part B premiums. Sec. 3403. Independent Medicare Advisory Board. 
Subtitle F—Health Care Quality Improvements 
Sec. 3501. Health care delivery system research; Quality improvement technical as-
sistance. 
Sec. 3502. Establishing community health teams to support the patient-centered 
medical home.

medical home. 
Sec. 3503. Medication management services in treatment of chronic disease. Sec. 3504. Design and implementation of regionalized systems for emergency care. Sec. 3505. Trauma care centers and service availability. Sec. 3506. Program to facilitate shared decisionmaking. Sec. 3507. Presentation of prescription drug benefit and risk information. Sec. 3508. Demonstration program to integrate quality improvement and patient

safety training into clinical education of health professionals. 
Sec. 3509. Improving women’s health. Sec. 3510. Patient navigator program. Sec. 3511. Authorization of appropriations. 
Subtitle G—Protecting and Improving Guaranteed Medicare Benefits 
Sec. 3601. Protecting and improving guaranteed Medicare benefits. 
Sec. 3602. No cuts in guaranteed benefits. 
TITLE IV—PREVENTION OF CHRONIC DISEASE AND IMPROVING PUBLIC 
HEALTH

HEALTH 
Subtitle A—Modernizing Disease Prevention and Public Health Systems 
Sec. 4001. National Prevention, Health Promotion and Public Health Council. 
Sec. 4002. Prevention and Public Health Fund. 
Sec. 4003. Clinical and community preventive services. Sec. 4004. Education and outreach campaign regarding preventive benefits. 
Subtitle B—Increasing Access to Clinical Preventive Services 
Sec. 4101. School-based health centers. 
Sec. 4102. Oral healthcare prevention activities.

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124 STAT. 125 PUBLIC LAW 111–148—MAR. 23, 2010 
Sec. 4103. Medicare coverage of annual wellness visit providing a personalized pre-
vention plan. 
Sec. 4104. Removal of barriers to preventive services in Medicare. Sec. 4105. Evidence-based coverage of preventive services in Medicare. Sec. 4106. Improving access to preventive services for eligible adults in Medicaid. Sec. 4107. Coverage of comprehensive tobacco cessation services for pregnant 
women in Medicaid.

women in Medicaid. 
Sec. 4108. Incentives for prevention of chronic diseases in medicaid. 
Subtitle C—Creating Healthier Communities 
Sec. 4201. Community transformation grants. 
Sec. 4202. Healthy aging, living well; evaluation of community-based prevention 
and wellness programs for Medicare beneficiaries. 
Sec. 4203. Removing barriers and improving access to wellness for individuals with 
disabilities.

disabilities. 
Sec. 4204. Immunizations. Sec. 4205. Nutrition labeling of standard menu items at chain restaurants. Sec. 4206. Demonstration project concerning individualized wellness plan. Sec. 4207. Reasonable break time for nursing mothers. 
Subtitle D—Support for Prevention and Public Health Innovation 
Sec. 4301. Research on optimizing the delivery of public health services.

Sec. 4302. Understanding health disparities: data collection and analysis. Sec. 4303. CDC and employer-based wellness programs. Sec. 4304. Epidemiology-Laboratory Capacity Grants. Sec. 4305. Advancing research and treatment for pain care management. Sec. 4306. Funding for Childhood Obesity Demonstration Project. 
Subtitle E—Miscellaneous Provisions 
Sec. 4401. Sense of the Senate concerning CBO scoring. 
Sec. 4402. Effectiveness of Federal health and wellness initiatives.

TITLE V—HEALTH CARE WORKFORCE 
Subtitle A—Purpose and Definitions 
Sec. 5001. Purpose. 
Sec. 5002. Definitions. 
Subtitle B—Innovations in the Health Care Workforce 
Sec. 5101. National health care workforce commission. 
Sec. 5102. State health care workforce development grants. Sec. 5103. Health care workforce assessment. 
Subtitle C—Increasing the Supply of the Health Care Workforce 
Sec. 5201. Federally supported student loan funds.

Sec. 5202. Nursing student loan program. Sec. 5203. Health care workforce loan repayment programs. Sec. 5204. Public health workforce recruitment and retention programs. Sec. 5205. Allied health workforce recruitment and retention programs. Sec. 5206. Grants for State and local programs. Sec. 5207. Funding for National Health Service Corps. Sec. 5208. Nurse-managed health clinics. Sec. 5209. Elimination of cap on commissioned corps. Sec. 5210. Establishing a Ready Reserve Corps.

Subtitle D—Enhancing Health Care Workforce Education and Training 
Sec. 5301. Training in family medicine, general internal medicine, general pediat-
rics, and physician assistantship. 
Sec. 5302. Training opportunities for direct care workers. Sec. 5303. Training in general, pediatric, and public health dentistry. Sec. 5304. Alternative dental health care providers demonstration project. Sec. 5305. Geriatric education and training; career awards; comprehensive geriatric 
education.

education. 
Sec. 5306. Mental and behavioral health education and training grants. Sec. 5307. Cultural competency, prevention, and public health and individuals with 
disabilities training. 
Sec. 5308. Advanced nursing education grants. Sec. 5309. Nurse education, practice, and retention grants. Sec. 5310. Loan repayment and scholarship program. Sec. 5311. Nurse faculty loan program.

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124 STAT. 126 PUBLIC LAW 111–148—MAR. 23, 2010 
Sec. 5312. Authorization of appropriations for parts B through D of title VIII. 
Sec. 5313. Grants to promote the community health workforce. Sec. 5314. Fellowship training in public health. Sec. 5315. United States Public Health Sciences Track. 
Subtitle E—Supporting the Existing Health Care Workforce 
Sec. 5401. Centers of excellence.

Sec. 5401. Centers of excellence. 
Sec. 5402. Health care professionals training for diversity. Sec. 5403. Interdisciplinary, community-based linkages. Sec. 5404. Workforce diversity grants. Sec. 5405. Primary care extension program. 
Subtitle F—Strengthening Primary Care and Other Workforce Improvements 
Sec. 5501. Expanding access to primary care services and general surgery services.

Sec. 5502. Medicare Federally qualified health center improvements. Sec. 5503. Distribution of additional residency positions. Sec. 5504. Counting resident time in nonprovider settings. Sec. 5505. Rules for counting resident time for didactic and scholarly activities and 
other activities. 
Sec. 5506. Preservation of resident cap positions from closed hospitals. Sec. 5507. Demonstration projects To address health professions workforce needs;

extension of family-to-family health information centers. 
Sec. 5508. Increasing teaching capacity. Sec. 5509. Graduate nurse education demonstration. 
Subtitle G—Improving Access to Health Care Services 
Sec. 5601. Spending for Federally Qualified Health Centers (FQHCs). 
Sec. 5602. Negotiated rulemaking for development of methodology and criteria for 
designating medically underserved populations and health professions shortage areas.

Sec. 5603. Reauthorization of the Wakefield Emergency Medical Services for Chil-
dren Program. 
Sec. 5604. Co-locating primary and specialty care in community-based mental 
health settings. 
Sec. 5605. Key National indicators. 
Subtitle H—General Provisions 
Sec. 5701. Reports. 
TITLE VI—TRANSPARENCY AND PROGRAM INTEGRITY 
Subtitle A—Physician Ownership and Other Transparency 
Sec. 6001. Limitation on Medicare exception to the prohibition on certain physician 
referrals for hospitals.

referrals for hospitals. 
Sec. 6002. Transparency reports and reporting of physician ownership or invest-
ment interests. 
Sec. 6003. Disclosure requirements for in-office ancillary services exception to the 
prohibition on physician self-referral for certain imaging services. 
Sec. 6004. Prescription drug sample transparency. Sec. 6005. Pharmacy benefit managers transparency requirements. 
Subtitle B—Nursing Home Transparency and Improvement 
PART I—I
MPROVING TRANSPARENCY OF INFORMATION

PART I—I
MPROVING TRANSPARENCY OF INFORMATION  
Sec. 6101. Required disclosure of ownership and additional disclosable parties in-
formation. 
Sec. 6102. Accountability requirements for skilled nursing facilities and nursing fa-
cilities. 
Sec. 6103. Nursing home compare Medicare website. Sec. 6104. Reporting of expenditures. Sec. 6105. Standardized complaint form. Sec. 6106. Ensuring staffing accountability. Sec. 6107. GAO study and report on Five-Star Quality Rating System. 
PART II—T

PART II—T
ARGETING ENFORCEMENT  
Sec. 6111. Civil money penalties. 
Sec. 6112. National independent monitor demonstration project. Sec. 6113. Notification of facility closure. Sec. 6114. National demonstration projects on culture change and use of informa-
tion technology in nursing homes. 
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124 STAT. 127 PUBLIC LAW 111–148—MAR. 23, 2010 
PART III—I MPROVING STAFF TRAINING  
Sec. 6121. Dementia and abuse prevention training. 
Subtitle C—Nationwide Program for National and State Background Checks on 
Direct Patient Access Employees of Long-term Care Facilities and Providers 
Sec. 6201. Nationwide program for National and State background checks on direct 
patient access employees of long-term care facilities and providers. 
Subtitle D—Patient-Centered Outcomes Research

Subtitle D—Patient-Centered Outcomes Research 
Sec. 6301. Patient-Centered Outcomes Research. 
Sec. 6302. Federal coordinating council for comparative effectiveness research. 
Subtitle E—Medicare, Medicaid, and CHIP Program Integrity Provisions 
Sec. 6401. Provider screening and other enrollment requirements under Medicare, 
Medicaid, and CHIP.

Medicaid, and CHIP. 
Sec. 6402. Enhanced Medicare and Medicaid program integrity provisions. Sec. 6403. Elimination of duplication between the Healthcare Integrity and Protec-
tion Data Bank and the National Practitioner Data Bank. 
Sec. 6404. Maximum period for submission of Medicare claims reduced to not more 
than 12 months. 
Sec. 6405. Physicians who order items or services required to be Medicare enrolled 
physicians or eligible professionals.

physicians or eligible professionals. 
Sec. 6406. Requirement for physicians to provide documentation on referrals to pro-
grams at high risk of waste and abuse. 
Sec. 6407. Face to face encounter with patient required before physicians may cer-
tify eligibility for home health services or durable medical equipment under Medicare. 
Sec. 6408. Enhanced penalties. Sec. 6409. Medicare self-referral disclosure protocol. Sec. 6410. Adjustments to the Medicare durable medical equipment, prosthetics,

orthotics, and supplies competitive acquisition program. 
Sec. 6411. Expansion of the Recovery Audit Contractor (RAC) program. 
Subtitle F—Additional Medicaid Program Integrity Provisions 
Sec. 6501. Termination of provider participation under Medicaid if terminated 
under Medicare or other State plan. 
Sec. 6502. Medicaid exclusion from participation relating to certain ownership, con-
trol, and management affiliations.

trol, and management affiliations. 
Sec. 6503. Billing agents, clearinghouses, or other alternate payees required to reg-
ister under Medicaid. 
Sec. 6504. Requirement to report expanded set of data elements under MMIS to de-
tect fraud and abuse. 
Sec. 6505. Prohibition on payments to institutions or entities located outside of the 
United States. 
Sec. 6506. Overpayments. Sec. 6507. Mandatory State use of national correct coding initiative. Sec. 6508. General effective date.

Subtitle G—Additional Program Integrity Provisions 
Sec. 6601. Prohibition on false statements and representations. 
Sec. 6602. Clarifying definition. Sec. 6603. Development of model uniform report form. Sec. 6604. Applicability of State law to combat fraud and abuse. Sec. 6605. Enabling the Department of Labor to issue administrative summary 
cease and desist orders and summary seizures orders against plans that are in financially hazardous condition.

Sec. 6606. MEWA plan registration with Department of Labor. Sec. 6607. Permitting evidentiary privilege and confidential communications. 
Subtitle H—Elder Justice Act 
Sec. 6701. Short title of subtitle. 
Sec. 6702. Definitions. Sec. 6703. Elder Justice. 
Subtitle I—Sense of the Senate Regarding Medical Malpractice 
Sec. 6801. Sense of the Senate regarding medical malpractice. 
TITLE VII—IMPROVING ACCESS TO INNOVATIVE MEDICAL THERAPIES 
Subtitle A—Biologics Price Competition and Innovation

Sec. 7001. Short title. 
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124 STAT. 128 PUBLIC LAW 111–148—MAR. 23, 2010 
Sec. 7002. Approval pathway for biosimilar biological products. 
Sec. 7003. Savings. 
Subtitle B—More Affordable Medicines for Children and Underserved Communities 
Sec. 7101. Expanded participation in 340B program. 
Sec. 7102. Improvements to 340B program integrity. Sec. 7103. GAO study to make recommendations on improving the 340B program. 
TITLE VIII—CLASS ACT 
Sec. 8001. Short title of title.

Sec. 8001. Short title of title. 
Sec. 8002. Establishment of national voluntary insurance program for purchasing 
community living assistance services and support. 
TITLE IX—REVENUE PROVISIONS 
Subtitle A—Revenue Offset Provisions 
Sec. 9001. Excise tax on high cost employer-sponsored health coverage.

Sec. 9002. Inclusion of cost of employer-sponsored health coverage on W–2. Sec. 9003. Distributions for medicine qualified only if for prescribed drug or insulin. Sec. 9004. Increase in additional tax on distributions from HSAs and Archer MSAs 
not used for qualified medical expenses. 
Sec. 9005. Limitation on health flexible spending arrangements under cafeteria 
plans.

plans. 
Sec. 9006. Expansion of information reporting requirements. Sec. 9007. Additional requirements for charitable hospitals. Sec. 9008. Imposition of annual fee on branded prescription pharmaceutical manu-
facturers and importers. 
Sec. 9009. Imposition of annual fee on medical device manufacturers and import-
ers.

ers. 
Sec. 9010. Imposition of annual fee on health insurance providers. Sec. 9011. Study and report of effect on veterans health care. Sec. 9012. Elimination of deduction for expenses allocable to Medicare Part D sub-
sidy. 
Sec. 9013. Modification of itemized deduction for medical expenses. Sec. 9014. Limitation on excessive remuneration paid by certain health insurance 
providers.

providers. 
Sec. 9015. Additional hospital insurance tax on high-income taxpayers. Sec. 9016. Modification of section 833 treatment of certain health organizations. Sec. 9017. Excise tax on elective cosmetic medical procedures. 
Subtitle B—Other Provisions 
Sec. 9021. Exclusion of health benefits provided by Indian tribal governments. 
Sec. 9022. Establishment of simple cafeteria plans for small businesses. Sec. 9023. Qualifying therapeutic discovery project credit.

TITLE X—STRENGTHENING QUALITY, AFFORDABLE HEALTH CARE FOR 
ALL AMERICANS 
Subtitle A—Provisions Relating to Title I 
Sec. 10101. Amendments to subtitle A. 
Sec. 10102. Amendments to subtitle B. Sec. 10103. Amendments to subtitle C. Sec. 10104. Amendments to subtitle D. Sec. 10105. Amendments to subtitle E. Sec. 10106. Amendments to subtitle F. Sec. 10107. Amendments to subtitle G. Sec. 10108. Free choice vouchers. Sec. 10109. Development of standards for financial and administrative trans-

actions. 
Subtitle B—Provisions Relating to Title II 
PART I—M
EDICAID AND CHIP 
Sec. 10201. Amendments to the Social Security Act and title II of this Act. 
Sec. 10202. Incentives for States to offer home and community-based services as a 
long-term care alternative to nursing homes. 
Sec. 10203. Extension of funding for CHIP through fiscal year 2015 and other 
CHIP-related provisions. 
PART II—S UPPORT FOR PREGNANT AND PARENTING TEENS AND WOMEN  
Sec. 10211. Definitions.

Sec. 10211. Definitions. 
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124 STAT. 129 PUBLIC LAW 111–148—MAR. 23, 2010 
Sec. 10212. Establishment of pregnancy assistance fund. 
Sec. 10213. Permissible uses of Fund. Sec. 10214. Appropriations. 
PART III—I
NDIAN HEALTH CAREIMPROVEMENT  
Sec. 10221. Indian health care improvement. 
Subtitle C—Provisions Relating to Title III 
Sec. 10301. Plans for a Value-Based purchasing program for ambulatory surgical 
centers.

Sec. 10302. Revision to national strategy for quality improvement in health care. Sec. 10303. Development of outcome measures. Sec. 10304. Selection of efficiency measures. Sec. 10305. Data collection; public reporting. Sec. 10306. Improvements under the Center for Medicare and Medicaid Innovation. Sec. 10307. Improvements to the Medicare shared savings program. Sec. 10308. Revisions to national pilot program on payment bundling. Sec. 10309. Revisions to hospital readmissions reduction program.

to hospital readmissions reduction program. Sec. 10310. Repeal of physician payment update.

Sec. 10311. Revisions to extension of ambulance add-ons. Sec. 10312. Certain payment rules for long-term care hospital services and morato-
rium on the establishment of certain hospitals and facilities. 
Sec. 10313. Revisions to the extension for the rural community hospital demonstra-
tion program.

tion program. 
Sec. 10314. Adjustment to low-volume hospital provision. Sec. 10315. Revisions to home health care provisions. Sec. 10316. Medicare DSH. Sec. 10317. Revisions to extension of section 508 hospital provisions. Sec. 10318. Revisions to transitional extra benefits under Medicare Advantage. Sec. 10319. Revisions to market basket adjustments. Sec. 10320. Expansion of the scope of, and additional improvements to, the Inde-
pendent Medicare Advisory Board.

pendent Medicare Advisory Board. 
Sec. 10321. Revision to community health teams. Sec. 10322. Quality reporting for psychiatric hospitals. Sec. 10323. Medicare coverage for individuals exposed to environmental health haz-
ards. 
Sec. 10324. Protections for frontier States. Sec. 10325. Revision to skilled nursing facility prospective payment system. Sec. 10326. Pilot testing pay-for-performance programs for certain Medicare pro-
viders.

viders. 
Sec. 10327. Improvements to the physician quality reporting system. Sec. 10328. Improvement in part D medication therapy management (MTM) pro-
grams. 
Sec. 10329. Developing methodology to assess health plan value. Sec. 10330. Modernizing computer and data systems of the Centers for Medicare & 
Medicaid services to support improvements in care delivery.

Sec. 10331. Public reporting of performance information. Sec. 10332. Availability of medicare data for performance measurement. Sec. 10333. Community-based collaborative care networks. Sec. 10334. Minority health. Sec. 10335. Technical correction to the hospital value-based purchasing program. Sec. 10336. GAO study and report on Medicare beneficiary access to high-quality 
dialysis services. 
Subtitle D—Provisions Relating to Title IV 
Sec. 10401. Amendments to subtitle A.

Sec. 10401. Amendments to subtitle A. 
Sec. 10402. Amendments to subtitle B. Sec. 10403. Amendments to subtitle C. Sec. 10404. Amendments to subtitle D. Sec. 10405. Amendments to subtitle E. Sec. 10406. Amendment relating to waiving coinsurance for preventive services. Sec. 10407. Better diabetes care. Sec. 10408. Grants for small businesses to provide comprehensive workplace 
wellness programs.

wellness programs. 
Sec. 10409. Cures Acceleration Network. Sec. 10410. Centers of Excellence for Depression. Sec. 10411. Programs relating to congenital heart disease. Sec. 10412. Automated Defibrillation in Adam’s Memory Act. Sec. 10413. Young women’s breast health awareness and support of young women 
diagnosed with breast cancer. 
Subtitle E—Provisions Relating to Title V 
Sec. 10501. Amendments to the Public Health Service Act, the Social Security Act, 
and title V of this Act.

and title V of this Act. 
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124 STAT. 130 PUBLIC LAW 111–148—MAR. 23, 2010 
Sec. 10502. Infrastructure to Expand Access to Care. 
Sec. 10503. Community Health Centers and the National Health Service Corps 
Fund. 
Sec. 10504. Demonstration project to provide access to affordable care. 
Subtitle F—Provisions Relating to Title VI 
Sec. 10601. Revisions to limitation on medicare exception to the prohibition on cer-
tain physician referrals for hospitals.

tain physician referrals for hospitals. 
Sec. 10602. Clarifications to patient-centered outcomes research. Sec. 10603. Striking provisions relating to individual provider application fees. Sec. 10604. Technical correction to section 6405. Sec. 10605. Certain other providers permitted to conduct face to face encounter for 
home health services. 
Sec. 10606. Health care fraud enforcement. Sec. 10607. State demonstration programs to evaluate alternatives to current med-
ical tort litigation.

ical tort litigation. 
Sec. 10608. Extension of medical malpractice coverage to free clinics. Sec. 10609. Labeling changes. 
Subtitle G—Provisions Relating to Title VIII 
Sec. 10801. Provisions relating to title VIII. 
Subtitle H—Provisions Relating to Title IX 
Sec. 10901. Modifications to excise tax on high cost employer-sponsored health cov-
erage. 
Sec. 10902. Inflation adjustment of limitation on health flexible spending arrange-
ments under cafeteria plans.

ments under cafeteria plans. 
Sec. 10903. Modification of limitation on charges by charitable hospitals. Sec. 10904. Modification of annual fee on medical device manufacturers and im-
porters. 
Sec. 10905. Modification of annual fee on health insurance providers. Sec. 10906. Modifications to additional hospital insurance tax on high-income tax-
payers. 
Sec. 10907. Excise tax on indoor tanning services in lieu of elective cosmetic med-
ical procedures.

ical procedures. 
Sec. 10908. Exclusion for assistance provided to participants in State student loan 
repayment programs for certain health professionals. 
Sec. 10909. Expansion of adoption credit and adoption assistance programs. 
TITLE I—QUALITY, AFFORDABLE 
HEALTH CARE FOR ALL AMERICANS 
Subtitle A—Immediate Improvements in 
Health Care Coverage for All Americans 
SEC. 1001. AMENDMENTS TO THE PUBLIC HEALTH SERVICE ACT. 
Part A of title XXVII of the Public Health Service Act (42

U.S.C. 300gg et seq.) is amended— 
(1) by striking the part heading and inserting the following: 
‘‘PART A—INDIVIDUAL AND GROUP MARKET 
REFORMS’’; 
(2) by redesignating sections 2704 through 2707 as sections 
2725 through 2728, respectively; 
(3) by redesignating sections 2711 through 2713 as sections 
2731 through 2733, respectively; 
(4) by redesignating sections 2721 through 2723 as sections 
2735 through 2737, respectively; and 
(5) by inserting after section 2702, the following:

42 USC 300gg–21— 300gg–23. 42 USC 
300gg–11— 300gg–13, 300gg–9. 42 USC 
300gg–4— 300gg–7, 300gg–25— 300gg–28. 
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124 STAT. 131 PUBLIC LAW 111–148—MAR. 23, 2010 
‘‘Subpart II—Improving Coverage 
‘‘SEC. 2711. NO LIFETIME OR ANNUAL LIMITS. 
‘‘(a) I NGENERAL .—A group health plan and a health insurance 
issuer offering group or individual health insurance coverage may not establish— 
‘‘(1) lifetime limits on the dollar value of benefits for any 
participant or beneficiary; or 
‘‘(2) unreasonable annual limits (within the meaning of

section 223 of the Internal Revenue Code of 1986) on the dollar value of benefits for any participant or beneficiary. ‘‘(b) P
ERBENEFICIARY LIMITS .—Subsection (a) shall not be con-

strued to prevent a group health plan or health insurance coverage that is not required to provide essential health benefits under section 1302(b) of the Patient Protection and Affordable Care Act from placing annual or lifetime per beneficiary limits on specific covered benefits to the extent that such limits are otherwise per-mitted under Federal or State law. 
‘‘SEC. 2712. PROHIBITION ON RESCISSIONS. 
‘‘A group health plan and a health insurance issuer offering

group or individual health insurance coverage shall not rescind such plan or coverage with respect to an enrollee once the enrollee is covered under such plan or coverage involved, except that this section shall not apply to a covered individual who has performed an act or practice that constitutes fraud or makes an intentional misrepresentation of material fact as prohibited by the terms of the plan or coverage. Such plan or coverage may not be cancelled except with prior notice to the

not be cancelled except with prior notice to the enrollee, and only as permitted under section 2702(c) or 2742(b).

‘‘SEC. 2713. COVERAGE OF PREVENTIVE HEALTH SERVICES. 
issuer offering group or individual health insurance coverage shall, at a minimum provide coverage for and shall not impose any cost sharing requirements for— 
‘‘(1) evidence-based items or services that have in effect 
a rating of ‘A’ or ‘B’ in the current recommendations of the United States Preventive Services Task Force;

‘‘(2) immunizations that have in effect a recommendation 
from the Advisory Committee on Immunization Practices of the Centers for Disease Control and Prevention with respect to the individual involved; and 
‘‘(3) with respect to infants, children, and adolescents, evi-
dence-informed preventive care and screenings provided for in the comprehensive guidelines supported by the Health Resources and Services Administration. 
‘‘(4) with respect to women, such additional preventive

care and screenings not described in paragraph (1) as provided for in comprehensive guidelines supported by the Health Resources and Services Administration for purposes of this paragraph. 
‘‘(5) for the purposes of this Act, and for the purposes 
of any other provision of law, the current recommendations of the United States Preventive Service Task Force regarding breast cancer screening, mammography, and prevention shall 42 USC 300gg–13. 42 USC 
300gg–12. 42 USC 
300gg–11.

300gg–11. 
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124 STAT. 132 PUBLIC LAW 111–148—MAR. 23, 2010 
be considered the most current other than those issued in 
or around November 2009. 
Nothing in this subsection shall be construed to prohibit a plan or issuer from providing coverage for services in addition to those recommended by United States Preventive Services Task Force or to deny coverage for services that are not recommended by such Task Force. 
‘‘(b) I
NTERVAL .— 
‘‘(1) I N GENERAL .—The Secretary shall establish a minimum

interval between the date on which a recommendation described in subsection (a)(1) or (a)(2) or a guideline under subsection (a)(3) is issued and the plan year with respect to which the requirement described in subsection (a) is effective with respect to the service described in such recommendation or guideline. 
‘‘(2) M
INIMUM .—The interval described in paragraph (1) 
shall not be less than 1 year. ‘‘(c) V
ALUE -BASED INSURANCE DESIGN .—The Secretary may

ALUE -BASED INSURANCE DESIGN .—The Secretary may 
develop guidelines to permit a group health plan and a health insurance issuer offering group or individual health insurance cov-erage to utilize value-based insurance designs. 
‘‘SEC. 2714. EXTENSION OF DEPENDENT COVERAGE. 
‘‘(a) I NGENERAL .—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) R
EGULATIONS .—The Secretary shall promulgate regulations

to define the dependents to which coverage shall be made available under subsection (a). 
‘‘(c) R
ULE 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. 2715. DEVELOPMENT AND UTILIZATION OF UNIFORM EXPLA-
NATION OF COVERAGE DOCUMENTS AND STANDARDIZED DEFINITIONS. 
‘‘(a) I NGENERAL .—Not later than 12 months after the date

of enactment of the Patient Protection and Affordable Care Act, the Secretary shall develop standards for use by a group health plan and a health insurance issuer offering group or individual health insurance coverage, in compiling and providing to enrollees a summary of benefits and coverage explanation that accurately describes the benefits and coverage under the applicable plan or coverage. In developing such standards, the Secretary shall consult

with the National Association of Insurance Commissioners (referred to in this section as the ‘NAIC’), a working group composed of representatives of health insurance-related consumer advocacy organizations, health insurance issuers, health care professionals, patient advocates including those representing individuals with lim-ited English proficiency, and other qualified individuals. 
‘‘(b) R
EQUIREMENTS .—The standards for the summary of bene-

fits and coverage developed under subsection (a) shall provide for the following: Deadline. 42 USC 
300gg–15. 42 USC 
300gg–14. 
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124 STAT. 133 PUBLIC LAW 111–148—MAR. 23, 2010 
‘‘(1) A PPEARANCE .—The standards shall ensure that the 
summary of benefits and coverage is presented in a uniform format that does not exceed 4 pages in length and does not include print smaller than 12-point font. 
‘‘(2) L
ANGUAGE .—The standards shall ensure that the sum-
mary is presented in a culturally and linguistically appropriate manner and utilizes terminology understandable by the average plan enrollee. 
‘‘(3) C

‘‘(3) C
ONTENTS .—The standards shall ensure that the sum-
mary of benefits and coverage includes— 
‘‘(A) uniform definitions of standard insurance terms 
and medical terms (consistent with subsection (g)) so that consumers may compare health insurance coverage and understand the terms of coverage (or exception to such coverage); 
‘‘(B) a description of the coverage, including cost 
sharing for— 
‘‘(i) each of the categories of the essential health

benefits described in subparagraphs (A) through (J) of section 1302(b)(1) of the Patient Protection and Affordable Care Act; and 
‘‘(ii) other benefits, as identified by the Secretary; 
‘‘(C) the exceptions, reductions, and limitations on cov-
erage; 
‘‘(D) the cost-sharing provisions, including deductible, 
coinsurance, and co-payment obligations; 
‘‘(E) the renewability and continuation of coverage 
provisions; 
‘‘(F) a coverage facts label that includes examples to

illustrate common benefits scenarios, including pregnancy and serious or chronic medical conditions and related cost sharing, such scenarios to be based on recognized clinical practice guidelines; 
‘‘(G) a statement of whether the plan or coverage— 
‘‘(i) provides minimum essential coverage (as 
defined under section 5000A(f) of the Internal Revenue Code 1986); and 
‘‘(ii) ensures that the plan or coverage share of

the total allowed costs of benefits provided under the plan or coverage is not less than 60 percent of such costs; ‘‘(H) a statement that the outline is a summary of 
the policy or certificate and that the coverage document itself should be consulted to determine the governing contractual provisions; and 
‘‘(I) a contact number for the consumer to call with

additional questions and an Internet web address where a copy of the actual individual coverage policy or group certificate of coverage can be reviewed and obtained. 
‘‘(c) P
ERIODIC REVIEW AND UPDATING .—The Secretary shall 
periodically review and update, as appropriate, the standards devel-oped under this section. 
‘‘(d) R
EQUIREMENT TOPROVIDE .— 
‘‘(1) I N GENERAL .—Not later than 24 months after the date

of enactment of the Patient Protection and Affordable Care Act, each entity described in paragraph (3) shall provide, prior Deadline. 
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124 STAT. 134 PUBLIC LAW 111–148—MAR. 23, 2010 
to any enrollment restriction, a summary of benefits and cov-
erage explanation pursuant to the standards developed by the Secretary under subsection (a) to— 
‘‘(A) an applicant at the time of application; ‘‘(B) an enrollee prior to the time of enrollment or 
reenrollment, as applicable; and 
‘‘(C) a policyholder or certificate holder at the time 
of issuance of the policy or delivery of the certificate. ‘‘(2) C

OMPLIANCE .—An entity described in paragraph (3) 
is deemed to be in compliance with this section if the summary of benefits and coverage described in subsection (a) is provided in paper or electronic form. 
‘‘(3) E
NTITIES IN GENERAL .—An entity described in this 
paragraph is— 
‘‘(A) a health insurance issuer (including a group health 
plan that is not a self-insured plan) offering health insur-ance coverage within the United States; or 
‘‘(B) in the case of a self-insured group health plan,

the plan sponsor or designated administrator of the plan (as such terms are defined in section 3(16) of the Employee Retirement Income Security Act of 1974). ‘‘(4) N
OTICE OF MODIFICATIONS .—If a group health plan

or health insurance issuer makes any material modification in any of the terms of the plan or coverage involved (as defined for purposes of section 102 of the Employee Retirement Income Security Act of 1974) that is not reflected in the most recently provided summary of benefits and coverage, the plan or issuer shall provide notice of such modification to enrollees not later than 60 days prior to the date on which such modification will become effective. ‘‘(e) P

REEMPTION .—The standards developed under subsection 
(a) shall preempt any related State standards that require a sum-mary of benefits and coverage that provides less information to consumers than that required to be provided under this section, as determined by the Secretary. 
‘‘(f) F
AILURE TOPROVIDE .—An entity described in subsection

(d)(3) that willfully fails to provide the information required under this section shall be subject to a fine of not more than $1,000 for each such failure. Such failure with respect to each enrollee 
shall constitute a separate offense for purposes of this subsection. 
‘‘(g) D
EVELOPMENT OF STANDARD DEFINITIONS .— 
‘‘(1) I N GENERAL .—The Secretary shall, by regulation, pro-

vide for the development of standards for the definitions of terms used in health insurance coverage, including the insur-ance-related terms described in paragraph (2) and the medical terms described in paragraph (3). 
‘‘(2) I
NSURANCE -RELATED TERMS .—The insurance-related

terms described in this paragraph are premium, deductible, co-insurance, co-payment, out-of-pocket limit, preferred pro-vider, non-preferred provider, out-of-network co-payments, UCR (usual, customary and reasonable) fees, excluded services, griev-ance and appeals, and such other terms as the Secretary deter-mines are important to define so that consumers may compare health insurance coverage and understand the terms of their coverage. Regulations. Fine. Deadline.

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124 STAT. 135 PUBLIC LAW 111–148—MAR. 23, 2010 
‘‘(3) M EDICAL TERMS .—The medical terms described in this

paragraph are hospitalization, hospital outpatient care, emer-gency room care, physician services, prescription drug coverage, durable medical equipment, home health care, skilled nursing care, rehabilitation services, hospice services, emergency med-ical transportation, and such other terms as the Secretary determines are important to define so that consumers may compare the medical benefits offered by health insurance and understand the extent of those medical benefits (or exceptions to those

‘‘SEC. 2716. PROHIBITION OF DISCRIMINATION BASED ON SALARY. 
‘‘(a) I NGENERAL .—The plan sponsor of a group health plan

(other than a self-insured plan) may not establish rules relating to the health insurance coverage eligibility (including continued eligibility) of any full-time employee under the terms of the plan that are based on the total hourly or annual salary of the employee or otherwise establish eligibility rules that have the effect of discriminating in favor of higher wage employees. 
‘‘(b) L
IMITATION .—Subsection (a) shall not be construed to pro-

hibit a plan sponsor from establishing contribution requirements for enrollment in the plan or coverage that provide for the payment by employees with lower hourly or annual compensation of a lower dollar or percentage contribution than the payment required of similarly situated employees with a higher hourly or annual com-pensation. 
‘‘SEC. 2717. ENSURING THE QUALITY OF CARE. 
‘‘(a) Q UALITY REPORTING .— 
‘‘(1) I N GENERAL .—Not later than 2 years after the date

of enactment of the Patient Protection and Affordable Care Act, the Secretary, in consultation with experts in health care quality and stakeholders, shall develop reporting requirements for use by a group health plan, and a health insurance issuer offering group or individual health insurance coverage, with respect to plan or coverage benefits and health care provider reimbursement structures that— 
‘‘(A) improve health outcomes through the implementa-

tion of activities such as quality reporting, effective case management, care coordination, chronic disease manage-ment, and medication and care compliance initiatives, including through the use of the medical homes model as defined for purposes of section 3602 of the Patient Protection and Affordable Care Act, for treatment or serv-ices under the plan or coverage; 
‘‘(B) implement activities to prevent hospital readmis-

sions through a comprehensive program for hospital dis-charge that includes patient-centered education and coun-seling, comprehensive discharge planning, and post dis-
charge reinforcement by an appropriate health care profes-sional; 
‘‘(C) implement activities to improve patient safety and 
reduce medical errors through the appropriate use of best clinical practices, evidence based medicine, and health information technology under the plan or coverage; and

‘‘(D) implement wellness and health promotion activi-
ties. ‘‘(2) R
EPORTING REQUIREMENTS .— 42 USC 300gg–17. 42 USC 
300gg–16. 
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124 STAT. 136 PUBLIC LAW 111–148—MAR. 23, 2010 
‘‘(A) I N GENERAL .—A group health plan and a health 
insurance issuer offering group or individual health insur-ance coverage shall annually submit to the Secretary, and to enrollees under the plan or coverage, a report on whether the benefits under the plan or coverage satisfy the elements described in subparagraphs (A) through (D) of paragraph (1). 
‘‘(B) T
IMING OF REPORTS .—A report under subpara-

graph (A) shall be made available to an enrollee under the plan or coverage during each open enrollment period. 
‘‘(C) A
VAILABILITY OF REPORTS .—The Secretary shall 
make reports submitted under subparagraph (A) available to the public through an Internet website. 
‘‘(D) P
ENALTIES .—In developing the reporting require-
ments under paragraph (1), the Secretary may develop and impose appropriate penalties for non-compliance with such requirements.

‘‘(E) E
XCEPTIONS .—In developing the reporting require-
ments under paragraph (1), the Secretary may provide for exceptions to such requirements for group health plans and health insurance issuers that substantially meet the goals of this section. 
‘‘(b) W
ELLNESS AND PREVENTION PROGRAMS .—For purposes of

subsection (a)(1)(D), wellness and health promotion activities may include personalized wellness and prevention services, which are coordinated, maintained or delivered by a health care provider, a wellness and prevention plan manager, or a health, wellness or prevention services organization that conducts health risk assess-ments or offers ongoing face-to-face, telephonic or web-based inter-vention efforts for each of the program’s participants, and which may include the following wellness and

and which may include the following wellness and prevention efforts:

‘‘(1) Smoking cessation. ‘‘(2) Weight management. ‘‘(3) Stress management. ‘‘(4) Physical fitness. ‘‘(5) Nutrition. 
‘‘(6) Heart disease prevention. ‘‘(7) Healthy lifestyle support. ‘‘(8) Diabetes prevention. 
‘‘(c) R
EGULATIONS .—Not later than 2 years after the date of 
enactment of the Patient Protection and Affordable Care Act, the Secretary shall promulgate regulations that provide criteria for determining whether a reimbursement structure is described in subsection (a). 
‘‘(d) S

‘‘(d) S
TUDY AND REPORT .—Not later than 180 days after the 
date on which regulations are promulgated under subsection (c), the Government Accountability Office shall review such regulations and conduct a study and submit to the Committee on Health, Education, Labor, and Pensions of the Senate and the Committee on Energy and Commerce of the House of Representatives a report regarding the impact the activities under this section have had on the quality and cost of health care.

‘‘SEC. 2718. BRINGING DOWN THE COST OF HEALTH CARE COVERAGE. 
‘‘(a) C LEAR ACCOUNTING FOR COSTS .—A health insurance issuer 
offering group or individual health insurance coverage shall, with Reports. 42 USC 
300gg–18. Deadline. 
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124 STAT. 137 PUBLIC LAW 111–148—MAR. 23, 2010 
respect to each plan year, submit to the Secretary a report con-
cerning the percentage of total premium revenue that such coverage expends— 
‘‘(1) on reimbursement for clinical services provided to 
enrollees under such coverage; 
‘‘(2) for activities that improve health care quality; and ‘‘(3) on all other non-claims costs, including an explanation 
of the nature of such costs, and excluding State taxes and licensing or regulatory fees.

The Secretary shall make reports received under this section avail-able to the public on the Internet website of the Department of Health and Human Services. 
‘‘(b) E
NSURING THAT CONSUMERS RECEIVE VALUE FOR THEIR  
PREMIUM PAYMENTS .— 
‘‘(1) R EQUIREMENT TO PROVIDE VALUE FOR PREMIUM PAY -
MENTS .—A health insurance issuer offering group or individual

health insurance coverage shall, with respect to each plan year, provide an annual rebate to each enrollee under such coverage, on a pro rata basis, in an amount that is equal to the amount by which premium revenue expended by the issuer on activities described in subsection (a)(3) exceeds— 
‘‘(A) with respect to a health insurance issuer offering 
coverage in the group market, 20 percent, or such lower percentage as a State may by regulation determine; or

‘‘(B) with respect to a health insurance issuer offering 
coverage in the individual market, 25 percent, or such lower percentage as a State may by regulation determine, except that such percentage shall be adjusted to the extent the Secretary determines that the application of such percentage with a State may destabilize the existing indi-vidual market in such State. ‘‘(2) C
ONSIDERATION IN SETTING PERCENTAGES .—In deter-

mining the percentages under paragraph (1), a State shall seek to ensure adequate participation by health insurance issuers, competition in the health insurance market in the State, and value for consumers so that premiums are used 
for clinical services and quality improvements. 
‘‘(3) T
ERMINATION .—The provisions of this subsection shall 
have no force or effect after December 31, 2013. ‘‘(c) S

TANDARD HOSPITAL CHARGES .—Each hospital operating 
within the United States shall for each year establish (and update) and make public (in accordance with guidelines developed by the Secretary) a list of the hospital’s standard charges for items and services provided by the hospital, including for diagnosis-related groups established under section 1886(d)(4) of the Social Security Act. 
‘‘(d) D
EFINITIONS .—The Secretary, in consultation with the

National Association of Insurance Commissions, shall establish uni-form definitions for the activities reported under subsection (a). 
‘‘SEC. 2719. APPEALS PROCESS. 
‘‘A group health plan and a health insurance issuer offering 
group or individual health insurance coverage shall implement an effective appeals process for appeals of coverage determinations and claims, under which the plan or issuer shall, at a minimum— 
‘‘(1) have in effect an internal claims appeal process; 42 USC

300gg–19. Public 
information. Web posting. 
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124 STAT. 138 PUBLIC LAW 111–148—MAR. 23, 2010 
‘‘(2) provide notice to enrollees, in a culturally and linguis-
tically appropriate manner, of available internal and external appeals processes, and the availability of any applicable office of health insurance consumer assistance or ombudsman estab-lished under section 2793 to assist such enrollees with the appeals processes; 
‘‘(3) allow an enrollee to review their file, to present evi-

dence and testimony as part of the appeals process, and to receive continued coverage pending the outcome of the appeals process; and 
‘‘(4) provide an external review process for such plans and 
issuers that, at a minimum, includes the consumer protections set forth in the Uniform External Review Model Act promul-gated by the National Association of Insurance Commissioners and is binding on such plans.’’. 
SEC. 1002. HEALTH INSURANCE CONSUMER INFORMATION.

Part C of title XXVII of the Public Health Service Act (42 
U.S.C. 300gg–91 et seq.) is amended by adding at the end the following: 
‘‘SEC. 2793. HEALTH INSURANCE CONSUMER INFORMATION. 
‘‘(a) I NGENERAL .—The Secretary shall award grants to States 
to enable such States (or the Exchanges operating in such States) to establish, expand, or provide support for— 
‘‘(1) offices of health insurance consumer assistance; or ‘‘(2) health insurance ombudsman programs. 
‘‘(b) E
LIGIBILITY .—

‘‘(b) E
LIGIBILITY .— 
‘‘(1) I N GENERAL .—To be eligible to receive a grant, a State 
shall designate an independent office of health insurance con-
sumer assistance, or an ombudsman, that, directly or in coordination with State health insurance regulators and con-sumer assistance organizations, receives and responds to inquiries and complaints concerning health insurance coverage with respect to Federal health insurance requirements and under State law. 
‘‘(2) C

‘‘(2) C
RITERIA .—A State that receives a grant under this 
section shall comply with criteria established by the Secretary for carrying out activities under such grant. ‘‘(c) D
UTIES .—The office of health insurance consumer assist-
ance or health insurance ombudsman shall— 
‘‘(1) assist with the filing of complaints and appeals,

including filing appeals with the internal appeal or grievance process of the group health plan or health insurance issuer involved and providing information about the external appeal process; 
‘‘(2) collect, track, and quantify problems and inquiries 
encountered by consumers; 
‘‘(3) educate consumers on their rights and responsibilities 
with respect to group health plans and health insurance cov-erage; 
‘‘(4) assist consumers with enrollment in a group health

plan or health insurance coverage by providing information, referral, and assistance; and 
‘‘(5) resolve problems with obtaining premium tax credits 
under section 36B of the Internal Revenue Code of 1986. Grants. 42 USC 
300gg–93. Notification. 
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124 STAT. 139 PUBLIC LAW 111–148—MAR. 23, 2010 
‘‘(d) D ATA COLLECTION .—As a condition of receiving a grant

under subsection (a), an office of health insurance consumer assist-ance or ombudsman program shall be required to collect and report data to the Secretary on the types of problems and inquiries encoun-tered by consumers. The Secretary shall utilize such data to identify areas where more enforcement action is necessary and shall share such information with State insurance regulators, the Secretary of Labor, and the Secretary of the Treasury for use in the enforce-ment activities of such

‘‘(e) F
UNDING .— 
‘‘(1) I NITIAL FUNDING .—There is hereby appropriated to 
the Secretary, out of any funds in the Treasury not otherwise appropriated, $30,000,000 for the first fiscal year for which this section applies to carry out this section. Such amount shall remain available without fiscal year limitation. 
‘‘(2) A
UTHORIZATION FOR SUBSEQUENT YEARS .—There is

UTHORIZATION FOR SUBSEQUENT YEARS .—There is 
authorized to be appropriated to the Secretary for each fiscal year following the fiscal year described in paragraph (1), such sums as may be necessary to carry out this section.’’. 
SEC. 1003. ENSURING THAT CONSUMERS GET VALUE FOR THEIR DOL-
LARS. 
U.S.C. 300gg–91 et seq.), as amended by section 1002, is further amended by adding at the end the following:

‘‘SEC. 2794. ENSURING THAT CONSUMERS GET VALUE FOR THEIR DOL-
LARS. 
‘‘(a) I NITIAL PREMIUM REVIEW PROCESS .— 
‘‘(1) I N GENERAL .—The Secretary, in conjunction with 
States, shall establish a process for the annual review, begin-ning with the 2010 plan year and subject to subsection (b)(2)(A), of unreasonable increases in premiums for health insurance coverage. 
‘‘(2) J
USTIFICATION AND DISCLOSURE .—The process estab-

lished under paragraph (1) shall require health insurance issuers to submit to the Secretary and the relevant State a justification for an unreasonable premium increase prior to the implementation of the increase. Such issuers shall promi-nently post such information on their Internet websites. The Secretary shall ensure the public disclosure of information on such increases and justifications for all health insurance issuers. ‘‘(b) C

ONTINUING PREMIUM REVIEW PROCESS .— 
‘‘(1) I NFORMING SECRETARY OF PREMIUM INCREASE PAT -
TERNS .—As a condition of receiving a grant under subsection 
(c)(1), a State, through its Commissioner of Insurance, shall— 
‘‘(A) provide the Secretary with information about 
trends in premium increases in health insurance coverage 
in premium rating areas in the State; and 
‘‘(B) make recommendations, as appropriate, to the

State Exchange about whether particular health insurance issuers should be excluded from participation in the Exchange based on a pattern or practice of excessive or unjustified premium increases. ‘‘(2) M
ONITORING BY SECRETARY OF PREMIUM INCREASES .— 
‘‘(A) I N GENERAL .—Beginning with plan years begin-
ning in 2014, the Secretary, in conjunction with the States Effective date. Web posting. Effective date. 42 USC 
300gg–94.

300gg–94. 
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124 STAT. 140 PUBLIC LAW 111–148—MAR. 23, 2010 
and consistent with the provisions of subsection (a)(2), shall 
monitor premium increases of health insurance coverage offered through an Exchange and outside of an Exchange. 
‘‘(B) C
ONSIDERATION IN OPENING EXCHANGE .—In deter-

mining under section 1312(f)(2)(B) of the Patient Protection and Affordable Care Act whether to offer qualified health plans in the large group market through an Exchange, the State shall take into account any excess of premium growth outside of the Exchange as compared to the rate of such growth inside the Exchange. 
‘‘(c) G
RANTS IN SUPPORT OF PROCESS .— 
‘‘(1) P REMIUM REVIEW GRANTS DURING 2010 THROUGH 2014 .—

The Secretary shall carry out a program to award grants to States during the 5-year period beginning with fiscal year 2010 to assist such States in carrying out subsection (a), including— 
‘‘(A) in reviewing and, if appropriate under State law, 
approving premium increases for health insurance cov-erage; and 
‘‘(B) in providing information and recommendations 
to the Secretary under subsection (b)(1). ‘‘(2) F
UNDING .— 
‘‘(A) I N GENERAL .—Out of all funds in the Treasury

not otherwise appropriated, there are appropriated to the Secretary $250,000,000, to be available for expenditure for grants under paragraph (1) and subparagraph (B). 
‘‘(B) F
URTHER AVAILABILITY FOR INSURANCE REFORM  
AND CONSUMER PROTECTION .—If the amounts appropriated

under subparagraph (A) are not fully obligated under grants under paragraph (1) by the end of fiscal year 2014, any remaining funds shall remain available to the Sec-retary for grants to States for planning and implementing the insurance reforms and consumer protections under part A. 
‘‘(C) A
LLOCATION .—The Secretary shall establish a for-
mula for determining the amount of any grant to a State under this subsection. Under such formula— 
‘‘(i) the Secretary shall consider the number of

‘‘(i) the Secretary shall consider the number of 
plans of health insurance coverage offered in each State and the population of the State; and 
‘‘(ii) no State qualifying for a grant under para-
graph (1) shall receive less than $1,000,000, or more than $5,000,000 for a grant year.’’. 
SEC. 1004. EFFECTIVE DATES. 
(a) I NGENERAL .—Except as provided for in subsection (b),

this subtitle (and the amendments made by this subtitle) shall become effective for plan years beginning on or after the date that is 6 months after the date of enactment of this Act, except that the amendments made by sections 1002 and 1003 shall become effective for fiscal years beginning with fiscal year 2010. 
(b) S
PECIAL RULE.—The amendments made by sections 1002 
and 1003 shall take effect on the date of enactment of this Act. 42 USC 
300gg–11 note.

300gg–11 note. 
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124 STAT. 141 PUBLIC LAW 111–148—MAR. 23, 2010 
Subtitle B—Immediate Actions to Preserve 
and Expand Coverage 
SEC. 1101. IMMEDIATE ACCESS TO INSURANCE FOR UNINSURED 
INDIVIDUALS WITH A PREEXISTING CONDITION. 
(a) I NGENERAL .—Not later than 90 days after the date of

enactment of this Act, the Secretary shall establish a temporary high risk health insurance pool program to provide health insurance coverage for eligible individuals during the period beginning on the date on which such program is established and ending on January 1, 2014. 
(b) A
DMINISTRATION .— 
(1) I N GENERAL .—The Secretary may carry out the program 
under this section directly or through contracts to eligible enti-ties. 
(2) E
LIGIBLE ENTITIES .—To be eligible for a contract under

paragraph (1), an entity shall— 
(A) be a State or nonprofit private entity; (B) submit to the Secretary an application at such 
time, in such manner, and containing such information as the Secretary may require; and 
(C) agree to utilize contract funding to establish and 
administer a qualified high risk pool for eligible individuals. (3) M
AINTENANCE OF EFFORT .—To be eligible to enter into

a contract with the Secretary under this subsection, a State shall agree not to reduce the annual amount the State expended for the operation of one or more State high risk pools during the year preceding the year in which such contract is entered into. (c) Q
UALIFIED HIGHRISKPOOL.— 
(1) I N GENERAL .—Amounts made available under this sec-
tion shall be used to establish a qualified high risk pool that meets the requirements of paragraph (2). 
(2) R

(2) R
EQUIREMENTS .—A qualified high risk pool meets the 
requirements of this paragraph if such pool— 
(A) provides to all eligible individuals health insurance 
coverage that does not impose any preexisting condition exclusion with respect to such coverage; 
(B) provides health insurance coverage— 
(i) in which the issuer’s share of the total allowed 
costs of benefits provided under such coverage is not less than 65 percent of such costs; and

(ii) that has an out of pocket limit not greater 
than the applicable amount described in section 223(c)(2) of the Internal Revenue Code of 1986 for the year involved, except that the Secretary may modify such limit if necessary to ensure the pool meets the actuarial value limit under clause (i); (C) ensures that with respect to the premium rate 
charged for health insurance coverage offered to eligible individuals through the high risk pool, such rate shall—

(i) except as provided in clause (ii), vary only as 
provided for under section 2701 of the Public Health Service Act (as amended by this Act and notwith-standing the date on which such amendments take 
effect); Deadline. Time period. 42 USC 18001. 
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124 STAT. 142 PUBLIC LAW 111–148—MAR. 23, 2010 
(ii) vary on the basis of age by a factor of not 
greater than 4 to 1; and 
(iii) be established at a standard rate for a 
standard population; and (D) meets any other requirements determined appro-
priate by the Secretary. 
(d) E
LIGIBLE INDIVIDUAL .—An individual shall be deemed to 
be an eligible individual for purposes of this section if such indi-vidual— 
(1) is a citizen or national of the United States or is

lawfully present in the United States (as determined in accord-ance with section 1411); 
(2) has not been covered under creditable coverage (as 
defined in section 2701(c)(1) of the Public Health Service Act as in effect on the date of enactment of this Act) during the 6-month period prior to the date on which such individual is applying for coverage through the high risk pool; and 
(3) has a pre-existing condition, as determined in a manner

consistent with guidance issued by the Secretary. (e) P
ROTECTION AGAINST DUMPING RISK BY INSURERS .— 
(1) I N GENERAL .—The Secretary shall establish criteria for 
determining whether health insurance issuers and employment- based health plans have discouraged an individual from remaining enrolled in prior coverage based on that individual’s health status. 
(2) S
ANCTIONS .—An issuer or employment-based health

ANCTIONS .—An issuer or employment-based health 
plan shall be responsible for reimbursing the program under this section for the medical expenses incurred by the program for an individual who, based on criteria established by the Secretary, the Secretary finds was encouraged by the issuer to disenroll from health benefits coverage prior to enrolling in coverage through the program. The criteria shall include at least the following circumstances:

(A) In the case of prior coverage obtained through 
an employer, the provision by the employer, group health plan, or the issuer of money or other financial consideration for disenrolling from the coverage. 
(B) In the case of prior coverage obtained directly from 
an issuer or under an employment-based health plan— 
(i) the provision by the issuer or plan of money 
or other financial consideration for disenrolling from the coverage; or 
(ii) in the case of an individual whose premium

(ii) in the case of an individual whose premium 
for the prior coverage exceeded the premium required by the program (adjusted based on the age factors applied to the prior coverage)— 
(I) the prior coverage is a policy that is no 
longer being actively marketed (as defined by the Secretary) by the issuer; or 
(II) the prior coverage is a policy for which 
duration of coverage form issue or health status are factors that can be considered in determining premiums at renewal. 
(3) C

(3) C
ONSTRUCTION .—Nothing in this subsection shall be 
construed as constituting exclusive remedies for violations of criteria established under paragraph (1) or as preventing States Criteria. 
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124 STAT. 143 PUBLIC LAW 111–148—MAR. 23, 2010 
from applying or enforcing such paragraph or other provisions 
under law with respect to health insurance issuers. (f) O
VERSIGHT .—The Secretary shall establish— 
(1) an appeals process to enable individuals to appeal a 
determination under this section; and 
(2) procedures to protect against waste, fraud, and abuse. 
(g) F UNDING ; TERMINATION OF AUTHORITY .— 
(1) I N GENERAL .—There is appropriated to the Secretary,

out of any moneys in the Treasury not otherwise appropriated, $5,000,000,000 to pay claims against (and the administrative costs of) the high risk pool under this section that are in excess of the amount of premiums collected from eligible individuals enrolled in the high risk pool. Such funds shall be available without fiscal year limitation. 
(2) I
NSUFFICIENT FUNDS .—If the Secretary estimates for

any fiscal year that the aggregate amounts available for the payment of the expenses of the high risk pool will be less than the actual amount of such expenses, the Secretary shall make such adjustments as are necessary to eliminate such deficit. 
(3) T
ERMINATION OF AUTHORITY .— 
(A) I N GENERAL .—Except as provided in subparagraph 
(B), coverage of eligible individuals under a high risk pool in a State shall terminate on January 1, 2014. 
(B) T
RANSITION TO EXCHANGE .—The Secretary shall

develop procedures to provide for the transition of eligible individuals enrolled in health insurance coverage offered through a high risk pool established under this section into qualified health plans offered through an Exchange. Such procedures shall ensure that there is no lapse in coverage with respect to the individual and may extend coverage after the termination of the risk pool involved, if the Secretary determines necessary to avoid such a lapse. (4) L

IMITATIONS .—The Secretary has the authority to stop 
taking applications for participation in the program under this section to comply with the funding limitation provided for in paragraph (1). 
(5) R
ELATION TO STATE LAWS .—The standards established 
under this section shall supersede any State law or regulation (other than State licensing laws or State laws relating to plan solvency) with respect to qualified high risk pools which are established in accordance with this section.

SEC. 1102. REINSURANCE FOR EARLY RETIREES. 
(a) A DMINISTRATION .— 
(1) I N GENERAL .—Not later than 90 days after the date

of enactment of this Act, the Secretary shall establish a tem-porary reinsurance program to provide reimbursement to participating employment-based plans for a portion of the cost of providing health insurance coverage to early retirees (and to the eligible spouses, surviving spouses, and dependents of such retirees) during the period beginning on the date on which such program is established and ending on January 1, 2014. 
(2) R
EFERENCE .—In this section:

(2) R
EFERENCE .—In this section: 
(A) H EALTH BENEFITS .—The term ‘‘health benefits’’ 
means medical, surgical, hospital, prescription drug, and such other benefits as shall be determined by the Secretary, Deadline. Time period. 42 USC 18002. Procedures. 
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124 STAT. 144 PUBLIC LAW 111–148—MAR. 23, 2010 
whether self-funded, or delivered through the purchase 
of insurance or otherwise. 
(B) E MPLOYMENT -BASED PLAN .—The term ‘‘employ-
ment-based plan’’ means a group health benefits plan that— 
(i) is— 
(I) maintained by one or more current or

(I) maintained by one or more current or 
former employers (including without limitation any State or local government or political subdivision thereof), employee organization, a voluntary employees’ beneficiary association, or a committee or board of individuals appointed to administer such plan; or 
(II) a multiemployer plan (as defined in section 
3(37) of the Employee Retirement Income Security Act of 1974); and (ii) provides health benefits to early retirees. 
(C) E

(C) E
ARLY RETIREES .—The term ‘‘early retirees’’ means 
individuals who are age 55 and older but are not eligible for coverage under title XVIII of the Social Security Act, and who are not active employees of an employer maintaining, or currently contributing to, the employment- based plan or of any employer that has made substantial contributions to fund such plan. 
(b) P
ARTICIPATION .— 
(1) E MPLOYMENT -BASED PLAN ELIGIBILITY .—A participating

employment-based plan is an employment-based plan that— 
(A) meets the requirements of paragraph (2) with 
respect to health benefits provided under the plan; and 
(B) submits to the Secretary an application for partici-
pation in the program, at such time, in such manner, and containing such information as the Secretary shall require. (2) E
MPLOYMENT -BASED HEALTH BENEFITS .—An employ-
ment-based plan meets the requirements of this paragraph if the plan—

(A) implements programs and procedures to generate 
cost-savings with respect to participants with chronic and high-cost conditions; 
(B) provides documentation of the actual cost of medical 
claims involved; and 
(C) is certified by the Secretary. 
(c) P
AYMENTS .— 
(1) S UBMISSION OF CLAIMS .— 
(A) I N GENERAL .—A participating employment-based 
plan shall submit claims for reimbursement to the Sec-

retary which shall contain documentation of the actual costs of the items and services for which each claim is being submitted. 
(B) B
ASIS FOR CLAIMS .—Claims submitted under

(B) B
ASIS FOR CLAIMS .—Claims submitted under 
subparagraph (A) shall be based on the actual amount expended by the participating employment-based plan involved within the plan year for the health benefits pro-vided to an early retiree or the spouse, surviving spouse, or dependent of such retiree. In determining the amount of a claim for purposes of this subsection, the participating Certification.

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124 STAT. 145 PUBLIC LAW 111–148—MAR. 23, 2010 
employment-based plan shall take into account any nego-

tiated price concessions (such as discounts, direct or indirect subsidies, rebates, and direct or indirect remunera-tions) obtained by such plan with respect to such health benefit. For purposes of determining the amount of any such claim, the costs paid by the early retiree or the retiree’s spouse, surviving spouse, or dependent in the form of deductibles, co-payments, or co-insurance shall be included in the amounts paid by the participating employ-ment-based plan. (2) P

ROGRAM PAYMENTS .—If the Secretary determines that 
a participating employment-based plan has submitted a valid claim under paragraph (1), the Secretary shall reimburse such plan for 80 percent of that portion of the costs attributable to such claim that exceed $15,000, subject to the limits con-tained in paragraph (3). 
(3) L
IMIT.—To be eligible for reimbursement under the

IMIT.—To be eligible for reimbursement under the 
program, a claim submitted by a participating employment- based plan shall not be less than $15,000 nor greater than $90,000. Such amounts shall be adjusted each fiscal year based on the percentage increase in the Medical Care Component of the Consumer Price Index for all urban consumers (rounded to the nearest multiple of $1,000) for the year involved. 
(4) U
SE OF PAYMENTS .—Amounts paid to a participating

employment-based plan under this subsection shall be used to lower costs for the plan. Such payments may be used to reduce premium costs for an entity described in subsection (a)(2)(B)(i) or to reduce premium contributions, co-payments, deductibles, co-insurance, or other out-of-pocket costs for plan participants. Such payments shall not be used as general reve-nues for an entity described in subsection (a)(2)(B)(i). The Sec-retary shall develop a mechanism to monitor the appropriate use of

a mechanism to monitor the appropriate use of such payments by such entities.

(5) P
AYMENTS NOT TREATED AS INCOME .—Payments 
received under this subsection shall not be included in deter-mining the gross income of an entity described in subsection (a)(2)(B)(i) that is maintaining or currently contributing to a participating employment-based plan. 
(6) A
PPEALS .—The Secretary shall establish— 
(A) an appeals process to permit participating employ-
ment-based plans to appeal a determination of the Sec-retary with respect to claims submitted under this section; and

(B) procedures to protect against fraud, waste, and 
abuse under the program. 
(d) A
UDITS .—The Secretary shall conduct annual audits of 
claims data submitted by participating employment-based plans under this section to ensure that such plans are in compliance with the requirements of this section. 
(e) F
UNDING .—There is appropriated to the Secretary, out of

any moneys in the Treasury not otherwise appropriated, $5,000,000,000 to carry out the program under this section. Such funds shall be available without fiscal year limitation. 
(f) L
IMITATION .—The Secretary has the authority to stop taking 
applications for participation in the program based on the avail-ability of funding under subsection (e).

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124 STAT. 146 PUBLIC LAW 111–148—MAR. 23, 2010 
SEC. 1103. IMMEDIATE INFORMATION THAT ALLOWS CONSUMERS TO 
IDENTIFY AFFORDABLE COVERAGE OPTIONS. 
(a) I NTERNET PORTAL TO AFFORDABLE COVERAGE OPTIONS .— 
(1) I MMEDIATE ESTABLISHMENT .—Not later than July 1, 
2010, the Secretary, in consultation with the States, shall estab-lish a mechanism, including an Internet website, through which a resident of any State may identify affordable health insurance coverage options in that State. 
(2) C

(2) C
ONNECTING TO AFFORDABLE COVERAGE .—An Internet 
website established under paragraph (1) shall, to the extent practicable, provide ways for residents of any State to receive information on at least the following coverage options: 
(A) Health insurance coverage offered by health insur-
ance issuers, other than coverage that provides reimburse-ment only for the treatment or mitigation of— 
(i) a single disease or condition; or 
(ii) an unreasonably limited set of diseases or

(ii) an unreasonably limited set of diseases or 
conditions (as determined by the Secretary); (B) Medicaid coverage under title XIX of the Social 
Security Act. 
(C) Coverage under title XXI of the Social Security 
Act. 
(D) A State health benefits high risk pool, to the extent 
that such high risk pool is offered in such State; and 
(E) Coverage under a high risk pool under section 
1101. 
(b) E
NHANCING COMPARATIVE PURCHASING OPTIONS .—

(b) E
NHANCING COMPARATIVE PURCHASING OPTIONS .— 
(1) I N GENERAL .—Not later than 60 days after the date

of enactment of this Act, the Secretary shall develop a standard-ized format to be used for the presentation of information relating to the coverage options described in subsection (a)(2). Such format shall, at a minimum, require the inclusion of information on the percentage of total premium revenue expended on nonclinical costs (as reported under section 2718(a) of the Public Health Service Act), eligibility, availability, pre-mium rates, and cost sharing with respect to such coverage options

sharing with respect to such coverage options and be consistent with the standards adopted for the uniform explanation of coverage as provided for in section 2715 of the Public Health Service Act.

(2) U
SE OF FORMAT .—The Secretary shall utilize the format 
developed under paragraph (1) in compiling information con-cerning coverage options on the Internet website established under subsection (a). (c) A
UTHORITY TOCONTRACT .—The Secretary may carry out 
this section through contracts entered into with qualified entities. 
SEC. 1104. ADMINISTRATIVE SIMPLIFICATION. 
(a) P URPOSE OF ADMINISTRATIVE SIMPLIFICATION .—Section 261

of the Health Insurance Portability and Accountability Act of 1996 (42 U.S.C. 1320d note) is amended— 
(1) by inserting ‘‘uniform’’ before ‘‘standards’’; and (2) by inserting ‘‘and to reduce the clerical burden on 
patients, health care providers, and health plans’’ before the period at the end. (b) O
PERATING RULES FOR HEALTH INFORMATION TRANS -
ACTIONS .— Deadline. 
Standard format. Deadlines. 
42 USC 18003.

42 USC 18003. 
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124 STAT. 147 PUBLIC LAW 111–148—MAR. 23, 2010 
(1) D EFINITION OF OPERATING RULES .—Section 1171 of the 
Social Security Act (42 U.S.C. 1320d) is amended by adding at the end the following: 
‘‘(9) O
PERATING RULES .—The term ‘operating rules’ means 
the necessary business rules and guidelines for the electronic exchange of information that are not defined by a standard or its implementation specifications as adopted for purposes of this part.’’. 
(2) T

(2) T
RANSACTION STANDARDS ; OPERATING RULES AND  
COMPLIANCE .—Section 1173 of the Social Security Act (42 U.S.C. 
1320d–2) is amended— 
(A) in subsection (a)(2), by adding at the end the fol-
lowing new subparagraph: 
‘‘(J) Electronic funds transfers.’’; (B) in subsection (a), by adding at the end the following 
new paragraph: ‘‘(4) R
EQUIREMENTS FOR FINANCIAL AND ADMINISTRATIVE  
TRANSACTIONS .— 
‘‘(A) I N GENERAL .—The standards and associated oper-

ating rules adopted by the Secretary shall— 
‘‘(i) to the extent feasible and appropriate, enable 
determination of an individual’s eligibility and finan-cial responsibility for specific services prior to or at the point of care; 
‘‘(ii) be comprehensive, requiring minimal aug-
mentation by paper or other communications; 
‘‘(iii) provide for timely acknowledgment, response,

and status reporting that supports a transparent claims and denial management process (including adju-dication and appeals); and 
‘‘(iv) describe all data elements (including reason 
and remark codes) in unambiguous terms, require that such data elements be required or conditioned upon set values in other fields, and prohibit additional condi-tions (except where necessary to implement State or Federal law, or to protect against fraud and abuse). ‘‘(B) R

EDUCTION OF CLERICAL BURDEN .—In adopting 
standards and operating rules for the transactions referred to under paragraph (1), the Secretary shall seek to reduce the number and complexity of forms (including paper and electronic forms) and data entry required by patients and providers.’’; and 
(C) by adding at the end the following new subsections: 
‘‘(g) O
PERATING RULES .— 
‘‘(1) I N GENERAL .—The Secretary shall adopt a single set

of operating rules for each transaction referred to under sub-section (a)(1) with the goal of creating as much uniformity in the implementation of the electronic standards as possible. Such operating rules shall be consensus-based and reflect the necessary business rules affecting health plans and health care providers and the manner in which they operate pursuant to standards issued under Health Insurance Portability and Accountability Act of 1996. 
‘‘(2) O

‘‘(2) O
PERATING RULES DEVELOPMENT .—In adopting oper-
ating rules under this subsection, the Secretary shall consider recommendations for operating rules developed by a qualified nonprofit entity that meets the following requirements: 
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124 STAT. 148 PUBLIC LAW 111–148—MAR. 23, 2010 
‘‘(A) The entity focuses its mission on administrative 
simplification. 
‘‘(B) The entity demonstrates a multi-stakeholder and 
consensus-based process for development of operating rules, including representation by or participation from health plans, health care providers, vendors, relevant Federal agencies, and other standard development organizations. 
‘‘(C) The entity has a public set of guiding principles

that ensure the operating rules and process are open and transparent, and supports nondiscrimination and conflict of interest policies that demonstrate a commitment to open, fair, and nondiscriminatory practices. 
‘‘(D) The entity builds on the transaction standards 
issued under Health Insurance Portability and Account-ability Act of 1996. 
‘‘(E) The entity allows for public review and updates 
of the operating rules. ‘‘(3) R
EVIEW AND RECOMMENDATIONS .—The National Com-

mittee on Vital and Health Statistics shall— 
‘‘(A) advise the Secretary as to whether a nonprofit 
entity meets the requirements under paragraph (2); 
‘‘(B) review the operating rules developed and rec-
ommended by such nonprofit entity; 
‘‘(C) determine whether such operating rules represent 
a consensus view of the health care stakeholders and are consistent with and do not conflict with other existing standards;

‘‘(D) evaluate whether such operating rules are con-
sistent with electronic standards adopted for health information technology; and 
‘‘(E) submit to the Secretary a recommendation as to 
whether the Secretary should adopt such operating rules. ‘‘(4) I
MPLEMENTATION .— 
‘‘(A) I N GENERAL .—The Secretary shall adopt operating

rules under this subsection, by regulation in accordance with subparagraph (C), following consideration of the oper-ating rules developed by the non-profit entity described in paragraph (2) and the recommendation submitted by the National Committee on Vital and Health Statistics under paragraph (3)(E) and having ensured consultation with providers. 
‘‘(B) A
DOPTION REQUIREMENTS ; EFFECTIVE DATES .— 
‘‘(i) E LIGIBILITY FOR A HEALTH PLAN AND HEALTH

‘‘(i) E LIGIBILITY FOR A HEALTH PLAN AND HEALTH  
CLAIM STATUS .—The set of operating rules for eligibility 
for a health plan and health claim status transactions shall be adopted not later than July 1, 2011, in a 
manner ensuring that such operating rules are effective not later than January 1, 2013, and may allow for the use of a machine readable identification card. 
‘‘(ii) E
LECTRONIC FUNDS TRANSFERS AND HEALTH  
CARE PAYMENT AND REMITTANCE ADVICE .—The set of

CARE PAYMENT AND REMITTANCE ADVICE .—The set of 
operating rules for electronic funds transfers and health care payment and remittance advice trans-actions shall— 
‘‘(I) allow for automated reconciliation of the 
electronic payment with the remittance advice; and Deadlines. Regulations. 
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124 STAT. 149 PUBLIC LAW 111–148—MAR. 23, 2010 
‘‘(II) be adopted not later than July 1, 2012, 
in a manner ensuring that such operating rules are effective not later than January 1, 2014. ‘‘(iii) H
EALTH CLAIMS OR EQUIVALENT ENCOUNTER  
INFORMATION , ENROLLMENT AND DISENROLLMENT IN A  
HEALTH PLAN , HEALTH PLAN PREMIUM PAYMENTS , 
REFERRAL CERTIFICATION AND AUTHORIZATION .—The set

of operating rules for health claims or equivalent encounter information, enrollment and disenrollment in a health plan, health plan premium payments, and referral certification and authorization transactions shall be adopted not later than July 1, 2014, in a manner ensuring that such operating rules are effective not later than January 1, 2016. ‘‘(C) E
XPEDITED RULEMAKING .—The Secretary shall

XPEDITED RULEMAKING .—The Secretary shall 
promulgate an interim final rule applying any standard or operating rule recommended by the National Committee on Vital and Health Statistics pursuant to paragraph (3). The Secretary shall accept and consider public comments on any interim final rule published under this subpara-graph for 60 days after the date of such publication. 
‘‘(h) C
OMPLIANCE .— 
‘‘(1) H EALTH PLAN CERTIFICATION .— 
‘‘(A) E LIGIBILITY FOR A HEALTH PLAN , HEALTH CLAIM

STATUS , ELECTRONIC FUNDS TRANSFERS , HEALTH CARE PAY -
MENT AND REMITTANCE ADVICE .—Not later than December

31, 2013, a health plan shall file a statement with the Secretary, in such form as the Secretary may require, certifying that the data and information systems for such plan are in compliance with any applicable standards (as described under paragraph (7) of section 1171) and associ-ated operating rules (as described under paragraph (9) of such section) for electronic funds transfers, eligibility for a health plan, health claim status, and health care payment and remittance advice, respectively.

‘‘(B) H
HEALTH PLAN , HEALTH PLAN PREMIUM PAYMENTS , HEALTH  
CLAIMS ATTACHMENTS , REFERRAL CERTIFICATION AND  
AUTHORIZATION .—Not later than December 31, 2015, a

health plan shall file a statement with the Secretary, in such form as the Secretary may require, certifying that the data and information systems for such plan are in compliance with any applicable standards and associated operating rules for health claims or equivalent encounter information, enrollment and disenrollment in a health plan, health plan premium payments, health claims attachments, and referral certification and authorization, respectively. A health plan shall provide the same

A health plan shall provide the same level of documentation to certify compliance with such transactions as is required to certify compliance with the transactions specified in subparagraph (A). ‘‘(2) D

OCUMENTATION OF COMPLIANCE .—A health plan shall 
provide the Secretary, in such form as the Secretary may require, with adequate documentation of compliance with the standards and operating rules described under paragraph (1). A health plan shall not be considered to have provided adequate Certification. Deadlines. Public comments.

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124 STAT. 150 PUBLIC LAW 111–148—MAR. 23, 2010 
documentation and shall not be certified as being in compliance 
with such standards, unless the health plan— 
‘‘(A) demonstrates to the Secretary that the plan con-
ducts the electronic transactions specified in paragraph (1) in a manner that fully complies with the regulations of the Secretary; and 
‘‘(B) provides documentation showing that the plan

has completed end-to-end testing for such transactions with their partners, such as hospitals and physicians. ‘‘(3) S
ERVICE CONTRACTS .—A health plan shall be required 
to ensure that any entities that provide services pursuant to a contract with such health plan shall comply with any applicable certification and compliance requirements (and pro-vide the Secretary with adequate documentation of such compli-ance) under this subsection. 
‘‘(4) C
ERTIFICATION BY OUTSIDE ENTITY .—The Secretary

ERTIFICATION BY OUTSIDE ENTITY .—The Secretary 
may designate independent, outside entities to certify that a health plan has complied with the requirements under this subsection, provided that the certification standards employed by such entities are in accordance with any standards or oper-ating rules issued by the Secretary. 
‘‘(5) C
OMPLIANCE WITH REVISED STANDARDS AND OPERATING  
RULES .— 
‘‘(A) I N GENERAL .—A health plan (including entities

described under paragraph (3)) shall file a statement with the Secretary, in such form as the Secretary may require, certifying that the data and information systems for such plan are in compliance with any applicable revised stand-ards and associated operating rules under this subsection for any interim final rule promulgated by the Secretary under subsection (i) that— 
‘‘(i) amends any standard or operating rule 
described under paragraph (1) of this subsection; or

‘‘(ii) establishes a standard (as described under 
subsection (a)(1)(B)) or associated operating rules (as described under subsection (i)(5)) for any other finan-cial and administrative transactions. ‘‘(B) D
ATE OF COMPLIANCE .—A health plan shall comply 
with such requirements not later than the effective date of the applicable standard or operating rule. ‘‘(6) A
UDITS OF HEALTH PLANS .—The Secretary shall conduct

periodic audits to ensure that health plans (including entities described under paragraph (3)) are in compliance with any standards and operating rules that are described under para-graph (1) or subsection (i)(5). ‘‘(i) R
EVIEW AND AMENDMENT OF STANDARDS AND OPERATING  
RULES .— 
‘‘(1) E STABLISHMENT .—Not later than January 1, 2014, the 
Secretary shall establish a review committee (as described under paragraph (4)). 
‘‘(2) E
VALUATIONS AND REPORTS .—

‘‘(2) E
VALUATIONS AND REPORTS .— 
‘‘(A) H EARINGS .—Not later than April 1, 2014, and 
not less than biennially thereafter, the Secretary, acting through the review committee, shall conduct hearings to evaluate and review the adopted standards and operating rules established under this section. Deadlines. Certification. 
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124 STAT. 151 PUBLIC LAW 111–148—MAR. 23, 2010 
‘‘(B) R EPORT .—Not later than July 1, 2014, and not 
less than biennially thereafter, the review committee shall provide recommendations for updating and improving such standards and operating rules. The review committee shall recommend a single set of operating rules per transaction standard and maintain the goal of creating as much uni-formity as possible in the implementation of the electronic standards. ‘‘(3) I
NTERIM FINAL RULEMAKING .—

NTERIM FINAL RULEMAKING .— 
‘‘(A) I N GENERAL .—Any recommendations to amend 
adopted standards and operating rules that have been approved by the review committee and reported to the Secretary under paragraph (2)(B) shall be adopted by the Secretary through promulgation of an interim final rule not later than 90 days after receipt of the committee’s report. 
‘‘(B) P
UBLIC COMMENT .— 
‘‘(i) P UBLIC COMMENT PERIOD .—The Secretary shall

accept and consider public comments on any interim final rule published under this paragraph for 60 days after the date of such publication. 
‘‘(ii) E
FFECTIVE DATE .—The effective date of any 
amendment to existing standards or operating rules that is adopted through an interim final rule published under this paragraph shall be 25 months following the close of such public comment period. 
‘‘(4) R
EVIEW COMMITTEE .— 
‘‘(A) D EFINITION .—For the purposes of this subsection,

the term ‘review committee’ means a committee chartered by or within the Department of Health and Human services that has been designated by the Secretary to carry out this subsection, including— 
‘‘(i) the National Committee on Vital and Health 
Statistics; or 
‘‘(ii) any appropriate committee as determined by 
the Secretary. ‘‘(B) C
OORDINATION OF HIT STANDARDS .—In developing

OORDINATION OF HIT STANDARDS .—In developing 
recommendations under this subsection, the review com-mittee shall ensure coordination, as appropriate, with the standards that support the certified electronic health record technology approved by the Office of the National Coordi-nator for Health Information Technology. ‘‘(5) O
PERATING RULES FOR OTHER STANDARDS ADOPTED BY  
THE SECRETARY .—The Secretary shall adopt a single set of

operating rules (pursuant to the process described under sub-section (g)) for any transaction for which a standard had been adopted pursuant to subsection (a)(1)(B). ‘‘(j) P
ENALTIES .— 
‘‘(1) P ENALTY FEE .— 
‘‘(A) I N GENERAL .—Not later than April 1, 2014, and

annually thereafter, the Secretary shall assess a penalty fee (as determined under subparagraph (B)) against a health plan that has failed to meet the requirements under subsection (h) with respect to certification and documenta-tion of compliance with— 
‘‘(i) the standards and associated operating rules 
described under paragraph (1) of such subsection; and Deadline.

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124 STAT. 152 PUBLIC LAW 111–148—MAR. 23, 2010 
‘‘(ii) a standard (as described under subsection 
(a)(1)(B)) and associated operating rules (as described under subsection (i)(5)) for any other financial and administrative transactions. ‘‘(B) F
EE AMOUNT .—Subject to subparagraphs (C), (D),

EE AMOUNT .—Subject to subparagraphs (C), (D), 
and (E), the Secretary shall assess a penalty fee against a health plan in the amount of $1 per covered life until certification is complete. The penalty shall be assessed per person covered by the plan for which its data systems for major medical policies are not in compliance and shall be imposed against the health plan for each day that the plan is not in compliance with the requirements under subsection (h). 
‘‘(C) A

‘‘(C) A
DDITIONAL PENALTY FOR MISREPRESENTATION .— 
A health plan that knowingly provides inaccurate or incom-plete information in a statement of certification or docu-mentation of compliance under subsection (h) shall be sub-ject to a penalty fee that is double the amount that would otherwise be imposed under this subsection. 
‘‘(D) A
NNUAL FEE INCREASE .—The amount of the pen-

alty fee imposed under this subsection shall be increased on an annual basis by the annual percentage increase in total national health care expenditures, as determined by the Secretary. 
‘‘(E) P
ENALTY LIMIT .—A penalty fee assessed against 
a health plan under this subsection shall not exceed, on an annual basis— 
‘‘(i) an amount equal to $20 per covered life under 
such plan; or 
‘‘(ii) an amount equal to $40 per covered life under

the plan if such plan has knowingly provided inac-curate or incomplete information (as described under subparagraph (C)). ‘‘(F) D
ETERMINATION OF COVERED INDIVIDUALS .—The 
Secretary shall determine the number of covered lives under a health plan based upon the most recent statements and filings that have been submitted by such plan to the Securities and Exchange Commission. ‘‘(2) N
OTICE AND DISPUTE PROCEDURE .—The Secretary shall

establish a procedure for assessment of penalty fees under this subsection that provides a health plan with reasonable notice and a dispute resolution procedure prior to provision of a notice of assessment by the Secretary of the Treasury (as described under paragraph (4)(B)). 
‘‘(3) P
ENALTY FEE REPORT .—Not later than May 1, 2014,

ENALTY FEE REPORT .—Not later than May 1, 2014, 
and annually thereafter, the Secretary shall provide the Sec-retary of the Treasury with a report identifying those health plans that have been assessed a penalty fee under this sub-section. 
‘‘(4) C
OLLECTION OF PENALTY FEE .— 
‘‘(A) I N GENERAL .—The Secretary of the Treasury,

acting through the Financial Management Service, shall administer the collection of penalty fees from health plans that have been identified by the Secretary in the penalty fee report provided under paragraph (3). 
‘‘(B) N
OTICE .—Not later than August 1, 2014, and 
annually thereafter, the Secretary of the Treasury shall Deadline.

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124 STAT. 153 PUBLIC LAW 111–148—MAR. 23, 2010 
provide notice to each health plan that has been assessed 
a penalty fee by the Secretary under this subsection. Such notice shall include the amount of the penalty fee assessed by the Secretary and the due date for payment of such fee to the Secretary of the Treasury (as described in subparagraph (C)). 
‘‘(C) P
AYMENT DUE DATE .—Payment by a health plan

AYMENT DUE DATE .—Payment by a health plan 
for a penalty fee assessed under this subsection shall be made to the Secretary of the Treasury not later than November 1, 2014, and annually thereafter. 
‘‘(D) U
NPAID PENALTY FEES .—Any amount of a penalty 
fee assessed against a health plan under this subsection for which payment has not been made by the due date provided under subparagraph (C) shall be— 
‘‘(i) increased by the interest accrued on such

‘‘(i) increased by the interest accrued on such 
amount, as determined pursuant to the underpayment rate established under section 6621 of the Internal Revenue Code of 1986; and 
‘‘(ii) treated as a past-due, legally enforceable debt 
owed to a Federal agency for purposes of section 6402(d) of the Internal Revenue Code of 1986. ‘‘(E) A
DMINISTRATIVE FEES .—Any fee charged or allo-

cated for collection activities conducted by the Financial Management Service will be passed on to a health plan on a pro-rata basis and added to any penalty fee collected from the plan.’’. 
(c) P
ROMULGATION OF RULES .— 
(1) U NIQUE HEALTH PLAN IDENTIFIER .—The Secretary shall

promulgate a final rule to establish a unique health plan identi-fier (as described in section 1173(b) of the Social Security Act (42 U.S.C. 1320d–2(b))) based on the input of the National Committee on Vital and Health Statistics. The Secretary may do so on an interim final basis and such rule shall be effective not later than October 1, 2012. 
(2) E
LECTRONIC FUNDS TRANSFER .—The Secretary shall

LECTRONIC FUNDS TRANSFER .—The Secretary shall 
promulgate a final rule to establish a standard for electronic funds transfers (as described in section 1173(a)(2)(J) of the Social Security Act, as added by subsection (b)(2)(A)). The Sec-retary may do so on an interim final basis and shall adopt such standard not later than January 1, 2012, in a manner ensuring that such standard is effective not later than January 1, 2014. 
(3) H
EALTH CLAIMS ATTACHMENTS .—The Secretary shall

EALTH CLAIMS ATTACHMENTS .—The Secretary shall 
promulgate a final rule to establish a transaction standard and a single set of associated operating rules for health claims attachments (as described in section 1173(a)(2)(B) of the Social

Security Act (42 U.S.C. 1320d–2(a)(2)(B))) that is consistent with the X12 Version 5010 transaction standards. The Secretary may do so on an interim final basis and shall adopt a trans-action standard and a single set of associated operating rules not later than January 1, 2014, in a manner ensuring that such standard is effective not later than January 1, 2016. (d) E
XPANSION OF ELECTRONIC TRANSACTIONS IN MEDICARE .— 
Section 1862(a) of the Social Security Act (42 U.S.C. 1395y(a)) is amended—

(1) in paragraph (23), by striking the ‘‘or’’ at the end; Deadline. 
Effective date. Deadline. 
Effective date. Effective date. 42 USC 
1320d–2 note. 
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124 STAT. 154 PUBLIC LAW 111–148—MAR. 23, 2010 
(2) in paragraph (24), by striking the period and inserting 
‘‘; or’’; and 
(3) by inserting after paragraph (24) the following new 
paragraph: 
‘‘(25) not later than January 1, 2014, for which the payment 
is other than by electronic funds transfer (EFT) or an electronic remittance in a form as specified in ASC X12 835 Health Care Payment and Remittance Advice or subsequent standard.’’. 
SEC. 1105. EFFECTIVE DATE.

SEC. 1105. EFFECTIVE DATE. 
This subtitle shall take effect on the date of enactment of 
this Act. 
Subtitle C—Quality Health Insurance 
Coverage for All Americans 
PART I—HEALTH INSURANCE MARKET 
REFORMS 
SEC. 1201. AMENDMENT TO THE PUBLIC HEALTH SERVICE ACT. 
Part A of title XXVII of the Public Health Service Act (42 
U.S.C. 300gg et seq.), as amended by section 1001, is further amended— 
(1) by striking the heading for subpart 1 and inserting 
the following: 
‘‘Subpart I—General Reform’’;

‘‘Subpart I—General Reform’’; 
(2)(A) in section 2701 (42 U.S.C. 300gg), by striking the 
section heading and subsection (a) and inserting the following: 
‘‘SEC. 2704. PROHIBITION OF PREEXISTING CONDITION EXCLUSIONS 
OR OTHER DISCRIMINATION BASED ON HEALTH STATUS. 

issuer offering group or individual health insurance coverage may not impose any preexisting condition exclusion with respect to such plan or coverage.’’; and 
(B) by transferring such section (as amended by subpara-
graph (A)) so as to appear after the section 2703 added by paragraph (4); 
(3)(A) in section 2702 (42 U.S.C. 300gg–1)— 
(i) by striking the section heading and all that follows 
through subsection (a); 
(ii) in subsection (b)— 
(I) by striking ‘‘health insurance issuer offering

health insurance coverage in connection with a group health plan’’ each place that such appears and inserting ‘‘health insurance issuer offering group or individual health insurance coverage’’; and 
(II) in paragraph (2)(A)— 
(aa) by inserting ‘‘or individual’’ after 
‘‘employer’’; and 
(bb) by inserting ‘‘or individual health cov-
erage, as the case may be’’ before the semicolon; and 
(iii) in subsection (e)— 42 USC 300gg–1, 300gg–4. 42 USC 
300gg–3. 42 USC 
1320d note.

1320d note. 
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124 STAT. 155 PUBLIC LAW 111–148—MAR. 23, 2010 
(I) by striking ‘‘(a)(1)(F)’’ and inserting ‘‘(a)(6)’’; 
(II) by striking ‘‘2701’’ and inserting ‘‘2704’’; and (III) by striking ‘‘2721(a)’’ and inserting ‘‘2735(a)’’; 
and (B) by transferring such section (as amended by 
subparagraph (A)) to appear after section 2705(a) as added by paragraph (4); and (4) by inserting after the subpart heading (as added by 
paragraph (1)) the following: 
‘‘SEC. 2701. FAIR HEALTH INSURANCE PREMIUMS.

‘‘SEC. 2701. FAIR HEALTH INSURANCE PREMIUMS. 
‘‘(a) P ROHIBITING DISCRIMINATORY PREMIUM RATES .— 
‘‘(1) I N GENERAL .—With respect to the premium rate 
charged by a health insurance issuer for health insurance cov-erage offered in the individual or small group market— 
‘‘(A) such rate shall vary with respect to the particular 
plan or coverage involved only by— 
‘‘(i) whether such plan or coverage covers an indi-
vidual or family; 
‘‘(ii) rating area, as established in accordance with

paragraph (2); 
‘‘(iii) age, except that such rate shall not vary 
by more than 3 to 1 for adults (consistent with section 2707(c)); and 
‘‘(iv) tobacco use, except that such rate shall not 
vary by more than 1.5 to 1; and ‘‘(B) such rate shall not vary with respect to the par-
ticular plan or coverage involved by any other factor not described in subparagraph (A). ‘‘(2) R
ATING AREA .— 
‘‘(A) I N GENERAL .—Each State shall establish 1 or more

rating areas within that State for purposes of applying the requirements of this title. 
‘‘(B) S
ECRETARIAL REVIEW .—The Secretary shall review 
the rating areas established by each State under subpara-
graph (A) to ensure the adequacy of such areas for purposes of carrying out the requirements of this title. If the Sec-retary 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) P

ERMISSIBLE AGE BANDS .—The Secretary, in consulta-
tion with the National Association of Insurance Commissioners, shall define the permissible age bands for rating purposes under paragraph (1)(A)(iii). 
‘‘(4) A
PPLICATION 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 per-mitted under clauses (iii) and (iv) of paragraph (1)(A) shall be applied based on the portion of the premium that is attrib-utable to each family member covered under the plan or cov-erage. 
‘‘(5) S
PECIAL RULE FOR LARGE GROUP MARKET .—If a State

PECIAL RULE FOR LARGE GROUP MARKET .—If a State 
permits health insurance issuers that offer coverage in the large group market in the State to offer such coverage through the State Exchange (as provided for under section 1312(f)(2)(B) Definition. 42 USC 300gg. 
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124 STAT. 156 PUBLIC LAW 111–148—MAR. 23, 2010 
of the Patient Protection and Affordable Care Act), the provi-
sions of this subsection shall apply to all coverage offered in such market in the State. 
‘‘SEC. 2702. GUARANTEED AVAILABILITY OF COVERAGE. 
‘‘(a) G UARANTEED ISSUANCE OF COVERAGE IN THE INDIVIDUAL  
AND GROUP MARKET .—Subject to subsections (b) through (e), 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) E
NROLLMENT .— 
‘‘(1) R ESTRICTION .—A health insurance issuer described in 
subsection (a) may restrict enrollment in coverage described in such subsection to open or special enrollment periods. 
‘‘(2) E
STABLISHMENT .—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) R
EGULATIONS .—The Secretary shall promulgate regula-
tions with respect to enrollment periods under paragraphs (1) and (2). 
‘‘SEC. 2703. GUARANTEED RENEWABILITY OF COVERAGE. 
‘‘(a) I NGENERAL .—Except as provided in this section, if a health

insurance issuer offers health insurance coverage in the individual or group market, the issuer must renew or continue in force such coverage at the option of the plan sponsor or the individual, as applicable. 
‘‘SEC. 2705. PROHIBITING DISCRIMINATION AGAINST INDIVIDUAL 
PARTICIPANTS AND BENEFICIARIES BASED ON HEALTH STATUS. 

issuer offering group or individual health insurance coverage may not establish rules for eligibility (including continued eligibility) of any individual to enroll under the terms of the plan or coverage based on any of the following health status-related factors in rela-tion to the individual or a dependent of the individual: 
‘‘(1) Health status. ‘‘(2) Medical condition (including both physical and mental 
illnesses).

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. ‘‘(j) P
ROGRAMS OF HEALTH PROMOTION OR DISEASE PREVEN -
TION .— 
‘‘(1) G ENERAL PROVISIONS .— 
‘‘(A) G ENERAL RULE .—For purposes of subsection

‘‘(A) G ENERAL RULE .—For purposes of subsection 
(b)(2)(B), a program of health promotion or disease preven-tion (referred to in this subsection as a ‘wellness program’) shall be a program offered by an employer that is designed 42 USC 300gg–4. 42 USC 
300gg–2. 42 USC 
300gg–1. 
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124 STAT. 157 PUBLIC LAW 111–148—MAR. 23, 2010 
to promote health or prevent disease that meets the 
applicable requirements of this subsection. 
‘‘(B) N O 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 participa-tion in the program is made available to all similarly situated individuals and the requirements of paragraph (2) are complied with. 
‘‘(C) C
ONDITIONS BASED ON HEALTH STATUS FACTOR .—

ONDITIONS BASED ON HEALTH STATUS FACTOR .— 
If any of the conditions for obtaining a premium discount or rebate or other reward for participation in a wellness program is based on an individual satisfying a standard that is related to a health status factor, such wellness program shall not violate this section if the requirements of paragraph (3) are complied with. ‘‘(2) W
ELLNESS PROGRAMS NOT SUBJECT TO REQUIRE -
MENTS .—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 participa-tion 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

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) W

ELLNESS PROGRAMS SUBJECT TO REQUIREMENTS .— 
If any of the conditions for obtaining a premium discount, 
rebate, or reward under a wellness program as described in paragraph (1)(C) is based on an individual satisfying a standard that is related to a health status factor, the wellness program shall not violate this section if the following requirements are 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 
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124 STAT. 158 PUBLIC LAW 111–148—MAR. 23, 2010 
addition to employees or individuals, any class of depend-

ents (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

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 mecha-nism (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 Secre-taries 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

subparagraph to up to 50 percent of the cost of coverage if the Secretaries determine that such an increase is appro-priate.

‘‘(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 pre-venting disease in, participating individuals and it is not overly burdensome, is not a subterfuge for discriminating based on a health status factor, and is not highly suspect in the method chosen to promote health or prevent disease.

‘‘(C) The plan shall give individuals eligible for the 
program the opportunity to qualify for the reward under the program at least once each year. 
‘‘(D) The full reward under the wellness program shall 
be made available to all similarly situated individuals. For such purpose, among other things: 
‘‘(i) The reward is not available to all similarly 
situated individuals for a period unless the wellness program allows— 
‘‘(I) for a reasonable alternative standard (or

‘‘(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

‘‘(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 state-ment from an individual’s physician, that a health status factor makes it unreasonably difficult or medi-cally inadvisable for the individual to satisfy or attempt to satisfy the otherwise applicable standard. 
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124 STAT. 159 PUBLIC LAW 111–148—MAR. 23, 2010 
‘‘(E) The plan or issuer involved shall disclose in all 
plan materials describing the terms of the wellness pro-gram the availability of a reasonable alternative standard (or the possibility of waiver of the otherwise applicable standard) required under subparagraph (D). If plan mate-rials disclose that such a program is available, without describing its terms, the disclosure under this subpara-graph shall not be required. 
‘‘(k) E

‘‘(k) E
XISTING PROGRAMS .—Nothing in this section shall prohibit 
a program of health promotion or disease prevention that was established prior to the date of enactment of this section and applied with all applicable regulations, and that is operating on such date, from continuing to be carried out for as long as such regulations remain in effect. 
‘‘(l) W
ELLNESS PROGRAM DEMONSTRATION PROJECT .— 
‘‘(1) I N GENERAL .—Not later than July 1, 2014, the Sec-

retary, in consultation with the Secretary of the Treasury and the Secretary of Labor, shall establish a 10-State demonstration project under which participating States shall apply the provi-sions of subsection (j) to programs of health promotion offered by a health insurance issuer that offers health insurance cov-erage in the individual market in such State. 
‘‘(2) E
XPANSION OF DEMONSTRATION PROJECT .—If the Sec-

retary, in consultation with the Secretary of the Treasury and the Secretary of Labor, determines that the demonstration project described in paragraph (1) is effective, such Secretaries may, beginning on July 1, 2017 expand such demonstration project to include additional participating States. 
‘‘(3) R
EQUIREMENTS .— 
‘‘(A) M AINTENANCE OF COVERAGE .—The Secretary, in

consultation with the Secretary of the Treasury and the Secretary of Labor, shall not approve the participation of a State in the demonstration project under this section unless the Secretaries determine that the State’s project is designed in a manner that— 
‘‘(i) will not result in any decrease in coverage; 
and 
‘‘(ii) will not increase the cost to the Federal

‘‘(ii) will not increase the cost to the Federal 
Government in providing credits under section 36B of the Internal Revenue Code of 1986 or cost-sharing assistance under section 1402 of the Patient Protection and Affordable Care Act. ‘‘(B) O
THER REQUIREMENTS .—States that participate in 
the demonstration project under this subsection— 
‘‘(i) may permit premium discounts or rebates or 
the modification of otherwise applicable copayments

or deductibles for adherence to, or participation in, a reasonably designed program of health promotion and disease prevention; 
‘‘(ii) shall ensure that requirements of consumer 
protection are met in programs of health promotion in the individual market; 
‘‘(iii) shall require verification from health insur-
ance issuers that offer health insurance coverage in the individual market of such State that premium discounts— Expansion date. Deadline.

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124 STAT. 160 PUBLIC LAW 111–148—MAR. 23, 2010 
‘‘(I) do not create undue burdens for individ-
uals insured in the individual market; 
‘‘(II) do not lead to cost shifting; and ‘‘(III) are not a subterfuge for discrimination; 
‘‘(iv) shall ensure that consumer data is protected 
in accordance with the requirements of section 264(c) of the Health Insurance Portability and Accountability Act of 1996 (42 U.S.C. 1320d–2 note); and 
‘‘(v) shall ensure and demonstrate to the satisfac-

tion of the Secretary that the discounts or other rewards provided under the project reflect the expected level of participation in the wellness program involved and the anticipated effect the program will have on utilization or medical claim costs. 
‘‘(m) R
EPORT .— 
‘‘(1) I N GENERAL .—Not later than 3 years after the date

of enactment of the Patient Protection and Affordable Care Act, the Secretary, in consultation with the Secretary of the Treasury and the Secretary of Labor, shall submit a report to the appropriate committees of Congress concerning— 
‘‘(A) the effectiveness of wellness programs (as defined 
in subsection (j)) in promoting health and preventing dis-ease; 
‘‘(B) the impact of such wellness programs on the access

to care and affordability of coverage for participants and non-participants of such programs; 
‘‘(C) the impact of premium-based and cost-sharing 
incentives on participant behavior and the role of such programs in changing behavior; and 
‘‘(D) the effectiveness of different types of rewards. 
‘‘(2) D
ATA COLLECTION .—In preparing the report described

in paragraph (1), the Secretaries shall gather relevant informa-tion from employers who provide employees with access to wellness programs, including State and Federal agencies. ‘‘(n) R
EGULATIONS .—Nothing in this section shall be construed 
as prohibiting the Secretaries of Labor, Health and Human Services, 
or the Treasury from promulgating regulations in connection with this section. 
‘‘SEC. 2706. NON-DISCRIMINATION IN HEALTH CARE.

‘‘SEC. 2706. NON-DISCRIMINATION IN HEALTH CARE. 
‘‘(a) P ROVIDERS .—A group health plan and a health insurance

issuer offering group or individual health insurance coverage shall not discriminate with respect to participation under the plan or coverage against any health care provider who is acting within the scope of that provider’s license or certification under applicable State law. This section shall not require that a group health plan or health insurance issuer contract with any health care provider willing to abide by the terms and conditions for participation estab-lished by the plan or issuer.

participation estab-lished by the plan or issuer. Nothing in this section shall be con-strued as preventing a group health plan, a health insurance issuer, or the Secretary from establishing varying reimbursement rates based on quality or performance measures.

‘‘(b) I
NDIVIDUALS .—The provisions of section 1558 of the Patient 
Protection and Affordable Care Act (relating to non-discrimination) shall apply with respect to a group health plan or health insurance issuer offering group or individual health insurance coverage. Applicability. 42 USC 
300gg–5. 
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124 STAT. 161 PUBLIC LAW 111–148—MAR. 23, 2010 
‘‘SEC. 2707. COMPREHENSIVE HEALTH INSURANCE COVERAGE. 
‘‘(a) C OVERAGE FOR ESSENTIAL HEALTH BENEFITS PACKAGE .— 
A health insurance issuer that offers health insurance coverage in the individual or small group market shall ensure that such coverage includes the essential health benefits package required under section 1302(a) of the Patient Protection and Affordable Care Act. 
‘‘(b) C
OST-SHARING UNDER GROUP HEALTH PLANS .—A group

OST-SHARING UNDER GROUP HEALTH PLANS .—A group 
health plan shall ensure that any annual cost-sharing imposed under the plan does not exceed the limitations provided for under paragraphs (1) and (2) of section 1302(c). 
‘‘(c) C
HILD -ONLY PLANS .—If a health insurance issuer offers

health insurance coverage in any level of coverage specified under section 1302(d) of the Patient Protection and Affordable Care Act, the issuer shall also offer such coverage in that level as a plan in which the only enrollees are individuals who, as of the beginning of a plan year, have not attained the age of 21. 
‘‘(d) D
ENTAL ONLY.—This section shall not apply to a plan 
described in section 1302(d)(2)(B)(ii)(I). 
‘‘SEC. 2708. PROHIBITION ON EXCESSIVE WAITING PERIODS.

group or individual health insurance coverage shall not apply any waiting period (as defined in section 2704(b)(4)) that exceeds 90 days.’’. 
PART II—OTHER PROVISIONS 
SEC. 1251. PRESERVATION OF RIGHT TO MAINTAIN EXISTING COV-
ERAGE. 
(a) N OCHANGES TO EXISTING COVERAGE .— 
(1) I N GENERAL .—Nothing in this Act (or an amendment

made by this Act) shall be construed to require that an indi-vidual terminate coverage under a group health plan or health insurance coverage in which such individual was enrolled on the date of enactment of this Act. 
(2) C
ONTINUATION OF COVERAGE .—With respect to a group

health plan or health insurance coverage in which an individual was enrolled on the date of enactment of this Act, this subtitle and subtitle A (and the amendments made by such subtitles) shall not apply to such plan or coverage, regardless of whether the individual renews such coverage after such date of enact-ment. (b) A
LLOWANCE FOR FAMILY MEMBERS TOJOINCURRENT COV-
ERAGE .—With respect to a group health plan or health insurance

coverage in which an individual was enrolled on the date of enact-ment of this Act and which is renewed after such date, family members of such individual shall be permitted to enroll in such plan or coverage if such enrollment is permitted under the terms of the plan in effect as of such date of enactment. 
(c) A
LLOWANCE FOR NEWEMPLOYEES TOJOINCURRENT PLAN.—

LLOWANCE FOR NEWEMPLOYEES TOJOINCURRENT PLAN.— 
A group health plan that provides coverage on the date of enactment of this Act may provide for the enrolling of new employees (and their families) in such plan, and this subtitle and subtitle A (and the amendments made by such subtitles) shall not apply with respect to such plan and such new employees (and their families). 42 USC 18011. 42 USC 
300gg–7. 42 USC 
300gg–6.

300gg–6. 
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124 STAT. 162 PUBLIC LAW 111–148—MAR. 23, 2010 
(d) E FFECT ON COLLECTIVE BARGAINING AGREEMENTS .—In the

case of health insurance coverage maintained pursuant to one or more collective bargaining agreements between employee represent-atives and one or more employers that was ratified before the date of enactment of this Act, the provisions of this subtitle and subtitle A (and the amendments made by such subtitles) shall not apply until the date on which the last of the collective bar-gaining agreements relating to the coverage terminates. Any cov-erage amendment made pursuant to a collective

cov-erage amendment made pursuant to a collective bargaining agree-ment relating to the coverage which amends the coverage solely to conform to any requirement added by this subtitle or subtitle A (or amendments) shall not be treated as a termination of such collective bargaining agreement.

(e) D
EFINITION .—In this title, the term ‘‘grandfathered health 
plan’’ means any group health plan or health insurance coverage to which this section applies. 
SEC. 1252. RATING REFORMS MUST APPLY UNIFORMLY TO ALL 
HEALTH INSURANCE ISSUERS AND GROUP HEALTH PLANS. 
Any standard or requirement adopted by a State pursuant

to this title, or any amendment made by this title, shall be applied uniformly to all health plans in each insurance market to which the standard and requirements apply. The preceding sentence shall also apply to a State standard or requirement relating to the standard or requirement required by this title (or any such amend-ment) that is not the same as the standard or requirement but that is not preempted under section 1321(d). 
SEC. 1253. EFFECTIVE DATES.

SEC. 1253. EFFECTIVE DATES. 
This subtitle (and the amendments made by this subtitle) shall 
become effective for plan years beginning on or after January 1, 2014. 
Subtitle D—Available Coverage Choices for 
All Americans 
PART I—ESTABLISHMENT OF QUALIFIED 
HEALTH PLANS 
SEC. 1301. QUALIFIED HEALTH PLAN DEFINED. 
(a) Q UALIFIED HEALTH PLAN.—In this title: 
(1) I N GENERAL .—The term ‘‘qualified health plan’’ means 
a health plan that— 
(A) has in effect a certification (which may include

a seal or other indication of approval) that such plan meets the criteria for certification described in section 1311(c) issued or recognized by each Exchange through which such plan is offered; 
(B) provides the essential health benefits package 
described in section 1302(a); and 
(C) is offered by a health insurance issuer that— 
(i) is licensed and in good standing to offer health

insurance coverage in each State in which such issuer offers health insurance coverage under this title; 42 USC 18021. 42 USC 
300gg note. 42 USC 18012. 
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124 STAT. 163 PUBLIC LAW 111–148—MAR. 23, 2010 
(ii) agrees to offer at least one qualified health 
plan in the silver level and at least one plan in the gold level in each such Exchange; 
(iii) agrees to charge the same premium rate for 
each qualified health plan of the issuer without regard to whether the plan is offered through an Exchange or whether the plan is offered directly from the issuer or through an agent; and 
(iv) complies with the regulations developed by

(iv) complies with the regulations developed by 
the Secretary under section 1311(d) and such other requirements as an applicable Exchange may establish. 
(2) I
NCLUSION OF CO -OP PLANS AND COMMUNITY HEALTH  
INSURANCE OPTION .—Any reference in this title to a qualified 
health plan shall be deemed to include a qualified health plan offered through the CO-OP program under section 1322 or a community health insurance option under section 1323, unless specifically provided for otherwise. (b) T

ERMS RELATING TO HEALTH PLANS .—In this title: 
(1) H EALTH PLAN .— 
(A) I N GENERAL .—The term ‘‘health plan’’ means health 
insurance coverage and a group health plan. 
(B) E XCEPTION FOR SELF -INSURED PLANS AND MEWAS .—

Except to the extent specifically provided by this title, the term ‘‘health plan’’ shall not include a group health plan or multiple employer welfare arrangement to the extent the plan or arrangement is not subject to State insurance regulation under section 514 of the Employee Retirement Income Security Act of 1974. (2) H
EALTH INSURANCE COVERAGE AND ISSUER .—The terms

EALTH INSURANCE COVERAGE AND ISSUER .—The terms 
‘‘health insurance coverage’’ and ‘‘health insurance issuer’’ have the meanings given such terms by section 2791(b) of the Public Health Service Act. 
(3) G
ROUP HEALTH PLAN .—The term ‘‘group health plan’’ 
has the meaning given such term by section 2791(a) of the Public Health Service Act. 
SEC. 1302. ESSENTIAL HEALTH BENEFITS REQUIREMENTS. 
(a) E SSENTIAL HEALTH BENEFITS PACKAGE .—In this title, the

term ‘‘essential health benefits package’’ means, with respect to any health plan, coverage that— 
(1) provides for the essential health benefits defined by 
the Secretary under subsection (b); 
(2) limits cost-sharing for such coverage in accordance with 
subsection (c); and 
(3) subject to subsection (e), provides either the bronze, 
silver, gold, or platinum level of coverage described in sub-section (d). (b) E
SSENTIAL HEALTH BENEFITS .—

SSENTIAL HEALTH BENEFITS .— 
(1) I N GENERAL .—Subject to paragraph (2), the Secretary 
shall define the essential health benefits, except that such benefits shall include at least the following general categories and the items and services covered within the categories: 
(A) Ambulatory patient services. (B) Emergency services. (C) Hospitalization. (D) Maternity and newborn care. 42 USC 18022.

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124 STAT. 164 PUBLIC LAW 111–148—MAR. 23, 2010 
(E) Mental health and substance use disorder services, 
including behavioral health treatment. 
(F) Prescription drugs. (G) Rehabilitative and habilitative services and devices. (H) Laboratory services. (I) Preventive and wellness services and chronic dis-
ease management. 
(J) Pediatric services, including oral and vision care. 
(2) L
IMITATION .— 
(A) I N GENERAL .—The Secretary shall ensure that the

scope of the essential health benefits under paragraph (1) is equal to the scope of benefits provided under a typical employer plan, as determined by the Secretary. To inform this determination, the Secretary of Labor shall conduct a survey of employer-sponsored coverage to determine the benefits typically covered by employers, including multiem-ployer plans, and provide a report on such survey to the Secretary. 
(B) C
ERTIFICATION .—In defining the essential health

ERTIFICATION .—In defining the essential health 
benefits described in paragraph (1), and in revising the benefits under paragraph (4)(H), the Secretary shall submit a report to the appropriate committees of Congress con-taining a certification from the Chief Actuary of the Centers for Medicare & Medicaid Services that such essential health benefits meet the limitation described in paragraph (2). (3) N
OTICE AND HEARING .—In defining the essential health

benefits described in paragraph (1), and in revising the benefits under paragraph (4)(H), the Secretary shall provide notice and an opportunity for public comment. 
(4) R
EQUIRED ELEMENTS FOR CONSIDERATION .—In defining 
the essential health benefits under paragraph (1), the Secretary shall— 
(A) ensure that such essential health benefits reflect 
an appropriate balance among the categories described in such subsection, so that benefits are not unduly weighted toward any category;

(B) not make coverage decisions, determine reimburse-
ment rates, establish incentive programs, or design benefits in ways that discriminate against individuals because of their age, disability, or expected length of life; 
(C) take into account the health care needs of diverse 
segments of the population, including women, children, persons with disabilities, and other groups; 
(D) ensure that health benefits established as essential

not be subject to denial to individuals against their wishes on the basis of the individuals’ age or expected length of life or of the individuals’ present or predicted disability, degree of medical dependency, or quality of life; 
(E) provide that a qualified health plan shall not be 
treated as providing coverage for the essential health bene-fits described in paragraph (1) unless the plan provides that— 
(i) coverage for emergency department services will

be provided without imposing any requirement under the plan for prior authorization of services or any limitation on coverage where the provider of services does not have a contractual relationship with the plan Reports. Survey. 
Reports. Determination. 
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124 STAT. 165 PUBLIC LAW 111–148—MAR. 23, 2010 
for the providing of services that is more restrictive 
than the requirements or limitations that apply to emergency department services received from providers who do have such a contractual relationship with the plan; and 
(ii) if such services are provided out-of-network,

the cost-sharing requirement (expressed as a copayment amount or coinsurance rate) is the same requirement that would apply if such services were provided in-network; (F) provide that if a plan described in section

1311(b)(2)(B)(ii) (relating to stand-alone dental benefits plans) is offered through an Exchange, another health plan offered through such Exchange shall not fail to be treated as a qualified health plan solely because the plan does not offer coverage of benefits offered through the stand- alone plan that are otherwise required under paragraph (1)(J); and 
(G) periodically review the essential health benefits 
under paragraph (1), and provide a report to Congress and the public that contains—

(i) an assessment of whether enrollees are facing 
any difficulty accessing needed services for reasons of coverage or cost; 
(ii) an assessment of whether the essential health 
benefits needs to be modified or updated to account for changes in medical evidence or scientific advance-ment; 
(iii) information on how the essential health bene-
fits will be modified to address any such gaps in access or changes in the evidence base; 
(iv) an assessment of the potential of additional

or expanded benefits to increase costs and the inter-actions between the addition or expansion of benefits and reductions in existing benefits to meet actuarial limitations described in paragraph (2); and (H) periodically update the essential health benefits 
under paragraph (1) to address any gaps in access to cov-erage or changes in the evidence base the Secretary identi-fies in the review conducted under subparagraph (G). (5) R
ULE OF CONSTRUCTION .—Nothing in this title shall

be construed to prohibit a health plan from providing benefits in excess of the essential health benefits described in this subsection. (c) R
EQUIREMENTS RELATING TO COST-SHARING .— 
(1) A NNUAL LIMITATION ON COST -SHARING .— 
(A) 2014.—The cost-sharing incurred under a health

plan with respect to self-only coverage or coverage other than self-only coverage for a plan year beginning in 2014 shall not exceed the dollar amounts in effect under section 223(c)(2)(A)(ii) of the Internal Revenue Code of 1986 for self-only and family coverage, respectively, for taxable years beginning in 2014. 
(B) 2015 
AND LATER .—In the case of any plan year 
beginning in a calendar year after 2014, the limitation under this paragraph shall—

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124 STAT. 166 PUBLIC LAW 111–148—MAR. 23, 2010 
(i) in the case of self-only coverage, be equal to 
the dollar amount under subparagraph (A) for self- only coverage for plan years beginning in 2014, increased by an amount equal to the product of that amount and the premium adjustment percentage under paragraph (4) for the calendar year; and 
(ii) in the case of other coverage, twice the amount 
in effect under clause (i).

in effect under clause (i). 
If the amount of any increase under clause (i) is not a multiple of $50, such increase shall be rounded to the next lowest multiple of $50. (2) A
NNUAL LIMITATION ON DEDUCTIBLES FOR EMPLOYER - 
SPONSORED PLANS .— 
(A) I N GENERAL .—In the case of a health plan offered 
in the small group market, the deductible under the plan shall not exceed— 
(i) $2,000 in the case of a plan covering a single 
individual; and 
(ii) $4,000 in the case of any other plan.

(ii) $4,000 in the case of any other plan. 
The amounts under clauses (i) and (ii) may be increased by the maximum amount of reimbursement which is reasonably available to a participant under a flexible spending arrangement described in section 106(c)(2) of the Internal Revenue Code of 1986 (determined without regard to any salary reduction arrangement). 
(B) I
NDEXING OF LIMITS .—In the case of any plan year 
beginning in a calendar year after 2014—

beginning in a calendar year after 2014— 
(i) the dollar amount under subparagraph (A)(i) 
shall be increased by an amount equal to the product of that amount and the premium adjustment percent-age under paragraph (4) for the calendar year; and 
(ii) the dollar amount under subparagraph (A)(ii) 
shall be increased to an amount equal to twice the amount in effect under subparagraph (A)(i) for plan years beginning in the calendar year, determined after application of clause (i).

If the amount of any increase under clause (i) is not a multiple of $50, such increase shall be rounded to the next lowest multiple of $50. 
(C) A
CTUARIAL VALUE .—The limitation under this para-
graph shall be applied in such a manner so as to not affect the actuarial value of any health plan, including a plan in the bronze level. 
(D) C
OORDINATION WITH PREVENTIVE LIMITS .—Nothing

OORDINATION WITH PREVENTIVE LIMITS .—Nothing 
in this paragraph shall be construed to allow a plan to have a deductible under the plan apply to benefits described 
in section 2713 of the Public Health Service Act. (3) C
OST-SHARING .—In this title— 
(A) I N GENERAL .—The term ‘‘cost-sharing’’ includes— 
(i) deductibles, coinsurance, copayments, or similar 
charges; and 
(ii) 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 Rev-enue Code of 1986) with respect to essential health benefits covered under the plan. 
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124 STAT. 167 PUBLIC LAW 111–148—MAR. 23, 2010 
(B) E XCEPTIONS .—Such term does not include pre-
miums, balance billing amounts for non-network providers, or spending for non-covered services. (4) P
REMIUM ADJUSTMENT PERCENTAGE .—For purposes of

REMIUM ADJUSTMENT PERCENTAGE .—For purposes of 
paragraphs (1)(B)(i) and (2)(B)(i), 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). (d) L
EVELS OF COVERAGE .—

EVELS OF COVERAGE .— 
(1) L EVELS OF COVERAGE DEFINED .—The levels of coverage 
described in this subsection are as follows: 
(A) B RONZE LEVEL .—A plan in the bronze level shall 
provide a level of coverage that is designed to provide benefits that are actuarially equivalent to 60 percent of the full actuarial value of the benefits provided under the plan. 
(B) S
ILVER LEVEL .—A plan in the silver level shall

ILVER LEVEL .—A plan in the silver level shall 
provide a level of coverage that is designed to provide benefits that are actuarially equivalent to 70 percent of the full actuarial value of the benefits provided under the plan. 
(C) G
OLD LEVEL .—A plan in the gold level shall provide 
a level of coverage that is designed to provide benefits that are actuarially equivalent to 80 percent of the full actuarial value of the benefits provided under the plan. 
(D) P

(D) P
LATINUM LEVEL .—A plan in the platinum level 
shall provide a level of coverage that is designed to provide benefits that are actuarially equivalent to 90 percent of the full actuarial value of the benefits provided under the plan. (2) A
CTUARIAL VALUE .— 
(A) I N GENERAL .—Under regulations issued by the Sec-

retary, the level of coverage of a plan shall be determined on the basis that the essential health benefits described in subsection (b) shall be provided to a standard population (and without regard to the population the plan may actually provide benefits to). 
(B) E
MPLOYER CONTRIBUTIONS .—The Secretary may

(B) E
MPLOYER CONTRIBUTIONS .—The Secretary may 
issue regulations under which employer contributions to a health savings account (within the meaning of section 223 of the Internal Revenue Code of 1986) may be taken into account in determining the level of coverage for a plan of the employer. 
(C) A
PPLICATION .—In determining under this title, the

Public Health Service Act, or the Internal Revenue Code of 1986 the percentage of the total allowed costs of benefits provided under a group health plan or health insurance coverage that are provided by such plan or coverage, the rules contained in the regulations under this paragraph shall apply. (3) A
LLOWABLE VARIANCE .—The Secretary shall develop

LLOWABLE VARIANCE .—The Secretary shall develop 
guidelines to provide for a de minimis variation in the actuarial valuations used in determining the level of coverage of a plan to account for differences in actuarial estimates. Guidelines. Determination. 
Deadline. 
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124 STAT. 168 PUBLIC LAW 111–148—MAR. 23, 2010 
(4) P LAN REFERENCE .—In this title, any reference to a 
bronze, silver, gold, or platinum plan shall be treated as a reference to a qualified health plan providing a bronze, silver, gold, or platinum level of coverage, as the case may be. (e) C
ATASTROPHIC PLAN.— 
(1) I N GENERAL .—A health plan not providing a bronze,

silver, gold, or platinum level of coverage shall be treated as meeting the requirements of subsection (d) with respect to any plan year if— 
(A) the only individuals who are eligible to enroll in 
the plan are individuals described in paragraph (2); and 
(B) the plan provides— 
(i) except as provided in clause (ii), the essential

health benefits determined under subsection (b), except that the plan provides no benefits for any plan year until the individual has incurred cost-sharing expenses in an amount equal to the annual limitation in effect under subsection (c)(1) for the plan year (except as provided for in section 2713); and 
(ii) coverage for at least three primary care visits. 
(2) I
NDIVIDUALS ELIGIBLE FOR ENROLLMENT .—An individual 
is described in this paragraph for any plan year if the indi-vidual—

(A) has not attained the age of 30 before the beginning 
of the plan year; or 
(B) has a certification in effect for any plan year under 
this title that the individual is exempt from the require-ment under section 5000A of the Internal Revenue Code of 1986 by reason of— 
(i) section 5000A(e)(1) of such Code (relating to 
individuals without affordable coverage); or 
(ii) section 5000A(e)(5) of such Code (relating to 
individuals with hardships). 
(3) R

(3) R
ESTRICTION TO INDIVIDUAL MARKET .—If a health insur-
ance issuer offers a health plan described in this subsection, the issuer may only offer the plan in the individual market. (f) C
HILD -ONLY PLANS .—If a qualified health plan is offered

through the Exchange in any level of coverage specified under subsection (d), the issuer shall also offer that plan through the Exchange in that level as a plan in which the only enrollees are individuals who, as of the beginning of a plan year, have not attained the age of 21, and such plan shall be treated as a qualified health plan. 
SEC. 1303. SPECIAL RULES. 
(a) S PECIAL RULES RELATING TO COVERAGE OF ABORTION SERV-
ICES.— 
(1) V OLUNTARY CHOICE OF COVERAGE OF ABORTION SERV -
ICES.—

ICES.— 
(A) I N GENERAL .—Notwithstanding any other provision 
of this title (or any amendment made by this title), and subject to subparagraphs (C) and (D)— 
(i) nothing in this title (or any amendment made 
by this title), shall be construed to require a qualified health plan to provide coverage of services described in subparagraph (B)(i) or (B)(ii) as part of its essential health benefits for any plan year; and 42 USC 18023.

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124 STAT. 169 PUBLIC LAW 111–148—MAR. 23, 2010 
(ii) the issuer of a qualified health plan shall deter-
mine whether or not the plan provides coverage of services described in subparagraph (B)(i) or (B)(ii) as part of such benefits for the plan year. (B) A
BORTION SERVICES .— 
(i) A BORTIONS FOR WHICH PUBLIC FUNDING IS  
PROHIBITED .—The services described in this clause are

abortions for which the expenditure of Federal funds appropriated for the Department of Health and Human Services is not permitted, based on the law as in effect as of the date that is 6 months before the beginning of the plan year involved. 
(ii) A
BORTIONS FOR WHICH PUBLIC FUNDING IS  
ALLOWED .—The services described in this clause are

abortions for which the expenditure of Federal funds appropriated for the Department of Health and Human Services is permitted, based on the law as in effect as of the date that is 6 months before the beginning of the plan year involved. (C) P
ROHIBITION ON FEDERAL FUNDS FOR ABORTION  
SERVICES IN COMMUNITY HEALTH INSURANCE OPTION .— 
(i) D ETERMINATION BY SECRETARY .—The Secretary

(i) D ETERMINATION BY SECRETARY .—The Secretary 
may not determine, in accordance with subparagraph (A)(ii), that the community health insurance option established under section 1323 shall provide coverage of services described in subparagraph (B)(i) as part of benefits for the plan year unless the Secretary— 
(I) assures compliance with the requirements 
of paragraph (2); 
(II) assures, in accordance with applicable

(II) assures, in accordance with applicable 
provisions of generally accepted accounting requirements, circulars on funds management of the Office of Management and Budget, and guid-ance on accounting of the Government Account-ability Office, that no Federal funds are used for such coverage; and 
(III) notwithstanding section 1323(e)(1)(C) or

(III) notwithstanding section 1323(e)(1)(C) or 
any other provision of this title, takes all necessary steps to assure that the United States does not bear the insurance risk for a community health insurance option’s coverage of services described in subparagraph (B)(i). (ii) S
TATE REQUIREMENT .—If a State requires, in

addition to the essential health benefits required under section 1323(b)(3) (A), coverage of services described in subparagraph (B)(i) for enrollees of a community health insurance option offered in such State, the State shall assure that no funds flowing through or from the community health insurance option, and no other Federal funds, pay or defray the cost of providing cov-erage of services described in subparagraph (B)(i). The United States shall not bear the insurance risk for a State’s

shall not bear the insurance risk for a State’s required coverage of services described in subparagraph (B)(i).

(iii) E
XCEPTIONS .—Nothing in this subparagraph 
shall apply to coverage of services described in subpara-graph (B)(ii) by the community health insurance Determination. 
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124 STAT. 170 PUBLIC LAW 111–148—MAR. 23, 2010 
option. Services described in subparagraph (B)(ii) shall 
be covered to the same extent as such services are covered under title XIX of the Social Security Act. (D) A
SSURED AVAILABILITY OF VARIED COVERAGE  
THROUGH EXCHANGES .— 
(i) I N GENERAL .—The Secretary shall assure that 
with respect to qualified health plans offered in any Exchange established pursuant to this title— 
(I) there is at least one such plan that provides

coverage of services described in clauses (i) and (ii) of subparagraph (B); and 
(II) there is at least one such plan that does 
not provide coverage of services described in subparagraph (B)(i). (ii) S
PECIAL RULES .—For purposes of clause (i)— 
(I) a plan shall be treated as described in 
clause (i)(II) if the plan does not provide coverage of services described in either subparagraph (B)(i) or (B)(ii); and 
(II) if a State has one Exchange covering more

(II) if a State has one Exchange covering more 
than 1 insurance market, the Secretary shall meet the requirements of clause (i) separately with respect to each such market. 
(2) P
ROHIBITION ON THE USE OF FEDERAL FUNDS .— 
(A) I N GENERAL .—If a qualified health plan provides 
coverage of services described in paragraph (1)(B)(i), the issuer of the plan shall not use any amount attributable to any of the following for purposes of paying for such services:

(i) The credit under section 36B of the Internal 
Revenue Code of 1986 (and the amount (if any) of the advance payment of the credit under section 1412 of the Patient Protection and Affordable Care Act). 
(ii) Any cost-sharing reduction under section 1402 
of thePatient Protection and Affordable Care Act (and the amount (if any) of the advance payment of the reduction under section 1412 of the Patient Protection and Affordable Care Act). (B) S
EGREGATION OF FUNDS .—In the case of a plan

EGREGATION OF FUNDS .—In the case of a plan 
to which subparagraph (A) applies, the issuer of the plan shall, out of amounts not described in subparagraph (A), segregate an amount equal to the actuarial amounts deter-mined under subparagraph (C) for all enrollees from the amounts described in subparagraph (A). 
(C) A
CTUARIAL VALUE OF OPTIONAL SERVICE COV -
ERAGE .— 
(i) I N GENERAL .—The Secretary shall estimate the

basic per enrollee, per month cost, determined on an average actuarial basis, for including coverage under a qualified health plan of the services described in paragraph (1)(B)(i). 
(ii) C
ONSIDERATIONS .—In making such estimate, 
the Secretary— 
(I) may take into account the impact on overall 
costs of the inclusion of such coverage, but may not take into account any cost reduction estimated Cost estimate.

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124 STAT. 171 PUBLIC LAW 111–148—MAR. 23, 2010 
to result from such services, including prenatal 
care, delivery, or postnatal care; 
(II) shall estimate such costs as if such cov-
erage were included for the entire population cov-ered; and 
(III) may not estimate such a cost at less 
than $1 per enrollee, per month. 
(3) P
ROVIDER CONSCIENCE PROTECTIONS .—No individual

ROVIDER CONSCIENCE PROTECTIONS .—No individual 
health care provider or health care facility may be discriminated against because of a willingness or an unwillingness, if doing so is contrary to the religious or moral beliefs of the provider or facility, to provide, pay for, provide coverage of, or refer for abortions. (b) A
PPLICATION OF STATE AND FEDERAL LAWS REGARDING  
ABORTION .— 
(1) N O PREEMPTION OF STATE LAWS REGARDING ABORTION .—

Nothing in this Act shall be construed to preempt or otherwise have any effect on State laws regarding the prohibition of (or requirement of) coverage, funding, or procedural require-ments on abortions, including parental notification or consent for the performance of an abortion on a minor. 
(2) N
O EFFECT ON FEDERAL LAWS REGARDING ABORTION .— 
(A) I N GENERAL .—Nothing in this Act shall be con-
strued to have any effect on Federal laws regarding—

(i) conscience protection; (ii) willingness or refusal to provide abortion; and (iii) discrimination on the basis of the willingness 
or refusal to provide, pay for, cover, or refer for abortion or to provide or participate in training to provide abor-tion. 
(3) N
O EFFECT ON FEDERAL CIVIL RIGHTS LAW .—Nothing 
in this subsection shall alter the rights and obligations of employees and employers under title VII of the Civil Rights Act of 1964. (c) A

PPLICATION OF EMERGENCY SERVICES LAWS.—Nothing in 
this Act shall be construed to relieve any health care provider 
from providing emergency services as required by State or Federal law, including section 1867 of the Social Security Act (popularly known as ‘‘EMTALA’’). 
SEC. 1304. RELATED DEFINITIONS. 
(a) D EFINITIONS RELATING TO MARKETS .—In this title: 
(1) G ROUP MARKET .—The term ‘‘group market’’ means the

health insurance market under which individuals obtain health insurance coverage (directly or through any arrangement) on behalf of themselves (and their dependents) through a group health plan maintained by an employer. 
(2) I
NDIVIDUAL MARKET .—The term ‘‘individual market’’ 
means the market for health insurance coverage offered to individuals other than in connection with a group health plan. 
(3) L
ARGE AND SMALL GROUP MARKETS .—The terms ‘‘large

ARGE AND SMALL GROUP MARKETS .—The terms ‘‘large 
group market’’ and ‘‘small group market’’ mean the health insurance market under which individuals obtain health insur-ance coverage (directly or through any arrangement) on behalf of themselves (and their dependents) through a group health plan maintained by a large employer (as defined in subsection 42 USC 18024. Abortions.

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124 STAT. 172 PUBLIC LAW 111–148—MAR. 23, 2010 
(b)(1)) or by a small employer (as defined in subsection (b)(2)), 
respectively. (b) E
MPLOYERS .—In this title: 
(1) L ARGE EMPLOYER .—The term ‘‘large employer’’ means, 
in connection with a group health plan with respect to a cal-endar year and a plan year, an employer who employed an average of at least 101 employees on business days during the preceding calendar year and who employs at least 1 employee on the first day of the plan year. 
(2) S

(2) S
MALL EMPLOYER .—The term ‘‘small employer’’ means, 
in connection with a group health plan with respect to a cal-endar year and a plan year, an employer who employed an average of at least 1 but not more than 100 employees on business days during the preceding calendar year and who employs at least 1 employee on the first day of the plan year. 
(3) S
TATE OPTION TO TREAT 50 EMPLOYEES AS SMALL .—

TATE OPTION TO TREAT 50 EMPLOYEES AS SMALL .— 
In the case of plan years beginning before January 1, 2016, a State may elect to apply this subsection by substituting ‘‘51 employees’’ for ‘‘101 employees’’ in paragraph (1) and by substituting ‘‘50 employees’’ for ‘‘100 employees’’ in paragraph (2). 
(4) R
ULES FOR DETERMINING EMPLOYER SIZE .—For purposes 
of this subsection— 
(A) A PPLICATION OF AGGREGATION RULE FOR  
EMPLOYERS .—All persons treated as a single employer

under subsection (b), (c), (m), or (o) of section 414 of the Internal Revenue Code of 1986 shall be treated as 1 employer. 
(B) E
MPLOYERS NOT IN EXISTENCE IN PRECEDING  
YEAR .—In the case of an employer which was not in exist-

ence throughout the preceding calendar year, the deter-mination of whether such employer is a small or large employer shall be based on the average number of employees that it is reasonably expected such employer will employ on business days in the current calendar year. 
(C) P
REDECESSORS .—Any reference in this subsection 
to an employer shall include a reference to any predecessor of such employer. 
(D) C
ONTINUATION OF PARTICIPATION FOR GROWING  
SMALL EMPLOYERS .—If—

SMALL EMPLOYERS .—If— 
(i) a qualified employer that is a small employer 
makes enrollment in qualified health plans offered in the small group market available to its employees through an Exchange; and 
(ii) the employer ceases to be a small employer 
by reason of an increase in the number of employees 
of such employer;

of such employer; 
the employer shall continue to be treated as a small employer for purposes of this subtitle for the period begin-ning with the increase and ending with the first day on which the employer does not make such enrollment avail-able to its employees. 
(c) S
ECRETARY .—In this title, the term ‘‘Secretary’’ means the 
Secretary of Health and Human Services. 
(d) S TATE .—In this title, the term ‘‘State’’ means each of the 
50 States and the District of Columbia. Time period.

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124 STAT. 173 PUBLIC LAW 111–148—MAR. 23, 2010 
PART II—CONSUMER CHOICES AND INSUR-
ANCE COMPETITION THROUGH HEALTH BENEFIT EXCHANGES 
SEC. 1311. AFFORDABLE CHOICES OF HEALTH BENEFIT PLANS. 
(a) A SSISTANCE TO STATES TO ESTABLISH AMERICAN HEALTH  
BENEFIT EXCHANGES .— 
(1) P LANNING AND ESTABLISHMENT GRANTS .—There shall

be appropriated to the Secretary, out of any moneys in the Treasury not otherwise appropriated, an amount necessary to enable the Secretary to make awards, not later than 1 year after the date of enactment of this Act, to States in the amount specified in paragraph (2) for the uses described in paragraph (3). 
(2) A
MOUNT SPECIFIED .—For each fiscal year, the Secretary 
shall determine the total amount that the Secretary will make available to each State for grants under this subsection. 
(3) U

(3) U
SE OF FUNDS .—A State shall use amounts awarded 
under this subsection for activities (including planning activi-ties) related to establishing an American Health Benefit Exchange, as described in subsection (b). 
(4) R
ENEWABILITY OF GRANT .— 
(A) I N GENERAL .—Subject to subsection (d)(4), the Sec-
retary may renew a grant awarded under paragraph (1) if the State recipient of such grant— 
(i) is making progress, as determined by the Sec-
retary, toward—

retary, toward— 
(I) establishing an Exchange; and (II) implementing the reforms described in 
subtitles A and C (and the amendments made by such subtitles); and (ii) is meeting such other benchmarks as the Sec-
retary may establish. (B) L
IMITATION .—No grant shall be awarded under 
this subsection after January 1, 2015. (5) T
ECHNICAL ASSISTANCE TO FACILITATE PARTICIPATION  
IN SHOP EXCHANGES .—The Secretary shall provide technical

assistance to States to facilitate the participation of qualified small businesses in such States in SHOP Exchanges. (b) A
MERICAN HEALTH BENEFIT EXCHANGES .— 
(1) I N GENERAL .—Each State shall, not later than January 
1, 2014, establish an American Health Benefit Exchange (referred to in this title as an ‘‘Exchange’’) for the State that— 
(A) facilitates the purchase of qualified health plans; (B) provides for the establishment of a Small Business

Health Options Program (in this title referred to as a ‘‘SHOP Exchange’’) that is designed to assist qualified employers in the State who are small employers in facili-tating the enrollment of their employees in qualified health plans offered in the small group market in the State; and 
(C) meets the requirements of subsection (d). 
(2) M
ERGER OF INDIVIDUAL AND SHOP EXCHANGES .—A State

ERGER OF INDIVIDUAL AND SHOP EXCHANGES .—A State 
may elect to provide only one Exchange in the State for pro-viding both Exchange and SHOP Exchange services to both qualified individuals and qualified small employers, but only Establishment. Deadline. Deadline. Determination. Deadline. 42 USC 18031. 
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124 STAT. 174 PUBLIC LAW 111–148—MAR. 23, 2010 
if the Exchange has adequate resources to assist such individ-
uals and employers. (c) R
ESPONSIBILITIES OF THE SECRETARY .— 
(1) I N GENERAL .—The Secretary shall, by regulation, estab-
lish criteria for the certification of health plans as qualified health plans. Such criteria shall require that, to be certified, a plan shall, at a minimum— 
(A) meet marketing requirements, and not employ mar-

keting practices or benefit designs that have the effect of discouraging the enrollment in such plan by individuals with significant health needs; 
(B) ensure a sufficient choice of providers (in a manner 
consistent with applicable network adequacy provisions under section 2702(c) of the Public Health Service Act), and provide information to enrollees and prospective enrollees on the availability of in-network and out-of-net-work providers; 
(C) include within health insurance plan networks

those essential community providers, where available, that serve predominately low-income, medically-underserved individuals, such as health care providers defined in section 340B(a)(4) of the Public Health Service Act and providers described in section 1927(c)(1)(D)(i)(IV) of the Social Secu-rity Act as set forth by section 221 of Public Law 111– 8, except that nothing in this subparagraph shall be con-strued to require any health plan to provide coverage for any specific medical procedure;

on clinical quality measures such as the Healthcare Effectiveness Data and Information Set, patient experience ratings on a standardized Consumer Assessment of Healthcare Providers and Systems survey, as well as con-sumer access, utilization management, quality assurance, provider credentialing, complaints and appeals, network adequacy and access, and patient information programs by any entity recognized by the Secretary for the accredita-tion of health insurance issuers or plans (so long as

of health insurance issuers or plans (so long as any such entity has transparent and rigorous methodological and scoring criteria); or

(ii) receive such accreditation within a period estab-
lished by an Exchange for such accreditation that is applicable to all qualified health plans; 
(E) implement a quality improvement strategy 
described in subsection (g)(1); 
(F) utilize a uniform enrollment form that qualified

individuals and qualified employers may use (either elec-tronically or on paper) in enrolling in qualified health plans offered through such Exchange, and that takes into account criteria that the National Association of Insurance Commis-sioners develops and submits to the Secretary; 
(G) utilize the standard format established for pre-
senting health benefits plan options; and 
(H) provide information to enrollees and prospective

enrollees, and to each Exchange in which the plan is offered, on any quality measures for health plan perform-ance endorsed under section 399JJ of the Public Health Service Act, as applicable. Regulations. 
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124 STAT. 175 PUBLIC LAW 111–148—MAR. 23, 2010 
(2) R ULE OF CONSTRUCTION .—Nothing in paragraph (1)(C) 
shall be construed to require a qualified health plan to contract with a provider described in such paragraph if such provider refuses to accept the generally applicable payment rates of such plan. 
(3) R
ATING SYSTEM .—The Secretary shall develop a rating

system that would rate qualified health plans offered through an Exchange in each benefits level on the basis of the relative quality and price. The Exchange shall include the quality rating in the information provided to individuals and employers through the Internet portal established under paragraph (4). 
(4) E
NROLLEE SATISFACTION SYSTEM .—The Secretary shall

develop an enrollee satisfaction survey system that would evaluate the level of enrollee satisfaction with qualified health plans offered through an Exchange, for each such qualified health plan that had more than 500 enrollees in the previous year. The Exchange shall include enrollee satisfaction informa-tion in the information provided to individuals and employers through the Internet portal established under paragraph (5) in a manner that allows individuals to easily compare enrollee

allows individuals to easily compare enrollee satisfaction levels between comparable plans.

(5) I
NTERNET PORTALS .—The Secretary shall— 
(A) continue to operate, maintain, and update the 
Internet portal developed under section 1103(a) and to assist States in developing and maintaining their own such portal; and 
(B) make available for use by Exchanges a model tem-

plate for an Internet portal that may be used to direct qualified individuals and qualified employers to qualified health plans, to assist such individuals and employers in determining whether they are eligible to participate in an Exchange or eligible for a premium tax credit or cost- sharing reduction, and to present standardized information (including quality ratings) regarding qualified health plans offered through an Exchange to assist consumers in making easy health insurance choices.

Such template shall include, with respect to each qualified health plan offered through the Exchange in each rating area, access to the uniform outline of coverage the plan is required to provide under section 2716 of the Public Health Service Act and to a copy of the plan’s written policy. 
(6) E
NROLLMENT PERIODS .—The Secretary shall require an 
Exchange to provide for— 
(A) an initial open enrollment, as determined by the

Secretary (such determination to be made not later than July 1, 2012); 
(B) annual open enrollment periods, as determined 
by the Secretary for calendar years after the initial enroll-ment period; 
(C) special enrollment periods specified in section 9801 
of the Internal Revenue Code of 1986 and other special enrollment periods under circumstances similar to such periods under part D of title XVIII of the Social Security Act; and 
(D) special monthly enrollment periods for Indians (as

defined in section 4 of the Indian Health Care Improvement Act). 
Native Americans. Determination. Determination. Contracts. 
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124 STAT. 176 PUBLIC LAW 111–148—MAR. 23, 2010 
(d) R EQUIREMENTS .— 
(1) I N GENERAL .—An Exchange shall be a governmental 
agency or nonprofit entity that is established by a State. 
(2) O FFERING OF COVERAGE .— 
(A) I N GENERAL .—An Exchange shall make available 
qualified health plans to qualified individuals and qualified employers. 
(B) L
(i) I N GENERAL .—An Exchange may not make 
available any health plan that is not a qualified health plan. 
(ii) O

(ii) O
FFERING OF STAND -ALONE DENTAL BENEFITS .— 
Each Exchange within a State shall allow an issuer of a plan that only provides limited scope dental bene-fits meeting the requirements of section 9832(c)(2)(A) of the Internal Revenue Code of 1986 to offer the plan through the Exchange (either separately or in conjunction with a qualified health plan) if the plan provides pediatric dental benefits meeting the require-ments of section 1302(b)(1)(J)). 
(3) R

(3) R
ULES RELATING TO ADDITIONAL REQUIRED BENEFITS .— 
(B), an Exchange may make available a qualified health plan notwithstanding any provision of law that may require benefits other than the essential health benefits specified under section 1302(b). 
(B) S
TATES MAY REQUIRE ADDITIONAL BENEFITS .— 
(i) I N GENERAL .—Subject to the requirements of

(i) I N GENERAL .—Subject to the requirements of 
clause (ii), a State may require that a qualified health plan offered in such State offer benefits in addition to the essential health benefits specified under section 1302(b). 
(ii) S
TATE MUST ASSUME COST .—A State shall make

TATE MUST ASSUME COST .—A State shall make 
payments to or on behalf of an individual eligible for the premium tax credit under section 36B of the Internal Revenue Code of 1986 and any cost-sharing reduction under section 1402 to defray the cost to the individual of any additional benefits described in clause (i) which are not eligible for such credit or reduction under section 36B(b)(3)(D) of such Code and section 1402(c)(4). 
(4) F
UNCTIONS .—An Exchange shall, at a minimum—

UNCTIONS .—An Exchange shall, at a minimum— 
(A) implement procedures for the certification, recertifi-
cation, and decertification, consistent with guidelines devel-oped by the Secretary under subsection (c), of health plans as qualified health plans; 
(B) provide for the operation of a toll-free telephone 
hotline to respond to requests for assistance; 
(C) maintain an Internet website through which

(C) maintain an Internet website through which 
enrollees and prospective enrollees of qualified health plans may obtain standardized comparative information on such plans; 
(D) assign a rating to each qualified health plan offered 
through such Exchange in accordance with the criteria developed by the Secretary under subsection (c)(3); 
(E) utilize a standardized format for presenting health 
benefits plan options in the Exchange, including the use Web site. Hotline. Procedures. Payments.

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124 STAT. 177 PUBLIC LAW 111–148—MAR. 23, 2010 
of the uniform outline of coverage established under section 
2715 of the Public Health Service Act; 
(F) in accordance with section 1413, inform individuals

of eligibility requirements for the medicaid program under title XIX of the Social Security Act, the CHIP program under title XXI of such Act, or any applicable State or local public program and if through screening of the application by the Exchange, the Exchange determines that such individuals are eligible for any such program, enroll such individuals in such program; 
(G) establish and make available by electronic means

a calculator to determine the actual cost of coverage after the application of any premium tax credit under section 36B of the Internal Revenue Code of 1986 and any cost- sharing reduction under section 1402; 
(H) subject to section 1411, grant a certification 
attesting that, for purposes of the individual responsibility penalty under section 5000A of the Internal Revenue Code of 1986, an individual is exempt from the individual requirement or from the penalty imposed by such section because—

(i) there is no affordable qualified health plan 
available through the Exchange, or the individual’s employer, covering the individual; or 
(ii) the individual meets the requirements for any 
other such exemption from the individual responsibility requirement or penalty; (I) transfer to the Secretary of the Treasury— 
(i) a list of the individuals who are issued a certifi-
cation under subparagraph (H), including the name and taxpayer identification number of each individual;

(ii) the name and taxpayer identification number 
of each individual who was an employee of an employer but who was determined to be eligible for the premium tax credit under section 36B of the Internal Revenue Code of 1986 because— 
(I) the employer did not provide minimum 
essential coverage; or 
(II) the employer provided such minimum

(II) the employer provided such minimum 
essential coverage but it was determined under section 36B(c)(2)(C) of such Code to either be unaffordable to the employee or not provide the required minimum actuarial value; and (iii) the name and taxpayer identification number 
of each individual who notifies the Exchange under section 1411(b)(4) that they have changed employers

and of each individual who ceases coverage under a qualified health plan during a plan year (and the effec-tive date of such cessation); (J) provide to each employer the name of each employee 
of the employer described in subparagraph (I)(ii) who ceases coverage under a qualified health plan during a plan year (and the effective date of such cessation); and 
(K) establish the Navigator program described in sub-
section (i). (5) F
UNDING LIMITATIONS .— Lists. Certification.

UNDING LIMITATIONS .— Lists. Certification. 
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124 STAT. 178 PUBLIC LAW 111–148—MAR. 23, 2010 
(A) N O FEDERAL FUNDS FOR CONTINUED OPERATIONS .— 
In establishing an Exchange under this section, the State shall ensure that such Exchange is self-sustaining begin-ning on January 1, 2015, including allowing the Exchange to charge assessments or user fees to participating health insurance issuers, or to otherwise generate funding, to support its operations. 
(B) P
ROHIBITING WASTEFUL USE OF FUNDS .—In carrying

ROHIBITING WASTEFUL USE OF FUNDS .—In carrying 
out activities under this subsection, an Exchange shall not utilize any funds intended for the administrative and operational expenses of the Exchange for staff retreats, promotional giveaways, excessive executive compensation, or promotion of Federal or State legislative and regulatory modifications. (6) C
ONSULTATION .—An Exchange shall consult with stake-
holders relevant to carrying out the activities under this section, including—

(A) health care consumers who are enrollees in quali-
fied health plans; 
(B) individuals and entities with experience in facili-
tating enrollment in qualified health plans; 
(C) representatives of small businesses and self- 
employed individuals; 
(D) State Medicaid offices; and (E) advocates for enrolling hard to reach populations. 
(7) P
UBLICATION OF COSTS .—An Exchange shall publish

UBLICATION OF COSTS .—An Exchange shall publish 
the average costs of licensing, regulatory fees, and any other payments required by the Exchange, and the administrative costs of such Exchange, on an Internet website to educate consumers on such costs. Such information shall also include monies lost to waste, fraud, and abuse. (e) C
ERTIFICATION .— 
(1) I N GENERAL .—An Exchange may certify a health plan 
as a qualified health plan if— 
(A) such health plan meets the requirements for certifi-

cation as promulgated by the Secretary under subsection (c)(1); and 
(B) the Exchange determines that making available 
such health plan through such Exchange is in the interests of qualified individuals and qualified employers in the State or States in which such Exchange operates, except that the Exchange may not exclude a health plan— 
(i) on the basis that such plan is a fee-for-service 
plan; 
(ii) through the imposition of premium price con-
trols; or

trols; or 
(iii) on the basis that the plan provides treatments 
necessary to prevent patients’ deaths in circumstances the Exchange determines are inappropriate or too costly. 
(2) P
REMIUM CONSIDERATIONS .—The Exchange shall require

health plans seeking certification as qualified health plans to submit a justification for any premium increase prior to implementation of the increase. Such plans shall prominently post such information on their websites. The Exchange may take this information, and the information and the rec-ommendations provided to the Exchange by the State under 
Web site. Determination. Web site. Effective date.

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124 STAT. 179 PUBLIC LAW 111–148—MAR. 23, 2010 
section 2794(b)(1) of the Public Health Service Act (relating 
to patterns or practices of excessive or unjustified premium increases), into consideration when determining whether to make such health plan available through the Exchange. The Exchange shall take into account any excess of premium growth outside the Exchange as compared to the rate of such growth inside the Exchange, including information reported by the States. (f) F
LEXIBILITY .—

LEXIBILITY .— 
(1) R EGIONAL OR OTHER INTERSTATE EXCHANGES .—An 
Exchange may operate in more than one State if— 
(A) each State in which such Exchange operates per-
mits such operation; and 
(B) the Secretary approves such regional or interstate 
Exchange. (2) S
UBSIDIARY EXCHANGES .—A State may establish one 
or more subsidiary Exchanges if— 
(A) each such Exchange serves a geographically distinct 
area; and 
(B) the area served by each such Exchange is at least

as large as a rating area described in section 2701(a) of the Public Health Service Act. (3) A
UTHORITY TO CONTRACT .— 
(A) I N GENERAL .—A State may elect to authorize an 
Exchange established by the State under this section to enter into an agreement with an eligible entity to carry out 1 or more responsibilities of the Exchange. 
(B) E
LIGIBLE ENTITY .—In this paragraph, the term 
‘‘eligible entity’’ means— 
(i) a person— 
(I) incorporated under, and subject to the laws

(I) incorporated under, and subject to the laws 
of, 1 or more States; 
(II) that has demonstrated experience on a 
State or regional basis in the individual and small group health insurance markets and in benefits coverage; and 
(III) that is not a health insurance issuer or

(III) that is not a health insurance issuer or 
that is treated under subsection (a) or (b) of section 52 of the Internal Revenue Code of 1986 as a member of the same controlled group of corpora-tions (or under common control with) as a health insurance issuer; or (ii) the State medicaid agency under title XIX of 
the Social Security Act. 
(g) R
EWARDING QUALITY THROUGH MARKET -BASED INCEN -
TIVES .— 
(1) S TRATEGY DESCRIBED .—A strategy described in this

paragraph is a payment structure that provides increased reimbursement or other incentives for— 
(A) improving health outcomes through the 
implementation of activities that shall include quality reporting, effective case management, care coordination, chronic disease management, medication and care compli-ance initiatives, including through the use of the medical home model, for treatment or services under the plan or coverage; Definition.

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124 STAT. 180 PUBLIC LAW 111–148—MAR. 23, 2010 
(B) the implementation of activities to prevent hospital 
readmissions through a comprehensive program for hos-pital discharge that includes patient-centered education and counseling, comprehensive discharge planning, and post discharge reinforcement by an appropriate health care professional; 
(C) the implementation of activities to improve patient

safety and reduce medical errors through the appropriate use of best clinical practices, evidence based medicine, and health information technology under the plan or coverage; and 
(D) the implementation of wellness and health pro-
motion activities. (2) G
UIDELINES .—The Secretary, in consultation with 
experts in health care quality and stakeholders, shall develop guidelines concerning the matters described in paragraph (1). 
(3) R
EQUIREMENTS .—The guidelines developed under para-

graph (2) shall require the periodic reporting to the applicable Exchange of the activities that a qualified health plan has conducted to implement a strategy described in paragraph (1). (h) Q
UALITY IMPROVEMENT .— 
(1) E NHANCING PATIENT SAFETY .—Beginning on January 
1, 2015, a qualified health plan may contract with— 
(A) a hospital with greater than 50 beds only if such 
hospital— 
(i) utilizes a patient safety evaluation system as

described in part C of title IX of the Public Health Service Act; and 
(ii) implements a mechanism to ensure that each 
patient receives a comprehensive program for hospital discharge that includes patient-centered education and counseling, comprehensive discharge planning, and post discharge reinforcement by an appropriate health care professional; or (B) a health care provider only if such provider imple-

ments such mechanisms to improve health care quality as the Secretary may by regulation require. (2) E
XCEPTIONS .—The Secretary may establish reasonable 
exceptions to the requirements described in paragraph (1). 
(3) A DJUSTMENT .—The Secretary may by regulation adjust 
the number of beds described in paragraph (1)(A). (i) N
AVIGATORS .— 
(1) I N GENERAL .—An Exchange shall establish a program

under which it awards grants to entities described in paragraph (2) to carry out the duties described in paragraph (3). 
(2) E
(A) I N GENERAL .—To be eligible to receive a grant

under paragraph (1), an entity shall demonstrate to the Exchange involved that the entity has existing relation-ships, or could readily establish relationships, with employers and employees, consumers (including uninsured and underinsured consumers), or self-employed individuals likely to be qualified to enroll in a qualified health plan. 
(B) T
YPES .—Entities described in subparagraph (A)

YPES .—Entities described in subparagraph (A) 
may include trade, industry, and professional associations, commercial fishing industry organizations, ranching and farming organizations, community and consumer-focused Grants. Effective date. Reports. 
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124 STAT. 181 PUBLIC LAW 111–148—MAR. 23, 2010 
nonprofit groups, chambers of commerce, unions, small 
business development centers, other licensed insurance agents and brokers, and other entities that— 
(i) are capable of carrying out the duties described 
in paragraph (3); 
(ii) meet the standards described in paragraph 
(4); and 
(iii) provide information consistent with the stand-
ards developed under paragraph (5). 
(3) D
UTIES .—An entity that serves as a navigator under

a grant under this subsection shall— 
(A) conduct public education activities to raise aware-
ness of the availability of qualified health plans; 
(B) distribute fair and impartial information con-
cerning enrollment in qualified health plans, and the avail-ability of premium tax credits under section 36B of the Internal Revenue Code of 1986 and cost-sharing reductions under section 1402;

(C) facilitate enrollment in qualified health plans; (D) provide referrals to any applicable office of health 
insurance consumer assistance or health insurance ombudsman established under section 2793 of the Public Health Service Act, or any other appropriate State agency or agencies, for any enrollee with a grievance, complaint, or question regarding their health plan, coverage, or a determination under such plan or coverage; and 
(E) provide information in a manner that is culturally

and linguistically appropriate to the needs of the population being served by the Exchange or Exchanges. (4) S
TANDARDS .— 
(A) I N GENERAL .—The Secretary shall establish stand-

ards for navigators under this subsection, including provi-sions to ensure that any private or public entity that is selected as a navigator is qualified, and licensed if appro-priate, to engage in the navigator activities described in this subsection and to avoid conflicts of interest. Under such standards, a navigator shall not— 
(i) be a health insurance issuer; or (ii) receive any consideration directly or indirectly

from any health insurance issuer in connection with the enrollment of any qualified individuals or employees of a qualified employer in a qualified health plan. 
(5) F
AIR AND IMPARTIAL INFORMATION AND SERVICES .—The 
Secretary, in collaboration with States, shall develop standards to ensure that information made available by navigators is fair, accurate, and impartial. 
(6) F
UNDING .—Grants under this subsection shall be made

from the operational funds of the Exchange and not Federal funds received by the State to establish the Exchange. (j) A
PPLICABILITY OF MENTAL HEALTH PARITY .—Section 2726 
of the Public Health Service Act shall apply to qualified health plans in the same manner and to the same extent as such section applies to health insurance issuers and group health plans. 
(k) C
ONFLICT .—An Exchange may not establish rules that con-

flict with or prevent the application of regulations promulgated by the Secretary under this subtitle. Standards. 
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124 STAT. 182 PUBLIC LAW 111–148—MAR. 23, 2010 
SEC. 1312. CONSUMER CHOICE. 
(a) C HOICE .— 
(1) Q UALIFIED INDIVIDUALS .—A qualified individual may 
enroll in any qualified health plan available to such individual. 
(2) Q UALIFIED EMPLOYERS .— 
(A) E MPLOYER MAY SPECIFY LEVEL .—A qualified 
employer may provide support for coverage of employees under a qualified health plan by selecting any level of coverage under section 1302(d) to be made available to employees through an Exchange. 
(B) E

(B) E
MPLOYEE MAY CHOOSE PLANS WITHIN A LEVEL .— 
Each employee of a qualified employer that elects a level of coverage under subparagraph (A) may choose to enroll in a qualified health plan that offers coverage at that level. 
(b) P
AYMENT OF PREMIUMS BY QUALIFIED INDIVIDUALS .—A 
qualified individual enrolled in any qualified health plan may pay any applicable premium owed by such individual to the health insurance issuer issuing such qualified health plan. 
(c) S
INGLE RISKPOOL.—

(c) S
INGLE RISKPOOL.— 
(1) I NDIVIDUAL MARKET .—A health insurance issuer shall 
consider all enrollees in all health plans (other than grand-fathered health plans) offered by such issuer in the individual market, including those enrollees who do not enroll in such plans through the Exchange, to be members of a single risk pool. 
(2) S
MALL GROUP MARKET .—A health insurance issuer shall

consider all enrollees in all health plans (other than grand-fathered health plans) offered by such issuer in the small group market, including those enrollees who do not enroll in such plans through the Exchange, to be members of a single risk pool. 
(3) M
ERGER OF MARKETS .—A State may require the indi-
vidual and small group insurance markets within a State to be merged if the State determines appropriate. 
(4) S
TATE LAW .—A State law requiring grandfathered

TATE LAW .—A State law requiring grandfathered 
health plans to be included in a pool described in paragraph (1) or (2) shall not apply. (d) E
MPOWERING CONSUMER CHOICE .— 
(1) C ONTINUED OPERATION OF MARKET OUTSIDE  
EXCHANGES .—Nothing in this title shall be construed to pro-
hibit— 
(A) a health insurance issuer from offering outside 
of an Exchange a health plan to a qualified individual or qualified employer; and 
(B) a qualified individual from enrolling in, or a quali-

fied employer from selecting for its employees, a health plan offered outside of an Exchange. (2) C
ONTINUED OPERATION OF STATE BENEFIT REQUIRE -
MENTS .—Nothing in this title shall be construed to terminate, 
abridge, or limit the operation of any requirement under State law with respect to any policy or plan that is offered outside of an Exchange to offer benefits. 
(3) V
OLUNTARY NATURE OF AN EXCHANGE .— 
(A) C HOICE TO ENROLL OR NOT TO ENROLL .—Nothing

(A) C HOICE TO ENROLL OR NOT TO ENROLL .—Nothing 
in this title shall be construed to restrict the choice of 42 USC 18032. 
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124 STAT. 183 PUBLIC LAW 111–148—MAR. 23, 2010 
a qualified individual to enroll or not to enroll in a qualified 
health plan or to participate in an Exchange. 
(B) P ROHIBITION AGAINST COMPELLED ENROLLMENT .— 
Nothing in this title shall be construed to compel an indi-vidual to enroll in a qualified health plan or to participate in an Exchange. 
(C) I
NDIVIDUALS ALLOWED TO ENROLL IN ANY PLAN .—

NDIVIDUALS ALLOWED TO ENROLL IN ANY PLAN .— 
A qualified individual may enroll in any qualified health plan, except that in the case of a catastrophic plan described in section 1302(e), a qualified individual may enroll in the plan only if the individual is eligible to enroll in the plan under section 1302(e)(2). 
(D) M
EMBERS OF CONGRESS IN THE EXCHANGE .— 
(i) R EQUIREMENT .—Notwithstanding any other

(i) R EQUIREMENT .—Notwithstanding any other 
provision of law, after the effective date of this subtitle, the only health plans that the Federal Government may make available to Members of Congress and congressional staff with respect to their service as a Member of Congress or congressional staff shall be health plans that are— 
(I) created under this Act (or an amendment 
made by this Act); or 
(II) offered through an Exchange established

(II) offered through an Exchange established 
under this Act (or an amendment made by this Act). (ii) D
EFINITIONS .—In this section: 
(I) M EMBER OF CONGRESS .—The term ‘‘Member 
of Congress’’ means any member of the House of Representatives or the Senate. 
(II) C
ONGRESSIONAL STAFF .—The term 
‘‘congressional staff’’ means all full-time and part- time employees employed by the official office of a Member of Congress, whether in Washington, DC or outside of Washington, DC. 
(4) N

(4) N
O PENALTY FOR TRANSFERRING TO MINIMUM ESSENTIAL  
COVERAGE OUTSIDE EXCHANGE .—An Exchange, or a qualified

health plan offered through an Exchange, shall not impose any penalty or other fee on an individual who cancels enroll-ment in a plan because the individual becomes eligible for minimum essential coverage (as defined in section 5000A(f) of the Internal Revenue Code of 1986 without regard to para-graph (1)(C) or (D) thereof) or such coverage becomes affordable (within the meaning of section 36B(c)(2)(C) of such Code). (e) E
NROLLMENT THROUGH AGENTS OR BROKERS .—The Sec-

retary shall establish procedures under which a State may allow agents or brokers— 
(1) to enroll individuals in any qualified health plans in 
the individual or small group market as soon as the plan is offered through an Exchange in the State; and 
(2) to assist individuals in applying for premium tax credits 
and cost-sharing reductions for plans sold through an Exchange.

Such procedures may include the establishment of rate schedules for broker commissions paid by health benefits plans offered through an exchange. 
(f) Q
UALIFIED INDIVIDUALS AND EMPLOYERS ; ACCESS LIMITED  
TOCITIZENS AND LAWFUL RESIDENTS .— 
(1) Q UALIFIED INDIVIDUALS .—In this title: Procedures. 
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124 STAT. 184 PUBLIC LAW 111–148—MAR. 23, 2010 
(A) I N GENERAL .—The term ‘‘qualified individual’’ 
means, with respect to an Exchange, an individual who— 
(i) is seeking to enroll in a qualified health plan 
in the individual market offered through the Exchange; and 
(ii) resides in the State that established the 
Exchange (except with respect to territorial agreements under section 1312(f)). (B) I
NCARCERATED INDIVIDUALS EXCLUDED .—An indi-

vidual shall not be treated as a qualified individual if, at the time of enrollment, the individual is incarcerated, other than incarceration pending the disposition of charges. (2) Q
UALIFIED EMPLOYER .—In this title: 
(A) I N GENERAL .—The term ‘‘qualified employer’’ means

a small employer that elects to make all full-time employees of such employer eligible for 1 or more qualified health plans offered in the small group market through an Exchange that offers qualified health plans. 
(B) E
XTENSION TO LARGE GROUPS .— 
(i) I N GENERAL .—Beginning in 2017, each State

(i) I N GENERAL .—Beginning in 2017, each State 
may allow issuers of health insurance coverage in the large group market in the State to offer qualified health plans in such market through an Exchange. Nothing in this subparagraph shall be construed as requiring the issuer to offer such plans through an Exchange. 
(ii) L
ARGE EMPLOYERS ELIGIBLE .—If a State under

ARGE EMPLOYERS ELIGIBLE .—If a State under 
clause (i) allows issuers to offer qualified health plans in the large group market through an Exchange, the term ‘‘qualified employer’’ shall include a large employer that elects to make all full-time employees of such employer eligible for 1 or more qualified health plans offered in the large group market through the Exchange. 
(3) A
CCESS LIMITED TO LAWFUL RESIDENTS .—If an indi-

vidual is not, or is not reasonably expected to be for the entire period for which enrollment is sought, a citizen or national 
of the United States or an alien lawfully present in the United States, the individual shall not be treated as a qualified indi-vidual and may not be covered under a qualified health plan in the individual market that is offered through an Exchange. 
SEC. 1313. FINANCIAL INTEGRITY. 
(a) A CCOUNTING FOR EXPENDITURES .—

(a) A CCOUNTING FOR EXPENDITURES .— 
(1) I N GENERAL .—An Exchange shall keep an accurate 
accounting of all activities, receipts, and expenditures and shall annually submit to the Secretary a report concerning such accountings. 
(2) I
NVESTIGATIONS .—The Secretary, in coordination with

the Inspector General of the Department of Health and Human Services, may investigate the affairs of an Exchange, may examine the properties and records of an Exchange, and may require periodic reports in relation to activities undertaken by an Exchange. An Exchange shall fully cooperate in any investigation conducted under this paragraph. 
(3) A
UDITS .—An Exchange shall be subject to annual audits 
by the Secretary. Deadline. Deadline.

by the Secretary. Deadline. Deadline. 
Reports. 42 USC 18033. Effective date. Definition. Definition. 
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124 STAT. 185 PUBLIC LAW 111–148—MAR. 23, 2010 
(4) P ATTERN OF ABUSE .—If the Secretary determines that

an Exchange or a State has engaged in serious misconduct with respect to compliance with the requirements of, or carrying out of activities required under, this title, the Secretary may rescind from payments otherwise due to such State involved under this or any other Act administered by the Secretary an amount not to exceed 1 percent of such payments per year until corrective actions are taken by the State that are deter-mined to be adequate by the Secretary. 
(5) P

(5) P
ROTECTIONS AGAINST FRAUD AND ABUSE .—With respect 
to activities carried out under this title, the Secretary shall provide for the efficient and non-discriminatory administration of Exchange activities and implement any measure or procedure that— 
(A) the Secretary determines is appropriate to reduce 
fraud and abuse in the administration of this title; and 
(B) the Secretary has authority to implement under 
this title or any other Act. (6) A
PPLICATION OF THE FALSE CLAIMS ACT .—

PPLICATION OF THE FALSE CLAIMS ACT .— 
(A) I N GENERAL .—Payments made by, through, or in

connection with an Exchange are subject to the False Claims Act (31 U.S.C. 3729 et seq.) if those payments include any Federal funds. Compliance with the require-ments of this Act concerning eligibility for a health insur-ance issuer to participate in the Exchange shall be a mate-rial condition of an issuer’s entitlement to receive pay-ments, including payments of premium tax credits and cost-sharing reductions, through the Exchange. 
(B) D
AMAGES .—Notwithstanding paragraph (1) of sec-

tion 3729(a) of title 31, United States Code, and subject to paragraph (2) of such section, the civil penalty assessed under the False Claims Act on any person found liable under such Act as described in subparagraph (A) shall be increased by not less than 3 times and not more than 6 times the amount of damages which the Government sustains because of the act of that person. 
(b) GAO O
VERSIGHT .—Not later than 5 years after the first

date on which Exchanges are required to be operational under this title, the Comptroller General shall conduct an ongoing study of Exchange activities and the enrollees in qualified health plans offered through Exchanges. Such study shall review— 
(1) the operations and administration of Exchanges,

including surveys and reports of qualified health plans offered through Exchanges and on the experience of such plans (including data on enrollees in Exchanges and individuals pur-chasing health insurance coverage outside of Exchanges), the expenses of Exchanges, claims statistics relating to qualified health plans, complaints data relating to such plans, and the manner in which Exchanges meet their goals; 
(2) any significant observations regarding the utilization 
and adoption of Exchanges;

and adoption of Exchanges; 
(3) where appropriate, recommendations for improvements 
in the operations or policies of Exchanges; and 
(4) how many physicians, by area and specialty, are not 
taking or accepting new patients enrolled in Federal Govern-ment health care programs, and the adequacy of provider net-works of Federal Government health care programs. Deadline. Study. Penalty. Determination.

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124 STAT. 186 PUBLIC LAW 111–148—MAR. 23, 2010 
PART III—STATE FLEXIBILITY RELATING TO 
EXCHANGES 
SEC. 1321. STATE FLEXIBILITY IN OPERATION AND ENFORCEMENT OF 
EXCHANGES AND RELATED REQUIREMENTS. 
(a) E STABLISHMENT OF STANDARDS .— 
(1) I N GENERAL .—The Secretary shall, as soon as prac-
ticable after the date of enactment of this Act, issue regulations setting standards for meeting the requirements under this title, and the amendments made by this title, with respect to—

(A) the establishment and operation of Exchanges 
(including SHOP Exchanges); 
(B) the offering of qualified health plans through such 
Exchanges; 
(C) the establishment of the reinsurance and risk 
adjustment programs under part V; and 
(D) such other requirements as the Secretary deter-
mines appropriate.

mines appropriate. 
The preceding sentence shall not apply to standards for require-ments under subtitles A and C (and the amendments made by such subtitles) for which the Secretary issues regulations under the Public Health Service Act. 
(2) C
ONSULTATION .—In issuing the regulations under para-

graph (1), the Secretary shall consult with the National Associa-tion of Insurance Commissioners and its members and with health insurance issuers, consumer organizations, and such other individuals as the Secretary selects in a manner designed to ensure balanced representation among interested parties. (b) S
TATE ACTION .—Each State that elects, at such time and

in such manner as the Secretary may prescribe, to apply the require-ments described in subsection (a) shall, not later than January 1, 2014, adopt and have in effect— 
(1) the Federal standards established under subsection (a); 
or 
(2) a State law or regulation that the Secretary determines 
implements the standards within the State. (c) F
AILURE TOESTABLISH EXCHANGE OR IMPLEMENT REQUIRE -
MENTS .— 
(1) I N GENERAL .—If— 
(A) a State is not an electing State under subsection 
(b); or

(b); or 
(B) the Secretary determines, on or before January 
1, 2013, that an electing State— 
(i) will not have any required Exchange operational 
by January 1, 2014; or 
(ii) has not taken the actions the Secretary deter-
mines necessary to implement— 
(I) the other requirements set forth in the 
standards under subsection (a); or 
(II) the requirements set forth in subtitles A 
and C and the amendments made by such sub-titles;

the Secretary shall (directly or through agreement with a not- for-profit entity) establish and operate such Exchange within the State and the Secretary shall take such actions as are necessary to implement such other requirements. Determination. Deadline. Deadline. Regulations. 42 USC 18041. 
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124 STAT. 187 PUBLIC LAW 111–148—MAR. 23, 2010 
(2) E NFORCEMENT AUTHORITY .—The provisions of section 
2736(b) of the Public Health Services Act shall apply to the enforcement under paragraph (1) of requirements of subsection (a)(1) (without regard to any limitation on the application of those provisions to group health plans). (d) N
OINTERFERENCE WITHSTATE REGULATORY AUTHORITY .—

OINTERFERENCE WITHSTATE REGULATORY AUTHORITY .— 
Nothing in this title shall be construed to preempt any State law that does not prevent the application of the provisions of this title. 
(e) P
RESUMPTION FOR CERTAIN STATE -OPERATED EXCHANGES .— 
(1) I N GENERAL .—In the case of a State operating an

Exchange before January 1, 2010, and which has insured a percentage of its population not less than the percentage of the population projected to be covered nationally after the implementation of this Act, that seeks to operate an Exchange under this section, the Secretary shall presume that such Exchange meets the standards under this section unless the Secretary determines, after completion of the process estab-lished under paragraph (2), that the Exchange does not comply with such standards.

(2) P
ROCESS .—The Secretary shall establish a process to 
work with a State described in paragraph (1) to provide assist-ance necessary to assist the State’s Exchange in coming into compliance with the standards for approval under this section. 
SEC. 1322. FEDERAL PROGRAM TO ASSIST ESTABLISHMENT AND OPER-
ATION OF NONPROFIT, MEMBER-RUN HEALTH INSUR-ANCE ISSUERS. 
(a) E STABLISHMENT OF PROGRAM .— 
(1) I N GENERAL .—The Secretary shall establish a program

to carry out the purposes of this section to be known as the Consumer Operated and Oriented Plan (CO–OP) program. 
(2) P
URPOSE .—It is the purpose of the CO–OP program 
to foster the creation of qualified nonprofit health insurance issuers to offer qualified health plans in the individual and small group markets in the States in which the issuers are licensed to offer such plans. (b) L
OANS AND GRANTS UNDER THE CO–OP P ROGRAM .— 
(1) I N GENERAL .—The Secretary shall provide through the

CO–OP program for the awarding to persons applying to become qualified nonprofit health insurance issuers of— 
(A) loans to provide assistance to such person in 
meeting its start-up costs; and 
(B) grants to provide assistance to such person in 
meeting any solvency requirements of States in which the person seeks to be licensed to issue qualified health plans. (2) R
EQUIREMENTS FOR AWARDING LOANS AND GRANTS .— 
(A) I N GENERAL .—In awarding loans and grants under

the CO–OP program, the Secretary shall— 
(i) take into account the recommendations of the 
advisory board established under paragraph (3); 
(ii) give priority to applicants that will offer quali-
fied health plans on a Statewide basis, will utilize integrated care models, and have significant private support; and 
(iii) ensure that there is sufficient funding to estab-
lish at least 1 qualified nonprofit health insurance 42 USC 18042. Determination. Applicability.

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124 STAT. 188 PUBLIC LAW 111–148—MAR. 23, 2010 
issuer in each State, except that nothing in this clause 
shall prohibit the Secretary from funding the establish-ment of multiple qualified nonprofit health insurance issuers in any State if the funding is sufficient to do so. (B) S
TATES WITHOUT ISSUERS IN PROGRAM .—If no health

TATES WITHOUT ISSUERS IN PROGRAM .—If no health 
insurance issuer applies to be a qualified nonprofit health insurance issuer within a State, the Secretary may use amounts appropriated under this section for the awarding of grants to encourage the establishment of a qualified nonprofit health insurance issuer within the State or the expansion of a qualified nonprofit health insurance issuer from another State to the State. 
(C) A
GREEMENT .— 
(i) I N GENERAL .—The Secretary shall require any

person receiving a loan or grant under the CO–OP program to enter into an agreement with the Secretary which requires such person to meet (and to continue to meet)— 
(I) any requirement under this section for such 
person to be treated as a qualified nonprofit health insurance issuer; and 
(II) any requirements contained in the agree-
ment for such person to receive such loan or grant. (ii) R
ESTRICTIONS ON USE OF FEDERAL FUNDS .—

ESTRICTIONS ON USE OF FEDERAL FUNDS .— 
The agreement shall include a requirement that no portion of the funds made available by any loan or grant under this section may be used— 
(I) for carrying on propaganda, or otherwise 
attempting, to influence legislation; or 
(II) for marketing. 
Nothing in this clause shall be construed to allow a person to take any action prohibited by section 501(c)(29) of the Internal Revenue Code of 1986. 
(iii) F
AILURE TO MEET REQUIREMENTS .—If the Sec-

(iii) F
retary determines that a person has failed to meet any requirement described in clause (i) or (ii) and has failed to correct such failure within a reasonable period of time of when the person first knows (or reasonably should have known) of such failure, such person shall repay to the Secretary an amount equal to the sum of— 
(I) 110 percent of the aggregate amount of 
loans and grants received under this section; plus

(II) interest on the aggregate amount of loans 
and grants received under this section for the period the loans or grants were outstanding. 
The Secretary shall notify the Secretary of the Treasury of any determination under this section of a failure that results in the termination of an issuer’s tax-exempt status under section 501(c)(29) of such Code. (D) T
IME FOR AWARDING LOANS AND GRANTS .—The Sec-

retary shall not later than July 1, 2013, award the loans and grants under the CO–OP program and begin the dis-tribution of amounts awarded under such loans and grants. (3) A
DVISORY BOARD .— Establishment. Deadline. Notification. Determination. 
Payments. Lobbying. 
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124 STAT. 189 PUBLIC LAW 111–148—MAR. 23, 2010 
(A) I N GENERAL .—The advisory board under this para-
graph shall consist of 15 members appointed by the Comp-troller General of the United States from among individuals with qualifications described in section 1805(c)(2) of the Social Security Act. 
(B) R
ULES RELATING TO APPOINTMENTS .— 
(i) S TANDARDS .—Any individual appointed under

(i) S TANDARDS .—Any individual appointed under 
subparagraph (A) shall meet ethics and conflict of interest standards protecting against insurance industry involvement and interference. 
(ii) O
RIGINAL APPOINTMENTS .—The original 
appointment of board members under subparagraph (A)(ii) shall be made no later than 3 months after the date of enactment of this Act. (C) V
ACANCY .—Any vacancy on the advisory board 
shall be filled in the same manner as the original appoint-ment. 
(D) P

(D) P
AY AND REIMBURSEMENT .— 
(i) N O COMPENSATION FOR MEMBERS OF ADVISORY  
BOARD .—Except as provided in clause (ii), a member 
of the advisory board may not receive pay, allowances, or benefits by reason of their service on the board. 
(ii) T
RAVEL EXPENSES .—Each member shall receive 
travel expenses, including per diem in lieu of subsist-ence under subchapter I of chapter 57 of title 5, United States Code. (E) A
PPLICATION OF FACA .—The Federal Advisory Com-

mittee Act (5 U.S.C. App.) shall apply to the advisory board, except that section 14 of such Act shall not apply. 
(F) T
ERMINATION .—The advisory board shall terminate 
on the earlier of the date that it completes its duties under this section or December 31, 2015. 
(c) Q
UALIFIED NONPROFIT HEALTH INSURANCE ISSUER .—For 
purposes of this section— 
(1) I N GENERAL .—The term ‘‘qualified nonprofit health

insurance issuer’’ means a health insurance issuer that is an organization— 
(A) that is organized under State law as a nonprofit, 
member corporation; 
(B) substantially all of the activities of which consist 
of the issuance of qualified health plans in the individual and small group markets in each State in which it is licensed to issue such plans; and 
(C) that meets the other requirements of this sub-
section. (2) C
ERTAIN ORGANIZATIONS PROHIBITED .—An organization

shall not be treated as a qualified nonprofit health insurance issuer if— 
(A) the organization or a related entity (or any prede-
cessor of either) was a health insurance issuer on July 16, 2009; or 
(B) the organization is sponsored by a State or local 
government, any political subdivision thereof, or any instrumentality of such government or political subdivision. (3) G
OVERNANCE REQUIREMENTS .—An organization shall

OVERNANCE REQUIREMENTS .—An organization shall 
not be treated as a qualified nonprofit health insurance issuer unless— Definition. Deadline. 
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124 STAT. 190 PUBLIC LAW 111–148—MAR. 23, 2010 
(A) the governance of the organization is subject to 
a majority vote of its members; 
(B) its governing documents incorporate ethics and 
conflict of interest standards protecting against insurance industry involvement and interference; and 
(C) as provided in regulations promulgated by the Sec-
retary, the organization is required to operate with a strong consumer focus, including timeliness, responsiveness, and accountability to members. (4) P

ROFITS INURE TO BENEFIT OF MEMBERS .—An organiza-
tion shall not be treated as a qualified nonprofit health insur-ance issuer unless any profits made by the organization are required to be used to lower premiums, to improve benefits, or for other programs intended to improve the quality of health care delivered to its members. 
(5) C
OMPLIANCE WITH STATE INSURANCE LAWS .—An

organization shall not be treated as a qualified nonprofit health insurance issuer unless the organization meets all the require-ments that other issuers of qualified health plans are required to meet in any State where the issuer offers a qualified health plan, including solvency and licensure requirements, rules on payments to providers, and compliance with network adequacy rules, rate and form filing rules, any applicable State premium assessments and any other State law described in section

(6) C
OORDINATION WITH STATE INSURANCE REFORMS .—An 
organization shall not be treated as a qualified nonprofit health insurance issuer unless the organization does not offer a health plan in a State until that State has in effect (or the Secretary has implemented for the State) the market reforms required by part A of title XXVII of the Public Health Service Act (as amended by subtitles A and C of this Act). (d) E
STABLISHMENT OF PRIVATE PURCHASING COUNCIL .—

STABLISHMENT OF PRIVATE PURCHASING COUNCIL .— 
(1) I N GENERAL .—Qualified nonprofit health insurance 
issuers participating in the CO–OP program under this section may establish a private purchasing council to enter into collec-tive purchasing arrangements for items and services that increase administrative and other cost efficiencies, including claims administration, administrative services, health informa-tion technology, and actuarial services. 
(2) C

(2) C
OUNCIL MAY NOT SET PAYMENT RATES .—The private 
purchasing council established under paragraph (1) shall not set payment rates for health care facilities or providers partici-pating in health insurance coverage provided by qualified non-profit health insurance issuers. 
(3) C
ONTINUED APPLICATION OF ANTITRUST LAWS .— 
(A) I N GENERAL .—Nothing in this section shall be con-

strued to limit the application of the antitrust laws to any private purchasing council (whether or not established under this subsection) or to any qualified nonprofit health insurance issuer participating in such a council. 
(B) A
NTITRUST LAWS .—For purposes of this subpara-

graph, the term ‘‘antitrust laws’’ has the meaning given the term in subsection (a) of the first section of the Clayton Act (15 U.S.C. 12(a)). Such term also includes section 5 of the Federal Trade Commission Act (15 U.S.C. 45) to 
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124 STAT. 191 PUBLIC LAW 111–148—MAR. 23, 2010 
the extent that such section 5 applies to unfair methods 
of competition. 
(e) L IMITATION ON PARTICIPATION .—No representative of any

Federal, State, or local government (or of any political subdivision or instrumentality thereof), and no representative of a person described in subsection (c)(2)(A), may serve on the board of directors of a qualified nonprofit health insurance issuer or with a private purchasing council established under subsection (d). 
(f) L
IMITATIONS ON SECRETARY .— 
(1) I N GENERAL .—The Secretary shall not— 
(A) participate in any negotiations between 1 or more

qualified nonprofit health insurance issuers (or a private purchasing council established under subsection (d)) and any health care facilities or providers, including any drug manufacturer, pharmacy, or hospital; and 
(B) establish or maintain a price structure for 
reimbursement of any health benefits covered by such issuers. (2) C
OMPETITION .—Nothing in this section shall be con-

strued as authorizing the Secretary to interfere with the competitive nature of providing health benefits through quali-fied nonprofit health insurance issuers. (g) A
PPROPRIATIONS .—There are hereby appropriated, out of 
any funds in the Treasury not otherwise appropriated, $6,000,000,000 to carry out this section. 
(h) T
AXEXEMPTION FOR QUALIFIED NONPROFIT HEALTH INSUR -
ANCE ISSUER .— 
(1) I N GENERAL .—Section 501(c) of the Internal Revenue

Code of 1986 (relating to list of exempt organizations) is amended by adding at the end the following: 
‘‘(29) CO–OP 
HEALTH INSURANCE ISSUERS .— 
‘‘(A) I N GENERAL .—A qualified nonprofit health insur-

ance issuer (within the meaning of section 1322 of the Patient Protection and Affordable Care Act) which has received a loan or grant under the CO–OP program under such section, but only with respect to periods for which the issuer is in compliance with the requirements of such section and any agreement with respect to the loan or grant. 
‘‘(B) C
ONDITIONS FOR EXEMPTION .—Subparagraph (A) 
shall apply to an organization only if— 
‘‘(i) the organization has given notice to the Sec-

retary, in such manner as the Secretary may by regula-tions prescribe, that it is applying for recognition of its status under this paragraph, 
‘‘(ii) except as provided in section 1322(c)(4) of 
the Patient Protection and Affordable Care Act, no part of the net earnings of which inures to the benefit of any private shareholder or individual, 
‘‘(iii) no substantial part of the activities of which 
is carrying on propaganda, or otherwise attempting, to influence legislation, and

‘‘(iv) the organization does not participate in, or 
intervene in (including the publishing or distributing of statements), any political campaign on behalf of (or in opposition to) any candidate for public office.’’. Lobbying. Notice. Applicability. 26 USC 501. 
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124 STAT. 192 PUBLIC LAW 111–148—MAR. 23, 2010 
(2) A DDITIONAL REPORTING REQUIREMENT .—Section 6033 of 
such Code (relating to returns by exempt organizations) is amended by redesignating subsection (m) as subsection (n) and by inserting after subsection (l) the following: ‘‘(m) A
DDITIONAL INFORMATION REQUIRED FROM CO–OP 
INSURERS .—An organization described in section 501(c)(29) shall 
include on the return required under subsection (a) the following information:

‘‘(1) The amount of the reserves required by each State 
in which the organization is licensed to issue qualified health plans. 
‘‘(2) The amount of reserves on hand.’’. (3) A
PPLICATION OF TAX ON EXCESS BENEFIT TRANS -
ACTIONS .—Section 4958(e)(1) of such Code (defining applicable 
tax-exempt organization) is amended by striking ‘‘paragraph (3) or (4)’’ and inserting ‘‘paragraph (3), (4), or (29)’’. (i) GAO S
TUDY AND REPORT .— 
(1) S TUDY .—The Comptroller General of the General

Accountability Office shall conduct an ongoing study on com-petition and market concentration in the health insurance market in the United States after the implementation of the reforms in such market under the provisions of, and the amend-ments made by, this Act. Such study shall include an analysis of new issuers of health insurance in such market. 
(2) R
EPORT .—The Comptroller General shall, not later than

December 31 of each even-numbered year (beginning with 2014), report to the appropriate committees of the Congress the results of the study conducted under paragraph (1), including any recommendations for administrative or legislative changes the Comptroller General determines necessary or appropriate to increase competition in the health insurance market. 
SEC. 1323. COMMUNITY HEALTH INSURANCE OPTION. 
(a) V OLUNTARY NATURE .— 
(1) N O REQUIREMENT FOR HEALTH CARE PROVIDERS TO

PARTICIPATE .—Nothing in this section shall be construed to 
require a health care provider to participate in a community health insurance option, or to impose any penalty for non- participation. 
(2) N
O REQUIREMENT FOR INDIVIDUALS TO JOIN .—Nothing 
in this section shall be construed to require an individual to participate in a community health insurance option, or to impose any penalty for non-participation. 
(3) S
TATE OPT OUT .— 
(A) I N GENERAL .—A State may elect to prohibit

(A) I N GENERAL .—A State may elect to prohibit 
Exchanges in such State from offering a community health insurance option if such State enacts a law to provide for such prohibition. 
(B) T
ERMINATION OF OPT OUT .—A State may repeal 
a law described in subparagraph (A) and provide for the offering of such an option through the Exchange. 
(b) E
STABLISHMENT OF COMMUNITY HEALTH INSURANCE  
OPTION .— 
(1) E STABLISHMENT .—The Secretary shall establish a

community health insurance option to offer, through the Exchanges established under this title (other than Exchanges 42 USC 18043. Effective date. 
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124 STAT. 193 PUBLIC LAW 111–148—MAR. 23, 2010 
in States that elect to opt out as provided for in subsection 
(a)(3)), health care coverage that provides value, choice, com-petition, and stability of affordable, high quality coverage throughout the United States. 
(2) C
OMMUNITY HEALTH INSURANCE OPTION .—In this sec-
tion, the term ‘‘community health insurance option’’ means health insurance coverage that— 
(A) except as specifically provided for in this section,

complies with the requirements for being a qualified health plan; 
(B) provides high value for the premium charged; (C) reduces administrative costs and promotes adminis-
trative simplification for beneficiaries; 
(D) promotes high quality clinical care; (E) provides high quality customer service to bene-
ficiaries; 
(F) offers a sufficient choice of providers; and (G) complies with State laws (if any), except as other-

wise provided for in this title, relating to the laws described in section 1324(b). (3) E
(A) G ENERAL RULE .—Except as provided in subpara-
graph (B), a community health insurance option offered under this section shall provide coverage only for the essen-tial health benefits described in section 1302(b). 
(B) S
TATES MAY OFFER ADDITIONAL BENEFITS .—Nothing

TATES MAY OFFER ADDITIONAL BENEFITS .—Nothing 
in this section shall preclude a State from requiring that benefits in addition to the essential health benefits required under subparagraph (A) be provided to enrollees of a community health insurance option offered in such State. 
(C) C
REDITS .— 
(i) I N GENERAL .—An individual enrolled in a

(i) I N GENERAL .—An individual enrolled in a 
community health insurance option under this section shall be eligible for credits under section 36B of the Internal Revenue Code of 1986 in the same manner as an individual who is enrolled in a qualified health plan. 
(ii) N
O ADDITIONAL FEDERAL COST .—A requirement

(ii) N
O ADDITIONAL FEDERAL COST .—A requirement 
by a State under subparagraph (B) that benefits in addition to the essential health benefits required under subparagraph (A) be provided to enrollees of a commu-nity health insurance option shall not affect the amount of a premium tax credit provided under section 36B of the Internal Revenue Code of 1986 with respect to such plan. (D) S

payments to or on behalf of an eligible individual to defray the cost of any additional benefits described in subpara-graph (B). 
(E) E
NSURING ACCESS TO ALL SERVICES .—Nothing in

NSURING ACCESS TO ALL SERVICES .—Nothing in 
this Act shall prohibit an individual enrolled in a commu-nity health insurance option from paying out-of-pocket the full cost of any item or service not included as an essential health benefit or otherwise covered as a benefit by a health plan. Nothing in subparagraph (B) shall prohibit any type of medical provider from accepting an out-of-pocket pay-ment from an individual enrolled in a community health Payments. Definition.

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124 STAT. 194 PUBLIC LAW 111–148—MAR. 23, 2010 
insurance option for a service otherwise not included as 
an essential health benefit. 
(F) P ROTECTING ACCESS TO END OF LIFE CARE .—A 
community health insurance option offered under this sec-tion shall be prohibited from limiting access to end of life care. (4) C
OST SHARING .—A community health insurance option 
shall offer coverage at each of the levels of coverage described in section 1302(d). 
(5) P
REMIUMS .—

(5) P
REMIUMS .— 
(A) P REMIUMS SUFFICIENT TO COVER COSTS .—The Sec-
retary shall establish geographically adjusted premium rates in an amount sufficient to cover expected costs (including claims and administrative costs) using methods in general use by qualified health plans. 
(B) A
PPLICABLE RULES .—The provisions of title XXVII

PPLICABLE RULES .—The provisions of title XXVII 
of the Public Health Service Act relating to premiums shall apply to community health insurance options under this section, including modified community rating provi-sions under section 2701 of such Act. 
(C) C
OLLECTION OF DATA .—The Secretary shall collect 
data as necessary to set premium rates under subpara-graph (A). 
(D) N
ATIONAL POOLING .—Notwithstanding any other

ATIONAL POOLING .—Notwithstanding any other 
provision of law, the Secretary may treat all enrollees in community health insurance options as members of a single pool. 
(E) C
ONTINGENCY MARGIN .—In establishing premium 
rates under subparagraph (A), the Secretary shall include an appropriate amount for a contingency margin. (6) R
EIMBURSEMENT RATES .— 
(A) N EGOTIATED RATES .—The Secretary shall negotiate

rates for the reimbursement of health care providers for benefits covered under a community health insurance option. 
(B) L
IMITATION .—The rates described in subparagraph 
(A) shall not be higher, in aggregate, than the average reimbursement rates paid by health insurance issuers offering qualified health plans through the Exchange. 
(C) I
NNOVATION .—Subject to the limits contained in

NNOVATION .—Subject to the limits contained in 
subparagraph (A), a State Advisory Council established or designated under subsection (d) may develop or encour-age the use of innovative payment policies that promote quality, efficiency and savings to consumers. (7) S
OLVENCY AND CONSUMER PROTECTION .— 
(A) S OLVENCY .—The Secretary shall establish a Fed-

eral solvency standard to be applied with respect to a community health insurance option. A community health insurance option shall also be subject to the solvency standard of each State in which such community health insurance option is offered. 
(B) M
INIMUM REQUIRED .—In establishing the standard

INIMUM REQUIRED .—In establishing the standard 
described under subparagraph (A), the Secretary shall require a reserve fund that shall be equal to at least the dollar value of the incurred but not reported claims of a community health insurance option. Standard. 
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124 STAT. 195 PUBLIC LAW 111–148—MAR. 23, 2010 
(C) C ONSUMER PROTECTIONS .—The consumer protection 
laws of a State shall apply to a community health insurance option. (8) R
EQUIREMENTS ESTABLISHED IN PARTNERSHIP WITH  
INSURANCE COMMISSIONERS .— 
(A) I N GENERAL .—The Secretary, in collaboration with

the National Association of Insurance Commissioners (in this paragraph referred to as the ‘‘NAIC’’), may promulgate regulations to establish additional requirements for a community health insurance option. 
(B) A
PPLICABILITY .—Any requirement promulgated 
under subparagraph (A) shall be applicable to such option beginning 90 days after the date on which the regulation involved becomes final. 
(c) S
TART -UPFUND.— 
(1) E STABLISHMENT OF FUND .—

(1) E STABLISHMENT OF FUND .— 
(A) I N GENERAL .—There is established in the Treasury

of the United States a trust fund to be known as the ‘‘Health Benefit Plan Start-Up Fund’’ (referred to in this section as the ‘‘Start-Up Fund’’), that shall consist of such amounts as may be appropriated or credited to the Start- Up Fund as provided for in this subsection to provide loans for the initial operations of a community health insur-ance option. Such amounts shall remain available until expended. 
(B) F
UNDING .—There is hereby appropriated to the

UNDING .—There is hereby appropriated to the 
Start-Up Fund, out of any moneys in the Treasury not otherwise appropriated an amount requested by the Sec-retary of Health and Human Services as necessary to— 
(i) pay the start-up costs associated with the initial 
operations of a community health insurance option; and 
(ii) pay the costs of making payments on claims 
submitted during the period that is not more than 90 days from the date on which such option is offered. 
(2) U

(2) U
SE OF START -UP FUND .—The Secretary shall use 
amounts contained in the Start-Up Fund to make payments (subject to the repayment requirements in paragraph (4)) for the purposes described in paragraph (1)(B). 
(3) P
ASS THROUGH OF REBATES .—The Secretary may estab-
lish procedures for reducing the amount of payments to a contracting administrator to take into account any rebates or price concessions. 
(4) R
EPAYMENT .— 
(A) I N GENERAL .—A community health insurance

(A) I N GENERAL .—A community health insurance 
option shall be required to repay the Secretary of the Treasury (on such terms as the Secretary may require) for any payments made under paragraph (1)(B) by the date that is not later than 9 years after the date on which the payment is made. The Secretary may require the pay-ment of interest with respect to such repayments at rates that do not exceed the market interest rate (as determined by the Secretary). 
(B) S

(B) S
ANCTIONS IN CASE OF FOR -PROFIT CONVERSION .— 
In any case in which the Secretary enters into a contract with a qualified entity for the offering of a community health insurance option and such entity is determined to Deadline. Effective date. Applicability. 
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124 STAT. 196 PUBLIC LAW 111–148—MAR. 23, 2010 
be a for-profit entity by the Secretary, such entity shall 
be— 
(i) immediately liable to the Secretary for any pay-
ments received by such entity from the Start-Up Fund; and 
(ii) permanently ineligible to offer a qualified 
health plan. 
(d) S
TATE ADVISORY COUNCIL .— 
(1) E STABLISHMENT .—A State (other than a State that

elects to opt out as provided for in subsection (a)(3)) shall establish or designate a public or non-profit private entity to serve as the State Advisory Council to provide recommenda-tions to the Secretary on the operations and policies of a community health insurance option in the State. Such Council shall provide recommendations on at least the following: 
(A) policies and procedures to integrate quality 
improvement and cost containment mechanisms into the health care delivery system;

(B) mechanisms to facilitate public awareness of the 
availability of a community health insurance option; and 
(C) alternative payment structures under a community 
health insurance option for health care providers that encourage quality improvement and cost control. (2) M
EMBERS .—The members of the State Advisory Council 
shall be representatives of the public and shall include health care consumers and providers. 
(3) A
PPLICABILITY OF RECOMMENDATIONS .—The Secretary

PPLICABILITY OF RECOMMENDATIONS .—The Secretary 
may apply the recommendations of a State Advisory Council to a community health insurance option in that State, in any other State, or in all States. (e) A
UTHORITY TOCONTRACT ; TERMS OF CONTRACT .— 
(1) A UTHORITY .— 
(A) I N GENERAL .—The Secretary may enter into a con-

tract or contracts with one or more qualified entities for the purpose of performing administrative functions (including functions described in subsection (a)(4) of section 1874A of the Social Security Act) with respect to a commu-nity health insurance option in the same manner as the Secretary may enter into contracts under subsection (a)(1) of such section. The Secretary shall have the same authority with respect to a community health insurance option under this section as the Secretary has

option under this section as the Secretary has under sub-sections (a)(1) and (b) of section 1874A of the Social Security Act with respect to title XVIII of such Act.

(B) R
EQUIREMENTS APPLY .—If the Secretary enters into 
a contract with a qualified entity to offer a community health insurance option, under such contract such entity— 
(i) shall meet the criteria established under para-
graph (2); and 
(ii) shall receive an administrative fee under para-
graph (7). (C) L
IMITATION .—Contracts under this subsection shall 
not involve the transfer of insurance risk to the contracting administrator. 
(D) R
EFERENCE .—An entity with which the Secretary

EFERENCE .—An entity with which the Secretary 
has entered into a contract under this paragraph shall be referred to as a ‘‘contracting administrator’’. Fee. 
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124 STAT. 197 PUBLIC LAW 111–148—MAR. 23, 2010 
(2) Q UALIFIED ENTITY .—To be qualified to be selected by 
the Secretary to offer a community health insurance option, an entity shall— 
(A) meet the criteria established under section 
1874A(a)(2) of the Social Security Act; 
(B) be a nonprofit entity for purposes of offering such 
option; 
(C) meet the solvency standards applicable under sub-
section (b)(7); 
(D) be eligible to offer health insurance or health bene-
fits coverage;

fits coverage; 
(E) meet quality standards specified by the Secretary; (F) have in place effective procedures to control fraud, 
abuse, and waste; and 
(G) meet such other requirements as the Secretary 
may impose.

Procedures described under subparagraph (F) shall include the implementation of procedures to use beneficiary identifiers to identify individuals entitled to benefits so that such an individ-ual’s social security account number is not used, and shall also include procedures for the use of technology (including front-end, prepayment intelligent data-matching technology similar to that used by hedge funds, investment funds, and banks) to provide real-time data analysis of claims for payment under

data analysis of claims for payment under this title to identify and investigate unusual billing or order practices under this title that could indicate fraud or abuse.

(3) T
ERM.—A contract provided for under paragraph (1) 
shall be for a term of at least 5 years but not more than 10 years, as determined by the Secretary. At the end of each such term, the Secretary shall conduct a competitive bidding process for the purposes of renewing existing contracts or selecting new qualified entities with which to enter into con-tracts under such paragraph. 
(4) L
IMITATION .—A contract may not be renewed under

IMITATION .—A contract may not be renewed under 
this subsection unless the Secretary determines that the con-tracting administrator has met performance requirements established by the Secretary in the areas described in para-graph (7)(B). 
(5) A
UDITS .—The Inspector General shall conduct periodic 
audits with respect to contracting administrators under this subsection to ensure that the administrator involved is in compliance with this section. 
(6) R

shall be revoked by the Secretary, upon the recommendation of the Inspector General, only after notice to the contracting administrator involved and an opportunity for a hearing. The Secretary may revoke such contract if the Secretary determines that such administrator has engaged in fraud, deception, waste, abuse of power, negligence, mismanagement of taxpayer dollars, or gross mismanagement. An entity that has had a contract revoked under this paragraph shall not be qualified to enter into a

paragraph shall not be qualified to enter into a subsequent contract under this subsection.

(7) F
EE FOR ADMINISTRATION .— 
(A) I N GENERAL .—The Secretary shall pay the con-
tracting administrator a fee for the management, adminis-tration, and delivery of the benefits under this section. Notification. Determination. 
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124 STAT. 198 PUBLIC LAW 111–148—MAR. 23, 2010 
(B) R EQUIREMENT FOR HIGH QUALITY ADMINISTRA -
TION .—The Secretary may increase the fee described in 
subparagraph (A) by not more than 10 percent, or reduce the fee described in subparagraph (A) by not more than 50 percent, based on the extent to which the contracting administrator, in the determination of the Secretary, meets performance requirements established by the Secretary, in at least the following areas:

(i) Maintaining low premium costs and low cost 
sharing requirements, provided that such requirements are consistent with section 1302. 
(ii) Reducing administrative costs and promoting 
administrative simplification for beneficiaries. 
(iii) Promoting high quality clinical care. (iv) Providing high quality customer service to 
beneficiaries. (C) N
ON-RENEWAL .—The Secretary may not renew a

ON-RENEWAL .—The Secretary may not renew a 
contract to offer a community health insurance option under this section with any contracting entity that has been assessed more than one reduction under subparagraph (B) during the contract period. (8) L
IMITATION .—Notwithstanding the terms of a contract 
under this subsection, the Secretary shall negotiate the reimbursement rates for purposes of subsection (b)(6). (f) R
EPORT BY HHS AND INSOLVENCY WARNINGS .—

EPORT BY HHS AND INSOLVENCY WARNINGS .— 
(1) I N GENERAL .—On an annual basis, the Secretary shall 
conduct a study on the solvency of a community health insur-ance option and submit to Congress a report describing the results of such study. 
(2) R
ESULT .—If, in any year, the result of the study under 
paragraph (1) is that a community health insurance option is insolvent, such result shall be treated as a community health insurance option solvency warning. 
(3) S

(3) S
UBMISSION OF PLAN AND PROCEDURE .— 
(A) I N GENERAL .—If there is a community health insur-
ance option solvency warning under paragraph (2) made in a year, the President shall submit to Congress, within the 15-day period beginning on the date of the budget submission to Congress under section 1105(a) of title 31, United States Code, for the succeeding year, proposed legis-lation to respond to such warning. 
(B) P
ROCEDURE .—In the case of a legislative proposal

ROCEDURE .—In the case of a legislative proposal 
submitted by the President pursuant to subparagraph (A), such proposal shall be considered by Congress using the same procedures described under sections 803 and 804 of the Medicare Prescription Drug, Improvement, and Mod-
ernization Act of 2003 that shall be used for a medicare funding warning. 
(g) M
ARKETING PARITY .—In a facility controlled by the Federal

Government, or by a State, where marketing or promotional mate-rials related to a community health insurance option are made available to the public, making available marketing or promotional materials relating to private health insurance plans shall not be prohibited. Such materials include informational pamphlets, guide-books, enrollment forms, or other materials determined reasonable for display. President. 
Deadline.

Deadline. 
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124 STAT. 199 PUBLIC LAW 111–148—MAR. 23, 2010 
(h) A UTHORIZATION OF APPROPRIATIONS .—There is authorized 
to be appropriated such sums as may be necessary to carry out this section. 
SEC. 1324. LEVEL PLAYING FIELD. 
(a) I NGENERAL .—Notwithstanding any other provision of law,

any health insurance coverage offered by a private health insurance issuer shall not be subject to any Federal or State law described in subsection (b) if a qualified health plan offered under the Con-sumer Operated and Oriented Plan program under section 1322, a community health insurance option under section 1323, or a nationwide qualified health plan under section 1333(b), is not sub-ject to such law. 
(b) L
AWS DESCRIBED .—The Federal and State laws described

in this subsection are those Federal and State laws relating to— 
(1) guaranteed renewal; (2) rating; (3) preexisting conditions; (4) non-discrimination; 
(5) quality improvement and reporting; (6) fraud and abuse; (7) solvency and financial requirements; (8) market conduct; (9) prompt payment; (10) appeals and grievances; (11) privacy and confidentiality; (12) licensure; and (13) benefit plan material or information. 
PART IV—STATE FLEXIBILITY TO ESTABLISH 
ALTERNATIVE PROGRAMS

ALTERNATIVE PROGRAMS 
SEC. 1331. STATE FLEXIBILITY TO ESTABLISH BASIC HEALTH PRO-
GRAMS FOR LOW-INCOME INDIVIDUALS NOT ELIGIBLE FOR MEDICAID. 
(1) I N GENERAL .—The Secretary shall establish a basic

health program meeting the requirements of this section under which a State may enter into contracts to offer 1 or more standard health plans providing at least the essential health benefits described in section 1302(b) to eligible individuals in lieu of offering such individuals coverage through an Exchange. 
(2) C
ERTIFICATIONS AS TO BENEFIT COVERAGE AND COSTS .—

Such program shall provide that a State may not establish a basic health program under this section unless the State establishes to the satisfaction of the Secretary, and the Sec-retary certifies, that— 
(A) in the case of an eligible individual enrolled in 
a standard health plan offered through the program, the State provides— 
(i) that the amount of the monthly premium an

(i) that the amount of the monthly premium an 
eligible individual is required to pay for coverage under the standard health plan for the individual and the individual’s dependents does not exceed the amount of the monthly premium that the eligible individual would have been required to pay (in the rating area in which the individual resides) if the individual had 42 USC 18051. 42 USC 18044.

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124 STAT. 200 PUBLIC LAW 111–148—MAR. 23, 2010 
enrolled in the applicable second lowest cost silver 
plan (as defined in section 36B(b)(3)(B) of the Internal Revenue Code of 1986) offered to the individual through an Exchange; and 
(ii) that the cost-sharing an eligible individual is 
required to pay under the standard health plan does not exceed— 
(I) the cost-sharing required under a platinum

(I) the cost-sharing required under a platinum 
plan in the case of an eligible individual with household income not in excess of 150 percent of the poverty line for the size of the family involved; and 
(II) the cost-sharing required under a gold plan 
in the case of an eligible individual not described in subclause (I); and 
(B) the benefits provided under the standard health 
plans offered through the program cover at least the essen-tial health benefits described in section 1302(b).

For purposes of subparagraph (A)(i), the amount of the monthly premium an individual is required to pay under either the standard health plan or the applicable second lowest cost silver plan shall be determined after reduction for any premium tax credits and cost-sharing reductions allowable with respect to either plan. (b) S
TANDARD HEALTH PLAN.—In this section, the term 
‘‘standard heath plan’’ means a health benefits plan that the State contracts with under this section—

(1) under which the only individuals eligible to enroll are 
eligible individuals; 
(2) that provides at least the essential health benefits 
described in section 1302(b); and 
(3) in the case of a plan that provides health insurance 
coverage offered by a health insurance issuer, that has a med-ical loss ratio of at least 85 percent. (c) C
ONTRACTING PROCESS .— 
(1) I N GENERAL .—A State basic health program shall estab-

lish a competitive process for entering into contracts with standard health plans under subsection (a), including negotia-tion of premiums and cost-sharing and negotiation of benefits in addition to the essential health benefits described in section 1302(b). 
(2) S
PECIFIC ITEMS TO BE CONSIDERED .—A State shall, as 
part of its competitive process under paragraph (1), include at least the following: 
(A) I
NNOVATION .—Negotiation with offerors of a

(A) I
NNOVATION .—Negotiation with offerors of a 
standard health plan for the inclusion of innovative fea-
tures in the plan, including— 
(i) care coordination and care management for 
enrollees, especially for those with chronic health conditions; 
(ii) incentives for use of preventive services; and (iii) the establishment of relationships between

providers and patients that maximize patient involve-ment in health care decision-making, including pro-viding incentives for appropriate utilization under the plan. Definition. 
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124 STAT. 201 PUBLIC LAW 111–148—MAR. 23, 2010 
(B) H EALTH AND RESOURCE DIFFERENCES .—Consider-
ation of, and the making of suitable allowances for, dif-ferences in health care needs of enrollees and differences in local availability of, and access to, health care providers. Nothing in this subparagraph shall be construed as allowing discrimination on the basis of pre-existing condi-tions or other health status-related factors. 
(C) M
ANAGED CARE .—Contracting with managed care

ANAGED CARE .—Contracting with managed care 
systems, or with systems that offer as many of the attributes of managed care as are feasible in the local health care market. 
(D) P
ERFORMANCE MEASURES .—Establishing specific

ERFORMANCE MEASURES .—Establishing specific 
performance measures and standards for issuers of standard health plans that focus on quality of care and improved health outcomes, requiring such plans to report to the State with respect to the measures and standards, and making the performance and quality information avail-able to enrollees in a useful form. (3) E
NHANCED AVAILABILITY .— 
(A) M ULTIPLE PLANS .—A State shall, to the maximum

extent feasible, seek to make multiple standard health plans available to eligible individuals within a State to ensure individuals have a choice of such plans. 
(B) R
EGIONAL COMPACTS .—A State may negotiate a 
regional compact with other States to include coverage of eligible individuals in all such States in agreements with issuers of standard health plans. (4) C
OORDINATION WITH OTHER STATE PROGRAMS .—A State

OORDINATION WITH OTHER STATE PROGRAMS .—A State 
shall seek to coordinate the administration of, and provision of benefits under, its program under this section with the State medicaid program under title XIX of the Social Security Act, the State child health plan under title XXI of such Act, and other State-administered health programs to maximize the efficiency of such programs and to improve the continuity of care. (d) T
RANSFER OF FUNDS TO STATES .—

RANSFER OF FUNDS TO STATES .— 
(1) I N GENERAL .—If the Secretary determines that a State 
electing the application of this section meets the requirements of the program established under subsection (a), the Secretary shall transfer to the State for each fiscal year for which 1 or more standard health plans are operating within the State the amount determined under paragraph (3). 
(2) U
SE OF FUNDS .—A State shall establish a trust for

the deposit of the amounts received under paragraph (1) and amounts in the trust fund shall only be used to reduce the premiums and cost-sharing of, or to provide additional benefits for, eligible individuals enrolled in standard health plans within the State. Amounts in the trust fund, and expenditures of such amounts, shall not be included in determining the amount of any non-Federal funds for purposes of meeting any matching or expenditure requirement of any federally-funded program. 
(3) A

(3) A
MOUNT OF PAYMENT .— 
(A) S ECRETARIAL DETERMINATION .— 
(i) I N GENERAL .—The amount determined under 
this paragraph for any fiscal year is the amount the Secretary determines is equal to 85 percent of the premium tax credits under section 36B of the Internal Determination. 
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124 STAT. 202 PUBLIC LAW 111–148—MAR. 23, 2010 
Revenue Code of 1986, and the cost-sharing reductions 
under section 1402, that would have been provided for the fiscal year to eligible individuals enrolled in standard health plans in the State if such eligible individuals were allowed to enroll in qualified health plans through an Exchange established under this sub-title. 
(ii) S
PECIFIC REQUIREMENTS .—The Secretary shall

make the determination under clause (i) on a per enrollee basis and shall take into account all relevant factors necessary to determine the value of the pre-mium tax credits and cost-sharing reductions that would have been provided to eligible individuals described in clause (i), including the age and income of the enrollee, whether the enrollment is for self- only or family coverage, geographic differences in aver-age spending for health care across rating areas, the health status of the

across rating areas, the health status of the enrollee for purposes of deter-mining risk adjustment payments and reinsurance pay-ments that would have been made if the enrollee had enrolled in a qualified health plan through an Exchange, and whether any reconciliation of the credit or cost-sharing reductions would have occurred if the enrollee had been so enrolled. This determination shall take into consideration the experience of other States with respect to participation in an Exchange and

with respect to participation in an Exchange and such credits and reductions provided to residents of the other States, with a special focus on enrollees with income below 200 percent of poverty.

(iii) C
ERTIFICATION .—The Chief Actuary of the 
Centers for Medicare & Medicaid Services, in consulta-tion with the Office of Tax Analysis of the Department of the Treasury, shall certify whether the methodology used to make determinations under this subparagraph, and such determinations, meet the requirements of clause (ii). Such certifications shall be based on suffi-cient data from the State and from comparable States about their experience with programs created by this Act. 
(B) C

(B) C
ORRECTIONS .—The Secretary shall adjust the pay-
ment for any fiscal year to reflect any error in the deter-minations under subparagraph (A) for any preceding fiscal year. (4) A
PPLICATION OF SPECIAL RULES .—The provisions of sec-
tion 1303 shall apply to a State basic health program, and to standard health plans offered through such program, in the same manner as such rules apply to qualified health plans. (e) E
LIGIBLE INDIVIDUAL .—

LIGIBLE INDIVIDUAL .— 
(1) I N GENERAL .—In this section, the term ‘‘eligible indi-
vidual’’ means, with respect to any State, an individual— 
(A) who a resident of the State who is not eligible 
to enroll in the State’s medicaid program under title XIX of the Social Security Act for benefits that at a minimum consist of the essential health benefits described in section 1302(b); Definition.

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124 STAT. 203 PUBLIC LAW 111–148—MAR. 23, 2010 
(B) whose household income exceeds 133 percent but 
does not exceed 200 percent of the poverty line for the size of the family involved; 
(C) who is not eligible for minimum essential coverage 
(as defined in section 5000A(f) of the Internal Revenue Code of 1986) or is eligible for an employer-sponsored plan that is not affordable coverage (as determined under section 5000A(e)(2) of such Code); and

(D) who has not attained age 65 as of the beginning 
of the plan year. 
Such term shall not include any individual who is not a quali-fied individual under section 1312 who is eligible to be covered by a qualified health plan offered through an Exchange. 
(2) E
LIGIBLE INDIVIDUALS MAY NOT USE EXCHANGE .—An

LIGIBLE INDIVIDUALS MAY NOT USE EXCHANGE .—An 
eligible individual shall not be treated as a qualified individual under section 1312 eligible for enrollment in a qualified health plan offered through an Exchange established under section 1311. (f) S
ECRETARIAL OVERSIGHT .—The Secretary shall each year 
conduct a review of each State program to ensure compliance with the requirements of this section, including ensuring that the State program meets—

(1) eligibility verification requirements for participation in 
the program; 
(2) the requirements for use of Federal funds received 
by the program; and 
(3) the quality and performance standards under this sec-
tion. (g) S
TANDARD HEALTH PLAN OFFERORS .—A State may provide

that persons eligible to offer standard health plans under a basic health program established under this section may include a licensed health maintenance organization, a licensed health insur-ance insurer, or a network of health care providers established to offer services under the program. 
(h) D
EFINITIONS .—Any term used in this section which is also 
used in section 36B of the Internal Revenue Code of 1986 shall 
have the meaning given such term by such section.

SEC. 1332. WAIVER FOR STATE INNOVATION. 
(a) A PPLICATION .— 
(1) I N GENERAL .—A State may apply to the Secretary for 
the waiver of all or any requirements described in paragraph (2) with respect to health insurance coverage within that State for plan years beginning on or after January 1, 2017. Such application shall— 
(A) be filed at such time and in such manner as the 
Secretary may require; 
(B) contain such information as the Secretary may 
require, including—

require, including— 
(i) a comprehensive description of the State legisla-
tion and program to implement a plan meeting the requirements for a waiver under this section; and 
(ii) a 10-year budget plan for such plan that is 
budget neutral for the Federal Government; and (C) provide an assurance that the State has enacted 
the law described in subsection (b)(2). Effective date. 42 USC 18052. Review.

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124 STAT. 204 PUBLIC LAW 111–148—MAR. 23, 2010 
(2) R EQUIREMENTS .—The requirements described in this 
paragraph with respect to health insurance coverage within the State for plan years beginning on or after January 1, 2014, are as follows: 
(A) Part I of subtitle D. (B) Part II of subtitle D. (C) Section 1402. (D) Sections 36B, 4980H, and 5000A of the Internal 
Revenue Code of 1986. (3) P
ASS THROUGH OF FUNDING .—With respect to a State

waiver under paragraph (1), under which, due to the structure of the State plan, individuals and small employers in the State would not qualify for the premium tax credits, cost-sharing reductions, or small business credits under sections 36B of the Internal Revenue Code of 1986 or under part I of subtitle E for which they would otherwise be eligible, the Secretary shall provide for an alternative means by which the aggregate amount of such credits or reductions that would have been paid on

or reductions that would have been paid on behalf of participants in the Exchanges established under this title had the State not received such waiver, shall be paid to the State for purposes of implementing the State plan under the waiver. Such amount shall be determined annually by the Secretary, taking into consideration the experi-ence of other States with respect to participation in an Exchange and credits and reductions provided under such provi-sions to residents of the other States.

(4) W
AIVER CONSIDERATION AND TRANSPARENCY .— 
(A) I N GENERAL .—An application for a waiver under 
this section shall be considered by the Secretary in accord-ance with the regulations described in subparagraph (B). 
(B) R
EGULATIONS .—Not later than 180 days after the 
date of enactment of this Act, the Secretary shall promul-gate regulations relating to waivers under this section that provide— 
(i) a process for public notice and comment at

(i) a process for public notice and comment at 
the State level, including public hearings, sufficient to ensure a meaningful level of public input; 
(ii) a process for the submission of an application 
that ensures the disclosure of— 
(I) the provisions of law that the State involved 
seeks to waive; and 
(II) the specific plans of the State to ensure 
that the waiver will be in compliance with sub-section (b); (iii) a process for providing public notice and com-

ment after the application is received by the Secretary, that is sufficient to ensure a meaningful level of public input and that does not impose requirements that are in addition to, or duplicative of, requirements imposed under the Administrative Procedures Act, or require-ments that are unreasonable or unnecessarily burden-some with respect to State compliance; 
(iv) a process for the submission to the Secretary

of periodic reports by the State concerning the implementation of the program under the waiver; and 
(v) a process for the periodic evaluation by the 
Secretary of the program under the waiver. Deadline. Effective date. 
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124 STAT. 205 PUBLIC LAW 111–148—MAR. 23, 2010 
(C) R EPORT .—The Secretary shall annually report to 
Congress concerning actions taken by the Secretary with respect to applications for waivers under this section. (5) C
OORDINATED WAIVER PROCESS .—The Secretary shall

OORDINATED WAIVER PROCESS .—The Secretary shall 
develop a process for coordinating and consolidating the State waiver processes applicable under the provisions of this section, and the existing waiver processes applicable under titles XVIII, XIX, and XXI of the Social Security Act, and any other Federal law relating to the provision of health care items or services. Such process shall permit a State to submit a single application for a waiver under any or all of such provisions. 
(6) D

(6) D
EFINITION .—In this section, the term ‘‘Secretary’’ 
means— 
(A) the Secretary of Health and Human Services with 
respect to waivers relating to the provisions described in subparagraph (A) through (C) of paragraph (2); and 
(B) the Secretary of the Treasury with respect to 
waivers relating to the provisions described in paragraph (2)(D). 
(b) G
RANTING OF WAIVERS .— 
(1) I N GENERAL .—The Secretary may grant a request for

a waiver under subsection (a)(1) only if the Secretary deter-mines that the State plan— 
(A) will provide coverage that is at least as comprehen-

sive as the coverage defined in section 1302(b) and offered through Exchanges established under this title as certified by Office of the Actuary of the Centers for Medicare & Medicaid Services based on sufficient data from the State and from comparable States about their experience with programs created by this Act and the provisions of this Act that would be waived; 
(B) will provide coverage and cost sharing protections

against excessive out-of-pocket spending that are at least as affordable as the provisions of this title would provide; 
(C) will provide coverage to at least a comparable 
number of its residents as the provisions of this title would provide; and 
(D) will not increase the Federal deficit. 
(2) R
EQUIREMENT TO ENACT A LAW .— 
(A) I N GENERAL .—A law described in this paragraph

is a State law that provides for State actions under a waiver under this section, including the implementation of the State plan under subsection (a)(1)(B). 
(B) T
a law described in subparagraph (A) and terminate the authority provided under the waiver with respect to the State. 
(c) S
COPE OF WAIVER .— 
(1) I N GENERAL .—The Secretary shall determine the scope

of a waiver of a requirement described in subsection (a)(2) granted to a State under subsection (a)(1). 
(2) L
IMITATION .—The Secretary may not waive under this 
section any Federal law or requirement that is not within the authority of the Secretary. (d) D
ETERMINATIONS BY SECRETARY .— 
(1) T IME FOR DETERMINATION .—The Secretary shall make 
a determination under subsection (a)(1) not later than 180 Deadline. Determination.

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124 STAT. 206 PUBLIC LAW 111–148—MAR. 23, 2010 
days after the receipt of an application from a State under 
such subsection. 
(2) E FFECT OF DETERMINATION .— 
(A) G RANTING OF WAIVERS .—If the Secretary deter-
mines to grant a waiver under subsection (a)(1), the Sec-retary shall notify the State involved of such determination and the terms and effectiveness of such waiver. 
(B) D
ENIAL OF WAIVER .—If the Secretary determines

ENIAL OF WAIVER .—If the Secretary determines 
a waiver should not be granted under subsection (a)(1), the Secretary shall notify the State involved, and the appro-priate committees of Congress of such determination and the reasons therefore. 
(e) T
ERM OF WAIVER .—No waiver under this section may extend

over a period of longer than 5 years unless the State requests continuation of such waiver, and such request shall be deemed granted unless the Secretary, within 90 days after the date of its submission to the Secretary, either denies such request in writing or informs the State in writing with respect to any addi-tional information which is needed in order to make a final deter-mination with respect to the request. 
SEC. 1333. PROVISIONS RELATING TO OFFERING OF PLANS IN MORE 
THAN ONE STATE.

THAN ONE STATE. 
(a) H EALTH CARECHOICE COMPACTS .— 
(1) I N GENERAL .—Not later than July 1, 2013, the Secretary 
shall, in consultation with the National Association of Insurance Commissioners, issue regulations for the creation of health care choice compacts under which 2 or more States may enter into an agreement under which— 
(A) 1 or more qualified health plans could be offered

in the individual markets in all such States but, except as provided in subparagraph (B), only be subject to the laws and regulations of the State in which the plan was written or issued; 
(B) the issuer of any qualified health plan to which 
the compact applies— 
(i) would continue to be subject to market conduct,

unfair trade practices, network adequacy, and con-sumer protection standards (including standards relating to rating), including addressing disputes as to the performance of the contract, of the State in which the purchaser resides; 
(ii) would be required to be licensed in each State

in which it offers the plan under the compact or to submit to the jurisdiction of each such State with regard to the standards described in clause (i) (including allowing access to records as if the insurer were licensed in the State); and 
(iii) must clearly notify consumers that the policy 
may not be subject to all the laws and regulations of the State in which the purchaser resides. 
(2) S
TATE AUTHORITY .—A State may not enter into an

TATE AUTHORITY .—A State may not enter into an 
agreement under this subsection unless the State enacts a law after the date of the enactment of this title that specifically authorizes the State to enter into such agreements. 
(3) A
PPROVAL OF COMPACTS .—The Secretary may approve 
interstate health care choice compacts under paragraph (1) Notification. Deadline. 
Regulations. 42 USC 18053. Deadline. 
Notification. Notification.

Notification. Notification. 
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124 STAT. 207 PUBLIC LAW 111–148—MAR. 23, 2010 
only if the Secretary determines that such health care choice 
compact— 
sive as the coverage defined in section 1302(b) and offered through Exchanges established under this title; 
(B) will provide coverage and cost sharing protections 
against excessive out-of-pocket spending that are at least as affordable as the provisions of this title would provide;

number of its residents as the provisions of this title would provide; 
(D) will not increase the Federal deficit; and (E) will not weaken enforcement of laws and regula-
tions described in paragraph (1)(B)(i) in any State that is included in such compact. (4) E
FFECTIVE DATE .—A health care choice compact 
described in paragraph (1) shall not take effect before January 1, 2016. (b) A
UTHORITY FOR NATIONWIDE PLANS .—

UTHORITY FOR NATIONWIDE PLANS .— 
(1) I N GENERAL .—Except as provided in paragraph (2), if 
an issuer (including a group of health insurance issuers affili-ated either by common ownership and control or by the common use of a nationally licensed service mark) of a qualified health plan in the individual or small group market meets the require-ments of this subsection (in this subsection a ‘‘nationwide quali-fied health plan’’)— 
(A) the issuer of the plan may offer the nationwide

qualified health plan in the individual or small group market in more than 1 State; and 
(B) with respect to State laws mandating benefit cov-
erage by a health plan, only the State laws of the State in which such plan is written or issued shall apply to the nationwide qualified health plan. (2) S
TATE OPT -OUT.—A State may, by specific reference

in a law enacted after the date of enactment of this title, provide that this subsection shall not apply to that State. Such opt-out shall be effective until such time as the State by law revokes it. 
(3) P
LAN REQUIREMENTS .—An issuer meets the require-
ments of this subsection with respect to a nationwide qualified health plan if, in the determination of the Secretary— 
(A) the plan offers a benefits package that is uniform

in each State in which the plan is offered and meets the requirements set forth in paragraphs (4) through (6); 
(B) the issuer is licensed in each State in which it 
offers the plan and is subject to all requirements of State 
law not inconsistent with this section, including but not limited to, the standards and requirements that a State imposes that do not prevent the application of a require-ment of part A of title XXVII of the Public Health Service Act or a requirement of this title;

(C) the issuer meets all requirements of this title with 
respect to a qualified health plan, including the require-ment to offer the silver and gold levels of the plan in each Exchange in the State for the market in which the plan is offered; Applicability. 
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124 STAT. 208 PUBLIC LAW 111–148—MAR. 23, 2010 
(D) the issuer determines the premiums for the plan 
in any State on the basis of the rating rules in effect in that State for the rating areas in which it is offered; 
(E) the issuer offers the nationwide qualified health

plan in at least 60 percent of the participating States in the first year in which the plan is offered, 65 percent of such States in the second year, 70 percent of such States in the third year, 75 percent of such States in the fourth year, and 80 percent of such States in the fifth and subsequent years; 
(F) the issuer shall offer the plan in participating

States across the country, in all geographic regions, and in all States that have adopted adjusted community rating before the date of enactment of this Act; and 
(G) the issuer clearly notifies consumers that the policy 
may not contain some benefits otherwise mandated for plans in the State in which the purchaser resides and provides a detailed statement of the benefits offered and the benefit differences in that State, in accordance with rules promulgated by the Secretary. (4) F

ORM REVIEW FOR NATIONWIDE PLANS .—Notwith-
standing any contrary provision of State law, at least 3 months before any nationwide qualified health plan is offered, the issuer shall file all nationwide qualified health plan forms with the regulator in each participating State in which the plan will be offered. An issuer may appeal the disapproval of a nationwide qualified health plan form to the Secretary. 
(5) A
PPLICABLE RULES .—The Secretary shall, in consulta-

tion with the National Association of Insurance Commissioners, issue rules for the offering of nationwide qualified health plans under this subsection. Nationwide qualified health plans may be offered only after such rules have taken effect. 
(6) C
OVERAGE .—The Secretary shall provide that the health 
benefits coverage provided to an individual through a nation-wide qualified health plan under this subsection shall include at least the essential benefits package described in section 1302.

(7) S
TATE LAW MANDATING BENEFIT COVERAGE BY A HEALTH  
BENEFITS PLAN .—For the purposes of this subsection, a State

law mandating benefit coverage by a health plan is a law that mandates health insurance coverage or the offer of health insurance coverage for specific health services or specific dis-eases. A law that mandates health insurance coverage or reimbursement for services provided by certain classes of pro-viders of health care services, or a law that mandates that certain classes of individuals must be covered as a group or as dependents, is not a State law mandating benefit coverage by a health

PART V—REINSURANCE AND RISK 
ADJUSTMENT 
SEC. 1341. TRANSITIONAL REINSURANCE PROGRAM FOR INDIVIDUAL 
AND SMALL GROUP MARKETS IN EACH STATE. 
(a) I NGENERAL .—Each State shall, not later than January 
1, 2014— Deadline. 42 USC 18061. Deadline. 
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124 STAT. 209 PUBLIC LAW 111–148—MAR. 23, 2010 
(1) include in the Federal standards or State law or regula-
tion the State adopts and has in effect under section 1321(b) the provisions described in subsection (b); and 
(2) establish (or enter into a contract with) 1 or more 
applicable reinsurance entities to carry out the reinsurance program under this section. (b) M
ODEL REGULATION .— 
(1) I N GENERAL .—In establishing the Federal standards

under section 1321(a), the Secretary, in consultation with the National Association of Insurance Commissioners (the ‘‘NAIC’’), shall include provisions that enable States to establish and maintain a program under which— 
(A) health insurance issuers, and third party adminis-
trators on behalf of group health plans, are required to make payments to an applicable reinsurance entity for any plan year beginning in the 3-year period beginning January 1, 2014 (as specified in paragraph (3); and

(B) the applicable reinsurance entity collects payments 
under subparagraph (A) and uses amounts so collected to make reinsurance payments to health insurance issuers described in subparagraph (A) that cover high risk individ-uals in the individual market (excluding grandfathered health plans) for any plan year beginning in such 3-year period. (2) H
IGH-RISK INDIVIDUAL ; PAYMENT AMOUNTS .—The Sec-
retary shall include the following in the provisions under para-graph (1): 
(A) D

(A) D
ETERMINATION OF HIGH -RISK INDIVIDUALS .—The 
method by which individuals will be identified as high risk individuals for purposes of the reinsurance program established under this section. Such method shall provide for identification of individuals as high-risk individuals on the basis of— 
(i) a list of at least 50 but not more than 100

(i) a list of at least 50 but not more than 100 
medical conditions that are identified as high-risk conditions and that may be based on the identification of diagnostic and procedure codes that are indicative of individuals with pre-existing, high-risk conditions; or 
(ii) any other comparable objective method of 
identification recommended by the American Academy of Actuaries. (B) P
AYMENT AMOUNT .—The formula for determining

AYMENT AMOUNT .—The formula for determining 
the amount of payments that will be paid to health insur-ance issuers described in paragraph (1)(A) that insure high- risk individuals. Such formula shall provide for the equi-table allocation of available funds through reconciliation and may be designed— 
(i) to provide a schedule of payments that specifies 
the amount that will be paid for each of the conditions identified under subparagraph (A); or

(ii) to use any other comparable method for deter-
mining payment amounts that is recommended by the American Academy of Actuaries and that encourages the use of care coordination and care management programs for high risk conditions. 
(3) D
ETERMINATION OF REQUIRED CONTRIBUTIONS .— Effective date. Time period. Contracts. 
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124 STAT. 210 PUBLIC LAW 111–148—MAR. 23, 2010 
(A) I N GENERAL .—The Secretary shall include in the

provisions under paragraph (1) the method for determining the amount each health insurance issuer and group health plan described in paragraph (1)(A) contributing to the reinsurance program under this section is required to con-tribute under such paragraph for each plan year beginning in the 36-month period beginning January 1, 2014. The contribution amount for any plan year may be based on the percentage of revenue of each issuer and the total costs of providing benefits to enrollees in

total costs of providing benefits to enrollees in self-insured plans or on a specified amount per enrollee and may be required to be paid in advance or periodically throughout the plan year.

(B) S
PECIFIC REQUIREMENTS .—The method under this 
paragraph shall be designed so that— 
(i) the contribution amount for each issuer propor-
tionally reflects each issuer’s fully insured commercial book of business for all major medical products and the total value of all fees charged by the issuer and the costs of coverage administered by the issuer as a third party administrator; 
(ii) the contribution amount can include an addi-

tional amount to fund the administrative expenses of the applicable reinsurance entity; 
(iii) the aggregate contribution amounts for all 
States shall, based on the best estimates of the NAIC and without regard to amounts described in clause (ii), equal $10,000,000,000 for plan years beginning in 2014, $6,000,000,000 for plan years beginning 2015, and $4,000,000,000 for plan years beginning in 2016; and

(iv) in addition to the aggregate contribution 
amounts under clause (iii), each issuer’s contribution amount for any calendar year under clause (iii) reflects its proportionate share of an additional $2,000,000,000 for 2014, an additional $2,000,000,000 for 2015, and an additional $1,000,000,000 for 2016. 
Nothing in this subparagraph shall be construed to pre-clude a State from collecting additional amounts from issuers on a voluntary basis. (4) E

XPENDITURE OF FUNDS .—The provisions under para-
graph (1) shall provide that— 
(A) the contribution amounts collected for any calendar 
year may be allocated and used in any of the three calendar years for which amounts are collected based on the reinsur-ance needs of a particular period or to reflect experience 
in a prior period; and 
(B) amounts remaining unexpended as of December,

(B) amounts remaining unexpended as of December, 
2016, may be used to make payments under any reinsur-ance program of a State in the individual market in effect in the 2-year period beginning on January 1, 2017. 
Notwithstanding the preceding sentence, any contribution amounts described in paragraph (3)(B)(iv) shall be deposited into the general fund of the Treasury of the United States and may not be used for the program established under this section. Time period.

Effective date. Effective date. 
Time period. 
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124 STAT. 211 PUBLIC LAW 111–148—MAR. 23, 2010 
(c) A PPLICABLE REINSURANCE ENTITY .—For purposes of this 
section— 
(1) I N GENERAL .—The term ‘‘applicable reinsurance entity’’ 
means a not-for-profit organization— 
(A) the purpose of which is to help stabilize premiums

for coverage in the individual and small group markets in a State during the first 3 years of operation of an Exchange for such markets within the State when the risk of adverse selection related to new rating rules and market changes is greatest; and 
(B) the duties of which shall be to carry out the reinsur-
ance program under this section by coordinating the funding and operation of the risk-spreading mechanisms designed to implement the reinsurance program. (2) S

TATE DISCRETION .—A State may have more than 1 
applicable reinsurance entity to carry out the reinsurance pro-gram under this section within the State and 2 or more States may enter into agreements to provide for an applicable reinsur-ance entity to carry out such program in all such States. 
(3) E
NTITIES ARE TAX -EXEMPT .—An applicable reinsurance

entity established under this section shall be exempt from taxation under chapter 1 of the Internal Revenue Code of 1986. The preceding sentence shall not apply to the tax imposed by section 511 such Code (relating to tax on unrelated business taxable income of an exempt organization). (d) C
OORDINATION WITHSTATE HIGH-RISK POOLS .—The State

shall eliminate or modify any State high-risk pool to the extent necessary to carry out the reinsurance program established under this section. The State may coordinate the State high-risk pool with such program to the extent not inconsistent with the provisions of this section. 
SEC. 1342. ESTABLISHMENT OF RISK CORRIDORS FOR PLANS IN INDI-
VIDUAL AND SMALL GROUP MARKETS. 
(a) I NGENERAL .—The Secretary shall establish and administer

a program of risk corridors for calendar years 2014, 2015, and 2016 under which a qualified health plan offered in the individual or small group market shall participate in a payment adjustment system based on the ratio of the allowable costs of the plan to the plan’s aggregate premiums. Such program shall be based on the program for regional participating provider organizations under part D of title XVIII of the Social Security Act. 
(b) P
AYMENT METHODOLOGY .—

(b) P
AYMENT METHODOLOGY .— 
(1) P AYMENTS OUT .—The Secretary shall provide under the 
program established under subsection (a) that if— 
(A) a participating plan’s allowable costs for any plan 
year are more than 103 percent but not more than 108 percent of the target amount, the Secretary shall pay to the plan an amount equal to 50 percent of the target amount in excess of 103 percent of the target amount; and 
(B) a participating plan’s allowable costs for any plan

year are more than 108 percent of the target amount, the Secretary shall pay to the plan an amount equal to the sum of 2.5 percent of the target amount plus 80 percent of allowable costs in excess of 108 percent of the target amount. 42 USC 18062. Definition. 
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124 STAT. 212 PUBLIC LAW 111–148—MAR. 23, 2010 
(2) P AYMENTS IN .—The Secretary shall provide under the 
year are less than 97 percent but not less than 92 percent of the target amount, the plan shall pay to the Secretary an amount equal to 50 percent of the excess of 97 percent of the target amount over the allowable costs; and 

year are less than 92 percent of the target amount, the plan shall pay to the Secretary an amount equal to the sum of 2.5 percent of the target amount plus 80 percent of the excess of 92 percent of the target amount over the allowable costs. 
(c) D
(1) A LLOWABLE COSTS .— 
(A) I N GENERAL .—The amount of allowable costs of

a plan for any year is an amount equal to the total costs (other than administrative costs) of the plan in providing benefits covered by the plan. 
(B) R
EDUCTION FOR RISK ADJUSTMENT AND REINSUR -
ANCE PAYMENTS .—Allowable costs shall reduced by any 
risk adjustment and reinsurance payments received under section 1341 and 1343. (2) T
ARGET AMOUNT .—The target amount of a plan for

ARGET AMOUNT .—The target amount of a plan for 
any year is an amount equal to the total premiums (including any premium subsidies under any governmental program), reduced by the administrative costs of the plan. 
SEC. 1343. RISK ADJUSTMENT. 
(a) I NGENERAL .— 
(1) L OW ACTUARIAL RISK PLANS .—Using the criteria and

methods developed under subsection (b), each State shall assess a charge on health plans and health insurance issuers (with respect to health insurance coverage) described in subsection (c) if the actuarial risk of the enrollees of such plans or coverage for a year is less than the average actuarial risk of all enrollees in all plans or coverage in such State for such year that are not self-insured group health plans (which are subject to the

provisions of the Employee Retirement Income Security Act of 1974). 
(2) H
IGH ACTUARIAL RISK PLANS .—Using the criteria and

methods developed under subsection (b), each State shall pro-vide a payment to health plans and health insurance issuers (with respect to health insurance coverage) described in sub-section (c) if the actuarial risk of the enrollees of such plans or coverage for a year is greater than the average actuarial risk of all enrollees in all plans and coverage in such State for such year that are not self-insured group health plans (which are subject to the provisions of the Employee Retirement Income

the provisions of the Employee Retirement Income Security Act of 1974). (b) C

RITERIA AND METHODS .—The Secretary, in consultation 
with States, shall establish criteria and methods to be used in carrying out the risk adjustment activities under this section. The Secretary may utilize criteria and methods similar to the criteria and methods utilized under part C or D of title XVIII of the Social Security Act. Such criteria and methods shall be included 42 USC 18063.

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124 STAT. 213 PUBLIC LAW 111–148—MAR. 23, 2010 
in the standards and requirements the Secretary prescribes under 
section 1321. 
(c) S COPE .—A health plan or a health insurance issuer is 
described in this subsection if such health plan or health insurance issuer provides coverage in the individual or small group market within the State. This subsection shall not apply to a grandfathered health plan or the issuer of a grandfathered health plan with respect to that plan.

Subtitle E—Affordable Coverage Choices 
for All Americans 
PART I—PREMIUM TAX CREDITS AND COST- 
SHARING REDUCTIONS 
Subpart A—Premium Tax Credits and Cost- 
sharing Reductions 
SEC. 1401. REFUNDABLE TAX CREDIT PROVIDING PREMIUM ASSIST-
ANCE FOR COVERAGE UNDER A QUALIFIED HEALTH PLAN. 
(a) I NGENERAL .—Subpart C of part IV of subchapter A of 
chapter 1 of the Internal Revenue Code of 1986 (relating to refund-able credits) is amended by inserting after section 36A the following new section:

‘‘SEC. 36B. REFUNDABLE CREDIT FOR COVERAGE UNDER A QUALIFIED 
HEALTH PLAN. 
‘‘(a) I NGENERAL .—In the case of an applicable taxpayer, there 
shall be allowed as a credit against the tax imposed by this subtitle for any taxable year an amount equal to the premium assistance credit amount of the taxpayer for the taxable year. 
‘‘(b) P
REMIUM ASSISTANCE CREDIT AMOUNT .—For purposes of 
this section— 
‘‘(1) I N GENERAL .—The term ‘premium assistance credit

amount’ means, with respect to any taxable year, the sum of the premium assistance amounts determined under para-graph (2) with respect to all coverage months of the taxpayer occurring during the taxable year. 
‘‘(2) P
REMIUM ASSISTANCE AMOUNT .—The premium assist-
ance amount determined under this subsection with respect to any coverage month is the amount equal to the lesser of— 
‘‘(A) the monthly premiums for such month for 1 or

more qualified health plans offered in the individual market within a State which cover the taxpayer, the taxpayer’s spouse, or any dependent (as defined in section 152) of the taxpayer and which were enrolled in through an Exchange established by the State under 1311 of the Patient Protection and Affordable Care Act, or 
‘‘(B) the excess (if any) of— 
‘‘(i) the adjusted monthly premium for such month

for the applicable second lowest cost silver plan with respect to the taxpayer, over Definition. 26 USC 36. 
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124 STAT. 214 PUBLIC LAW 111–148—MAR. 23, 2010 
‘‘(ii) an amount equal to 1/12 of the product of 
the applicable percentage and the taxpayer’s household income for the taxable year. 
‘‘(3) O
THER TERMS AND RULES RELATING TO PREMIUM ASSIST -
ANCE AMOUNTS .—For purposes of paragraph (2)— 
‘‘(A) A PPLICABLE PERCENTAGE .— 
‘‘(i) I N GENERAL .—Except as provided in clause

‘‘(i) I N GENERAL .—Except as provided in clause 
(ii), the applicable percentage with respect to any tax-payer for any taxable year is equal to 2.8 percent, increased by the number of percentage points (not greater than 7) which bears the same ratio to 7 percent-age points as— 
‘‘(I) the taxpayer’s household income for the 
taxable year in excess of 100 percent of the poverty line for a family of the size involved, bears to 
‘‘(II) an amount equal to 200 percent of the

‘‘(II) an amount equal to 200 percent of the 
poverty line for a family of the size involved. ‘‘(ii) S
PECIAL RULE FOR TAXPAYERS UNDER 133 PER -
CENT OF POVERTY LINE .—If a taxpayer’s household 
income for the taxable year is in excess of 100 percent, but not more than 133 percent, of the poverty line for a family of the size involved, the taxpayer’s applicable percentage shall be 2 percent. 
‘‘(iii) I
NDEXING .—In the case of taxable years begin-

ning in any calendar year after 2014, the Secretary shall adjust the initial and final applicable percentages under clause (i), and the 2 percent under clause (ii), for the calendar year to reflect the excess of the rate of premium growth between the preceding calendar year and 2013 over the rate of income growth for such period. ‘‘(B) A
PPLICABLE SECOND LOWEST COST SILVER PLAN .—

PPLICABLE SECOND LOWEST COST SILVER PLAN .— 
The applicable second lowest cost silver plan with respect to any applicable taxpayer is the second lowest cost silver plan of the individual market in the rating area in which the taxpayer resides which— 
‘‘(i) is offered through the same Exchange through 
which the qualified health plans taken into account under paragraph (2)(A) were offered, and 
‘‘(ii) provides— 
‘‘(I) self-only coverage in the case of an 
applicable taxpayer—

applicable taxpayer— 
‘‘(aa) whose tax for the taxable year is 
determined under section 1(c) (relating to unmarried individuals other than surviving spouses and heads of households) and who is not allowed a deduction under section 151 for the taxable year with respect to a dependent, or 
‘‘(bb) who is not described in item (aa) 
but who purchases only self-only coverage, and ‘‘(II) family coverage in the case of any other 
applicable taxpayer.

applicable taxpayer. 
If a taxpayer files a joint return and no credit is allowed under this section with respect to 1 of the spouses by reason of subsection (e), the taxpayer shall be treated as described in clause (ii)(I) unless a deduction is allowed 
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124 STAT. 215 PUBLIC LAW 111–148—MAR. 23, 2010 
under section 151 for the taxable year with respect to 
a dependent other than either spouse and subsection (e) does not apply to the dependent. 
‘‘(C) A
DJUSTED MONTHLY PREMIUM .—The adjusted

monthly premium for an applicable second lowest cost silver plan is the monthly premium which would have been charged (for the rating area with respect to which the premiums under paragraph (2)(A) were determined) for the plan if each individual covered under a qualified health plan taken into account under paragraph (2)(A) were covered by such silver plan and the premium was adjusted only for the age of each such individual in the manner allowed under section 2701 of the Public Health Service

under section 2701 of the Public Health Service Act. In the case of a State participating in the wellness discount demonstration project under section 2705(d) of the Public Health Service Act, the adjusted monthly premium shall be determined without regard to any premium discount or rebate under such project.

‘‘(D) A
DDITIONAL BENEFITS .—If— 
‘‘(i) a qualified health plan under section 1302(b)(5) 
of the Patient Protection and Affordable Care Act offers benefits in addition to the essential health benefits required to be provided by the plan, or 
‘‘(ii) a State requires a qualified health plan under 
section 1311(d)(3)(B) of such Act to cover benefits in addition to the essential health benefits required to be provided by the plan,

the portion of the premium for the plan properly allocable (under rules prescribed by the Secretary of Health and Human Services) to such additional benefits shall not be taken into account in determining either the monthly pre-mium or the adjusted monthly premium under paragraph (2). 
‘‘(E) S
PECIAL RULE FOR PEDIATRIC DENTAL COVERAGE .—

For purposes of determining the amount of any monthly premium, if an individual enrolls in both a qualified health plan and a plan described in section 1311(d)(2)(B)(ii)(I) of the Patient Protection and Affordable Care Act for any plan year, the portion of the premium for the plan described in such section that (under regulations prescribed by the Secretary) is properly allocable to pediatric dental benefits which are included in the essential health benefits required to be provided by a

health benefits required to be provided by a qualified health plan under section 1302(b)(1)(J) of such Act shall be treated as a premium payable for a qualified health plan.

‘‘(c) D
EFINITION AND RULES RELATING TO APPLICABLE TAX-
PAYERS , COVERAGE MONTHS , AND QUALIFIED HEALTH PLAN.—For 
‘‘(1) A PPLICABLE TAXPAYER .— 
‘‘(A) I N GENERAL .—The term ‘applicable taxpayer’ 
means, with respect to any taxable year, a taxpayer whose household income for the taxable year exceeds 100 percent but does not exceed 400 percent of an amount equal to the poverty line for a family of the size involved. 
‘‘(B) S

‘‘(B) S
PECIAL RULE FOR CERTAIN INDIVIDUALS LAWFULLY  
PRESENT IN THE UNITED STATES .—If— 
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124 STAT. 216 PUBLIC LAW 111–148—MAR. 23, 2010 
‘‘(i) a taxpayer has a household income which is 
not greater than 100 percent of an amount equal to the poverty line for a family of the size involved, and 
‘‘(ii) the taxpayer is an alien lawfully present in 
the United States, but is not eligible for the medicaid program under title XIX of the Social Security Act by reason of such alien status,

the taxpayer shall, for purposes of the credit under this section, be treated as an applicable taxpayer with a house-hold income which is equal to 100 percent of the poverty line for a family of the size involved. 
‘‘(C) M
ARRIED COUPLES MUST FILE JOINT RETURN .—

‘‘(C) M
ARRIED COUPLES MUST FILE JOINT RETURN .— 
If the taxpayer is married (within the meaning of section 7703) at the close of the taxable year, the taxpayer shall be treated as an applicable taxpayer only if the taxpayer and the taxpayer’s spouse file a joint return for the taxable year. 
‘‘(D) D
ENIAL OF CREDIT TO DEPENDENTS .—No credit

ENIAL OF CREDIT TO DEPENDENTS .—No credit 
shall be allowed under this section to any individual with respect to whom a deduction under section 151 is allowable to another taxpayer for a taxable year beginning in the calendar year in which such individual’s taxable year begins. ‘‘(2) C
OVERAGE MONTH .—For purposes of this subsection— 
‘‘(A) I N GENERAL .—The term ‘coverage month’ means, 
with respect to an applicable taxpayer, any month if—

‘‘(i) as of the first day of such month the taxpayer, 
the taxpayer’s spouse, or any dependent of the taxpayer is covered by a qualified health plan described in sub-section (b)(2)(A) that was enrolled in through an Exchange established by the State under section 1311 of the Patient Protection and Affordable Care Act, and 
‘‘(ii) the premium for coverage under such plan

‘‘(ii) the premium for coverage under such plan 
for such month is paid by the taxpayer (or through advance payment of the credit under subsection (a) under section 1412 of the Patient Protection and Affordable Care Act). ‘‘(B) E
XCEPTION FOR MINIMUM ESSENTIAL COVERAGE .— 
‘‘(i) I N GENERAL .—The term ‘coverage month’ shall

not include any month with respect to an individual if for such month the individual is eligible for minimum essential coverage other than eligibility for coverage described in section 5000A(f)(1)(C) (relating to coverage in the individual market). 
‘‘(ii) M
INIMUM ESSENTIAL COVERAGE .—The term 
‘minimum essential coverage’ has the meaning given such term by section 5000A(f). ‘‘(C) S
PECIAL RULE FOR EMPLOYER -SPONSORED MINIMUM  
ESSENTIAL COVERAGE .—For purposes of subparagraph (B)—

‘‘(i) C OVERAGE MUST BE AFFORDABLE .—Except as 
provided in clause (iii), an employee shall not be treated as eligible for minimum essential coverage if such coverage— 
‘‘(I) consists of an eligible employer-sponsored 
plan (as defined in section 5000A(f)(2)), and 
‘‘(II) the employee’s required contribution 
(within the meaning of section 5000A(e)(1)(B)) with

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124 STAT. 217 PUBLIC LAW 111–148—MAR. 23, 2010 
respect to the plan exceeds 9.8 percent of the 
applicable taxpayer’s household income. 
This clause shall also apply to an individual who is eligible to enroll in the plan by reason of a relationship the individual bears to the employee. 
‘‘(ii) C
OVERAGE MUST PROVIDE MINIMUM VALUE .—

‘‘(ii) C
OVERAGE MUST PROVIDE MINIMUM VALUE .— 
Except as provided in clause (iii), an employee shall not be treated as eligible for minimum essential cov-erage if such coverage consists of an eligible employer- sponsored plan (as defined in section 5000A(f)(2)) and the plan’s share of the total allowed costs of benefits provided under the plan is less than 60 percent of such costs. 
‘‘(iii) E
MPLOYEE OR FAMILY MUST NOT BE COVERED  
UNDER EMPLOYER PLAN .—Clauses (i) and (ii) shall not

apply if the employee (or any individual described in the last sentence of clause (i)) is covered under the eligible employer-sponsored plan or the grandfathered health plan. 
‘‘(iv) I
NDEXING .—In the case of plan years begin-
ning in any calendar year after 2014, the Secretary shall adjust the 9.8 percent under clause (i)(II) in the same manner as the percentages are adjusted under subsection (b)(3)(A)(ii). 
‘‘(3) D
EFINITIONS AND OTHER RULES .—

‘‘(3) D
EFINITIONS AND OTHER RULES .— 
‘‘(A) Q UALIFIED HEALTH PLAN .—The term ‘qualified 
health plan’ has the meaning given such term by section 1301(a) of the Patient Protection and Affordable Care Act, except that such term shall not include a qualified health plan which is a catastrophic plan described in section 1302(e) of such Act. 
‘‘(B) G
RANDFATHERED HEALTH PLAN .—The term ‘grand-

fathered health plan’ has the meaning given such term by section 1251 of the Patient Protection and Affordable Care Act. 
‘‘(d) T
ERMS RELATING TO INCOME AND FAMILIES .—For purposes 
of this section— 
‘‘(1) F AMILY SIZE .—The family size involved with respect

to any taxpayer shall be equal to the number of individuals for whom the taxpayer is allowed a deduction under section 151 (relating to allowance of deduction for personal exemptions) for the taxable year. 
‘‘(2) H
OUSEHOLD INCOME .— 
‘‘(A) H OUSEHOLD INCOME .—The term ‘household 
income’ means, with respect to any taxpayer, an amount equal to the sum of— 
‘‘(i) the modified gross income of the taxpayer, 
plus 
‘‘(ii) the aggregate modified gross incomes of all 
other individuals who—

other individuals who— 
‘‘(I) were taken into account in determining 
the taxpayer’s family size under paragraph (1), and 
‘‘(II) were required to file a return of tax 
imposed by section 1 for the taxable year. 
‘‘(B) M
ODIFIED GROSS INCOME .—The term ‘modified 
gross income’ means gross income— Applicability. 
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124 STAT. 218 PUBLIC LAW 111–148—MAR. 23, 2010 
‘‘(i) decreased by the amount of any deduction 
allowable under paragraph (1), (3), (4), or (10) of section 62(a), 
‘‘(ii) increased by the amount of interest received 
or accrued during the taxable year which is exempt from tax imposed by this chapter, and 
‘‘(iii) determined without regard to sections 911, 
931, and 933. 
‘‘(3) P
OVERTY LINE .— 
‘‘(A) I N GENERAL .—The term ‘poverty line’ has the

meaning given that term in section 2110(c)(5) of the Social Security Act (42 U.S.C. 1397jj(c)(5)). 
‘‘(B) P
OVERTY LINE USED .—In the case of any qualified 
health plan offered through an Exchange for coverage during a taxable year beginning in a calendar year, the poverty line used shall be the most recently published poverty line as of the 1st day of the regular enrollment period for coverage during such calendar year. 
‘‘(e) R
ULES FOR INDIVIDUALS NOTLAWFULLY PRESENT .—

ULES FOR INDIVIDUALS NOTLAWFULLY PRESENT .— 
‘‘(1) I N GENERAL .—If 1 or more individuals for whom a 
taxpayer is allowed a deduction under section 151 (relating to allowance of deduction for personal exemptions) for the tax-able year (including the taxpayer or his spouse) are individuals who are not lawfully present— 
‘‘(A) the aggregate amount of premiums otherwise

‘‘(A) the aggregate amount of premiums otherwise 
taken into account under clauses (i) and (ii) of subsection (b)(2)(A) shall be reduced by the portion (if any) of such premiums which is attributable to such individuals, and 
‘‘(B) for purposes of applying this section, the deter-
mination as to what percentage a taxpayer’s household income bears to the poverty level for a family of the size involved shall be made under one of the following methods: 
‘‘(i) A method under which—

‘‘(i) A method under which— 
‘‘(I) the taxpayer’s family size is determined 
by not taking such individuals into account, and 
‘‘(II) the taxpayer’s household income is equal 
to the product of the taxpayer’s household income (determined without regard to this subsection) and a fraction— 
‘‘(aa) the numerator of which is the pov-
erty line for the taxpayer’s family size deter-mined after application of subclause (I), and 
‘‘(bb) the denominator of which is the pov-

erty line for the taxpayer’s family size deter-mined without regard to subclause (I). 
‘‘(ii) A comparable method reaching the same result 
as the method under clause (i). 
‘‘(2) L
AWFULLY PRESENT .—For purposes of this section, an

individual shall be treated as lawfully present only if the indi-vidual is, and is reasonably expected to be for the entire period of enrollment for which the credit under this section is being claimed, a citizen or national of the United States or an alien lawfully present in the United States. 
‘‘(3) S
ECRETARIAL AUTHORITY .—The Secretary of Health and

Human Services, in consultation with the Secretary, shall pre-scribe rules setting forth the methods by which calculations of family size and household income are made for purposes Regulations. 
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124 STAT. 219 PUBLIC LAW 111–148—MAR. 23, 2010 
of this subsection. Such rules shall be designed to ensure that 
the least burden is placed on individuals enrolling in qualified health plans through an Exchange and taxpayers eligible for the credit allowable under this section. ‘‘(f) R
ECONCILIATION OF CREDIT AND ADVANCE CREDIT .— 
‘‘(1) I N GENERAL .—The amount of the credit allowed under

this section for any taxable year shall be reduced (but not below zero) by the amount of any advance payment of such credit under section 1412 of the Patient Protection and Afford-able Care Act. 
‘‘(2) E
XCESS ADVANCE PAYMENTS .— 
‘‘(A) I N GENERAL .—If the advance payments to a tax-

payer under section 1412 of the Patient Protection and Affordable Care Act for a taxable year exceed the credit allowed by this section (determined without regard to para-graph (1)), the tax imposed by this chapter for the taxable year shall be increased by the amount of such excess. 
‘‘(B) L
IMITATION ON INCREASE WHERE INCOME LESS  
THAN 400 PERCENT OF POVERTY LINE .— 
‘‘(i) I N GENERAL .—In the case of an applicable tax-

payer whose household income is less than 400 percent of the poverty line for the size of the family involved for the taxable year, the amount of the increase under subparagraph (A) shall in no event exceed $400 ($250 in the case of a taxpayer whose tax is determined under section 1(c) for the taxable year). 
‘‘(ii) I
NDEXING OF AMOUNT .—In the case of any 
calendar year beginning after 2014, each of the dollar amounts under clause (i) shall be increased by an amount equal to—

‘‘(I) such dollar amount, multiplied by ‘‘(II) the cost-of-living adjustment determined 
under section 1(f)(3) for the calendar year, deter-mined by substituting ‘calendar year 2013’ for ‘cal-endar year 1992’ in subparagraph (B) thereof. 
‘‘(g) R
EGULATIONS .—The Secretary shall prescribe such regula-

tions as may be necessary to carry out the provisions of this section, including regulations which provide for— 
‘‘(1) the coordination of the credit allowed under this section 
with the program for advance payment of the credit under section 1412 of the Patient Protection and Affordable Care Act, and 
‘‘(2) the application of subsection (f) where the filing status 
of the taxpayer for a taxable year is different from such status used for determining the advance payment of the credit.’’. (b) D

ISALLOWANCE OF DEDUCTION .—Section 280C of the 
Internal Revenue Code of 1986 is amended by adding at the end the following new subsection: 
‘‘(g) C
REDIT FOR HEALTH INSURANCE PREMIUMS .—No deduction 
shall be allowed for the portion of the premiums paid by the taxpayer for coverage of 1 or more individuals under a qualified health plan which is equal to the amount of the credit determined for the taxable year under section 36B(a) with respect to such premiums.’’. 26 USC 280C.

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124 STAT. 220 PUBLIC LAW 111–148—MAR. 23, 2010 
(c) S TUDY ON AFFORDABLE COVERAGE .— 
(1) S TUDY AND REPORT .— 
(A) I N GENERAL .—Not later than 5 years after the 
date of the enactment of this Act, the Comptroller General shall conduct a study on the affordability of health insur-ance coverage, including— 
(i) the impact of the tax credit for qualified health

insurance coverage of individuals under section 36B of the Internal Revenue Code of 1986 and the tax credit for employee health insurance expenses of small employers under section 45R of such Code on maintaining and expanding the health insurance cov-erage of individuals; 
(ii) the availability of affordable health benefits

plans, including a study of whether the percentage of household income used for purposes of section 36B(c)(2)(C) of the Internal Revenue Code of 1986 (as added by this section) is the appropriate level for deter-mining whether employer-provided coverage is afford-able for an employee and whether such level may be lowered without significantly increasing the costs to the Federal Government and reducing employer- provided coverage; and 
(iii) the ability of individuals to maintain essential

health benefits coverage (as defined in section 5000A(f) of the Internal Revenue Code of 1986). (B) R
EPORT .—The Comptroller General shall submit 
to the appropriate committees of Congress a report on the study conducted under subparagraph (A), together with legislative recommendations relating to the matters studied under such subparagraph. (2) A
PPROPRIATE COMMITTEES OF CONGRESS .—In this sub-

section, the term ‘‘appropriate committees of Congress’’ means the Committee on Ways and Means, the Committee on Edu-cation and Labor, and the Committee on Energy and Commerce of the House of Representatives and the Committee on Finance and the Committee on Health, Education, Labor and Pensions of the Senate. (d) C
ONFORMING AMENDMENTS .— 
(1) Paragraph (2) of section 1324(b) of title 31, United

States Code, is amended by inserting ‘‘36B,’’ after ‘‘36A,’’. 
(2) The table of sections for subpart C of part IV of sub-
chapter A of chapter 1 of the Internal Revenue Code of 1986 is amended by inserting after the item relating to section 36A the following new item: 
‘‘Sec. 36B. Refundable credit for coverage under a qualified health plan.’’. 
(e) E FFECTIVE DATE.—The amendments made by this section 
shall apply to taxable years ending after December 31, 2013.

SEC. 1402. REDUCED COST-SHARING FOR INDIVIDUALS ENROLLING 
IN QUALIFIED HEALTH PLANS. 
(a) I NGENERAL .—In the case of an eligible insured enrolled 
in a qualified health plan— 
(1) the Secretary shall notify the issuer of the plan of 
such eligibility; and 
(2) the issuer shall reduce the cost-sharing under the plan 
at the level and in the manner specified in subsection (c). Notification. 42 USC 18071. 26 USC 36B note.

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124 STAT. 221 PUBLIC LAW 111–148—MAR. 23, 2010 
(b) E LIGIBLE INSURED .—In this section, the term ‘‘eligible 
insured’’ means an individual— 
(1) who enrolls in a qualified health plan in the silver 
level of coverage in the individual market offered through an Exchange; and 
(2) whose household income exceeds 100 percent but does 
not exceed 400 percent of the poverty line for a family of the size involved.

In the case of an individual described in section 36B(c)(1)(B) of the Internal Revenue Code of 1986, the individual shall be treated as having household income equal to 100 percent for purposes of applying this section. 
(c) D
ETERMINATION OF REDUCTION IN COST-SHARING .— 
(1) R EDUCTION IN OUT -OF-POCKET LIMIT .— 
(A) I N GENERAL .—The reduction in cost-sharing under 
this subsection shall first be achieved by reducing the applicable out-of pocket limit under section 1302(c)(1) in the case of—

(i) an eligible insured whose household income is 
more than 100 percent but not more than 200 percent of the poverty line for a family of the size involved, by two-thirds; 
(ii) an eligible insured whose household income 
is more than 200 percent but not more than 300 per-cent of the poverty line for a family of the size involved, by one-half; and 
(iii) an eligible insured whose household income

(iii) an eligible insured whose household income 
is more than 300 percent but not more than 400 per-cent of the poverty line for a family of the size involved, by one-third. (B) C
OORDINATION WITH ACTUARIAL VALUE LIMITS .— 
(i) I N GENERAL .—The Secretary shall ensure the 
reduction under this paragraph shall not result in an increase in the plan’s share of the total allowed costs of benefits provided under the plan above— 
(I) 90 percent in the case of an eligible insured

described in paragraph (2)(A); 
(II) 80 percent in the case of an eligible insured 
described in paragraph (2)(B); and 
(III) 70 percent in the case of an eligible 
insured described in clause (ii) or (iii) of subpara-graph (A). (ii) A
DJUSTMENT .—The Secretary shall adjust the 
out-of pocket limits under paragraph (1) if necessary to ensure that such limits do not cause the respective actuarial values to exceed the levels specified in clause 
(i). 
(2) A

(i). 
(2) A
DDITIONAL REDUCTION FOR LOWER INCOME INSUREDS .— 
The Secretary shall establish procedures under which the issuer of a qualified health plan to which this section applies shall further reduce cost-sharing under the plan in a manner suffi-cient to— 
(A) in the case of an eligible insured whose household 
income is not less than 100 percent but not more than 150 percent of the poverty line for a family of the size involved, increase the plan’s share of the total allowed Procedures.

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124 STAT. 222 PUBLIC LAW 111–148—MAR. 23, 2010 
costs of benefits provided under the plan to 90 percent 
of such costs; and 
(B) in the case of an eligible insured whose household 
income is more than 150 percent but not more than 200 percent of the poverty line for a family of the size involved, increase the plan’s share of the total allowed costs of bene-fits provided under the plan to 80 percent of such costs. (3) M
ETHODS FOR REDUCING COST -SHARING .—

ETHODS FOR REDUCING COST -SHARING .— 
(A) I N GENERAL .—An issuer of a qualified health plan 
making reductions under this subsection shall notify the Secretary of such reductions and the Secretary shall make periodic and timely payments to the issuer equal to the value of the reductions. 
(B) C
APITATED PAYMENTS .—The Secretary may estab-

lish a capitated payment system to carry out the payment of cost-sharing reductions under this section. Any such system shall take into account the value of the reductions and make appropriate risk adjustments to such payments. (4) A
DDITIONAL BENEFITS .—If a qualified health plan under

section 1302(b)(5) offers benefits in addition to the essential health benefits required to be provided by the plan, or a State requires a qualified health plan under section 1311(d)(3)(B) to cover benefits in addition to the essential health benefits required to be provided by the plan, the reductions in cost- sharing under this section shall not apply to such additional benefits. 
(5) S
PECIAL RULE FOR PEDIATRIC DENTAL PLANS .—If an

individual enrolls in both a qualified health plan and a plan described in section 1311(d)(2)(B)(ii)(I) for any plan year, sub-section (a) shall not apply to that portion of any reduction in cost-sharing under subsection (c) that (under regulations prescribed by the Secretary) is properly allocable to pediatric dental benefits which are included in the essential health bene-fits required to be provided by a qualified health plan under section 1302(b)(1)(J). (d) S
PECIAL RULES FOR INDIANS .—

PECIAL RULES FOR INDIANS .— 
(1) I NDIANS UNDER 300 PERCENT OF POVERTY .—If an indi-
vidual enrolled in any qualified health plan in the individual market through an Exchange is an Indian (as defined in section 4(d) of the Indian Self-Determination and Education Assistance Act (25 U.S.C. 450b(d))) whose household income is not more than 300 percent of the poverty line for a family of the size involved, then, for purposes of this section— 
(A) such individual shall be treated as an eligible

insured; and 
(B) the issuer of the plan shall eliminate any cost- 
sharing under the plan. (2) I
TEMS OR SERVICES FURNISHED THROUGH INDIAN HEALTH  
PROVIDERS .—If an Indian (as so defined) enrolled in a qualified 
health plan is furnished an item or service directly by the Indian Health Service, an Indian Tribe, Tribal Organization, or Urban Indian Organization or through referral under con-tract health services— 
(A) no cost-sharing under the plan shall be imposed

under the plan for such item or service; and 
(B) the issuer of the plan shall not reduce the payment 
to any such entity for such item or service by the amount Notification. 
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124 STAT. 223 PUBLIC LAW 111–148—MAR. 23, 2010 
of any cost-sharing that would be due from the Indian 
but for subparagraph (A). (3) P
AYMENT .—The Secretary shall pay to the issuer of 
a qualified health plan the amount necessary to reflect the increase in actuarial value of the plan required by reason of this subsection. (e) R
(1) I N GENERAL .—If an individual who is an eligible insured 
is not lawfully present—

is not lawfully present— 
(A) no cost-sharing reduction under this section shall 
apply with respect to the individual; and 
(B) for purposes of applying this section, the determina-
tion as to what percentage a taxpayer’s household income bears to the poverty level for a family of the size involved shall be made under one of the following methods: 
(i) A method under which— 
(I) the taxpayer’s family size is determined 
by not taking such individuals into account, and

(II) the taxpayer’s household income is equal 
(aa) the numerator of which is the poverty 
line for the taxpayer’s family size determined after application of subclause (I), and 
(bb) the denominator of which is the pov-
erty line for the taxpayer’s family size deter-mined without regard to subclause (I).

(ii) A comparable method reaching the same result 
(2) L
AWFULLY PRESENT .—For purposes of this section, an 
individual shall be treated as lawfully present only if the indi-vidual is, and is reasonably expected to be for the entire period of enrollment for which the cost-sharing reduction under this section is being claimed, a citizen or national of the United States or an alien lawfully present in the United States. 
(3) S

(3) S
ECRETARIAL AUTHORITY .—The Secretary, in consulta-
tion with the Secretary of the Treasury, shall prescribe rules setting forth the methods by which calculations of family size and household income are made for purposes of this subsection. Such rules shall be designed to ensure that the least burden is placed on individuals enrolling in qualified health plans through an Exchange and taxpayers eligible for the credit allow-able under this section. (f) D

EFINITIONS AND SPECIAL RULES .—In this section: 
(1) I N GENERAL .—Any term used in this section which 
is also used in section 36B of the Internal Revenue Code of 1986 shall have the meaning given such term by such section. 
(2) L
IMITATIONS ON REDUCTION .—No cost-sharing reduction

shall be allowed under this section with respect to coverage for any month unless the month is a coverage month with respect to which a credit is allowed to the insured (or an applicable taxpayer on behalf of the insured) under section 36B of such Code. 
(3) D
ATA USED FOR ELIGIBILITY .—Any determination under 
this section shall be made on the basis of the taxable year for which the advance determination is made under section Regulations.

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124 STAT. 224 PUBLIC LAW 111–148—MAR. 23, 2010 
1412 and not the taxable year for which the credit under 
section 36B of such Code is allowed. 
Subpart B—Eligibility Determinations 
SEC. 1411. PROCEDURES FOR DETERMINING ELIGIBILITY FOR 
EXCHANGE PARTICIPATION, PREMIUM TAX CREDITS AND REDUCED COST-SHARING, AND INDIVIDUAL RESPONSI-BILITY EXEMPTIONS. 
(a) E STABLISHMENT OF PROGRAM .—The Secretary shall estab-
lish a program meeting the requirements of this section for deter-mining—

(1) whether an individual who is to be covered in the 
individual market by a qualified health plan offered through an Exchange, or who is claiming a premium tax credit or reduced cost-sharing, meets the requirements of sections 1312(f)(3), 1402(e), and 1412(d) of this title and section 36B(e) of the Internal Revenue Code of 1986 that the individual be a citizen or national of the United States or an alien lawfully present in the United States;

(2) in the case of an individual claiming a premium tax 
credit or reduced cost-sharing under section 36B of such Code or section 1402— 
(A) whether the individual meets the income and cov-
erage requirements of such sections; and 
(B) the amount of the tax credit or reduced cost- 
sharing; (3) whether an individual’s coverage under an employer- 
sponsored health benefits plan is treated as unaffordable under sections 36B(c)(2)(C) and 5000A(e)(2); and

(4) whether to grant a certification under section 
1311(d)(4)(H) attesting that, for purposes of the individual responsibility requirement under section 5000A of the Internal Revenue Code of 1986, an individual is entitled to an exemption from either the individual responsibility requirement or the penalty imposed by such section. (b) I
NFORMATION REQUIRED TOBEPROVIDED BY APPLICANTS .— 
(1) I N GENERAL .—An applicant for enrollment in a qualified

health plan offered through an Exchange in the individual market shall provide— 
(A) the name, address, and date of birth of each indi-
vidual who is to be covered by the plan (in this subsection referred to as an ‘‘enrollee’’); and 
(B) the information required by any of the following 
paragraphs that is applicable to an enrollee. (2) C
ITIZENSHIP OR IMMIGRATION STATUS .—The following 
information shall be provided with respect to every enrollee:

(A) In the case of an enrollee whose eligibility is based 
on an attestation of citizenship of the enrollee, the enrollee’s social security number. 
(B) In the case of an individual whose eligibility is

based on an attestation of the enrollee’s immigration status, the enrollee’s social security number (if applicable) and such identifying information with respect to the enrollee’s immigration status as the Secretary, after consultation with the Secretary of Homeland Security, determines appropriate. 42 USC 18081. 
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124 STAT. 225 PUBLIC LAW 111–148—MAR. 23, 2010 
(3) E LIGIBILITY AND AMOUNT OF TAX CREDIT OR REDUCED  
COST -SHARING .—In the case of an enrollee with respect to whom 
a premium tax credit or reduced cost-sharing under section 36B of such Code or section 1402 is being claimed, the following information: 
(A) I
NFORMATION REGARDING INCOME AND FAMILY  
SIZE.—The information described in section 6103(l)(21) for

the taxable year ending with or within the second calendar year preceding the calendar year in which the plan year begins. 
(B) C
HANGES IN CIRCUMSTANCES .—The information 
described in section 1412(b)(2), including information with respect to individuals who were not required to file an income tax return for the taxable year described in subparagraph (A) or individuals who experienced changes in marital status or family size or significant reductions in income. (4) E

MPLOYER -SPONSORED COVERAGE .—In the case of an 
enrollee with respect to whom eligibility for a premium tax credit under section 36B of such Code or cost-sharing reduction under section 1402 is being established on the basis that the enrollee’s (or related individual’s) employer is not treated under section 36B(c)(2)(C) of such Code as providing minimum essen-tial coverage or affordable minimum essential coverage, the following information: 
(A) The name, address, and employer identification

number (if available) of the employer. 
(B) Whether the enrollee or individual is a full-time 
employee and whether the employer provides such min-imum essential coverage. 
(C) If the employer provides such minimum essential 
coverage, the lowest cost option for the enrollee’s or individ-ual’s enrollment status and the enrollee’s or individual’s required contribution (within the meaning of section 5000A(e)(1)(B) of such Code) under the employer-sponsored plan.

(D) If an enrollee claims an employer’s minimum essen-
tial coverage is unaffordable, the information described in paragraph (3). 
If an enrollee changes employment or obtains additional employment while enrolled in a qualified health plan for which such credit or reduction is allowed, the enrollee shall notify the Exchange of such change or additional employment and provide the information described in this paragraph with respect to the new employer. 
(5) E

(5) E
XEMPTIONS FROM INDIVIDUAL RESPONSIBILITY REQUIRE -
MENTS .—In the case of an individual who is seeking an exemp-
tion certificate under section 1311(d)(4)(H) from any require-ment or penalty imposed by section 5000A, the following information: 
(A) In the case of an individual seeking exemption

based on the individual’s status as a member of an exempt religious sect or division, as a member of a health care sharing ministry, as an Indian, or as an individual eligible for a hardship exemption, such information as the Sec-retary shall prescribe. 
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124 STAT. 226 PUBLIC LAW 111–148—MAR. 23, 2010 
(B) In the case of an individual seeking exemption 
based on the lack of affordable coverage or the individual’s status as a taxpayer with household income less than 100 percent of the poverty line, the information described in paragraphs (3) and (4), as applicable. 
(c) V
ERIFICATION OF INFORMATION CONTAINED IN RECORDS OF  
SPECIFIC FEDERAL OFFICIALS .— 
(1) I NFORMATION TRANSFERRED TO SECRETARY .—An

(1) I NFORMATION TRANSFERRED TO SECRETARY .—An 
Exchange shall submit the information provided by an applicant under subsection (b) to the Secretary for verification in accord-ance with the requirements of this subsection and subsection (d). 
(2) C
ITIZENSHIP OR IMMIGRATION STATUS .— 
(A) C OMMISSIONER OF SOCIAL SECURITY .—The Sec-

retary shall submit to the Commissioner of Social Security the following information for a determination as to whether the information provided is consistent with the information in the records of the Commissioner: 
(i) The name, date of birth, and social security 
number of each individual for whom such information was provided under subsection (b)(2). 
(ii) The attestation of an individual that the indi-
vidual is a citizen. (B) S

ECRETARY OF HOMELAND SECURITY .— 
(i) I N GENERAL .—In the case of an individual— 
(I) who attests that the individual is an alien 
lawfully present in the United States; or 
(II) who attests that the individual is a citizen 
but with respect to whom the Commissioner of Social Security has notified the Secretary under subsection (e)(3) that the attestation is inconsistent with information in the records maintained by the Commissioner;

the Secretary shall submit to the Secretary of Home-land Security the information described in clause (ii) for a determination as to whether the information pro-vided is consistent with the information in the records of the Secretary of Homeland Security. 
(ii) I
NFORMATION .—The information described in 
clause (ii) is the following: 
(I) The name, date of birth, and any identifying 
information with respect to the individual’s immigration status provided under subsection (b)(2).

(II) The attestation that the individual is an 
alien lawfully present in the United States or in the case of an individual described in clause (i)(II), the attestation that the individual is a citizen. 
(3) E
LIGIBILITY FOR TAX CREDIT AND COST -SHARING REDUC -
TION .—The Secretary shall submit the information described

in subsection (b)(3)(A) provided under paragraph (3), (4), or (5) of subsection (b) to the Secretary of the Treasury for verification of household income and family size for purposes of eligibility. 
(4) M
ETHODS .— 
(A) I N GENERAL .—The Secretary, in consultation with 
the Secretary of the Treasury, the Secretary of Homeland Electronic submission. Submission.

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124 STAT. 227 PUBLIC LAW 111–148—MAR. 23, 2010 
Security, and the Commissioner of Social Security, shall 
provide that verifications and determinations under this subsection shall be done— 
(i) through use of an on-line system or otherwise 
for the electronic submission of, and response to, the information submitted under this subsection with respect to an applicant; or 
(ii) by determining the consistency of the informa-

tion submitted with the information maintained in the records of the Secretary of the Treasury, the Secretary of Homeland Security, or the Commissioner of Social Security through such other method as is approved by the Secretary. (B) F
LEXIBILITY .—The Secretary may modify the

methods used under the program established by this section for the Exchange and verification of information if the Secretary determines such modifications would reduce the administrative costs and burdens on the applicant, including allowing an applicant to request the Secretary of the Treasury to provide the information described in paragraph (3) directly to the Exchange or to the Secretary. The Secretary shall not make any such modification unless the Secretary determines that any applicable

the Secretary determines that any applicable requirements under this section and section 6103 of the Internal Revenue Code of 1986 with respect to the confidentiality, disclosure, maintenance, or use of information will be met.

(d) V
ERIFICATION BY SECRETARY .—In the case of information 
provided under subsection (b) that is not required under subsection (c) to be submitted to another person for verification, the Secretary shall verify the accuracy of such information in such manner as the Secretary determines appropriate, including delegating respon-sibility for verification to the Exchange. 
(e) A
CTIONS RELATING TO VERIFICATION .— 
(1) I N GENERAL .—Each person to whom the Secretary pro-

vided information under subsection (c) shall report to the Sec-retary under the method established under subsection (c)(4) the results of its verification and the Secretary shall notify the Exchange of such results. Each person to whom the Sec-retary provided information under subsection (d) shall report to the Secretary in such manner as the Secretary determines appropriate. 
(2) V
ERIFICATION .— 
(A) E LIGIBILITY FOR ENROLLMENT AND PREMIUM TAX

(A) E LIGIBILITY FOR ENROLLMENT AND PREMIUM TAX  
CREDITS AND COST -SHARING REDUCTIONS .—If information 
provided by an applicant under paragraphs (1), (2), (3), and (4) of subsection (b) is verified under subsections (c) 
and (d)— 
(i) the individual’s eligibility to enroll through the 
Exchange and to apply for premium tax credits and cost-sharing reductions shall be satisfied; and 
(ii) the Secretary shall, if applicable, notify the

Secretary of the Treasury under section 1412(c) of the amount of any advance payment to be made. (B) E
XEMPTION FROM INDIVIDUAL RESPONSIBILITY .—If 
information provided by an applicant under subsection (b)(5) is verified under subsections (c) and (d), the Secretary Notification. Reports. 
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124 STAT. 228 PUBLIC LAW 111–148—MAR. 23, 2010 
shall issue the certification of exemption described in sec-
tion 1311(d)(4)(H). (3) I
NCONSISTENCIES INVOLVING ATTESTATION OF CITIZEN -
SHIP OR LAWFUL PRESENCE .—If the information provided by

any applicant under subsection (b)(2) is inconsistent with information in the records maintained by the Commissioner of Social Security or Secretary of Homeland Security, whichever is applicable, the applicant’s eligibility will be determined in the same manner as an individual’s eligibility under the med-icaid program is determined under section 1902(ee) of the Social Security Act (as in effect on January 1, 2010). 
(4) I
NCONSISTENCIES INVOLVING OTHER INFORMATION .—

NCONSISTENCIES INVOLVING OTHER INFORMATION .— 
(A) I N GENERAL .—If the information provided by an 
applicant under subsection (b) (other than subsection (b)(2)) is inconsistent with information in the records maintained by persons under subsection (c) or is not verified under subsection (d), the Secretary shall notify the Exchange and the Exchange shall take the following actions: 
(i) R
EASONABLE EFFORT .—The Exchange shall

(i) R
EASONABLE EFFORT .—The Exchange shall 
make a reasonable effort to identify and address the causes of such inconsistency, including through typo-graphical or other clerical errors, by contacting the applicant to confirm the accuracy of the information, and by taking such additional actions as the Secretary, through regulation or other guidance, may identify. 
(ii) N
OTICE AND OPPORTUNITY TO CORRECT .—In the

(ii) N
OTICE AND OPPORTUNITY TO CORRECT .—In the 
case the inconsistency or inability to verify is not resolved under subparagraph (A), the Exchange shall— 
(I) notify the applicant of such fact; (II) provide the applicant an opportunity to

either present satisfactory documentary evidence or resolve the inconsistency with the person verifying the information under subsection (c) or (d) during the 90-day period beginning the date on which the notice required under subclause (I) is sent to the applicant. 
The Secretary may extend the 90-day period under subclause (II) for enrollments occurring during 2014. (B) S
PECIFIC ACTIONS NOT INVOLVING CITIZENSHIP OR  
LAWFUL PRESENCE .— 
(i) I N GENERAL .—Except as provided in paragraph

(3), the Exchange shall, during any period before the close of the period under subparagraph (A)(ii)(II), make any determination under paragraphs (2), (3), and (4) of subsection (a) on the basis of the information con-tained on the application. 
(ii) E
LIGIBILITY OR AMOUNT OF CREDIT OR REDUC -
TION .—If an inconsistency involving the eligibility for,

or amount of, any premium tax credit or cost-sharing reduction is unresolved under this subsection as of the close of the period under subparagraph (A)(ii)(II), the Exchange shall notify the applicant of the amount (if any) of the credit or reduction that is determined on the basis of the records maintained by persons under subsection (c). 
(iii) E
MPLOYER AFFORDABILITY .—If the Secretary 
notifies an Exchange that an enrollee is eligible for Time period. Notifications.

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124 STAT. 229 PUBLIC LAW 111–148—MAR. 23, 2010 
a premium tax credit under section 36B of such Code

or cost-sharing reduction under section 1402 because the enrollee’s (or related individual’s) employer does not provide minimum essential coverage through an employer-sponsored plan or that the employer does provide that coverage but it is not affordable coverage, the Exchange shall notify the employer of such fact and that the employer may be liable for the payment assessed under section 4980H of such Code. 
(iv) E
XEMPTION .—In any case where the inconsist-

ency involving, or inability to verify, information pro-vided under subsection (b)(5) is not resolved as of the close of the period under subparagraph (A)(ii)(II), the Exchange shall notify an applicant that no certification of exemption from any requirement or payment under section 5000A of such Code will be issued. (C) A
PPEALS PROCESS .—The Exchange shall also notify

PPEALS PROCESS .—The Exchange shall also notify 
each person receiving notice under this paragraph of the appeals processes established under subsection (f). 
(f) A
PPEALS AND REDETERMINATIONS .— 
(1) I N GENERAL .—The Secretary, in consultation with the 
Secretary of the Treasury, the Secretary of Homeland Security, and the Commissioner of Social Security, shall establish proce-dures by which the Secretary or one of such other Federal officers—

(A) hears and makes decisions with respect to appeals 
of any determination under subsection (e); and 
(B) redetermines eligibility on a periodic basis in appro-
priate circumstances. (2) E
MPLOYER LIABILITY .— 
(A) I N GENERAL .—The Secretary shall establish a sepa-

rate appeals process for employers who are notified under subsection (e)(4)(C) that the employer may be liable for a tax imposed by section 4980H of the Internal Revenue Code of 1986 with respect to an employee because of a determination that the employer does not provide minimum essential coverage through an employer-sponsored plan or that the employer does provide that coverage but it is not affordable coverage with respect to an employee. Such process shall provide an employer the

(i) present information to the Exchange for review 
of the determination either by the Exchange or the person making the determination, including evidence of the employer-sponsored plan and employer contribu-tions to the plan; and 
(ii) have access to the data used to make the 
determination to the extent allowable by law. 
Such process shall be in addition to any rights of appeal the employer may have under subtitle F of such Code. 
(B) C
ONFIDENTIALITY .—Notwithstanding any provision

ONFIDENTIALITY .—Notwithstanding any provision 
of this title (or the amendments made by this title) or section 6103 of the Internal Revenue Code of 1986, an employer shall not be entitled to any taxpayer return information with respect to an employee for purposes of determining whether the employer is subject to the penalty under section 4980H of such Code with respect to the employee, except that— Procedures.

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124 STAT. 230 PUBLIC LAW 111–148—MAR. 23, 2010 
(i) the employer may be notified as to the name 
of an employee and whether or not the employee’s income is above or below the threshold by which the affordability of an employer’s health insurance cov-erage is measured; and 
(ii) this subparagraph shall not apply to an

(ii) this subparagraph shall not apply to an 
employee who provides a waiver (at such time and in such manner as the Secretary may prescribe) authorizing an employer to have access to the employee’s taxpayer return information. 
(g) C
ONFIDENTIALITY OF APPLICANT INFORMATION .— 
(1) I N GENERAL .—An applicant for insurance coverage or

for a premium tax credit or cost-sharing reduction shall be required to provide only the information strictly necessary to authenticate identity, determine eligibility, and determine the amount of the credit or reduction. 
(2) R
ECEIPT OF INFORMATION .—Any person who receives 
information provided by an applicant under subsection (b) (whether directly or by another person at the request of the applicant), or receives information from a Federal agency under subsection (c), (d), or (e), shall—

(A) use the information only for the purposes of, and 
to the extent necessary in, ensuring the efficient operation of the Exchange, including verifying the eligibility of an individual to enroll through an Exchange or to claim a premium tax credit or cost-sharing reduction or the amount of the credit or reduction; and 
(B) not disclose the information to any other person 
except as provided in this section. 
(h) P
(1) F ALSE OR FRAUDULENT INFORMATION .— 
(A) C IVIL PENALTY .—

(A) C IVIL PENALTY .— 
(i) I N GENERAL .—If— 
(I) any person fails to provides correct informa-
tion under subsection (b); and 
(II) such failure is attributable to negligence 
or disregard of any rules or regulations of the Secretary, 
such person shall be subject, in addition to any other

penalties that may be prescribed by law, to a civil penalty of not more than $25,000 with respect to any failures involving an application for a plan year. For purposes of this subparagraph, the terms ‘‘negligence’’ and ‘‘disregard’’ shall have the same meanings as when used in section 6662 of the Internal Revenue Code of 1986. 
(ii) R
EASONABLE CAUSE EXCEPTION .—No penalty

(ii) R
EASONABLE CAUSE EXCEPTION .—No penalty 
shall be imposed under clause (i) if the Secretary deter-mines that there was a reasonable cause for the failure and that the person acted in good faith. (B) K
NOWING AND WILLFUL VIOLATIONS .—Any person 
who knowingly and willfully provides false or fraudulent information under subsection (b) shall be subject, in addi-tion to any other penalties that may be prescribed by law, to a civil penalty of not more than $250,000.

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124 STAT. 231 PUBLIC LAW 111–148—MAR. 23, 2010 
(2) I MPROPER USE OR DISCLOSURE OF INFORMATION .—Any 
person who knowingly and willfully uses or discloses informa-tion in violation of subsection (g) shall be subject, in addition to any other penalties that may be prescribed by law, to a civil penalty of not more than $25,000. 
(3) L
IMITATIONS ON LIENS AND LEVIES .—The Secretary (or, 
if applicable, the Attorney General of the United States) shall not—

(A) file notice of lien with respect to any property 
of a person by reason of any failure to pay the penalty imposed by this subsection; or 
(B) levy on any such property with respect to such 
failure. 
(i) S
TUDY OF ADMINISTRATION OF EMPLOYER RESPONSIBILITY .— 
(1) I N GENERAL .—The Secretary of Health and Human

Services shall, in consultation with the Secretary of the Treasury, conduct a study of the procedures that are necessary to ensure that in the administration of this title and section 4980H of the Internal Revenue Code of 1986 (as added by section 1513) that the following rights are protected: 
(A) The rights of employees to preserve their right

to confidentiality of their taxpayer return information and their right to enroll in a qualified health plan through an Exchange if an employer does not provide affordable coverage. 
(B) The rights of employers to adequate due process 
and access to information necessary to accurately deter-mine any payment assessed on employers. (2) R
EPORT .—Not later than January 1, 2013, the Secretary

of Health and Human Services shall report the results of the study conducted under paragraph (1), including any rec-ommendations for legislative changes, to the Committees on Finance and Health, Education, Labor and Pensions of the Senate and the Committees of Education and Labor and Ways and Means of the House of Representatives. 
SEC. 1412. ADVANCE DETERMINATION AND PAYMENT OF PREMIUM 
TAX CREDITS AND COST-SHARING REDUCTIONS. 
(a) I NGENERAL .—The Secretary, in consultation with the Sec-

retary of the Treasury, shall establish a program under which— 
(1) upon request of an Exchange, advance determinations 
are made under section 1411 with respect to the income eligi-bility of individuals enrolling in a qualified health plan in the individual market through the Exchange for the premium tax credit allowable under section 36B of the Internal Revenue Code of 1986 and the cost-sharing reductions under section 1402; 
(2) the Secretary notifies—

(2) the Secretary notifies— 
(A) the Exchange and the Secretary of the Treasury 
of the advance determinations; and 
(B) the Secretary of the Treasury of the name and 
employer identification number of each employer with respect to whom 1 or more employee of the employer were determined to be eligible for the premium tax credit under section 36B of the Internal Revenue Code of 1986 and the cost-sharing reductions under section 1402 because— Notification. 42 USC 18082.

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124 STAT. 232 PUBLIC LAW 111–148—MAR. 23, 2010 
(i) the employer did not provide minimum essential 
coverage; or 
(ii) the employer provided such minimum essential 
coverage but it was determined under section 36B(c)(2)(C) of such Code to either be unaffordable to the employee or not provide the required minimum actuarial value; and 
(3) the Secretary of the Treasury makes advance payments

of such credit or reductions to the issuers of the qualified health plans in order to reduce the premiums payable by individuals eligible for such credit. (b) A
DVANCE DETERMINATIONS .— 
(1) I N GENERAL .—The Secretary shall provide under the 
program established under subsection (a) that advance deter-mination of eligibility with respect to any individual shall be made— 
(A) during the annual open enrollment period

(A) during the annual open enrollment period 
applicable to the individual (or such other enrollment period as may be specified by the Secretary); and 
(B) on the basis of the individual’s household income 
for the most recent taxable year for which the Secretary, after consultation with the Secretary of the Treasury, deter-mines information is available. (2) C
HANGES IN CIRCUMSTANCES .—The Secretary shall pro-

vide procedures for making advance determinations on the basis of information other than that described in paragraph (1)(B) in cases where information included with an application form demonstrates substantial changes in income, changes in family size or other household circumstances, change in filing status, the filing of an application for unemployment benefits, or other significant changes affecting eligibility, including— 
(A) allowing an individual claiming a decrease of 20

percent or more in income, or filing an application for unemployment benefits, to have eligibility for the credit determined on the basis of household income for a later period or on the basis of the individual’s estimate of such income for the taxable year; and 
(B) the determination of household income in cases 
where the taxpayer was not required to file a return of tax imposed by this chapter for the second preceding tax-able year. 
(c) P
AYMENT OF PREMIUM TAXCREDITS AND COST-SHARING

AYMENT OF PREMIUM TAXCREDITS AND COST-SHARING  
REDUCTIONS .— 
(1) I N GENERAL .—The Secretary shall notify the Secretary 
of the Treasury and the Exchange through which the individual is enrolling of the advance determination under section 1411. 
(2) P
REMIUM TAX CREDIT .— 
(A) I N GENERAL .—The Secretary of the Treasury shall

make the advance payment under this section of any pre-mium tax credit allowed under section 36B of the Internal Revenue Code of 1986 to the issuer of a qualified health plan on a monthly basis (or such other periodic basis as the Secretary may provide). 
(B) I
SSUER RESPONSIBILITIES .—An issuer of a qualified 
health plan receiving an advance payment with respect to an individual enrolled in the plan shall— Notifications.

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124 STAT. 233 PUBLIC LAW 111–148—MAR. 23, 2010 
(i) reduce the premium charged the insured for 
any period by the amount of the advance payment for the period; 
(ii) notify the Exchange and the Secretary of such 
reduction; 
(iii) include with each billing statement the 
amount by which the premium for the plan has been reduced by reason of the advance payment; and 
(iv) in the case of any nonpayment of premiums 
by the insured— 
(I) notify the Secretary of such nonpayment; 
and

and 
(II) allow a 3-month grace period for non-
payment of premiums before discontinuing cov-erage. 
(3) C
OST-SHARING REDUCTIONS .—The Secretary shall also

notify the Secretary of the Treasury and the Exchange under paragraph (1) if an advance payment of the cost-sharing reduc-tions under section 1402 is to be made to the issuer of any qualified health plan with respect to any individual enrolled in the plan. The Secretary of the Treasury shall make such advance payment at such time and in such amount as the Secretary specifies in the notice. (d) N
OFEDERAL PAYMENTS FOR INDIVIDUALS NOTLAWFULLY

OFEDERAL PAYMENTS FOR INDIVIDUALS NOTLAWFULLY  
PRESENT .—Nothing in this subtitle or the amendments made by 
this subtitle allows Federal payments, credits, or cost-sharing reduc-tions for individuals who are not lawfully present in the United States. 
(e) S
TATE FLEXIBILITY .—Nothing in this subtitle or the amend-

ments made by this subtitle shall be construed to prohibit a State from making payments to or on behalf of an individual for coverage under a qualified health plan offered through an Exchange that are in addition to any credits or cost-sharing reductions allowable to the individual under this subtitle and such amendments. 
SEC. 1413. STREAMLINING OF PROCEDURES FOR ENROLLMENT 
THROUGH AN EXCHANGE AND STATE MEDICAID, CHIP, AND HEALTH SUBSIDY PROGRAMS.

meeting the requirements of this section under which residents of each State may apply for enrollment in, receive a determination of eligibility for participation in, and continue participation in, applicable State health subsidy programs. Such system shall ensure that if an individual applying to an Exchange is found through screening to be eligible for medical assistance under the State medicaid plan under title XIX, or eligible for enrollment under a State children’s health insurance program

under a State children’s health insurance program (CHIP) under title XXI of such Act, the individual is enrolled for assistance under such plan or program.

(b) R
EQUIREMENTS RELATING TO FORMS AND NOTICE .— 
(1) R EQUIREMENTS RELATING TO FORMS .— 
(A) I N GENERAL .—The Secretary shall develop and pro-
vide to each State a single, streamlined form that— 
(i) may be used to apply for all applicable State 
health subsidy programs within the State; 
(ii) may be filed online, in person, by mail, or 
by telephone; 42 USC 18083.

by telephone; 42 USC 18083. 
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124 STAT. 234 PUBLIC LAW 111–148—MAR. 23, 2010 
(iii) may be filed with an Exchange or with State 
officials operating one of the other applicable State health subsidy programs; and 
(iv) is structured to maximize an applicant’s ability 
to complete the form satisfactorily, taking into account the characteristics of individuals who qualify for applicable State health subsidy programs. (B) S
TATE AUTHORITY TO ESTABLISH FORM .—A State

TATE AUTHORITY TO ESTABLISH FORM .—A State 
may develop and use its own single, streamlined form as an alternative to the form developed under subpara-graph (A) if the alternative form is consistent with stand-ards promulgated by the Secretary under this section. 
(C) S
UPPLEMENTAL ELIGIBILITY FORMS .—The Secretary

UPPLEMENTAL ELIGIBILITY FORMS .—The Secretary 
may allow a State to use a supplemental or alternative form in the case of individuals who apply for eligibility that is not determined on the basis of the household income (as defined in section 36B of the Internal Revenue Code of 1986). (2) N
OTICE .—The Secretary shall provide that an applicant

filing a form under paragraph (1) shall receive notice of eligi-bility for an applicable State health subsidy program without any need to provide additional information or paperwork unless such information or paperwork is specifically required by law when information provided on the form is inconsistent with data used for the electronic verification under paragraph (3) or is otherwise insufficient to determine eligibility. (c) R
EQUIREMENTS RELATING TO ELIGIBILITY BASED ON DATA 
EXCHANGES .—

EXCHANGES .— 
(1) D EVELOPMENT OF SECURE INTERFACES .—Each State 
shall develop for all applicable State health subsidy programs a secure, electronic interface allowing an exchange of data (including information contained in the application forms described in subsection (b)) that allows a determination of eligibility for all such programs based on a single application. Such interface shall be compatible with the method established for data verification under section 1411(c)(4). 
(2) D

(2) D
ATA MATCHING PROGRAM .—Each applicable State 
health subsidy program shall participate in a data matching arrangement for determining eligibility for participation in the program under paragraph (3) that— 
(A) provides access to data described in paragraph 
(3); 
(B) applies only to individuals who— 
(i) receive assistance from an applicable State 
health subsidy program; or 
(ii) apply for such assistance— 
(I) by filing a form described in subsection 
(b); or

(b); or 
(II) by requesting a determination of eligibility 
and authorizing disclosure of the information described in paragraph (3) to applicable State health coverage subsidy programs for purposes of determining and establishing eligibility; and 
(C) consistent with standards promulgated by the Sec-
retary, including the privacy and data security safeguards described in section 1942 of the Social Security Act or that are otherwise applicable to such programs.

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124 STAT. 235 PUBLIC LAW 111–148—MAR. 23, 2010 
(3) D ETERMINATION OF ELIGIBILITY .— 
(A) I N GENERAL .—Each applicable State health subsidy 
program shall, to the maximum extent practicable— 
(i) establish, verify, and update eligibility for 
participation in the program using the data matching arrangement under paragraph (2); and 
(ii) determine such eligibility on the basis of reli-

able, third party data, including information described in sections 1137, 453(i), and 1942(a) of the Social Secu-rity Act, obtained through such arrangement. (B) E
XCEPTION .—This paragraph shall not apply in 
circumstances with respect to which the Secretary deter-mines that the administrative and other costs of use of the data matching arrangement under paragraph (2) out-weigh its expected gains in accuracy, efficiency, and pro-gram participation. (4) S

consultation with persons in possession of the data to be matched and representatives of applicable State health subsidy programs, promulgate standards governing the timing, con-tents, and procedures for data matching described in this sub-section. Such standards shall take into account administrative and other costs and the value of data matching to the establish-ment, verification, and updating of eligibility for applicable State health subsidy programs. (d) A
DMINISTRATIVE AUTHORITY .—

DMINISTRATIVE AUTHORITY .— 
(1) A GREEMENTS .—Subject to section 1411 and section 
6103(l)(21) of the Internal Revenue Code of 1986 and any other requirement providing safeguards of privacy and data integrity, the Secretary may establish model agreements, and enter into agreements, for the sharing of data under this sec-tion. 
(2) A
UTHORITY OF EXCHANGE TO CONTRACT OUT .—Nothing 
in this section shall be construed to— 
(A) prohibit contractual arrangements through which

a State medicaid agency determines eligibility for all applicable State health subsidy programs, but only if such agency complies with the Secretary’s requirements ensuring reduced administrative costs, eligibility errors, and disruptions in coverage; or 
(B) change any requirement under title XIX that eligi-
bility for participation in a State’s medicaid program must be determined by a public agency. 
(e) A
PPLICABLE STATE HEALTH SUBSIDY PROGRAM .—In this sec-

tion, the term ‘‘applicable State health subsidy program’’ means— 
(1) the program under this title for the enrollment in 
qualified health plans offered through an Exchange, including the premium tax credits under section 36B of the Internal Revenue Code of 1986 and cost-sharing reductions under section 1402; 
(2) a State medicaid program under title XIX of the Social 
Security Act; 
(3) a State children’s health insurance program (CHIP) 
under title XXI of such Act; and

under title XXI of such Act; and 
(4) a State program under section 1331 establishing quali-
fied basic health plans. 
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124 STAT. 236 PUBLIC LAW 111–148—MAR. 23, 2010 
SEC. 1414. DISCLOSURES TO CARRY OUT ELIGIBILITY REQUIREMENTS 
FOR CERTAIN PROGRAMS. 
(a) D ISCLOSURE OF TAXPAYER RETURN INFORMATION AND SOCIAL  
SECURITY NUMBERS .— 
(1) T AXPAYER RETURN INFORMATION .—Subsection (l) of sec-
tion 6103 of the Internal Revenue Code of 1986 is amended by adding at the end the following new paragraph: 
‘‘(21) D
ISCLOSURE OF RETURN INFORMATION TO CARRY OUT  
ELIGIBILITY REQUIREMENTS FOR CERTAIN PROGRAMS .—

ELIGIBILITY REQUIREMENTS FOR CERTAIN PROGRAMS .— 
‘‘(A) I N GENERAL .—The Secretary, upon written request

from the Secretary of Health and Human Services, shall disclose to officers, employees, and contractors of the Department of Health and Human Services return informa-tion of any taxpayer whose income is relevant in deter-mining any premium tax credit under section 36B or any cost-sharing reduction under section 1402 of the Patient Protection and Affordable Care Act or eligibility for partici-pation in a State medicaid program under title XIX of the Social Security Act, a State’s children’s

of the Social Security Act, a State’s children’s health insur-ance program under title XXI of the Social Security Act, or a basic health program under section 1331 of Patient

Protection and Affordable Care Act. Such return informa-tion shall be limited to— 
‘‘(i) taxpayer identity information with respect to 
such taxpayer, 
‘‘(ii) the filing status of such taxpayer, ‘‘(iii) the number of individuals for whom a deduc-
tion is allowed under section 151 with respect to the taxpayer (including the taxpayer and the taxpayer’s spouse), 
‘‘(iv) the modified gross income (as defined in sec-

tion 36B) of such taxpayer and each of the other individuals included under clause (iii) who are required to file a return of tax imposed by chapter 1 for the taxable year, 
‘‘(v) such other information as is prescribed by 
the Secretary by regulation as might indicate whether the taxpayer is eligible for such credit or reduction (and the amount thereof), and 
‘‘(vi) the taxable year with respect to which the

preceding information relates or, if applicable, the fact that such information is not available. ‘‘(B) I
NFORMATION TO EXCHANGE AND STATE AGEN -
CIES.—The Secretary of Health and Human Services may

disclose to an Exchange established under the Patient Protection and Affordable Care Act or its contractors, or to a State agency administering a State program described in subparagraph (A) or its contractors, any inconsistency between the information provided by the Exchange or State agency to the Secretary and the information provided to the Secretary under subparagraph (A). 
‘‘(C) R
ESTRICTION ON USE OF DISCLOSED INFORMA -
TION .—Return information disclosed under subparagraph

(A) or (B) may be used by officers, employees, and contrac-tors of the Department of Health and Human Services, an Exchange, or a State agency only for the purposes of, and to the extent necessary in— 26 USC 6103. 
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124 STAT. 237 PUBLIC LAW 111–148—MAR. 23, 2010 
‘‘(i) establishing eligibility for participation in the 
Exchange, and verifying the appropriate amount of, any credit or reduction described in subparagraph (A), 
‘‘(ii) determining eligibility for participation in the 
State programs described in subparagraph (A).’’. 
(2) S
OCIAL SECURITY NUMBERS .—Section 205(c)(2)(C) of the 
Social Security Act is amended by adding at the end the fol-lowing new clause:

‘‘(x) The Secretary of Health and Human Services, 
and the Exchanges established under section 1311 of the Patient Protection and Affordable Care Act, are authorized to collect and use the names and social security account numbers of individuals as required to administer the provisions of, and the amendments made by, the such Act.’’. 
(b) C
ONFIDENTIALITY AND DISCLOSURE .—Paragraph (3) of sec-
tion 6103(a) of such Code is amended by striking ‘‘or (20)’’ and inserting ‘‘(20), or (21)’’. 
(c) P

(c) P
ROCEDURES AND RECORDKEEPING RELATED TO DISCLO -
SURES .—Paragraph (4) of section 6103(p) of such Code is amended— 
(1) by inserting ‘‘, or any entity described in subsection 
(l)(21),’’ after ‘‘or (20)’’ in the matter preceding subparagraph (A), 
(2) by inserting ‘‘or any entity described in subsection 
(l)(21),’’ after ‘‘or (o)(1)(A)’’ in subparagraph (F)(ii), and 
(3) by inserting ‘‘or any entity described in subsection

(l)(21),’’ after ‘‘or (20)’’ both places it appears in the matter after subparagraph (F). (d) U
NAUTHORIZED DISCLOSURE OR INSPECTION .—Paragraph (2) 
of section 7213(a) of such Code is amended by striking ‘‘or (20)’’ and inserting ‘‘(20), or (21)’’. 
SEC. 1415. PREMIUM TAX CREDIT AND COST-SHARING REDUCTION 
PAYMENTS DISREGARDED FOR FEDERAL AND FEDER-ALLY-ASSISTED PROGRAMS. 
For purposes of determining the eligibility of any individual

for benefits or assistance, or the amount or extent of benefits or assistance, under any Federal program or under any State or local program financed in whole or in part with Federal funds— 
(1) any credit or refund allowed or made to any individual 
by reason of section 36B of the Internal Revenue Code of 1986 (as added by section 1401) shall not be taken into account as income and shall not be taken into account as resources for the month of receipt and the following 2 months; and

(2) any cost-sharing reduction payment or advance payment 
of the credit allowed under such section 36B that is made under section 1402 or 1412 shall be treated as made to the qualified health plan in which an individual is enrolled and not to that individual. 
PART II—SMALL BUSINESS TAX CREDIT 
SEC. 1421. CREDIT FOR EMPLOYEE HEALTH INSURANCE EXPENSES 
OF SMALL BUSINESSES. 
(a) I NGENERAL .—Subpart D of part IV of subchapter A of

chapter 1 of the Internal Revenue Code of 1986 (relating to business- 42 USC 18084. 26 USC 6103. 42 USC 405. 
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124 STAT. 238 PUBLIC LAW 111–148—MAR. 23, 2010 
related credits) is amended by inserting after section 45Q the fol-
lowing: 
‘‘SEC. 45R. EMPLOYEE HEALTH INSURANCE EXPENSES OF SMALL 
EMPLOYERS. 
‘‘(a) G ENERAL RULE.—For purposes of section 38, in the case 
of an eligible small employer, the small employer health insurance credit determined under this section for any taxable year in the credit period is the amount determined under subsection (b). 
‘‘(b) H

‘‘(b) H
EALTH INSURANCE CREDIT AMOUNT .—Subject to sub-
section (c), the amount determined under this subsection with respect to any eligible small employer is equal to 50 percent (35 percent in the case of a tax-exempt eligible small employer) of the lesser of— 
‘‘(1) the aggregate amount of nonelective contributions the

employer made on behalf of its employees during the taxable year under the arrangement described in subsection (d)(4) for premiums for qualified health plans offered by the employer to its employees through an Exchange, or 
‘‘(2) the aggregate amount of nonelective contributions

which the employer would have made during the taxable year under the arrangement if each employee taken into account under paragraph (1) had enrolled in a qualified health plan which had a premium equal to the average premium (as deter-mined by the Secretary of Health and Human Services) for the small group market in the rating area in which the employee enrolls for coverage. ‘‘(c) P
HASEOUT OF CREDIT AMOUNT BASED ON NUMBER OF  
EMPLOYEES AND AVERAGE WAGES .—The amount of the credit deter-

mined under subsection (b) without regard to this subsection shall be reduced (but not below zero) by the sum of the following amounts: 
‘‘(1) Such amount multiplied by a fraction the numerator 
of which is the total number of full-time equivalent employees of the employer in excess of 10 and the denominator of which is 15. 
‘‘(2) Such amount multiplied by a fraction the numerator

of which is the average annual wages of the employer in excess of the dollar amount in effect under subsection (d)(3)(B) and the denominator of which is such dollar amount. ‘‘(d) E
LIGIBLE SMALL EMPLOYER .—For purposes of this section— 
‘‘(1) I N GENERAL .—The term ‘eligible small employer’ 
means, with respect to any taxable year, an employer— 
‘‘(A) which has no more than 25 full-time equivalent 
employees for the taxable year, 
‘‘(B) the average annual wages of which do not exceed

an amount equal to twice the dollar amount in effect under paragraph (3)(B) for the taxable year, and 
‘‘(C) which has in effect an arrangement described 
in paragraph (4). ‘‘(2) F
ULL-TIME EQUIVALENT EMPLOYEES .— 
‘‘(A) I N GENERAL .—The term ‘full-time equivalent 
employees’ means a number of employees equal to the number determined by dividing— 
‘‘(i) the total number of hours of service for which 
wages were paid by the employer to employees during the taxable year, by

‘‘(ii) 2,080. 26 USC 45R. 
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124 STAT. 239 PUBLIC LAW 111–148—MAR. 23, 2010 
Such number shall be rounded to the next lowest whole 
number if not otherwise a whole number. 
‘‘(B) E XCESS HOURS NOT COUNTED .—If an employee 
works in excess of 2,080 hours of service during any taxable year, such excess shall not be taken into account under subparagraph (A). 
‘‘(C) H
OURS OF SERVICE .—The Secretary, in consulta-

tion with the Secretary of Labor, shall prescribe such regu-lations, rules, and guidance as may be necessary to deter-mine the hours of service of an employee, including rules for the application of this paragraph to employees who are not compensated on an hourly basis. ‘‘(3) A
VERAGE ANNUAL WAGES .— 
‘‘(A) I N GENERAL .—The average annual wages of an 
eligible small employer for any taxable year is the amount determined by dividing—

‘‘(i) the aggregate amount of wages which were 
paid by the employer to employees during the taxable year, by 
‘‘(ii) the number of full-time equivalent employees 
of the employee determined under paragraph (2) for the taxable year. 
Such amount shall be rounded to the next lowest multiple of $1,000 if not otherwise such a multiple. 
‘‘(B) D
OLLAR AMOUNT .—For purposes of paragraph 
(1)(B)— 
‘‘(i) 2011, 2012, AND 2013 .—The dollar amount in

effect under this paragraph for taxable years beginning in 2011, 2012, or 2013 is $20,000. 
‘‘(ii) S
UBSEQUENT YEARS .—In the case of a taxable 
year beginning in a calendar year after 2013, the dollar amount in effect under this paragraph shall be equal to $20,000, multiplied by the cost-of-living adjustment determined under section 1(f)(3) for the calendar year, determined by substituting ‘calendar year 2012’ for ‘calendar year 1992’ in subparagraph (B) thereof. 
‘‘(4) C

‘‘(4) C
ONTRIBUTION ARRANGEMENT .—An arrangement is 
described in this paragraph if it requires an eligible small employer to make a nonelective contribution on behalf of each employee who enrolls in a qualified health plan offered to employees by the employer through an exchange in an amount equal to a uniform percentage (not less than 50 percent) of the premium cost of the qualified health plan. 
‘‘(5) S
EASONAL WORKER HOURS AND WAGES NOT COUNTED .— 
For purposes of this subsection—

For purposes of this subsection— 
‘‘(A) I N GENERAL .—The number of hours of service 
worked by, and wages paid to, a seasonal worker of an employer shall not be taken into account in determining the full-time equivalent employees and average annual wages of the employer unless the worker works for the employer on more than 120 days during the taxable year. 
‘‘(B) D
EFINITION OF SEASONAL WORKER .—The term ‘sea-

sonal worker’ means a worker who performs labor or serv-ices on a seasonal basis as defined by the Secretary of Labor, including workers covered by section 500.20(s)(1) of title 29, Code of Federal Regulations and retail workers employed exclusively during holiday seasons. Regulations.

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124 STAT. 240 PUBLIC LAW 111–148—MAR. 23, 2010 
‘‘(e) O THER RULES AND DEFINITIONS .—For purposes of this sec-
tion— 
‘‘(1) E MPLOYEE .— 
‘‘(A) C ERTAIN EMPLOYEES EXCLUDED .—The term 
‘employee’ shall not include— 
‘‘(i) an employee within the meaning of section 
401(c)(1), 
‘‘(ii) any 2-percent shareholder (as defined in sec-
tion 1372(b)) of an eligible small business which is an S corporation, 
‘‘(iii) any 5-percent owner (as defined in section

416(i)(1)(B)(i)) of an eligible small business, or 
‘‘(iv) any individual who bears any of the relation-
ships described in subparagraphs (A) through (G) of section 152(d)(2) to, or is a dependent described in section 152(d)(2)(H) of, an individual described in clause (i), (ii), or (iii). ‘‘(B) L
EASED EMPLOYEES .—The term ‘employee’ shall 
include a leased employee within the meaning of section 414(n). ‘‘(2) C
REDIT PERIOD .—The term ‘credit period’ means, with

respect to any eligible small employer, the 2-consecutive-taxable year period beginning with the 1st taxable year in which the employer (or any predecessor) offers 1 or more qualified health plans to its employees through an Exchange. 
‘‘(3) N
ONELECTIVE CONTRIBUTION .—The term ‘nonelective 
contribution’ means an employer contribution other than an employer contribution pursuant to a salary reduction arrange-ment. 
‘‘(4) W
AGES .—The term ‘wages’ has the meaning given such

term by section 3121(a) (determined without regard to any dollar limitation contained in such section). 
‘‘(5) A
GGREGATION AND OTHER RULES MADE APPLICABLE .— 
‘‘(A) A GGREGATION RULES .—All employers treated as 
a single employer under subsection (b), (c), (m), or (o) of section 414 shall be treated as a single employer for purposes of this section. 
‘‘(B) O
THER RULES .—Rules similar to the rules of sub-
sections (c), (d), and (e) of section 52 shall apply.

‘‘(f) C REDIT MADE AVAILABLE TO TAX-EXEMPT ELIGIBLE SMALL  
EMPLOYERS .— 
‘‘(1) I N GENERAL .—In the case of a tax-exempt eligible small 
employer, there shall be treated as a credit allowable under subpart C (and not allowable under this subpart) the lesser of— 
‘‘(A) the amount of the credit determined under this 
section with respect to such employer, or 
‘‘(B) the amount of the payroll taxes of the employer 
during the calendar year in which the taxable year begins. ‘‘(2) T

AX-EXEMPT ELIGIBLE SMALL EMPLOYER .—For purposes 
of this section, the term ‘tax-exempt eligible small employer’ means an eligible small employer which is any organization described in section 501(c) which is exempt from taxation under section 501(a). 
‘‘(3) P
AYROLL TAXES .—For purposes of this subsection— 
‘‘(A) I N GENERAL .—The term ‘payroll taxes’ means— Applicability.

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124 STAT. 241 PUBLIC LAW 111–148—MAR. 23, 2010 
‘‘(i) amounts required to be withheld from the 
employees of the tax-exempt eligible small employer under section 3401(a), 
‘‘(ii) amounts required to be withheld from such 
employees under section 3101(b), and 
‘‘(iii) amounts of the taxes imposed on the tax- 
exempt eligible small employer under section 3111(b). ‘‘(B) S
PECIAL RULE .—A rule similar to the rule of sec-
tion 24(d)(2)(C) shall apply for purposes of subparagraph (A). 
‘‘(g) A

‘‘(g) A
PPLICATION OF SECTION FOR CALENDAR YEARS 2011, 2012, 
AND 2013.—In the case of any taxable year beginning in 2011, 
2012, or 2013, the following modifications to this section shall apply in determining the amount of the credit under subsection (a): 
‘‘(1) N
O CREDIT PERIOD REQUIRED .—The credit shall be

O CREDIT PERIOD REQUIRED .—The credit shall be 
determined without regard to whether the taxable year is in a credit period and for purposes of applying this section to taxable years beginning after 2013, no credit period shall be treated as beginning with a taxable year beginning before 2014. 
‘‘(2) A
MOUNT OF CREDIT .—The amount of the credit deter-
mined under subsection (b) shall be determined— 
‘‘(A) by substituting ‘35 percent (25 percent in the

case of a tax-exempt eligible small employer)’ for ‘50 percent (35 percent in the case of a tax-exempt eligible small employer)’, 
‘‘(B) by reference to an eligible small employer’s non-
elective contributions for premiums paid for health insur-ance coverage (within the meaning of section 9832(b)(1)) of an employee, and 
‘‘(C) by substituting for the average premium deter-

mined under subsection (b)(2) the amount the Secretary of Health and Human Services determines is the average premium for the small group market in the State in which the employer is offering health insurance coverage (or for such area within the State as is specified by the Secretary). ‘‘(3) C
ONTRIBUTION ARRANGEMENT .—An arrangement shall 
not fail to meet the requirements of subsection (d)(4) solely because it provides for the offering of insurance outside of an Exchange. ‘‘(h) I

NSURANCE DEFINITIONS .—Any term used in this section 
which is also used in the Public Health Service Act or subtitle A of title I of the Patient Protection and Affordable Care Act shall have the meaning given such term by such Act or subtitle. 
‘‘(i) R
tions as may be necessary to carry out the provisions of this section,

including regulations to prevent the avoidance of the 2-year limit on the credit period through the use of successor entities and the avoidance of the limitations under subsection (c) through the use of multiple entities.’’. 
(b) C
REDIT TOBEPART OF GENERAL BUSINESS CREDIT .—Section

38(b) of the Internal Revenue Code of 1986 (relating to current year business credit) is amended by striking ‘‘plus’’ at the end of paragraph (34), by striking the period at the end of paragraph (35) and inserting ‘‘, plus’’, and by inserting after paragraph (35) the following: 26 USC 38. Determination. Applicability. 
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124 STAT. 242 PUBLIC LAW 111–148—MAR. 23, 2010 
‘‘(36) the small employer health insurance credit deter-
mined under section 45R.’’. (c) C
REDIT ALLOWED AGAINST ALTERNATIVE MINIMUM TAX.— 
Section 38(c)(4)(B) of the Internal Revenue Code of 1986 (defining specified credits) is amended by redesignating clauses (vi), (vii), and (viii) as clauses (vii), (viii), and (ix), respectively, and by inserting after clause (v) the following new clause: 
‘‘(vi) the credit determined under section 45R,’’.

(d) D
ISALLOWANCE OF DEDUCTION FOR CERTAIN EXPENSES FOR  
WHICH CREDIT ALLOWED .— 
(1) I N GENERAL .—Section 280C of the Internal Revenue 
Code of 1986 (relating to disallowance of deduction for certain expenses for which credit allowed), as amended by section 1401(b), is amended by adding at the end the following new subsection: ‘‘(h) C
REDIT FOR EMPLOYEE HEALTH INSURANCE EXPENSES OF  
SMALL EMPLOYERS .—No deduction shall be allowed for that portion

of the premiums for qualified health plans (as defined in section 1301(a) of the Patient Protection and Affordable Care Act), or for health insurance coverage in the case of taxable years beginning in 2011, 2012, or 2013, paid by an employer which is equal to the amount of the credit determined under section 45R(a) with respect to the premiums.’’. 
(2) D
EDUCTION FOR EXPIRING CREDITS .—Section 196(c) of

such Code is amended by striking ‘‘and’’ at the end of paragraph (12), by striking the period at the end of paragraph (13) and inserting ‘‘, and’’, and by adding at the end the following new paragraph: 
‘‘(14) the small employer health insurance credit deter-
mined under section 45R(a).’’. (e) C
LERICAL AMENDMENT .—The table of sections for subpart 
D of part IV of subchapter A of chapter 1 of the Internal Revenue Code of 1986 is amended by adding at the end the following:

‘‘Sec. 45R. Employee health insurance expenses of small employers.’’. 
(f) E FFECTIVE DATES .— 
(1) I N GENERAL .—The amendments made by this section 
shall apply to amounts paid or incurred in taxable years begin-ning after December 31, 2010. 
(2) M
INIMUM TAX .—The amendments made by subsection 
(c) shall apply to credits determined under section 45R of the Internal Revenue Code of 1986 in taxable years beginning after December 31, 2010, and to carrybacks of such credits.

Subtitle F—Shared Responsibility for 
Health Care 
PART I—INDIVIDUAL RESPONSIBILITY 
SEC. 1501. REQUIREMENT TO MAINTAIN MINIMUM ESSENTIAL COV-
ERAGE. 
(a) F INDINGS .—Congress makes the following findings: 
(1) I N GENERAL .—The individual responsibility requirement

provided for in this section (in this subsection referred to as the ‘‘requirement’’) is commercial and economic in nature, and substantially affects interstate commerce, as a result of the effects described in paragraph (2). 42 USC 18091. Applicability. 
26 USC 38 note. 26 USC 38. 
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124 STAT. 243 PUBLIC LAW 111–148—MAR. 23, 2010 
(2) E FFECTS ON THE NATIONAL ECONOMY AND INTERSTATE  
COMMERCE .—The effects described in this paragraph are the 
following: 
(A) The requirement regulates activity that is commer-
cial and economic in nature: economic and financial decisions about how and when health care is paid for, and when health insurance is purchased. 
(B) Health insurance and health care services are a

significant part of the national economy. National health spending is projected to increase from $2,500,000,000,000, or 17.6 percent of the economy, in 2009 to $4,700,000,000,000 in 2019. Private health insurance spending is projected to be $854,000,000,000 in 2009, and pays for medical supplies, drugs, and equipment that are shipped in interstate commerce. Since most health insur-ance is sold by national or regional health insurance compa-nies, health insurance is sold in interstate commerce

health insurance is sold in interstate commerce and claims payments flow through interstate commerce.

(C) The requirement, together with the other provisions 
of this Act, will add millions of new consumers to the health insurance market, increasing the supply of, and demand for, health care services. According to the Congres-sional Budget Office, the requirement will increase the number and share of Americans who are insured. 
(D) The requirement achieves near-universal coverage

by building upon and strengthening the private employer- based health insurance system, which covers 176,000,000 Americans nationwide. In Massachusetts, a similar require-ment has strengthened private employer-based coverage: despite the economic downturn, the number of workers offered employer-based coverage has actually increased. 
(E) Half of all personal bankruptcies are caused in

part by medical expenses. By significantly increasing health insurance coverage, the requirement, together with the other provisions of this Act, will improve financial security for families. 
(F) Under the Employee Retirement Income Security 
Act of 1974 (29 U.S.C. 1001 et seq.), the Public Health Service Act (42 U.S.C. 201 et seq.), and this Act, the Federal Government has a significant role in regulating health insurance which is in interstate commerce.

Service Act (as added by section 1201 of this Act), if there were no requirement, many individuals would wait to pur-chase health insurance until they needed care. By signifi-cantly increasing health insurance coverage, the require-ment, together with the other provisions of this Act, will minimize this adverse selection and broaden the health insurance risk pool to include healthy individuals, which will lower health insurance premiums. The requirement is essential to creating effective health

is essential to creating effective health insurance markets in which improved health insurance products that are guaranteed issue and do not exclude coverage of pre- existing conditions can be sold.

(H) Administrative costs for private health insurance, 
which were $90,000,000,000 in 2006, are 26 to 30 percent of premiums in the current individual and small group 
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124 STAT. 244 PUBLIC LAW 111–148—MAR. 23, 2010 
markets. By significantly increasing health insurance cov-

erage and the size of purchasing pools, which will increase economies of scale, the requirement, together with the other provisions of this Act, will significantly reduce administra-tive costs and lower health insurance premiums. The requirement is essential to creating effective health insur-ance markets that do not require underwriting and elimi-nate its associated administrative costs. (3) S
UPREME COURT RULING .—In United States v. South-

UPREME COURT RULING .—In United States v. South- 
Eastern Underwriters Association (322 U.S. 533 (1944)), the Supreme Court of the United States ruled that insurance is interstate commerce subject to Federal regulation. (b) I
NGENERAL .—Subtitle D of the Internal Revenue Code 
of 1986 is amended by adding at the end the following new chapter: 
‘‘CHAPTER 48—MAINTENANCE OF MINIMUM ESSENTIAL 
COVERAGE 
‘‘Sec. 5000A. Requirement to maintain minimum essential coverage.

‘‘SEC. 5000A. REQUIREMENT TO MAINTAIN MINIMUM ESSENTIAL COV-
ERAGE. 
‘‘(a) R EQUIREMENT TOMAINTAIN MINIMUM ESSENTIAL COV-
ERAGE .—An applicable individual shall for each month beginning 
after 2013 ensure that the individual, and any dependent of the individual who is an applicable individual, is covered under min-imum essential coverage for such month. 
‘‘(b) S
HARED RESPONSIBILITY PAYMENT .— 
‘‘(1) I N GENERAL .—If an applicable individual fails to meet

the requirement of subsection (a) for 1 or more months during any calendar year beginning after 2013, then, except as pro-vided in subsection (d), there is hereby imposed a penalty with respect to the individual in the amount determined under subsection (c). 
‘‘(2) I
NCLUSION WITH RETURN .—Any penalty imposed by 
this section with respect to any month shall be included with a taxpayer’s return under chapter 1 for the taxable year which includes such month. 
‘‘(3) P

‘‘(3) P
AYMENT OF PENALTY .—If an individual with respect 
to whom a penalty is imposed by this section for any month— 
‘‘(A) is a dependent (as defined in section 152) of 
another taxpayer for the other taxpayer’s taxable year including such month, such other taxpayer shall be liable for such penalty, or 
‘‘(B) files a joint return for the taxable year including 
such month, such individual and the spouse of such indi-vidual shall be jointly liable for such penalty. 
‘‘(c) A

‘‘(c) A
MOUNT OF PENALTY .— 
‘‘(1) I N GENERAL .—The penalty determined under this sub-
section for any month with respect to any individual is an amount equal to 
1⁄12of the applicable dollar amount for the 
calendar year. 
‘‘(2) D OLLAR LIMITATION .—The amount of the penalty

imposed by this section on any taxpayer for any taxable year with respect to all individuals for whom the taxpayer is liable under subsection (b)(3) shall not exceed an amount equal to 300 percent the applicable dollar amount (determined without Penalty. 26 USC 5000A. 
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124 STAT. 245 PUBLIC LAW 111–148—MAR. 23, 2010 
regard to paragraph (3)(C)) for the calendar year with or within 
which the taxable year ends. 
‘‘(3) A PPLICABLE DOLLAR AMOUNT .—For purposes of para-
graph (1)— 
‘‘(A) I N GENERAL .—Except as provided in subpara-
graphs (B) and (C), the applicable dollar amount is $750. 
‘‘(B) P HASE IN .—The applicable dollar amount is $95 
for 2014 and $350 for 2015. 
‘‘(C) S PECIAL RULE FOR INDIVIDUALS UNDER AGE 18 .—

If an applicable individual has not attained the age of 18 as of the beginning of a month, the applicable dollar amount with respect to such individual for the month shall be equal to one-half of the applicable dollar amount for the calendar year in which the month occurs. 
‘‘(D) I
NDEXING OF AMOUNT .—In the case of any calendar 
year beginning after 2016, the applicable dollar amount shall be equal to $750, increased by an amount equal to—

‘‘(i) $750, multiplied by ‘‘(ii) the cost-of-living adjustment determined 
under section 1(f)(3) for the calendar year, determined by substituting ‘calendar year 2015’ for ‘calendar year 1992’ in subparagraph (B) thereof. 
If the amount of any increase under clause (i) is not a multiple of $50, such increase shall be rounded to the next lowest multiple of $50. ‘‘(4) T
ERMS RELATING TO INCOME AND FAMILIES .—For pur-
poses of this section— 
‘‘(A) F AMILY SIZE .—The family size involved with

respect to any taxpayer shall be equal to the number of individuals for whom the taxpayer is allowed a deduction under section 151 (relating to allowance of deduction for personal exemptions) for the taxable year. 
‘‘(B) H
OUSEHOLD INCOME .—The term ‘household 
income’ means, with respect to any taxpayer for any taxable year, an amount equal to the sum of— 
plus 

‘‘(C) M
gross income’ means gross income— 
‘‘(ii) increased by the amount of interest received

931, and 933. ‘‘(D) P
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124 STAT. 246 PUBLIC LAW 111–148—MAR. 23, 2010 
‘‘(i) I N GENERAL .—The term ‘poverty line’ has the 
‘‘(ii) P
OVERTY LINE USED .—In the case of any tax-
able year ending with or within a calendar year, the poverty line used shall be the most recently published poverty line as of the 1st day of such calendar year. 
‘‘(d) A
PPLICABLE INDIVIDUAL .—For purposes of this section—

‘‘(1) I N GENERAL .—The term ‘applicable individual’ means, 
with respect to any month, an individual other than an indi-vidual described in paragraph (2), (3), or (4). 
‘‘(2) R
ELIGIOUS EXEMPTIONS .— 
‘‘(A) R ELIGIOUS CONSCIENCE EXEMPTION .—Such term

shall not include any individual for any month if such individual has in effect an exemption under section 1311(d)(4)(H) of the Patient Protection and Affordable Care Act which certifies that such individual is a member of a recognized religious sect or division thereof described in section 1402(g)(1) and an adherent of established tenets or teachings of such sect or division as described in such section. 
‘‘(B) H
EALTH CARE SHARING MINISTRY .—

‘‘(B) H
EALTH CARE SHARING MINISTRY .— 
‘‘(i) I N GENERAL .—Such term shall not include any 
individual for any month if such individual is a member of a health care sharing ministry for the month. 
‘‘(ii) H
EALTH CARE SHARING MINISTRY .—The term 
‘health care sharing ministry’ means an organization— 
‘‘(I) which is described in section 501(c)(3) and 
is exempt from taxation under section 501(a), 
‘‘(II) members of which share a common set

‘‘(II) members of which share a common set 
of ethical or religious beliefs and share medical expenses among members in accordance with those beliefs and without regard to the State in which a member resides or is employed, 
‘‘(III) members of which retain membership 
even after they develop a medical condition, 
‘‘(IV) which (or a predecessor of which) has

‘‘(IV) which (or a predecessor of which) has 
been in existence at all times since December 31, 1999, and medical expenses of its members have been shared continuously and without interruption since at least December 31, 1999, and 
‘‘(V) which conducts an annual audit which 
is performed by an independent certified public accounting firm in accordance with generally accepted accounting principles and which is made available to the public upon request. 
‘‘(3) I

‘‘(3) I
NDIVIDUALS NOT LAWFULLY PRESENT .—Such term shall 
not include an individual for any month if for the month the individual is not a citizen or national of the United States or an alien lawfully present in the United States. 
‘‘(4) I
NCARCERATED INDIVIDUALS .—Such term shall not 
include an individual for any month if for the month the indi-vidual is incarcerated, other than incarceration pending the disposition of charges. ‘‘(e) E
XEMPTIONS .—No penalty shall be imposed under sub-

section (a) with respect to— 
‘‘(1) I NDIVIDUALS WHO CANNOT AFFORD COVERAGE .— 
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124 STAT. 247 PUBLIC LAW 111–148—MAR. 23, 2010 
‘‘(A) I N GENERAL .—Any applicable individual for any

month if the applicable individual’s required contribution (determined on an annual basis) for coverage for the month exceeds 8 percent of such individual’s household income for the taxable year described in section 1412(b)(1)(B) of the Patient Protection and Affordable Care Act. For pur-poses of applying this subparagraph, the taxpayer’s house-hold income shall be increased by any exclusion from gross income for any portion of the required contribution made through a salary reduction

‘‘(B) R
EQUIRED CONTRIBUTION .—For purposes of this 
paragraph, the term ‘required contribution’ means— 
‘‘(i) in the case of an individual eligible to purchase 
minimum essential coverage consisting of coverage through an eligible-employer-sponsored plan, the por-tion of the annual premium which would be paid by the individual (without regard to whether paid through salary reduction or otherwise) for self-only coverage, or 
‘‘(ii) in the case of an individual eligible only to

purchase minimum essential coverage described in sub-section (f)(1)(C), the annual premium for the lowest cost bronze plan available in the individual market through the Exchange in the State in the rating area in which the individual resides (without regard to whether the individual purchased a qualified health plan through the Exchange), reduced by the amount of the credit allowable under section 36B for the tax-able year (determined as if the individual was covered by a qualified health plan

individual was covered by a qualified health plan offered through the Exchange for the entire taxable year). ‘‘(C) S

PECIAL RULES FOR INDIVIDUALS RELATED TO  
EMPLOYEES .—For purposes of subparagraph (B)(i), if an 
applicable individual is eligible for minimum essential cov-erage through an employer by reason of a relationship to an employee, the determination shall be made by ref-erence to the affordability of the coverage to the employee. 
‘‘(D) I
NDEXING .—In the case of plan years beginning

NDEXING .—In the case of plan years beginning 
in any calendar year after 2014, subparagraph (A) shall be applied by substituting for ‘8 percent’ the percentage the Secretary of Health and Human Services determines reflects the excess of the rate of premium growth between the preceding calendar year and 2013 over the rate of income growth for such period. ‘‘(2) T
AXPAYERS WITH INCOME UNDER 100 PERCENT OF POV -
ERTY LINE .—Any applicable individual for any month during

a calendar year if the individual’s household income for the taxable year described in section 1412(b)(1)(B) of the Patient Protection and Affordable Care Act is less than 100 percent of the poverty line for the size of the family involved (deter-mined in the same manner as under subsection (b)(4)). 
‘‘(3) M
EMBERS OF INDIAN TRIBES .—Any applicable individual 
for any month during which the individual is a member of an Indian tribe (as defined in section 45A(c)(6)). 
‘‘(4) M

‘‘(4) M
ONTHS DURING SHORT COVERAGE GAPS .— 
‘‘(A) I N GENERAL .—Any month the last day of which 
occurred during a period in which the applicable individual Applicability. Determination. Definition. 
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124 STAT. 248 PUBLIC LAW 111–148—MAR. 23, 2010 
was not covered by minimum essential coverage for a 
continuous period of less than 3 months. 
‘‘(B) S PECIAL RULES .—For purposes of applying this 
paragraph— 
‘‘(i) the length of a continuous period shall be deter-
mined without regard to the calendar years in which months in such period occur, 
‘‘(ii) if a continuous period is greater than the

period allowed under subparagraph (A), no exception shall be provided under this paragraph for any month in the period, and 
‘‘(iii) if there is more than 1 continuous period 
described in subparagraph (A) covering months in a calendar year, the exception provided by this para-graph shall only apply to months in the first of such periods.

The Secretary shall prescribe rules for the collection of the penalty imposed by this section in cases where contin-uous periods include months in more than 1 taxable year. ‘‘(5) H
ARDSHIPS .—Any applicable individual who for any 
month is determined by the Secretary of Health and Human Services under section 1311(d)(4)(H) to have suffered a hardship with respect to the capability to obtain coverage under a quali-fied health plan. ‘‘(f) M
INIMUM ESSENTIAL COVERAGE .—For purposes of this sec-

tion— 
‘‘(1) I N GENERAL .—The term ‘minimum essential coverage’ 
means any of the following: 
‘‘(A) G OVERNMENT SPONSORED PROGRAMS .—Coverage 
under— 
‘‘(i) the Medicare program under part A of title 
XVIII of the Social Security Act, 
‘‘(ii) the Medicaid program under title XIX of the 
Social Security Act, 
‘‘(iii) the CHIP program under title XXI of the 
‘‘(iv) the TRICARE for Life program, ‘‘(v) the veteran’s health care program under

chapter 17 of title 38, United States Code, or 
‘‘(vi) a health plan under section 2504(e) of title 
22, United States Code (relating to Peace Corps volun-teers). ‘‘(B) E
MPLOYER -SPONSORED PLAN .—Coverage under an 
eligible employer-sponsored plan. 
‘‘(C) P LANS IN THE INDIVIDUAL MARKET .—Coverage 
under a health plan offered in the individual market within 
a State. 
‘‘(D) G RANDFATHERED HEALTH PLAN .—Coverage under 
a grandfathered health plan.

a grandfathered health plan. 
‘‘(E) O THER COVERAGE .—Such other health benefits cov-
erage, such as a State health benefits risk pool, as the Secretary of Health and Human Services, in coordination with the Secretary, recognizes for purposes of this sub-section. ‘‘(2) E
LIGIBLE EMPLOYER -SPONSORED PLAN .—The term 
‘eligible employer-sponsored plan’ means, with respect to any Definition. Applicability.

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124 STAT. 249 PUBLIC LAW 111–148—MAR. 23, 2010 
employee, a group health plan or group health insurance cov-
erage offered by an employer to the employee which is— 
‘‘(A) a governmental plan (within the meaning of sec-
tion 2791(d)(8) of the Public Health Service Act), or 
‘‘(B) any other plan or coverage offered in the small 
or large group market within a State. 
Such term shall include a grandfathered health plan described in paragraph (1)(D) offered in a group market. 
‘‘(3) E

‘‘(3) E
XCEPTED BENEFITS NOT TREATED AS MINIMUM ESSEN -
TIAL COVERAGE .—The term ‘minimum essential coverage’ shall 
not include health insurance coverage which consists of cov-erage of excepted benefits— 
‘‘(A) described in paragraph (1) of subsection (c) of 
section 2791 of the Public Health Service Act; or 
‘‘(B) described in paragraph (2), (3), or (4) of such 
subsection if the benefits are provided under a separate policy, certificate, or contract of insurance. ‘‘(4) I

NDIVIDUALS RESIDING OUTSIDE UNITED STATES OR RESI -
DENTS OF TERRITORIES .—Any applicable individual shall be 
treated as having minimum essential coverage for any month— 
‘‘(A) if such month occurs during any period described 
in subparagraph (A) or (B) of section 911(d)(1) which is applicable to the individual, or 
‘‘(B) if such individual is a bona fide resident of any 
possession of the United States (as determined under sec-tion 937(a)) for such month. ‘‘(5) I

NSURANCE -RELATED TERMS .—Any term used in this 
section which is also used in title I of the Patient Protection and Affordable Care Act shall have the same meaning as when used in such title. ‘‘(g) A
DMINISTRATION AND PROCEDURE .— 
‘‘(1) I N GENERAL .—The penalty provided by this section 
shall be paid upon notice and demand by the Secretary, and except as provided in paragraph (2), shall be assessed and collected in the same manner as an assessable penalty under subchapter B of chapter 68.

‘‘(2) S
PECIAL RULES .—Notwithstanding any other provision 
of law— 
‘‘(A) W AIVER OF CRIMINAL PENALTIES .—In the case of 
any failure by a taxpayer to timely pay any penalty imposed by this section, such taxpayer shall not be subject to any criminal prosecution or penalty with respect to such failure. 
‘‘(B) L
IMITATIONS ON LIENS AND LEVIES .—The Secretary 
shall not— 
‘‘(i) file notice of lien with respect to any property

of a taxpayer by reason of any failure to pay the penalty imposed by this section, or 
‘‘(ii) levy on any such property with respect to 
such failure.’’. 
(c) C
LERICAL AMENDMENT .—The table of chapters for subtitle 
D of the Internal Revenue Code of 1986 is amended by inserting after the item relating to chapter 47 the following new item: 
‘‘CHAPTER 48—M AINTENANCE OF MINIMUM ESSENTIAL COVERAGE .’’. 
(d) E FFECTIVE DATE.—The amendments made by this section

shall apply to taxable years ending after December 31, 2013. 26 USC 5000A 
note. 
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124 STAT. 250 PUBLIC LAW 111–148—MAR. 23, 2010 
SEC. 1502. REPORTING OF HEALTH INSURANCE COVERAGE. 
(a) I NGENERAL .—Part III of subchapter A of chapter 61 of 
the Internal Revenue Code of 1986 is amended by inserting after subpart C the following new subpart: 
‘‘Subpart D—Information Regarding Health 
Insurance Coverage 
‘‘Sec. 6055. Reporting of health insurance coverage. 
‘‘SEC. 6055. REPORTING OF HEALTH INSURANCE COVERAGE. 
‘‘(a) I NGENERAL .—Every person who provides minimum essen-

tial coverage to an individual during a calendar year shall, at such time as the Secretary may prescribe, make a return described in subsection (b). 
‘‘(b) F
ORM AND MANNER OF RETURN .— 
‘‘(1) I N GENERAL .—A return is described in this subsection 
if such return— 
‘‘(A) is in such form as the Secretary may prescribe, 
and 
‘‘(B) contains— 
‘‘(i) the name, address and TIN of the primary 
insured and the name and TIN of each other individual obtaining coverage under the policy,

‘‘(ii) the dates during which such individual was 
covered under minimum essential coverage during the calendar year, 
‘‘(iii) in the case of minimum essential coverage 
which consists of health insurance coverage, informa-tion concerning— 
‘‘(I) whether or not the coverage is a qualified 
health plan offered through an Exchange estab-lished under section 1311 of the Patient Protection and Affordable Care Act, and 
‘‘(II) in the case of a qualified health plan,

‘‘(II) in the case of a qualified health plan, 
the amount (if any) of any advance payment under section 1412 of the Patient Protection and Afford-able Care Act of any cost-sharing reduction under section 1402 of such Act or of any premium tax credit under section 36B with respect to such cov-erage, and ‘‘(iv) such other information as the Secretary may 
require. 
‘‘(2) I
NFORMATION RELATING TO EMPLOYER -PROVIDED COV -
ERAGE .—If minimum essential coverage provided to an indi-

vidual under subsection (a) consists of health insurance cov-erage of a health insurance issuer provided through a group health plan of an employer, a return described in this subsection shall include— 
‘‘(A) the name, address, and employer identification 
number of the employer maintaining the plan, 
‘‘(B) the portion of the premium (if any) required to 
be paid by the employer, and 
‘‘(C) if the health insurance coverage is a qualified

health plan in the small group market offered through an Exchange, such other information as the Secretary may require for administration of the credit under section 45R 26 USC 6055. 
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124 STAT. 251 PUBLIC LAW 111–148—MAR. 23, 2010 
(relating to credit for employee health insurance expenses 
of small employers). 
‘‘(c) S TATEMENTS TOBEFURNISHED TO INDIVIDUALS WITH 
RESPECT TO WHOM INFORMATION ISREPORTED .— 
‘‘(1) I N GENERAL .—Every person required to make a return 
under subsection (a) shall furnish to each individual whose name is required to be set forth in such return a written statement showing— 
‘‘(A) the name and address of the person required

to make such return and the phone number of the informa-tion contact for such person, and 
‘‘(B) the information required to be shown on the return 
with respect to such individual. ‘‘(2) T
IME FOR FURNISHING STATEMENTS .—The written state-
ment required under paragraph (1) shall be furnished on or before January 31 of the year following the calendar year for which the return under subsection (a) was required to be made. ‘‘(d) C
OVERAGE PROVIDED BY GOVERNMENTAL UNITS.—In the

OVERAGE PROVIDED BY GOVERNMENTAL UNITS.—In the 
case of coverage provided by any governmental unit or any agency or instrumentality thereof, the officer or employee who enters into the agreement to provide such coverage (or the person appropriately designated for purposes of this section) shall make the returns and statements required by this section. 
‘‘(e) M

tion, the term ‘minimum essential coverage’ has the meaning given such term by section 5000A(f).’’. 
(b) A
SSESSABLE PENALTIES .— 
(1) Subparagraph (B) of section 6724(d)(1) of the Internal 
Revenue Code of 1986 (relating to definitions) is amended by striking ‘‘or’’ at the end of clause (xxii), by striking ‘‘and’’ at the end of clause (xxiii) and inserting ‘‘or’’, and by inserting after clause (xxiii) the following new clause: 
‘‘(xxiv) section 6055 (relating to returns relating

to information regarding health insurance coverage), and’’. 
(2) Paragraph (2) of section 6724(d) of such Code is 
amended by striking ‘‘or’’ at the end of subparagraph (EE), by striking the period at the end of subparagraph (FF) and inserting ‘‘, or’’ and by inserting after subparagraph (FF) the following new subparagraph: 
‘‘(GG) section 6055(c) (relating to statements relating 
to information regarding health insurance coverage).’’. 
(c) N
OTIFICATION OF NONENROLLMENT .—Not later than June

30 of each year, the Secretary of the Treasury, acting through the Internal Revenue Service and in consultation with the Secretary

of Health and Human Services, shall send a notification to each individual who files an individual income tax return and who is not enrolled in minimum essential coverage (as defined in section 5000A of the Internal Revenue Code of 1986). Such notification shall contain information on the services available through the Exchange operating in the State in which such individual resides. 
(d) C
ONFORMING AMENDMENT .—The table of subparts for part

III of subchapter A of chapter 61 of such Code is amended by inserting after the item relating to subpart C the following new item: Deadline. 
42 USC 18092. 26 USC 6724. 
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124 STAT. 252 PUBLIC LAW 111–148—MAR. 23, 2010 
‘‘SUBPART D —INFORMATION REGARDING HEALTH INSURANCE COVERAGE ’’. 
shall apply to calendar years beginning after 2013. 
PART II—EMPLOYER RESPONSIBILITIES 
SEC. 1511. AUTOMATIC ENROLLMENT FOR EMPLOYEES OF LARGE 
The Fair Labor Standards Act of 1938 is amended by inserting 
after section 18 (29 U.S.C. 218) the following: 
‘‘SEC. 18A. AUTOMATIC ENROLLMENT FOR EMPLOYEES OF LARGE

‘‘In accordance with regulations promulgated by the Secretary,

an employer to which this Act applies that has more than 200 full-time employees and that offers employees enrollment in 1 or more health benefits plans shall automatically enroll new full- time employees in one of the plans offered (subject to any waiting period authorized by law) and to continue the enrollment of current employees in a health benefits plan offered through the employer. Any automatic enrollment program shall include adequate notice and the opportunity for an employee to opt

notice and the opportunity for an employee to opt out of any coverage the individual or employee were automatically enrolled in. Nothing in this section shall be construed to supersede any State law which establishes, implements, or continues in effect any standard or requirement relating to employers in connection with payroll except to the extent that such standard or requirement prevents an

employer from instituting the automatic enrollment program under this section.’’. 
SEC. 1512. EMPLOYER REQUIREMENT TO INFORM EMPLOYEES OF COV-
ERAGE OPTIONS. 
after section 18A (as added by section 1513) the following: 
‘‘SEC. 18B. NOTICE TO EMPLOYEES. 
‘‘(a) I NGENERAL .—In accordance with regulations promulgated

by the Secretary, an employer to which this Act applies, shall provide to each employee at the time of hiring (or with respect to current employees, not later than March 1, 2013), written notice— 
‘‘(1) informing the employee of the existence of an 
Exchange, including a description of the services provided by such Exchange, and the manner in which the employee may contact the Exchange to request assistance; 
‘‘(2) if the employer plan’s share of the total allowed costs

of benefits provided under the plan is less than 60 percent of such costs, that the employee may be eligible for a premium tax credit under section 36B of the Internal Revenue Code of 1986 and a cost sharing reduction under section 1402 of the Patient Protection and Affordable Care Act if the employee purchases a qualified health plan through the Exchange; and 
‘‘(3) if the employee purchases a qualified health plan

through the Exchange, the employee will lose the employer contribution (if any) to any health benefits plan offered by the employer and that all or a portion of such contribution may be excludable from income for Federal income tax pur-poses. Deadline. 29 USC 218B. 29 USC 218A. 26 USC 6055 
note. 
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124 STAT. 253 PUBLIC LAW 111–148—MAR. 23, 2010 
‘‘(b) E FFECTIVE DATE.—Subsection (a) shall take effect with 
respect to employers in a State beginning on March 1, 2013.’’. 
SEC. 1513. SHARED RESPONSIBILITY FOR EMPLOYERS. 
(a) I NGENERAL .—Chapter 43 of the Internal Revenue Code 
of 1986 is amended by adding at the end the following: 
‘‘SEC. 4980H. SHARED RESPONSIBILITY FOR EMPLOYERS REGARDING 
HEALTH COVERAGE. 
‘‘(a) L ARGE EMPLOYERS NOTOFFERING HEALTH COVERAGE .— 
If—

If— 
‘‘(1) any applicable large employer fails to offer to its full- 
time employees (and their dependents) the opportunity to enroll in minimum essential coverage under an eligible employer- sponsored plan (as defined in section 5000A(f)(2)) for any month, and 
‘‘(2) at least one full-time employee of the applicable large

employer has been certified to the employer under section 1411 of the Patient Protection and Affordable Care Act as having enrolled for such month in a qualified health plan with respect to which an applicable premium tax credit or cost-sharing reduction is allowed or paid with respect to the employee,

then there is hereby imposed on the employer an assessable pay-ment equal to the product of the applicable payment amount and the number of individuals employed by the employer as full-time employees during such month. 
‘‘(b) L
ARGE EMPLOYERS WITHWAITING PERIODS EXCEEDING 30 
DAYS.— 
‘‘(1) I N GENERAL .—In the case of any applicable large

employer which requires an extended waiting period to enroll in any minimum essential coverage under an employer-spon-sored plan (as defined in section 5000A(f)(2)), there is hereby imposed on the employer an assessable payment, in the amount specified in paragraph (2), for each full-time employee of the employer to whom the extended waiting period applies. 
‘‘(2) A
MOUNT .—For purposes of paragraph (1), the amount 
specified in this paragraph for a full-time employee is—

‘‘(A) in the case of an extended waiting period which 
exceeds 30 days but does not exceed 60 days, $400, and 
‘‘(B) in the case of an extended waiting period which 
exceeds 60 days, $600. ‘‘(3) E
XTENDED WAITING PERIOD .—The term ‘extended 
waiting period’ means any waiting period (as defined in section 2701(b)(4) of the Public Health Service Act) which exceeds 30 days. ‘‘(c) L
ARGE EMPLOYERS OFFERING COVERAGE WITHEMPLOYEES  
WHOQUALIFY FOR PREMIUM TAXCREDITS OR COST-SHARING REDUC -
TIONS .—

TIONS .— 
‘‘(1) I N GENERAL .—If— 
‘‘(A) an applicable large employer offers to its full- 
time employees (and their dependents) the opportunity to enroll in minimum essential coverage under an eligible employer-sponsored plan (as defined in section 5000A(f)(2)) for any month, and 
‘‘(B) 1 or more full-time employees of the applicable

large employer has been certified to the employer under section 1411 of the Patient Protection and Affordable Care Act as having enrolled for such month in a qualified health 26 USC 4980H. 
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124 STAT. 254 PUBLIC LAW 111–148—MAR. 23, 2010 
plan with respect to which an applicable premium tax 
credit or cost-sharing reduction is allowed or paid with respect to the employee, 
then there is hereby imposed on the employer an assessable payment equal to the product of the number of full-time employees of the applicable large employer described in subparagraph (B) for such month and 400 percent of the applicable payment amount. 
‘‘(2) O
VERALL LIMITATION .—The aggregate amount of tax

VERALL LIMITATION .—The aggregate amount of tax 
determined under paragraph (1) with respect to all employees of an applicable large employer for any month shall not exceed the product of the applicable payment amount and the number of individuals employed by the employer as full-time employees during such month. ‘‘(d) D
EFINITIONS AND SPECIAL RULES .—For purposes of this 
section— 
‘‘(1) A PPLICABLE PAYMENT AMOUNT .—The term ‘applicable

payment amount’ means, with respect to any month, 1⁄12of 
$750. 
‘‘(2) A PPLICABLE LARGE EMPLOYER .— 
‘‘(A) I N GENERAL .—The term ‘applicable large employer’ 
means, with respect to a calendar year, an employer who employed an average of at least 50 full-time employees on business days during the preceding calendar year. 
‘‘(B) E
XEMPTION FOR CERTAIN EMPLOYERS .— 
‘‘(i) I N GENERAL .—An employer shall not be consid-
ered to employ more than 50 full-time employees if—

‘‘(I) the employer’s workforce exceeds 50 full- 
time employees for 120 days or fewer during the calendar year, and 
‘‘(II) the employees in excess of 50 employed 
during such 120-day period were seasonal workers. ‘‘(ii) D
EFINITION OF SEASONAL WORKERS .—The term

EFINITION OF SEASONAL WORKERS .—The term 
‘seasonal worker’ means a worker who performs labor or services on a seasonal basis as defined by the Sec-retary of Labor, including workers covered by section 500.20(s)(1) of title 29, Code of Federal Regulations and retail workers employed exclusively during holiday seasons. ‘‘(C) R
ULES FOR DETERMINING EMPLOYER SIZE .—For 
purposes of this paragraph— 
‘‘(i) A PPLICATION OF AGGREGATION RULE FOR  

‘‘(ii) E
YEAR .—In the case of an employer which was not in

existence throughout the preceding calendar year, the determination of whether such employer is an applicable large employer shall be based on the average number of employees that it is reasonably expected such employer will employ on business days in the current calendar year. 
‘‘(iii) P
REDECESSORS .—Any reference in this sub-
section to an employer shall include a reference to any predecessor of such employer.

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124 STAT. 255 PUBLIC LAW 111–148—MAR. 23, 2010 
‘‘(3) A PPLICABLE PREMIUM TAX CREDIT AND COST -SHARING  
REDUCTION .—The term ‘applicable premium tax credit and cost- 
sharing reduction’ means— 
‘‘(A) any premium tax credit allowed under section 
36B, 
‘‘(B) any cost-sharing reduction under section 1402 of 
the Patient Protection and Affordable Care Act, and 
‘‘(C) any advance payment of such credit or reduction 
under section 1412 of such Act. ‘‘(4) F
ULL-TIME EMPLOYEE .—

ULL-TIME EMPLOYEE .— 
‘‘(A) I N GENERAL .—The term ‘full-time employee’ means 
an employee who is employed on average at least 30 hours of service per week. 
‘‘(B) H
tion with the Secretary of Labor, shall prescribe such regu-lations, rules, and guidance as may be necessary to deter-mine the hours of service of an employee, including rules for the application of this paragraph to employees who are not compensated on an hourly basis. ‘‘(5) I

NFLATION ADJUSTMENT .— 
‘‘(A) I N GENERAL .—In the case of any calendar year 
after 2014, each of the dollar amounts in subsection (b)(2) and (d)(1) shall be increased by an amount equal to the product of— 
‘‘(i) such dollar amount, and ‘‘(ii) the premium adjustment percentage (as 
defined in section 1302(c)(4) of the Patient Protection and Affordable Care Act) for the calendar year. ‘‘(B) R
OUNDING .—If the amount of any increase under

OUNDING .—If the amount of any increase under 
subparagraph (A) is not a multiple of $10, such increase shall be rounded to the next lowest multiple of $10. ‘‘(6) O
THER DEFINITIONS .—Any term used in this section 
which is also used in the Patient Protection and Affordable Care Act shall have the same meaning as when used in such Act. 
‘‘(7) T
AX NONDEDUCTIBLE .—For denial of deduction for the 
tax imposed by this section, see section 275(a)(6). ‘‘(e) A
DMINISTRATION AND PROCEDURE .—

‘‘(1) I N GENERAL .—Any assessable payment provided by 
this section shall be paid upon notice and demand by the Secretary, and shall be assessed and collected in the same manner as an assessable penalty under subchapter B of chapter 68. 
‘‘(2) T
IME FOR PAYMENT .—The Secretary may provide for 
the payment of any assessable payment provided by this section on an annual, monthly, or other periodic basis as the Secretary may prescribe. 
‘‘(3) C

‘‘(3) C
OORDINATION WITH CREDITS , ETC..—The Secretary 
shall prescribe rules, regulations, or guidance for the repayment of any assessable payment (including interest) if such payment is based on the allowance or payment of an applicable premium tax credit or cost-sharing reduction with respect to an employee, such allowance or payment is subsequently disallowed, and the assessable payment would not have been required to be made but for such allowance or payment.’’. Regulations.

Guidance. Regulations. 
Guidance. 
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124 STAT. 256 PUBLIC LAW 111–148—MAR. 23, 2010 
(b) C LERICAL AMENDMENT .—The table of sections for chapter 
43 of such Code is amended by adding at the end the following new item: 
‘‘Sec. 4980H. Shared responsibility for employers regarding health coverage.’’. 
(c) S TUDY AND REPORT OF EFFECT OF TAX ON WORKERS ’ 
WAGES .— 
(1) I N GENERAL .—The Secretary of Labor shall conduct

a study to determine whether employees’ wages are reduced by reason of the application of the assessable payments under section 4980H of the Internal Revenue Code of 1986 (as added by the amendments made by this section). The Secretary shall make such determination on the basis of the National Com-pensation Survey published by the Bureau of Labor Statistics. 
(2) R
EPORT .—The Secretary shall report the results of the

study under paragraph (1) to the Committee on Ways and Means of the House of Representatives and to the Committee on Finance of the Senate. (d) E
FFECTIVE DATE.—The amendments made by this section 
shall apply to months beginning after December 31, 2013. 
SEC. 1514. REPORTING OF EMPLOYER HEALTH INSURANCE COVERAGE. 
(a) I NGENERAL .—Subpart D of part III of subchapter A of

chapter 61 of the Internal Revenue Code of 1986, as added by section 1502, is amended by inserting after section 6055 the fol-lowing new section: 
‘‘SEC. 6056. LARGE EMPLOYERS REQUIRED TO REPORT ON HEALTH 
INSURANCE COVERAGE. 
‘‘(a) I NGENERAL .—Every applicable large employer required 
to meet the requirements of section 4980H with respect to its full-time employees during a calendar year shall, at such time as the Secretary may prescribe, make a return described in sub-section (b). 
‘‘(b) F

‘‘(b) F
ORM AND MANNER OF RETURN .—A return is described 
in this subsection if such return— 
‘‘(1) is in such form as the Secretary may prescribe, and ‘‘(2) contains— 
‘‘(A) the name, date, and employer identification 
number of the employer, 
‘‘(B) a certification as to whether the employer offers 
to its full-time employees (and their dependents) the oppor-tunity to enroll in minimum essential coverage under an eligible employer-sponsored plan (as defined in section 5000A(f)(2)),

‘‘(C) if the employer certifies that the employer did 
offer to its full-time employees (and their dependents) the opportunity to so enroll— 
‘‘(i) the length of any waiting period (as defined 
in section 2701(b)(4) of the Public Health Service Act) with respect to such coverage, 
‘‘(ii) the months during the calendar year for which 
coverage under the plan was available, 
‘‘(iii) the monthly premium for the lowest cost 
option in each of the enrollment categories under the plan, and

‘‘(iv) the applicable large employer’s share of the 
total allowed costs of benefits provided under the plan, Certification. 26 USC 6056. 26 USC 4980H 
note. Determination. 
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124 STAT. 257 PUBLIC LAW 111–148—MAR. 23, 2010 
‘‘(D) the number of full-time employees for each month 
during the calendar year, 
‘‘(E) the name, address, and TIN of each full-time 
employee during the calendar year and the months (if any) during which such employee (and any dependents) were covered under any such health benefits plans, and 
‘‘(F) such other information as the Secretary may 
require. 
‘‘(c) S
TATEMENTS TOBEFURNISHED TO INDIVIDUALS WITH

TATEMENTS TOBEFURNISHED TO INDIVIDUALS WITH 
under subsection (a) shall furnish to each full-time employee whose name is required to be set forth in such return under subsection (b)(2)(E) a written statement showing— 
‘‘(A) the name and address of the person required 
to make such return and the phone number of the informa-tion contact for such person, and

OORDINATION WITHOTHER REQUIREMENTS .—To the max-
imum extent feasible, the Secretary may provide that—

‘‘(1) any return or statement required to be provided under 
this section may be provided as part of any return or statement required under section 6051 or 6055, and 
‘‘(2) in the case of an applicable large employer offering 
health insurance coverage of a health insurance issuer, the employer may enter into an agreement with the issuer to include information required under this section with the return and statement required to be provided by the issuer under section 6055. ‘‘(e) C

case of any applicable large employer which is a governmental unit or any agency or instrumentality thereof, the person appro-priately designated for purposes of this section shall make the returns and statements required by this section. 
‘‘(f) D
EFINITIONS .—For purposes of this section, any term used 
in this section which is also used in section 4980H shall have the meaning given such term by section 4980H.’’. 
(b) A
SSESSABLE PENALTIES .—

(b) A
Revenue Code of 1986 (relating to definitions), as amended 
by section 1502, is amended by striking ‘‘or’’ at the end of clause (xxiii), by striking ‘‘and’’ at the end of clause (xxiv) and inserting ‘‘or’’, and by inserting after clause (xxiv) the following new clause: 
‘‘(xxv) section 6056 (relating to returns relating 
to large employers required to report on health insur-ance coverage), and’’.

(2) Paragraph (2) of section 6724(d) of such Code, as so 
amended, is amended by striking ‘‘or’’ at the end of subpara-graph (FF), by striking the period at the end of subparagraph 26 USC 6724. 
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124 STAT. 258 PUBLIC LAW 111–148—MAR. 23, 2010 
(GG) and inserting ‘‘, or’’ and by inserting after subparagraph 
(GG) the following new subparagraph: 
‘‘(HH) section 6056(c) (relating to statements relating 
to large employers required to report on health insurance coverage).’’. 
(c) C
ONFORMING AMENDMENT .—The table of sections for subpart 
D of part III of subchapter A of chapter 61 of such Code, as added by section 1502, is amended by adding at the end the fol-lowing new item:

‘‘Sec. 6056. Large employers required to report on health insurance coverage.’’. 
(d) E FFECTIVE DATE.—The amendments made by this section 
shall apply to periods beginning after December 31, 2013. 
SEC. 1515. OFFERING OF EXCHANGE-PARTICIPATING QUALIFIED 
HEALTH PLANS THROUGH CAFETERIA PLANS. 
(a) I NGENERAL .—Subsection (f) of section 125 of the Internal 
Revenue Code of 1986 is amended by adding at the end the following new paragraph: 
‘‘(3) C
ERTAIN EXCHANGE -PARTICIPATING QUALIFIED HEALTH

ERTAIN EXCHANGE -PARTICIPATING QUALIFIED HEALTH  
PLANS NOT QUALIFIED .— 
‘‘(A) I N GENERAL .—The term ‘qualified benefit’ shall 
not include any qualified health plan (as defined in section 1301(a) of the Patient Protection and Affordable Care Act) offered through an Exchange established under section 1311 of such Act. 
‘‘(B) E
XCEPTION FOR EXCHANGE -ELIGIBLE EMPLOYERS .—

XCEPTION FOR EXCHANGE -ELIGIBLE EMPLOYERS .— 
Subparagraph (A) shall not apply with respect to any employee if such employee’s employer is a qualified employer (as defined in section 1312(f)(2) of the Patient Protection and Affordable Care Act) offering the employee the opportunity to enroll through such an Exchange in a qualified health plan in a group market.’’. 
(b) C
ONFORMING AMENDMENTS .—Subsection (f) of section 125 
of such Code is amended—

of such Code is amended— 
(1) by striking ‘‘For purposes of this section, the term’’ 
and inserting ‘‘For purposes of this section— ‘‘(1) I
NGENERAL .—The term’’, and 
(2) by striking ‘‘Such term shall not include’’ and inserting 
‘‘(2) L ONG-TERM CARE INSURANCE NOT QUALIFIED .—The 
term ‘qualified benefit’ shall not include’’. (c) E
shall apply to taxable years beginning after December 31, 2013.

SEC. 1551. DEFINITIONS. 
Unless specifically provided for otherwise, the definitions con-
tained in section 2791 of the Public Health Service Act (42 U.S.C. 300gg–91) shall apply with respect to this title. 
SEC. 1552. TRANSPARENCY IN GOVERNMENT. 
Not later than 30 days after the date of enactment of this

Act, the Secretary of Health and Human Services shall publish on the Internet website of the Department of Health and Human Services, a list of all of the authorities provided to the Secretary under this Act (and the amendments made by this Act). Deadline. Web posting. 42 USC 18112. Applicability. 
42 USC 18111. 26 USC 125 note. 26 USC 125. 26 USC 6056 
note.

note. 
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124 STAT. 259 PUBLIC LAW 111–148—MAR. 23, 2010 
SEC. 1553. PROHIBITION AGAINST DISCRIMINATION ON ASSISTED SUI-
CIDE. 
(a) I NGENERAL .—The Federal Government, and any State or

local government or health care provider that receives Federal financial assistance under this Act (or under an amendment made by this Act) or any health plan created under this Act (or under an amendment made by this Act), may not subject an individual or institutional health care entity to discrimination on the basis that the entity does not provide any health care item or service furnished for the purpose of causing, or for the purpose of assisting in causing, the death of any individual,

in causing, the death of any individual, such as by assisted suicide, euthanasia, or mercy killing.

(b) D
EFINITION .—In this section, the term ‘‘health care entity’’ 
includes an individual physician or other health care professional, a hospital, a provider-sponsored organization, a health maintenance organization, a health insurance plan, or any other kind of health care facility, organization, or plan. 
(c) C
ONSTRUCTION AND TREATMENT OF CERTAIN SERVICES .— 
Nothing in subsection (a) shall be construed to apply to, or to affect, any limitation relating to—

(1) the withholding or withdrawing of medical treatment 
or medical care; 
(2) the withholding or withdrawing of nutrition or hydra-
tion; 
(3) abortion; or (4) the use of an item, good, benefit, or service furnished 
for the purpose of alleviating pain or discomfort, even if such use may increase the risk of death, so long as such item, good, benefit, or service is not also furnished for the purpose of causing, or the purpose of assisting in causing, death, for any reason. (d) A

DMINISTRATION .—The Office for Civil Rights of the Depart-
ment of Health and Human Services is designated to receive com-plaints of discrimination based on this section. 
SEC. 1554. ACCESS TO THERAPIES. 
Notwithstanding any other provision of this Act, the Secretary 
of Health and Human Services shall not promulgate any regulation that— 
(1) creates any unreasonable barriers to the ability of 
individuals to obtain appropriate medical care;

individuals to obtain appropriate medical care; 
(2) impedes timely access to health care services; (3) interferes with communications regarding a full range 
of treatment options between the patient and the provider; 
(4) restricts the ability of health care providers to provide 
full disclosure of all relevant information to patients making health care decisions; 
(5) violates the principles of informed consent and the 
ethical standards of health care professionals; or

(6) limits the availability of health care treatment for the 
full duration of a patient’s medical needs. 42 USC 18114. Abortion. 42 USC 18113. 
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124 STAT. 260 PUBLIC LAW 111–148—MAR. 23, 2010 
SEC. 1555. FREEDOM NOT TO PARTICIPATE IN FEDERAL HEALTH 
INSURANCE PROGRAMS. 
No individual, company, business, nonprofit entity, or health 
insurance issuer offering group or individual health insurance cov-erage shall be required to participate in any Federal health insur-ance program created under this Act (or any amendments made by this Act), or in any Federal health insurance program expanded

by this Act (or any such amendments), and there shall be no penalty or fine imposed upon any such issuer for choosing not to participate in such programs. 
SEC. 1556. EQUITY FOR CERTAIN ELIGIBLE SURVIVORS. 
(a) R EBUTTABLE PRESUMPTION .—Section 411(c)(4) of the Black 
Lung Benefits Act (30 U.S.C. 921(c)(4)) is amended by striking the last sentence. 
(b) C
ONTINUATION OF BENEFITS .—Section 422(l) of the Black

Lung Benefits Act (30 U.S.C. 932(l)) is amended by striking ‘‘, except with respect to a claim filed under this part on or after the effective date of the Black Lung Benefits Amendments of 1981’’. 
(c) E
shall apply with respect to claims filed under part B or part C of the Black Lung Benefits Act (30 U.S.C. 921 et seq., 931 et seq.) after January 1, 2005, that are pending on or after the date of enactment of this Act.

SEC. 1557. NONDISCRIMINATION. 
(a) I NGENERAL .—Except as otherwise provided for in this title

(or an amendment made by this title), an individual shall not, on the ground prohibited under title VI of the Civil Rights Act of 1964 (42 U.S.C. 2000d et seq.), title IX of the Education Amend-ments of 1972 (20 U.S.C. 1681 et seq.), the Age Discrimination Act of 1975 (42 U.S.C. 6101 et seq.), or section 504 of the Rehabilita-tion Act of 1973 (29 U.S.C. 794), be excluded from participation in, be denied the benefits of, or be subjected to discrimination under, any health program or activity,

under, any health program or activity, any part of which is receiving Federal financial assistance, including credits, subsidies, or con-tracts of insurance, or under any program or activity that is administered by an Executive Agency or any entity established under this title (or amendments). The enforcement mechanisms provided for and available under such title VI, title IX, section 504, or such Age Discrimination Act shall apply for purposes of violations of this subsection.

(or an amendment made by this title) shall be construed to invali-date or limit the rights, remedies, procedures, or legal standards available to individuals aggrieved under title VI of the Civil Rights Act of 1964 (42 U.S.C. 2000d et seq.), title VII of the Civil Rights Act of 1964 (42 U.S.C. 2000e et seq.), title IX of the Education Amendments of 1972 (20 U.S.C. 1681 et seq.), section 504 of the Rehabilitation Act of 1973 (29 U.S.C. 794), or the Age Discrimina-tion Act of 1975 (42 U.S.C. 611

Age Discrimina-tion Act of 1975 (42 U.S.C. 611 et seq.), or to supersede State laws that provide additional protections against discrimination on any basis described in subsection (a).

(c) R
EGULATIONS .—The Secretary may promulgate regulations 
to implement this section. Applicability. 42 USC 18116. Applicability. 
30 USC 921 note. 42 USC 18115. 
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124 STAT. 261 PUBLIC LAW 111–148—MAR. 23, 2010 
SEC. 1558. PROTECTIONS FOR EMPLOYEES. 
after section 18B (as added by section 1512) the following: 
‘‘SEC. 18C. PROTECTIONS FOR EMPLOYEES. 
‘‘(a) P ROHIBITION .—No employer shall discharge or in any

manner discriminate against any employee with respect to his or her compensation, terms, conditions, or other privileges of employment because the employee (or an individual acting at the request of the employee) has— 
‘‘(1) received a credit under section 36B of the Internal 
Revenue Code of 1986 or a subsidy under section 1402 of this Act; 
‘‘(2) provided, caused to be provided, or is about to provide

or cause to be provided to the employer, the Federal Govern-ment, or the attorney general of a State information relating to any violation of, or any act or omission the employee reason-ably believes to be a violation of, any provision of this title (or an amendment made by this title); 
‘‘(3) testified or is about to testify in a proceeding concerning 
such violation; 
‘‘(4) assisted or participated, or is about to assist or partici-
pate, in such a proceeding; or

pate, in such a proceeding; or 
‘‘(5) objected to, or refused to participate in, any activity, 
policy, practice, or assigned task that the employee (or other such person) reasonably believed to be in violation of any provi-sion of this title (or amendment), or any order, rule, regulation, standard, or ban under this title (or amendment). ‘‘(b) C
OMPLAINT PROCEDURE .— 
‘‘(1) I N GENERAL .—An employee who believes that he or

she has been discharged or otherwise discriminated against by any employer in violation of this section may seek relief in accordance with the procedures, notifications, burdens of proof, remedies, and statutes of limitation set forth in section 2087(b) of title 15, United States Code. 
‘‘(2) N
O LIMITATION ON RIGHTS .—Nothing in this section

O LIMITATION ON RIGHTS .—Nothing in this section 
shall be deemed to diminish the rights, privileges, or remedies of any employee under any Federal or State law or under any collective bargaining agreement. The rights and remedies in this section may not be waived by any agreement, policy, form, or condition of employment.’’. 
SEC. 1559. OVERSIGHT. 
The Inspector General of the Department of Health and Human

Services shall have oversight authority with respect to the adminis-tration and implementation of this title as it relates to such Depart-ment. 
SEC. 1560. RULES OF CONSTRUCTION. 
(a) N OEFFECT ON ANTITRUST LAWS.—Nothing in this title

(or an amendment made by this title) shall be construed to modify, impair, or supersede the operation of any of the antitrust laws. For the purposes of this section, the term ‘‘antitrust laws’’ has the meaning given such term in subsection (a) of the first section of the Clayton Act, except that such term includes section 5 of the Federal Trade Commission Act to the extent that such section 5 applies to unfair methods of competition. 42 USC 18118. 42 USC 18117. 29 USC 218C.

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124 STAT. 262 PUBLIC LAW 111–148—MAR. 23, 2010 
(b) R ULE OF CONSTRUCTION REGARDING HAWAII ’SPREPAID  
HEALTH CARE ACT.—Nothing in this title (or an amendment made 
by this title) shall be construed to modify or limit the application of the exemption for Hawaii’s Prepaid Health Care Act (Haw. Rev. Stat. §§ 393–1 et seq.) as provided for under section 514(b)(5) of the Employee Retirement Income Security Act of 1974 (29 U.S.C. 1144(b)(5)). 
(c) S

(c) S
TUDENT HEALTH INSURANCE PLANS .—Nothing in this title 
(or an amendment made by this title) shall be construed to prohibit an institution of higher education (as such term is defined for purposes of the Higher Education Act of 1965) from offering a student health insurance plan, to the extent that such requirement is otherwise permitted under applicable Federal, State or local law. 
(d) N
OEFFECT ON EXISTING REQUIREMENTS .—Nothing in this

title (or an amendment made by this title, unless specified by direct statutory reference) shall be construed to modify any existing Federal requirement concerning the State agency responsible for determining eligibility for programs identified in section 1413. 
SEC. 1561. HEALTH INFORMATION TECHNOLOGY ENROLLMENT STAND-
ARDS AND PROTOCOLS. 
Title XXX of the Public Health Service Act (42 U.S.C. 300jj 
et seq.) is amended by adding at the end the following: 
‘‘Subtitle C—Other Provisions

‘‘Subtitle C—Other Provisions 
‘‘SEC. 3021. HEALTH INFORMATION TECHNOLOGY ENROLLMENT 
STANDARDS AND PROTOCOLS. 
‘‘(a) I NGENERAL .— 
‘‘(1) S TANDARDS AND PROTOCOLS .—Not later than 180 days

after the date of enactment of this title, the Secretary, in consultation with the HIT Policy Committee and the HIT Stand-ards Committee, shall develop interoperable and secure stand-ards and protocols that facilitate enrollment of individuals in Federal and State health and human services programs, as determined by the Secretary. 
‘‘(2) M
ETHODS .—The Secretary shall facilitate enrollment

in such programs through methods determined appropriate by the Secretary, which shall include providing individuals and third parties authorized by such individuals and their designees notification of eligibility and verification of eligibility required under such programs. ‘‘(b) C
ONTENT .—The standards and protocols for electronic 
enrollment in the Federal and State programs described in sub-section (a) shall allow for the following:

‘‘(1) Electronic matching against existing Federal and State 
data, including vital records, employment history, enrollment systems, tax records, and other data determined appropriate by the Secretary to serve as evidence of eligibility and in lieu of paper-based documentation. 
‘‘(2) Simplification and submission of electronic documenta-
tion, digitization of documents, and systems verification of eligi-bility. 
‘‘(3) Reuse of stored eligibility information (including docu-

mentation) to assist with retention of eligible individuals. Deadline. Determination. 42 USC 300jj–51. 
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124 STAT. 263 PUBLIC LAW 111–148—MAR. 23, 2010 
‘‘(4) Capability for individuals to apply, recertify and man-
age their eligibility information online, including at home, at points of service, and other community-based locations. 
‘‘(5) Ability to expand the enrollment system to integrate 
new programs, rules, and functionalities, to operate at increased volume, and to apply streamlined verification and eligibility processes to other Federal and State programs, as appropriate.

‘‘(6) Notification of eligibility, recertification, and other 
needed communication regarding eligibility, which may include communication via email and cellular phones. 
‘‘(7) Other functionalities necessary to provide eligibles with 
streamlined enrollment process. ‘‘(c) A
PPROVAL AND NOTIFICATION .—With respect to any 
standard or protocol developed under subsection (a) that has been approved by the HIT Policy Committee and the HIT Standards Committee, the Secretary—

‘‘(1) shall notify States of such standards or protocols; and ‘‘(2) may require, as a condition of receiving Federal funds 
for the health information technology investments, that States or other entities incorporate such standards and protocols into such investments. ‘‘(d) G
RANTS FOR IMPLEMENTATION OF APPROPRIATE ENROLL -
MENT HIT.— 
‘‘(1) I N GENERAL .—The Secretary shall award grant to

eligible entities to develop new, and adapt existing, technology systems to implement the HIT enrollment standards and proto-cols developed under subsection (a) (referred to in this sub-section as ‘appropriate HIT technology’). 
‘‘(2) E
LIGIBLE ENTITIES .—To be eligible for a grant under 
this subsection, an entity shall— 
‘‘(A) be a State, political subdivision of a State, or 
a local governmental entity; and 
‘‘(B) submit to the Secretary an application at such

time, in such manner, and containing— 
‘‘(i) a plan to adopt and implement appropriate 
enrollment technology that includes— 
‘‘(I) proposed reduction in maintenance costs 
of technology systems; 
‘‘(II) elimination or updating of legacy systems; 
and 
‘‘(III) demonstrated collaboration with other 
entities that may receive a grant under this section that are located in the same State, political sub-division, or locality; ‘‘(ii) an assurance that the entity will share such

appropriate enrollment technology in accordance with 
paragraph (4); and 
‘‘(iii) such other information as the Secretary may 
require. 
‘‘(3) S
HARING .— 
‘‘(A) I N GENERAL .—The Secretary shall ensure that 
appropriate enrollment HIT adopted under grants under this subsection is made available to other qualified State, qualified political subdivisions of a State, or other appro-priate qualified entities (as described in subparagraph (B)) at no cost.

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124 STAT. 264 PUBLIC LAW 111–148—MAR. 23, 2010 
‘‘(B) Q UALIFIED ENTITIES .—The Secretary shall deter-
mine what entities are qualified to receive enrollment HIT under subparagraph (A), taking into consideration the rec-ommendations of the HIT Policy Committee and the HIT Standards Committee.’’. 
SEC. 1562. CONFORMING AMENDMENTS. 
(a) A PPLICABILITY .—Section 2735 of the Public Health Service 
Act (42 U.S.C. 300gg–21), as so redesignated by section 1001(4), is amended—

(1) by striking subsection (a); (2) in subsection (b)— 
(A) in paragraph (1), by striking ‘‘1 through 3’’ and 
inserting ‘‘1 and 2’’; and 
(B) in paragraph (2)— 
(i) in subparagraph (A), by striking ‘‘subparagraph 
(D)’’ and inserting ‘‘subparagraph (D) or (E)’’; 
(ii) by striking ‘‘1 through 3’’ and inserting ‘‘1 
and 2’’; and 
(iii) by adding at the end the following: 
‘‘(E) E
LECTION NOT APPLICABLE .—The election

‘‘(E) E
LECTION NOT APPLICABLE .—The election 
described in subparagraph (A) shall not be available with respect to the provisions of subpart 1.’’; (3) in subsection (c), by striking ‘‘1 through 3 shall not 
apply to any group’’ and inserting ‘‘1 and 2 shall not apply to any individual coverage or any group’’; and 
(4) in subsection (d)— 
(A) in paragraph (1), by striking ‘‘1 through 3 shall

not apply to any group’’ and inserting ‘‘1 and 2 shall not apply to any individual coverage or any group’’; 
(i) in the matter preceding subparagraph (A), by 
striking ‘‘1 through 3 shall not apply to any group’’ and inserting ‘‘1 and 2 shall not apply to any individual coverage or any group’’; and 
(ii) in subparagraph (C), by inserting ‘‘or, with 
respect to individual coverage, under any health insur-ance coverage maintained by the same health insur-

ance issuer’’; and (C) in paragraph (3), by striking ‘‘any group’’ and 
inserting ‘‘any individual coverage or any group’’. 
(b) D
EFINITIONS .—Section 2791(d) of the Public Health Service 
Act (42 U.S.C. 300gg–91(d)) is amended by adding at the end the following: 
‘‘(20) Q
UALIFIED HEALTH PLAN .—The term ‘qualified health 
plan’ has the meaning given such term in section 1301(a) of the Patient Protection and Affordable Care Act. 
‘‘(21) E
XCHANGE .—The term ‘Exchange’ means an American

XCHANGE .—The term ‘Exchange’ means an American 
Health Benefit Exchange established under section 1311 of the Patient Protection and Affordable Care Act.’’. (c) T
ECHNICAL AND CONFORMING AMENDMENTS .—Title XXVII 
of the Public Health Service Act (42 U.S.C. 300gg et seq.) is amended— 
(1) in section 2704 (42 U.S.C. 300gg), as so redesignated 
by section 1201(2)— 
(A) in subsection (c)— 42 USC 300gg–3.

(A) in subsection (c)— 42 USC 300gg–3. 
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124 STAT. 265 PUBLIC LAW 111–148—MAR. 23, 2010 
(i) in paragraph (2), by striking ‘‘group health plan’’ 
each place that such term appears and inserting ‘‘group or individual health plan’’; and 
(ii) in paragraph (3)— 
(I) by striking ‘‘group health insurance’’ each 
place that such term appears and inserting ‘‘group or individual health insurance’’; and 
(II) in subparagraph (D), by striking ‘‘small 
or large’’ and inserting ‘‘individual or group’’;

(B) in subsection (d), by striking ‘‘group health insur-
ance’’ each place that such term appears and inserting ‘‘group or individual health insurance’’; and 
(C) in subsection (e)(1)(A), by striking ‘‘group health 
insurance’’ and inserting ‘‘group or individual health insur-ance’’; (2) by striking the second heading for subpart 2 of part 
A (relating to other requirements); 
(3) in section 2725 (42 U.S.C. 300gg–4), as so redesignated 
by section 1001(2)—

by section 1001(2)— 
(A) in subsection (a), by striking ‘‘health insurance 
issuer offering group health insurance coverage’’ and inserting ‘‘health insurance issuer offering group or indi-vidual health insurance coverage’’; 
(B) in subsection (b)— 
(i) by striking ‘‘health insurance issuer offering

group health insurance coverage in connection with a group health plan’’ in the matter preceding para-graph (1) and inserting ‘‘health insurance issuer offering group or individual health insurance coverage’’; and 
(ii) in paragraph (1), by striking ‘‘plan’’ and 
inserting ‘‘plan or coverage’’; (C) in subsection (c)— 
(i) in paragraph (2), by striking ‘‘group health

(i) in paragraph (2), by striking ‘‘group health 
insurance coverage offered by a health insurance issuer’’ and inserting ‘‘health insurance issuer offering group or individual health insurance coverage’’; and 
(ii) in paragraph (3), by striking ‘‘issuer’’ and 
inserting ‘‘health insurance issuer’’; and (D) in subsection (e), by striking ‘‘health insurance

issuer offering group health insurance coverage’’ and inserting ‘‘health insurance issuer offering group or indi-vidual health insurance coverage’’; (4) in section 2726 (42 U.S.C. 300gg–5), as so redesignated 
(A) in subsection (a), by striking ‘‘(or health insurance 
coverage offered in connection with such a plan)’’ each place that such term appears and inserting ‘‘or a health insurance issuer offering group or individual health insur-ance coverage’’;

(B) in subsection (b), by striking ‘‘(or health insurance 
coverage offered in connection with such a plan)’’ each place that such term appears and inserting ‘‘or a health insurance issuer offering group or individual health insur-ance coverage’’; and 
(C) in subsection (c)— 
42 USC 
300gg–26. 42 USC 
300gg–25. 
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124 STAT. 266 PUBLIC LAW 111–148—MAR. 23, 2010 
(i) in paragraph (1), by striking ‘‘(and group health 
insurance coverage offered in connection with a group health plan)’’ and inserting ‘‘and a health insurance issuer offering group or individual health insurance coverage’’; 
(ii) in paragraph (2), by striking ‘‘(or health insur-

ance coverage offered in connection with such a plan)’’ each place that such term appears and inserting ‘‘or a health insurance issuer offering group or individual health insurance coverage’’; 
(5) in section 2727 (42 U.S.C. 300gg–6), as so redesignated 
by section 1001(2), by striking ‘‘health insurance issuers pro-viding health insurance coverage in connection with group health plans’’ and inserting ‘‘and health insurance issuers offering group or individual health insurance coverage’’;

(6) in section 2728 (42 U.S.C. 300gg–7), as so redesignated 
coverage offered in connection with such plan’’ and inserting ‘‘individual health insurance coverage’’; 
(i) in paragraph (1), by striking ‘‘or a health insur-

ance issuer that provides health insurance coverage in connection with a group health plan’’ and inserting ‘‘or a health insurance issuer that offers group or indi-vidual health insurance coverage’’; 
(ii) in paragraph (2), by striking ‘‘health insurance 
coverage offered in connection with the plan’’ and inserting ‘‘individual health insurance coverage’’; and 
(iii) in paragraph (3), by striking ‘‘health insurance

coverage offered by an issuer in connection with such plan’’ and inserting ‘‘individual health insurance cov-erage’’; (C) in subsection (c), by striking ‘‘health insurance 
issuer providing health insurance coverage in connection with a group health plan’’ and inserting ‘‘health insurance issuer that offers group or individual health insurance coverage’’; and 
(D) in subsection (e)(1), by striking ‘‘health insurance

coverage offered in connection with such a plan’’ and inserting ‘‘individual health insurance coverage’’; (7) by striking the heading for subpart 3; (8) in section 2731 (42 U.S.C. 300gg–11), as so redesignated 
by section 1001(3)— 
(A) by striking the section heading and all that follows 
through subsection (b); 
(B) in subsection (c)— 
(i) in paragraph (1)— 
(I) in the matter preceding subparagraph (A), 
by striking ‘‘small group’’ and inserting ‘‘group and individual’’; and

(II) in subparagraph (B)— 
(aa) in the matter preceding clause (i), 
by inserting ‘‘and individuals’’ after ‘‘employers’’; 
42 USC 300gg–1. 42 USC 
300gg–28. 42 USC 
300gg–27. 
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124 STAT. 267 PUBLIC LAW 111–148—MAR. 23, 2010 
(bb) in clause (i), by inserting ‘‘or any 
additional individuals’’ after ‘‘additional groups’’; and 
(cc) in clause (ii), by striking ‘‘without

(cc) in clause (ii), by striking ‘‘without 
regard to the claims experience of those employers and their employees (and their dependents) or any health status-related factor relating to such’’ and inserting ‘‘and individ-uals 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’’; and 
(ii) in paragraph (2), by striking ‘‘small group’’

and inserting ‘‘group or individual’’; (C) in subsection (d)— 
(i) by striking ‘‘small group’’ each place that such 
appears and inserting ‘‘group or individual’’; and 
(ii) in paragraph (1)(B)— 
(I) by striking ‘‘all employers’’ and inserting 
‘‘all employers and individuals’’; 
(II) by striking ‘‘those employers’’ and 
inserting ‘‘those individuals, employers’’; and 
(III) by striking ‘‘such employees’’ and 
inserting ‘‘such individuals, employees’’;

inserting ‘‘such individuals, employees’’; 
(D) by striking subsection (e); (E) by striking subsection (f); and (F) by transferring such section (as amended by this 
paragraph) to appear at the end of section 2702 (as added by section 1001(4)); (9) in section 2732 (42 U.S.C. 300gg–12), as so redesignated 
(i) in the matter preceding paragraph (1), by

(i) in the matter preceding paragraph (1), by 
striking ‘‘group health plan in the small or large group market’’ and inserting ‘‘health insurance coverage offered in the group or individual market’’; 
(ii) in paragraph (1), by inserting ‘‘, or individual, 
as applicable,’’ after ‘‘plan sponsor’’; 
(iii) in paragraph (2), by inserting ‘‘, or individual, 
as applicable,’’ after ‘‘plan sponsor’’; and 
(iv) by striking paragraph (3) and inserting the 
‘‘(3) V

‘‘(3) V
IOLATION OF PARTICIPATION OR CONTRIBUTION  
RATES .—In the case of a group health plan, the plan sponsor 
has failed to comply with a material plan provision relating to employer contribution or group participation rules, pursuant to applicable State law.’’; 
(I) in the matter preceding subparagraph (A),

by striking ‘‘group health insurance coverage offered in the small or large group market’’ and inserting ‘‘group or individual health insurance coverage’’; 42 USC 300gg–2. 
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124 STAT. 268 PUBLIC LAW 111–148—MAR. 23, 2010 
(II) in subparagraph (A), by inserting ‘‘or indi-
vidual, as applicable,’’ after ‘‘plan sponsor’’; 
(III) in subparagraph (B)— 
(aa) by inserting ‘‘or individual, as 
applicable,’’ after ‘‘plan sponsor’’; and 
(bb) by inserting ‘‘or individual health 
insurance coverage’’; and (IV) in subparagraph (C), by inserting ‘‘or 
individuals, as applicable,’’ after ‘‘those sponsors’’; and (ii) in paragraph (2)(A)—

(I) in the matter preceding clause (i), by 
striking ‘‘small group market or the large group market, or both markets,’’ and inserting ‘‘indi-vidual or group market, or all markets,’’; and 
(II) in clause (i), by inserting ‘‘or individual, 
(D) by transferring such section (as amended by this 
paragraph) to appear at the end of section 2703 (as added by section 1001(4)); (10) in section 2733 (42 U.S.C. 300gg–13), as so redesig-

nated by section 1001(4)— 
(A) in subsection (a)— 
striking ‘‘small employer’’ and inserting ‘‘small employer or an individual’’; 
as applicable,’’ after ‘‘employer’’ each place that such appears; and 
(iii) in paragraph (2), by striking ‘‘small employer’’ 
and inserting ‘‘employer, or individual, as applicable,’’; (B) in subsection (b)— 
(i) in paragraph (1)—

by striking ‘‘small employer’’ and inserting ‘‘employer, or individual, as applicable,’’; 
(II) in subparagraph (A), by adding ‘‘and’’ at 
the end; 
(III) by striking subparagraphs (B) and (C); 
and 
(IV) in subparagraph (D)— 
(aa) by inserting ‘‘, or individual, as 
applicable,’’ after ‘‘employer’’; and 
(bb) by redesignating such subparagraph 
as subparagraph (B); 
(ii) in paragraph (2)—

(ii) in paragraph (2)— 
(I) by striking ‘‘small employers’’ each place 
that such term appears and inserting ‘‘employers, or individuals, as applicable,’’; and 
(II) by striking ‘‘small employer’’ and inserting 
‘‘employer, or individual, as applicable,’’; and 
(C) by redesignating such section (as amended by this

paragraph) as section 2709 and transferring such section to appear after section 2708 (as added by section 1001(5)); (11) by redesignating subpart 4 as subpart 2; (12) in section 2735 (42 U.S.C. 300gg–21), as so redesig-
nated by section 1001(4)— 42 USC 300gg–9. 
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124 STAT. 269 PUBLIC LAW 111–148—MAR. 23, 2010 
(A) by striking subsection (a); 
(B) by striking ‘‘subparts 1 through 3’’ each place that 
such appears and inserting ‘‘subpart 1’’; 
(C) by redesignating subsections (b) through (e) as 
subsections (a) through (d), respectively; and 
(D) by redesignating such section (as amended by this 
paragraph) as section 2722; (13) in section 2736 (42 U.S.C. 300gg–22), as so redesig-
(A) in subsection (a)—

(i) in paragraph (1), by striking ‘‘small or large 
group markets’’ and inserting ‘‘individual or group market’’; and 
(ii) in paragraph (2), by inserting ‘‘or individual 
health insurance coverage’’ after ‘‘group health plans’’; (B) in subsection (b)(1)(B), by inserting ‘‘individual 
health insurance coverage or’’ after ‘‘respect to’’; and 

paragraph) as section 2723; (14) in section 2737(a)(1) (42 U.S.C. 300gg–23), as so 
redesignated by section 1001(4)— 
(A) by inserting ‘‘individual or’’ before ‘‘group health 
insurance’’; and 
(B) by redesignating such section(as amended by this 
paragraph) as section 2724; (15) in section 2762 (42 U.S.C. 300gg–62)— 
(A) in the section heading by inserting ‘‘
AND APPLICA -
TION ’’ before the period; and 
(B) by adding at the end the following: 
‘‘(c) A PPLICATION OF PARTA P ROVISIONS .—

‘‘(c) A PPLICATION OF PARTA P ROVISIONS .— 
‘‘(1) I N GENERAL .—The provisions of part A shall apply 
to health insurance issuers providing health insurance coverage in the individual market in a State as provided for in such part. 
‘‘(2) C
LARIFICATION .—To the extent that any provision of

this part conflicts with a provision of part A with respect to health insurance issuers providing health insurance coverage in the individual market in a State, the provisions of such part A shall apply.’’; and 
(16) in section 2791(e) (42 U.S.C. 300gg–91(e))— 
(A) in paragraph (2), by striking ‘‘51’’ and inserting 
‘‘101’’; and 
(B) in paragraph (4)— 
(i) by striking ‘‘at least 2’’ each place that such 
appears and inserting ‘‘at least 1’’; and 
(ii) by striking ‘‘50’’ and inserting ‘‘100’’.

(ii) by striking ‘‘50’’ and inserting ‘‘100’’. 
(d) A
PPLICATION .—Notwithstanding any other provision of the 
Patient Protection and Affordable Care Act, nothing in such Act (or an amendment made by such Act) shall be construed to— 
(1) prohibit (or authorize the Secretary of Health and

Human Services to promulgate regulations that prohibit) a group health plan or health insurance issuer from carrying out utilization management techniques that are commonly used as of the date of enactment of this Act; or 
(2) restrict the application of the amendments made by 
this subtitle. 42 USC 18120. 42 USC 
300gg–23. 42 USC 
300gg–22. 42 USC 
300gg–21.

300gg–21. 
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124 STAT. 270 PUBLIC LAW 111–148—MAR. 23, 2010 
(e) T ECHNICAL AMENDMENT TO THE EMPLOYEE RETIREMENT  
INCOME SECURITY ACT OF 1974.—Subpart B of part 7 of subtitle 
A 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. 715. ADDITIONAL MARKET REFORMS. 
‘‘(a) G ENERAL RULE.—Except as provided in subsection (b)— 
‘‘(1) the provisions of part A of title XXVII of the Public

Health Service Act (as amended by the Patient Protection and Affordable Care Act) shall apply to group health plans, and health insurance issuers providing health insurance coverage in connection with group health plans, as if included in this subpart; and 
‘‘(2) to the extent that any provision of this part conflicts

with a provision of such part A with respect to group health plans, or health insurance issuers providing health insurance coverage in connection with group health plans, the provisions of such part A shall apply. 
‘‘(b) E
XCEPTION .—Notwithstanding subsection (a), the provi-

sions of sections 2716 and 2718 of title XXVII of the Public Health Service Act (as amended by the Patient Protection and Affordable Care Act) shall not apply with respect to self-insured group health plans, and the provisions of this part shall continue to apply to such plans as if such sections of the Public Health Service Act (as so amended) had not been enacted.’’. 
(f) T
ECHNICAL AMENDMENT TO THE INTERNAL REVENUE CODE 
OF1986.—Subchapter B of chapter 100 of the Internal Revenue

Code of 1986 is amended by adding at the end the following: 
‘‘SEC. 9815. ADDITIONAL MARKET REFORMS. 
‘‘(1) the provisions of part A of title XXVII of the Public 
Health Service Act (as amended by the Patient Protection and Affordable Care Act) shall apply to group health plans, and health insurance issuers providing health insurance coverage in connection with group health plans, as if included in this subchapter; and

‘‘(2) to the extent that any provision of this subchapter 
conflicts with a provision of such part A with respect to group health plans, or health insurance issuers providing health insurance coverage in connection with group health plans, the provisions of such part A shall apply. ‘‘(b) E

sions of sections 2716 and 2718 of title XXVII of the Public Health Service Act (as amended by the Patient Protection and Affordable Care Act) shall not apply with respect to self-insured group health plans, and the provisions of this subchapter shall continue to apply to such plans as if such sections of the Public Health Service Act (as so amended) had not been enacted.’’. 
SEC. 1563. SENSE OF THE SENATE PROMOTING FISCAL RESPONSI-
BILITY.

BILITY. 
(a) F INDINGS .—The Senate makes the following findings: 
(1) Based on Congressional Budget Office (CBO) estimates, 
this Act will reduce the Federal deficit between 2010 and 2019. 
(2) CBO projects this Act will continue to reduce budget 
deficits after 2019. Applicability. 29 USC 9815. Applicability. 
29 USC 1185d. 
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124 STAT. 271 PUBLIC LAW 111–148—MAR. 23, 2010 
(3) Based on CBO estimates, this Act will extend the sol-
vency of the Medicare HI Trust Fund. 
(4) This Act will increase the surplus in the Social Security 
Trust Fund, which should be reserved to strengthen the finances of Social Security. 
(5) The initial net savings generated by the Community 
Living Assistance Services and Supports (CLASS) program are necessary to ensure the long-term solvency of that program. (b) S

ENSE OF THE SENATE .—It is the sense of the Senate that— 
(1) the additional surplus in the Social Security Trust 
Fund generated by this Act should be reserved for Social Secu-rity and not spent in this Act for other purposes; and 
(2) the net savings generated by the CLASS program should 
be reserved for the CLASS program and not spent in this Act for other purposes. 
Subtitle A—Improved Access to Medicaid

SEC. 2001. MEDICAID COVERAGE FOR THE LOWEST INCOME POPU-
LATIONS. 
(a) C OVERAGE FOR INDIVIDUALS WITH INCOME AT OR BELOW  
133 P ERCENT OF THE POVERTY LINE.— 
(1) B EGINNING 2014 .—Section 1902(a)(10)(A)(i) of the Social 
Security Act (42 U.S.C. 1396a) is amended— 
(A) by striking ‘‘or’’ at the end of subclause (VI); (B) by adding ‘‘or’’ at the end of subclause (VII); and (C) by inserting after subclause (VII) the following:

‘‘(VIII) beginning January 1, 2014, who are 
under 65 years of age, not pregnant, not entitled to, or enrolled for, benefits under part A of title XVIII, or enrolled for benefits under part B of title XVIII, and are not described in a previous subclause of this clause, and whose income (as determined under subsection (e)(14)) does not exceed 133 percent of the poverty line (as defined in section 2110(c)(5)) applicable to a family of the size involved, subject to subsection (k);’’. 
(2) P

(2) P
ROVISION OF AT LEAST MINIMUM ESSENTIAL COV -
ERAGE .— 
(A) I N GENERAL .—Section 1902 of such Act (42 U.S.C. 
1396a) is amended by inserting after subsection (j) the following: 
‘‘(k)(1) The medical assistance provided to an individual

described in subclause (VIII) of subsection (a)(10)(A)(i) shall consist of benchmark coverage described in section 1937(b)(1) or benchmark equivalent coverage described in section 1937(b)(2). Such medical assistance shall be provided subject to the requirements of section 1937, without regard to whether a State otherwise has elected the option to provide medical assistance through coverage under that section, unless an individual described in subclause (VIII) of subsection (a)(10)(A)(i) is also

(VIII) of subsection (a)(10)(A)(i) is also an individual for whom, under subparagraph (B) of section 1937(a)(2), the State may not require enrollment in benchmark coverage described in subsection (b)(1) Effective date.

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124 STAT. 272 PUBLIC LAW 111–148—MAR. 23, 2010 
of section 1937 or benchmark equivalent coverage described in 
subsection (b)(2) of that section.’’. 
(B) C ONFORMING AMENDMENT .—Section 1903(i) of the 
Social Security Act, as amended by section 6402(c), is amended— 
(i) in paragraph (24), by striking ‘‘or’’ at the end; (ii) in paragraph (25), by striking the period and 
inserting ‘‘; or’’; and 
‘‘(26) with respect to any amounts expended for medical

assistance for individuals described in subclause (VIII) of sub-section (a)(10)(A)(i) other than medical assistance provided through benchmark coverage described in section 1937(b)(1) or benchmark equivalent coverage described in section 1937(b)(2).’’. 
(3) F
EDERAL FUNDING FOR COST OF COVERING NEWLY  
ELIGIBLE INDIVIDUALS .—Section 1905 of the Social Security Act 
(42 U.S.C. 1396d), is amended— 
(A) in subsection (b), in the first sentence, by inserting

‘‘subsection (y) and’’ before ‘‘section 1933(d)’’; and 
(B) by adding at the end the following new subsection: 
‘‘(y) I NCREASED FMAP FOR MEDICAL ASSISTANCE FOR NEWLY  
ELIGIBLE MANDATORY INDIVIDUALS .— 
‘‘(1) A MOUNT OF INCREASE .— 
‘‘(A) 100 PERCENT FMAP .—During the period that begins

on January 1, 2014, and ends on December 31, 2016, not-withstanding subsection (b), the Federal medical assistance percentage determined for a State that is one of the 50 States or the District of Columbia for each fiscal year occurring during that period with respect to amounts expended for medical assistance for newly eligible individ-uals described in subclause (VIII) of section 1902(a)(10)(A)(i) shall be equal to 100 percent. 
‘‘(B) 2017 
AND 2018 .—

‘‘(B) 2017 
AND 2018 .— 
‘‘(i) I N GENERAL .—During the period that begins

on January 1, 2017, and ends on December 31, 2018, notwithstanding subsection (b) and subject to subpara-graph (D), the Federal medical assistance percentage determined for a State that is one of the 50 States or the District of Columbia for each fiscal year occur-ring during that period with respect to amounts expended for medical assistance for newly eligible individuals described in subclause (VIII) of section 1902(a)(10)(A)(i), shall be increased by the applicable percentage point increase

by the applicable percentage point increase specified in clause (ii) for the quarter and the State.

‘‘(ii) A
PPLICABLE PERCENTAGE POINT INCREASE .— 
‘‘(I) I N GENERAL .—For purposes of clause (i), 
the applicable percentage point increase for a quarter is the following: Time periods. 42 USC 13966. 
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124 STAT. 273 PUBLIC LAW 111–148—MAR. 23, 2010 
‘‘For any fiscal year quar-
ter occurring in the cal-
endar year: If the State is an expan-
sion State, the applicable 
percentage point increase 
is: If the State is not an ex-
pansion State, the appli-
cable percentage point in-
crease is: 
2017 30.3 34.3 
2018 31.3 33.3 
‘‘(II) E XPANSION STATE DEFINED .—For purposes

of the table in subclause (I), a State is an expan-sion State if, on the date of the enactment of the Patient Protection and Affordable Care Act, the State offers health benefits coverage statewide to parents and nonpregnant, childless adults whose income is at least 100 percent of the poverty line, that is not dependent on access to employer cov-erage, employer contribution, or employment and is not limited to premium assistance, hospital-only benefits, a high deductible health plan, or

benefits, a high deductible health plan, or alter-native benefits under a demonstration program authorized under section 1938. A State that offers health benefits coverage to only parents or only nonpregnant childless adults described in the pre-ceding sentence shall not be considered to be an expansion State.

AND SUCCEEDING YEARS .—Beginning January 
1, 2019, notwithstanding subsection (b) but subject to subparagraph (D), the Federal medical assistance percent-age determined for a State that is one of the 50 States or the District of Columbia for each fiscal year quarter occurring during that period with respect to amounts expended for medical assistance for newly eligible individ-uals described in subclause (VIII) of section 1902(a)(10)(A)(i), shall be increased by 32.3 percentage points. 
‘‘(D) L

‘‘(D) L
IMITATION .—The Federal medical assistance 
percentage determined for a State under subparagraph (B) or (C) shall in no case be more than 95 percent. ‘‘(2) D
EFINITIONS .—In this subsection: 
‘‘(A) N EWLY ELIGIBLE .—The term ‘newly eligible’

means, with respect to an individual described in subclause (VIII) of section 1902(a)(10)(A)(i), an individual who is not under 19 years of age (or such higher age as the State may have elected) and who, on the date of enactment of the Patient Protection and Affordable Care Act, is not eligible under the State plan or under a waiver of the plan for full benefits or for benchmark coverage described in subparagraph (A), (B), or (C) of section 1937(b)(1) or benchmark equivalent coverage described

or benchmark equivalent coverage described in section 1937(b)(2) that has an aggregate actuarial value that is at least actuarially equivalent to benchmark coverage described in subparagraph (A), (B), or (C) of section 1937(b)(1), or is eligible but not enrolled (or is on a waiting list) for such benefits or coverage through a waiver under the plan that has a capped or limited enrollment that is full. Effective date.

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124 STAT. 274 PUBLIC LAW 111–148—MAR. 23, 2010 
‘‘(B) F ULL BENEFITS .—The term ‘full benefits’ means, 
with respect to an individual, medical assistance for all services covered under the State plan under this title that is not less in amount, duration, or scope, or is determined by the Secretary to be substantially equivalent, to the medical assistance available for an individual described in section 1902(a)(10)(A)(i).’’. (4) S
TATE OPTIONS TO OFFER COVERAGE EARLIER AND

TATE OPTIONS TO OFFER COVERAGE EARLIER AND  
PRESUMPTIVE ELIGIBILITY ; CHILDREN REQUIRED TO HAVE COV -
ERAGE FOR PARENTS TO BE ELIGIBLE .— 
(A) I N GENERAL .—Subsection (k) of section 1902 of 
the Social Security Act (as added by paragraph (2)), is amended by inserting after paragraph (1) the following: 
‘‘(2) Beginning with the first day of any fiscal year quarter

that begins on or after January 1, 2011, and before January 1, 2014, a State may elect through a State plan amendment to provide medical assistance to individuals who would be described in sub-clause (VIII) of subsection (a)(10)(A)(i) if that subclause were effec-tive before January 1, 2014. A State may elect to phase-in the extension of eligibility for medical assistance to such individuals based on income, so long as the State does not extend such eligibility to individuals described in such

such eligibility to individuals described in such subclause with higher income before making individuals described in such subclause with lower income eligible for medical assistance.

‘‘(3) If an individual described in subclause (VIII) of subsection

(a)(10)(A)(i) is the parent of a child who is under 19 years of age (or such higher age as the State may have elected) who is eligible for medical assistance under the State plan or under a waiver of such plan (under that subclause or under a State plan amendment under paragraph (2), the individual may not be enrolled under the State plan unless the individual’s child is enrolled under the State plan or under a waiver of the plan or is enrolled in other health insurance coverage. For purposes

in other health insurance coverage. For purposes of the preceding sentence, the term ‘parent’ includes an individual treated as a caretaker relative for purposes of carrying out section 1931.’’.

(B) P
RESUMPTIVE ELIGIBILITY .—Section 1920 of the 
Social Security Act (42 U.S.C. 1396r–1) is amended by adding at the end the following: 
‘‘(e) If the State has elected the option to provide a presumptive

eligibility period under this section or section 1920A, the State may elect to provide a presumptive eligibility period (as defined in subsection (b)(1)) for individuals who are eligible for medical assistance under clause (i)(VIII) of subsection (a)(10)(A) or section 1931 in the same manner as the State provides for such a period under this section or section 1920A, subject to such guidance as the Secretary shall establish.’’. 
(5) C
ONFORMING AMENDMENTS .—

(5) C
(A) Section 1902(a)(10) of such Act (42 U.S.C. 
1396a(a)(10)) is amended in the matter following subpara-graph (G), by striking ‘‘and (XIV)’’ and inserting ‘‘(XIV)’’ and by inserting ‘‘and (XV) the medical assistance made available to an individual described in subparagraph (A)(i)(VIII) shall be limited to medical assistance described in subsection (k)(1)’’ before the semicolon. 
(B) Section 1902(l)(2)(C) of such Act (42 U.S.C.

(B) Section 1902(l)(2)(C) of such Act (42 U.S.C. 
1396a(l)(2)(C)) is amended by striking ‘‘100’’ and inserting ‘‘133’’. Guidelines. Effective date. 
Time period. 42 USC 1396a. 
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124 STAT. 275 PUBLIC LAW 111–148—MAR. 23, 2010 
(C) Section 1905(a) of such Act (42 U.S.C. 1396d(a)) 
is amended in the matter preceding paragraph (1)— 
(i) by striking ‘‘or’’ at the end of clause (xii); (ii) by inserting ‘‘or’’ at the end of clause (xiii); 
and 
(iii) by inserting after clause (xiii) the following: 
‘‘(xiv) individuals described in section 
1902(a)(10)(A)(i)(VIII),’’. 
(D) Section 1903(f)(4) of such Act (42 U.S.C. 1396b(f)(4))

is amended by inserting ‘‘1902(a)(10)(A)(i)(VIII),’’ after ‘‘1902(a)(10)(A)(i)(VII),’’. 
(E) Section 1937(a)(1)(B) of such Act (42 U.S.C. 1396u– 
7(a)(1)(B)) is amended by inserting ‘‘subclause (VIII) of section 1902(a)(10)(A)(i) or under’’ after ‘‘eligible under’’. 
(b) M
AINTENANCE OF MEDICAID INCOME ELIGIBILITY .—Section 
1902 of the Social Security Act (42 U.S.C. 1396a) is amended— 
(1) in subsection (a)—

(1) in subsection (a)— 
(A) by striking ‘‘and’’ at the end of paragraph (72); (B) by striking the period at the end of paragraph 
(73) and inserting ‘‘; and’’; and 
(C) by inserting after paragraph (73) the following 
new paragraph: ‘‘(74) provide for maintenance of effort under the State 
plan or under any waiver of the plan in accordance with sub-section (gg).’’; and 
(2) by adding at the end the following new subsection: 
‘‘(gg) M
AINTENANCE OF EFFORT .—

‘‘(gg) M
AINTENANCE OF EFFORT .— 
‘‘(1) G ENERAL REQUIREMENT TO MAINTAIN ELIGIBILITY  
STANDARDS UNTIL STATE EXCHANGE IS FULLY OPERATIONAL .—

Subject to the succeeding paragraphs of this subsection, during the period that begins on the date of enactment of the Patient Protection and Affordable Care Act and ends on the date on which the Secretary determines that an Exchange established by the State under section 1311 of the Patient Protection and Affordable Care Act is fully operational, as a condition for receiving any Federal payments under section 1903(a) for cal-endar quarters occurring during such period, a State shall not have

during such period, a State shall not have in effect eligibility standards, methodologies, or proce-dures under the State plan under this title or under any waiver of such plan that is in effect during that period, that are more restrictive than the eligibility standards, methodologies, or procedures, respectively, under the plan or waiver that are in effect on the date of enactment of the Patient Protection and Affordable Care Act.

‘‘(2) C
ONTINUATION OF ELIGIBILITY STANDARDS FOR CHIL -
DREN UNTIL OCTOBER 1 , 2019.—The requirement under para-

graph (1) shall continue to apply to a State through September 30, 2019, with respect to the eligibility standards, methodolo-gies, and procedures under the State plan under this title or under any waiver of such plan that are applicable to deter-mining the eligibility for medical assistance of any child who is under 19 years of age (or such higher age as the State may have elected). 
‘‘(3) N
ONAPPLICATION .—During the period that begins on

ONAPPLICATION .—During the period that begins on 
January 1, 2011, and ends on December 31, 2013, the require-ment under paragraph (1) shall not apply to a State with respect to nonpregnant, nondisabled adults who are eligible Time period. Deadline. Certification. Applicability. Time period. 
Determination. 
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124 STAT. 276 PUBLIC LAW 111–148—MAR. 23, 2010 
for medical assistance under the State plan or under a waiver

of the plan at the option of the State and whose income exceeds 133 percent of the poverty line (as defined in section 2110(c)(5)) applicable to a family of the size involved if, on or after December 31, 2010, the State certifies to the Secretary that, with respect to the State fiscal year during which the certifi-cation is made, the State has a budget deficit, or with respect to the succeeding State fiscal year, the State is projected to have a budget deficit. Upon submission of such a

have a budget deficit. Upon submission of such a certification to the Secretary, the requirement under paragraph (1) shall not apply to the State with respect to any remaining portion of the period described in the preceding sentence.

‘‘(4) D
ETERMINATION OF COMPLIANCE .— 
‘‘(A) S TATES SHALL APPLY MODIFIED GROSS INCOME .—

A State’s determination of income in accordance with sub-section (e)(14) shall not be considered to be eligibility stand-ards, methodologies, or procedures that are more restrictive than the standards, methodologies, or procedures in effect under the State plan or under a waiver of the plan on the date of enactment of the Patient Protection and Afford-able Care Act for purposes of determining compliance with the requirements of paragraph (1), (2), or (3). 
‘‘(B) S

‘‘(B) S
TATES MAY EXPAND ELIGIBILITY OR MOVE  
WAIVERED POPULATIONS INTO COVERAGE UNDER THE STATE  
PLAN .—With respect to any period applicable under para-

graph (1), (2), or (3), a State that applies eligibility stand-ards, methodologies, or procedures under the State plan under this title or under any waiver of the plan that are less restrictive than the eligibility standards, meth-odologies, or procedures, applied under the State plan or under a waiver of the plan on the date of enactment of the Patient Protection and Affordable Care Act, or that makes individuals who, on such date of enactment, are eligible for medical assistance under a

are eligible for medical assistance under a waiver of the State plan, after such date of enactment eligible for medical assistance through a State plan amendment with an income eligibility level that is not less than the income eligibility level that applied under the waiver, or as a result of the application of subclause (VIII) of section 1902(a)(10)(A)(i), shall not be considered to have in effect eligibility standards, methodologies, or procedures that are more restrictive than the

or procedures that are more restrictive than the standards, methodologies, or procedures in effect under the State plan or under a waiver of the plan on the date of enactment of the Patient Protec-tion and Affordable Care Act for purposes of determining compliance with the requirements of paragraph (1), (2), or (3).’’.

(c) M
EDICAID BENCHMARK BENEFITS MUSTCONSIST OF AT LEAST  
MINIMUM ESSENTIAL COVERAGE .—Section 1937(b) of such Act (42 
U.S.C. 1396u–7(b)) is amended— 
(1) in paragraph (1), in the matter preceding subparagraph 
(A), by inserting ‘‘subject to paragraphs (5) and (6),’’ before ‘‘each’’; 
(2) in paragraph (2)— 
(A) in the matter preceding subparagraph (A), by 
inserting ‘‘subject to paragraphs (5) and (6)’’ after ‘‘sub-section (a)(1),’’;

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124 STAT. 277 PUBLIC LAW 111–148—MAR. 23, 2010 
(B) in subparagraph (A)— 
(i) by redesignating clauses (iv) and (v) as clauses 
(vi) and (vii), respectively; and 
(ii) by inserting after clause (iii), the following: ‘‘(iv) Coverage of prescription drugs. ‘‘(v) Mental health services.’’; and 
(C) in subparagraph (C)— 
(i) by striking clauses (i) and (ii); and (ii) by redesignating clauses (iii) and (iv) as clauses 
(i) and (ii), respectively; and

(i) and (ii), respectively; and 
(3) by adding at the end the following new paragraphs: ‘‘(5) M
INIMUM STANDARDS .—Effective January 1, 2014, any 
benchmark benefit package under paragraph (1) or benchmark equivalent coverage under paragraph (2) must provide at least essential health benefits as described in section 1302(b) of the Patient Protection and Affordable Care Act. 
‘‘(6) M
ENTAL HEALTH SERVICES PARITY .— 
‘‘(A) I N GENERAL .—In the case of any benchmark ben-

efit package under paragraph (1) or benchmark equivalent coverage under paragraph (2) that is offered by an entity that is not a medicaid managed care organization and that provides both medical and surgical benefits and mental health or substance use disorder benefits, the entity shall ensure that the financial requirements and treatment limitations applicable to such mental health or substance use disorder benefits comply with the requirements of sec-tion 2705(a) of the Public Health Service

of sec-tion 2705(a) of the Public Health Service Act in the same manner as such requirements apply to a group health plan.

‘‘(B) D
EEMED COMPLIANCE .—Coverage provided with 
respect to an individual described in section 1905(a)(4)(B) and covered under the State plan under section 1902(a)(10)(A) of the services described in section 1905(a)(4)(B) (relating to early and periodic screening, diag-nostic, and treatment services defined in section 1905(r)) and provided in accordance with section 1902(a)(43), shall be deemed to satisfy the requirements of subparagraph (A).’’. 
(d) A
NNUAL REPORTS ON MEDICAID ENROLLMENT .—

(d) A
NNUAL REPORTS ON MEDICAID ENROLLMENT .— 
(1) S TATE REPORTS .—Section 1902(a) of the Social Security 
Act (42 U.S.C. 1396a(a)), as amended by subsection (b), is amended— 
(A) by striking ‘‘and’’ at the end of paragraph (73); (B) by striking the period at the end of paragraph 
(74) and inserting ‘‘; and’’; and 
(C) by inserting after paragraph (74) the following 
new paragraph: ‘‘(75) provide that, beginning January 2015, and annually

thereafter, the State shall submit a report to the Secretary that contains— 
‘‘(A) the total number of enrolled and newly enrolled 
individuals in the State plan or under a waiver of the plan for the fiscal year ending on September 30 of the preceding calendar year, disaggregated by population, including children, parents, nonpregnant childless adults, disabled individuals, elderly individuals, and such other Effective date. Effective date.

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124 STAT. 278 PUBLIC LAW 111–148—MAR. 23, 2010 
categories or sub-categories of individuals eligible for med-
ical assistance under the State plan or under a waiver of the plan as the Secretary may require; 
‘‘(B) a description, which may be specified by popu-
lation, of the outreach and enrollment processes used by the State during such fiscal year; and 
‘‘(C) any other data reporting determined necessary

by the Secretary to monitor enrollment and retention of individuals eligible for medical assistance under the State plan or under a waiver of the plan.’’. (2) R
EPORTS TO CONGRESS .—Beginning April 2015, and

annually thereafter, the Secretary of Health and Human Serv-ices shall submit a report to the appropriate committees of Congress on the total enrollment and new enrollment in Med-icaid for the fiscal year ending on September 30 of the preceding calendar year on a national and State-by-State basis, and shall include in each such report such recommendations for adminis-trative or legislative changes to improve enrollment in the Medicaid program as the Secretary determines appropriate. (e) S

TATE OPTION FOR COVERAGE FOR INDIVIDUALS WITH 
INCOME THAT EXCEEDS 133 P ERCENT OF THE POVERTY LINE.— 
(1) C OVERAGE AS OPTIONAL CATEGORICALLY NEEDY GROUP .— 
Section 1902 of the Social Security Act (42 U.S.C. 1396a) is amended— 
(A) in subsection (a)(10)(A)(ii)— 
(i) in subclause (XVIII), by striking ‘‘or’’ at the 
end; 
(ii) in subclause (XIX), by adding ‘‘or’’ at the end; 
and 
(iii) by adding at the end the following new sub-
clause: 
‘‘(XX) beginning January 1, 2014, who are

‘‘(XX) beginning January 1, 2014, who are 
under 65 years of age and are not described in or enrolled under a previous subclause of this clause, and whose income (as determined under subsection (e)(14)) exceeds 133 percent of the pov-erty line (as defined in section 2110(c)(5)) applicable to a family of the size involved but does not exceed the highest income eligibility level established under the State plan or under a waiver of the plan, subject to subsection (hh);’’ and

‘‘(hh)(1) A State may elect to phase-in the extension of eligibility

for medical assistance to individuals described in subclause (XX) of subsection (a)(10)(A)(ii) based on the categorical group (including nonpregnant childless adults) or income, so long as the State does not extend such eligibility to individuals described in such subclause with higher income before making individuals described in such subclause with lower income eligible for medical assistance. 
‘‘(2) If an individual described in subclause (XX) of subsection

(a)(10)(A)(ii) is the parent of a child who is under 19 years of age (or such higher age as the State may have elected) who is eligible for medical assistance under the State plan or under a waiver of such plan, the individual may not be enrolled under the State plan unless the individual’s child is enrolled under the State plan or under a waiver of the plan or is enrolled in other health insurance coverage. For purposes of the preceding sentence, Effective date. Effective date.

42 USC 1396a note. 
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124 STAT. 279 PUBLIC LAW 111–148—MAR. 23, 2010 
the term ‘parent’ includes an individual treated as a caretaker 
relative for purposes of carrying out section 1931.’’. 
(2) C ONFORMING AMENDMENTS .— 
(A) Section 1905(a) of such Act (42 U.S.C. 1396d(a)), 
as amended by subsection (a)(5)(C), is amended in the matter preceding paragraph (1)— 
(i) by striking ‘‘or’’ at the end of clause (xiii); (ii) by inserting ‘‘or’’ at the end of clause (xiv); 
and

and 
(iii) by inserting after clause (xiv) the following: 
‘‘(xv) individuals described in section 
1902(a)(10)(A)(ii)(XX),’’. 
(B) Section 1903(f)(4) of such Act (42 U.S.C. 1396b(f)(4)) 
is amended by inserting ‘‘1902(a)(10)(A)(ii)(XX),’’ after ‘‘1902(a)(10)(A)(ii)(XIX),’’. 
(C) Section 1920(e) of such Act (42 U.S.C. 1396r–1(e)), 
as added by subsection (a)(4)(B), is amended by inserting ‘‘or clause (ii)(XX)’’ after ‘‘clause (i)(VIII)’’.

SEC. 2002. INCOME ELIGIBILITY FOR NONELDERLY DETERMINED 
USING MODIFIED GROSS INCOME. 
(a) I NGENERAL .—Section 1902(e) of the Social Security Act 
(42 U.S.C. 1396a(e)) is amended by adding at the end the following: 
‘‘(14) I NCOME DETERMINED USING MODIFIED GROSS  
INCOME .— 
‘‘(A) I N GENERAL .—Notwithstanding subsection (r) or

any other provision of this title, except as provided in subparagraph (D), for purposes of determining income eligi-bility for medical assistance under the State plan or under any waiver of such plan and for any other purpose applicable under the plan or waiver for which a determina-tion of income is required, including with respect to the imposition of premiums and cost-sharing, a State shall use the modified gross income of an individual and, in the case of an individual in a family greater

in the case of an individual in a family greater than 1, the household income of such family. A State shall establish income eligibility thresholds for populations to be eligible for medical assistance under the State plan or a waiver of the plan using modified gross income and household income that are not less than the effective income eligibility levels that applied under the State plan or waiver on the date of enactment of the Patient Protection and Afford-able Care Act. For purposes of

and Afford-able Care Act. For purposes of complying with the mainte-nance of effort requirements under subsection (gg) during the transition to modified gross income and household income, a State shall, working with the Secretary, establish an equivalent income test that ensures individuals eligible for medical assistance under the State plan or under a waiver of the plan on the date of enactment of the Patient Protection and Affordable Care Act, do not lose coverage under the State plan or

Act, do not lose coverage under the State plan or under a waiver of the plan. The Secretary may waive such provisions of this title and title XXI as are necessary to ensure that States establish income and eligibility determination systems that protect bene-ficiaries.

‘‘(B) N
O INCOME OR EXPENSE DISREGARDS .—No type 
of expense, block, or other income disregard shall be applied Waiver authority. 
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124 STAT. 280 PUBLIC LAW 111–148—MAR. 23, 2010 
by a State to determine income eligibility for medical assist-
ance under the State plan or under any waiver of such plan or for any other purpose applicable under the plan or waiver for which a determination of income is required. 
‘‘(C) N
O ASSETS TEST .—A State shall not apply any 
assets or resources test for purposes of determining eligi-bility for medical assistance under the State plan or under a waiver of the plan. 
‘‘(D) E
XCEPTIONS .—

‘‘(D) E
XCEPTIONS .— 
‘‘(i) I NDIVIDUALS ELIGIBLE BECAUSE OF OTHER AID  
OR ASSISTANCE , ELDERLY INDIVIDUALS , MEDICALLY  
NEEDY INDIVIDUALS , AND INDIVIDUALS ELIGIBLE FOR  
MEDICARE COST -SHARING .—Subparagraphs (A), (B), and 
(C) shall not apply to the determination of eligibility under the State plan or under a waiver for medical assistance for the following: 
‘‘(I) Individuals who are eligible for medical

assistance under the State plan or under a waiver of the plan on a basis that does not require a determination of income by the State agency administering the State plan or waiver, including as a result of eligibility for, or receipt of, other Federal or State aid or assistance, individuals who are eligible on the basis of receiving (or being treated as if receiving) supplemental security income benefits under title XVI, and individuals who are eligible as a result of being or being deemed to

eligible as a result of being or being deemed to be a child in foster care under the responsibility of the State.

‘‘(II) Individuals who have attained age 65. ‘‘(III) Individuals who qualify for medical 
assistance under the State plan or under any waiver of such plan on the basis of being blind or disabled (or being treated as being blind or disabled) without regard to whether the individual is eligible for supplemental security income bene-fits under title XVI on the basis of being blind or disabled and including an individual who is eligible for medical assistance on the basis of sec-tion 1902(e)(3).

‘‘(IV) Individuals described in subsection 
(a)(10)(C). 
‘‘(V) Individuals described in any clause of sub-
section (a)(10)(E). ‘‘(ii) E
XPRESS LANE AGENCY FINDINGS .—In the case

XPRESS LANE AGENCY FINDINGS .—In the case 
of a State that elects the Express Lane option under paragraph (13), notwithstanding subparagraphs (A), (B), and (C), the State may rely on a finding made by an Express Lane agency in accordance with that paragraph relating to the income of an individual for purposes of determining the individual’s eligibility for medical assistance under the State plan or under a waiver of the plan. 
‘‘(iii) M
EDICARE PRESCRIPTION DRUG SUBSIDIES

‘‘(iii) M
EDICARE PRESCRIPTION DRUG SUBSIDIES  
DETERMINATIONS .—Subparagraphs (A), (B), and (C) 
shall not apply to any determinations of eligibility for premium and cost-sharing subsidies under and in 
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124 STAT. 281 PUBLIC LAW 111–148—MAR. 23, 2010 
accordance with section 1860D–14 made by the State 
pursuant to section 1935(a)(2). 
‘‘(iv) L ONG-TERM CARE .—Subparagraphs (A), (B),

‘‘(iv) L ONG-TERM CARE .—Subparagraphs (A), (B), 
and (C) shall not apply to any determinations of eligi-bility of individuals for purposes of medical assistance for nursing facility services, a level of care in any institution equivalent to that of nursing facility serv-ices, home or community-based services furnished under a waiver or State plan amendment under section 1915 or a waiver under section 1115, and services described in section 1917(c)(1)(C)(ii). 
‘‘(v) G

‘‘(v) G
RANDFATHER OF CURRENT ENROLLEES UNTIL  
DATE OF NEXT REGULAR REDETERMINATION .—An indi-

vidual who, on January 1, 2014, is enrolled in the State plan or under a waiver of the plan and who would be determined ineligible for medical assistance solely because of the application of the modified gross income or household income standard described in subparagraph (A), shall remain eligible for medical assistance under the State plan or waiver (and subject to the same premiums and cost-sharing as applied to the individual on that date) through March 31, 2014, or the date on which the

through March 31, 2014, or the date on which the individual’s next regu-larly scheduled redetermination of eligibility is to occur, whichever is later. ‘‘(E) T

State shall submit to the Secretary for the Secretary’s approval the income eligibility thresholds proposed to be established using modified gross income and household income, the methodologies and procedures to be used to determine income eligibility using modified gross income and household income and, if applicable, a State plan amendment establishing an optional eligibility category under subsection (a)(10)(A)(ii)(XX). To the extent prac-ticable, the State shall use the same methodologies

the State shall use the same methodologies and procedures for purposes of making such determinations as the State used on the date of enactment of the Patient Protection and Affordable Care Act. The Secretary shall ensure that the income eligibility thresholds proposed to be established using modified gross income and household income, including under the eligibility category established under subsection (a)(10)(A)(ii)(XX), and the methodologies and procedures proposed to be used to determine

and procedures proposed to be used to determine income eligibility, will not result in children who would have been eligible for medical assistance under the State plan or under a waiver of the plan on the date of enactment of the Patient Protection and Affordable Care Act no longer being eligible for such assistance.

retary shall not waive compliance with the requirements of this paragraph except to the extent necessary to permit a State to coordinate eligibility requirements for dual eligible individuals (as defined in section 1915(h)(2)(B)) under the State plan or under a waiver of the plan and under title XVIII and individuals who require the level of care provided in a hospital, a nursing facility, or an intermediate care facility for the mentally retarded. Submission.

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124 STAT. 282 PUBLIC LAW 111–148—MAR. 23, 2010 
‘‘(G) D EFINITIONS OF MODIFIED GROSS INCOME AND  
HOUSEHOLD INCOME .—In this paragraph, the terms ‘modi-
fied gross income’ and ‘household income’ have the meanings given such terms in section 36B(d)(2) of the Internal Revenue Code of 1986. 
‘‘(H) C
ONTINUED APPLICATION OF MEDICAID RULES  
REGARDING POINT -IN-TIME INCOME AND SOURCES OF  
INCOME .—The requirement under this paragraph for States

to use modified gross income and household income to determine income eligibility for medical assistance under the State plan or under any waiver of such plan and for any other purpose applicable under the plan or waiver for which a determination of income is required shall not be construed as affecting or limiting the application of— 
‘‘(i) the requirement under this title and under

‘‘(i) the requirement under this title and under 
the State plan or a waiver of the plan to determine an individual’s income as of the point in time at which an application for medical assistance under the State plan or a waiver of the plan is processed; or 
‘‘(ii) any rules established under this title or under 
the State plan or a waiver of the plan regarding sources of countable income.’’. 
(b) C
ONFORMING AMENDMENT .—Section 1902(a)(17) of such Act

(42 U.S.C. 1396a(a)(17)) is amended by inserting ‘‘(e)(14),’’ before ‘‘(l)(3)’’. 
(c) E
FFECTIVE DATE.—The amendments made by subsections 
(a) and (b) take effect on January 1, 2014. 
SEC. 2003. REQUIREMENT TO OFFER PREMIUM ASSISTANCE FOR 
EMPLOYER-SPONSORED INSURANCE. 
(a) I NGENERAL .—Section 1906A of such Act (42 U.S.C. 1396e– 
1) is amended— 
(A) by striking ‘‘may elect to’’ and inserting ‘‘shall’’; (B) by striking ‘‘under age 19’’; and

(C) by inserting ‘‘, in the case of an individual under 
age 19,’’ after ‘‘(and’’; (2) in subsection (c), in the first sentence, by striking ‘‘under 
age 19’’; and 
(3) in subsection (d)— 
(A) in paragraph (2)— 
(i) in the first sentence, by striking ‘‘under age 
19’’; and 
(ii) by striking the third sentence and inserting

‘‘A State may not require, as a condition of an indi-vidual (or the individual’s parent) being or remaining eligible for medical assistance under this title, that the individual (or the individual’s parent) apply for enrollment in qualified employer-sponsored coverage under this section.’’; and (B) in paragraph (3), by striking ‘‘the parent of an

individual under age 19’’ and inserting ‘‘an individual (or the parent of an individual)’’; and (4) in subsection (e), by striking ‘‘under age 19’’ each place 
it appears. 42 USC 1396a 
note. 
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124 STAT. 283 PUBLIC LAW 111–148—MAR. 23, 2010 
(b) C ONFORMING AMENDMENT .—The heading for section 1906A 
of such Act (42 U.S.C. 1396e–1) is amended by striking ‘‘ OPTION  
FOR CHILDREN ’’. 
(c) E FFECTIVE DATE.—The amendments made by this section 
take effect on January 1, 2014. 
SEC. 2004. MEDICAID COVERAGE FOR FORMER FOSTER CARE CHIL-
DREN. 
(a) I NGENERAL .—Section 1902(a)(10)(A)(i) of the Social Security 
Act (42 U.S.C. 1396a), as amended by section 2001(a)(1), is amended—

(1) by striking ‘‘or’’ at the end of subclause (VII); (2) by adding ‘‘or’’ at the end of subclause (VIII); and (3) by inserting after subclause (VIII) the following: 
‘‘(IX) who were in foster care under the respon-
sibility of a State for more than 6 months (whether or not consecutive) but are no longer in such care, who are not described in any of subclauses (I) through (VII) of this clause, and who are under 25 years of age;’’. 
(b) O
PTION TOPROVIDE PRESUMPTIVE ELIGIBILITY .—Section

1920(e) of such Act (42 U.S.C. 1396r–1(e)), as added by section 2001(a)(4)(B) and amended by section 2001(e)(2)(C), is amended by inserting ‘‘, clause (i)(IX),’’ after ‘‘clause (i)(VIII)’’. 
(c) C
(1) Section 1903(f)(4) of such Act (42 U.S.C. 1396b(f)(4)), 
as amended by section 2001(a)(5)(D), is amended by inserting ‘‘1902(a)(10)(A)(i)(IX),’’ after ‘‘1902(a)(10)(A)(i)(VIII),’’. 
(2) Section 1937(a)(2)(B)(viii) of such Act (42 U.S.C. 1396u–

7(a)(2)(B)(viii)) is amended by inserting ‘‘, or the individual qualifies for medical assistance on the basis of section 1902(a)(10)(A)(i)(IX)’’ before the period. (d) E
take effect on January 1, 2019. 
SEC. 2005. PAYMENTS TO TERRITORIES. 
(a) I NCREASE IN LIMIT ON PAYMENTS .—Section 1108(g) of the 
Social Security Act (42 U.S.C. 1308(g)) is amended— 
(1) in paragraph (2), in the matter preceding subparagraph

(A), by striking ‘‘paragraph (3)’’ and inserting ‘‘paragraphs (3) and (5)’’; 
(2) in paragraph (4), by striking ‘‘and (3)’’ and inserting 
‘‘(3), and (4)’’; and 
(3) by adding at the end the following paragraph: ‘‘(5) F
ISCAL YEAR 2011 AND THEREAFTER .—The amounts

ISCAL YEAR 2011 AND THEREAFTER .—The amounts 
otherwise determined under this subsection for Puerto Rico, the Virgin Islands, Guam, the Northern Mariana Islands, and American Samoa for the second, third, and fourth quarters of fiscal year 2011, and for each fiscal year after fiscal year 
2011 (after the application of subsection (f) and the preceding paragraphs of this subsection), shall be increased by 30 per-cent.’’. (b) D
ISREGARD OF PAYMENTS FOR MANDATORY EXPANDED

ISREGARD OF PAYMENTS FOR MANDATORY EXPANDED  
ENROLLMENT .—Section 1108(g)(4) of such Act (42 U.S.C. 1308(g)(4)) 
is amended— 
(1) by striking ‘‘to fiscal years beginning’’ and inserting 
‘‘to— 
‘‘(A) fiscal years beginning’’; 42 USC 1396a note. 42 USC 1396e–1 
note. 
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124 STAT. 284 PUBLIC LAW 111–148—MAR. 23, 2010 
(2) by striking the period at the end and inserting ‘‘; and’’; 
and 
(3) by adding at the end the following: 
‘‘(B) fiscal years beginning with fiscal year 2014, pay-

ments made to Puerto Rico, the Virgin Islands, Guam, the Northern Mariana Islands, or American Samoa with respect to amounts expended for medical assistance for newly eligible (as defined in section 1905(y)(2)) nonpreg-nant childless adults who are eligible under subclause (VIII) of section 1902(a)(10)(A)(i) and whose income (as determined under section 1902(e)(14)) does not exceed (in the case of each such commonwealth and territory respec-tively) the income eligibility level in effect for

the income eligibility level in effect for that popu-lation under title XIX or under a waiver on the date of enactment of the Patient Protection and Affordable Care Act, shall not be taken into account in applying subsection (f) (as increased in accordance with paragraphs (1), (2), (3), and (5) of this subsection) to such commonwealth or territory for such fiscal year.’’.

(c) I
NCREASED FMAP.— 
(1) I N GENERAL .—The first sentence of section 1905(b) of 
the Social Security Act (42 U.S.C. 1396d(b)) is amended by striking ‘‘shall be 50 per centum’’ and inserting ‘‘shall be 55 percent’’. 
(2) E
FFECTIVE DATE .—The amendment made by paragraph 
(1) takes effect on January 1, 2011. 
SEC. 2006. SPECIAL ADJUSTMENT TO FMAP DETERMINATION FOR CER-
TAIN STATES RECOVERING FROM A MAJOR DISASTER. 
Section 1905 of the Social Security Act (42 U.S.C. 1396d),

as amended by sections 2001(a)(3) and 2001(b)(2), is amended— 
(1) in subsection (b), in the first sentence, by striking 
‘‘subsection (y)’’ and inserting ‘‘subsections (y) and (aa)’’; and 
‘‘(aa)(1) Notwithstanding subsection (b), beginning January 1, 
2011, the Federal medical assistance percentage for a fiscal year for a disaster-recovery FMAP adjustment State shall be equal to the following:

year) for which this subsection applies to the State, the Federal medical assistance percentage determined for the fiscal year without regard to this subsection and subsection (y), increased by 50 percent of the number of percentage points by which the Federal medical assistance percentage determined for the State for the fiscal year without regard to this subsection and subsection (y), is less than the Federal medical assistance percentage determined for the State for the preceding fiscal year

for the State for the preceding fiscal year after the application of only subsection (a) of section 5001 of Public Law 111–5 (if applicable to the preceding fiscal year) and without regard to this subsection, subsection (y), and sub-sections (b) and (c) of section 5001 of Public Law 111–5.

‘‘(B) In the case of the second or any succeeding fiscal 
year for which this subsection applies to the State, the Federal medical assistance percentage determined for the preceding fiscal year under this subsection for the State, increased by 25 percent of the number of percentage points by which the Federal medical assistance percentage determined for the State Effective date. 42 USC 1396d 
note.

note. 
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124 STAT. 285 PUBLIC LAW 111–148—MAR. 23, 2010 
for the fiscal year without regard to this subsection and sub-
section (y), is less than the Federal medical assistance percent-age determined for the State for the preceding fiscal year under this subsection. ‘‘(2) In this subsection, the term ‘disaster-recovery FMAP

adjustment State’ means a State that is one of the 50 States or the District of Columbia, for which, at any time during the preceding 7 fiscal years, the President has declared a major disaster under section 401 of the Robert T. Stafford Disaster Relief and Emergency Assistance Act and determined as a result of such disaster that every county or parish in the State warrant individual and public assistance or public assistance from the Federal Govern-ment under such Act and for which—

year) for which this subsection applies to the State, the Federal medical assistance percentage determined for the State for the fiscal year without regard to this subsection and subsection (y), is less than the Federal medical assistance percentage determined for the State for the preceding fiscal year after the application of only subsection (a) of section 5001 of Public Law 111–5 (if applicable to the preceding fiscal year) and without regard to this subsection, subsection (y), and

regard to this subsection, subsection (y), and sub-sections (b) and (c) of section 5001 of Public Law 111–5, by at least 3 percentage points; and

‘‘(B) in the case of the second or any succeeding fiscal 
year for which this subsection applies to the State, the Federal medical assistance percentage determined for the State for the fiscal year without regard to this subsection and subsection (y), is less than the Federal medical assistance percentage determined for the State for the preceding fiscal year under this subsection by at least 3 percentage points. ‘‘(3) The Federal medical assistance percentage determined for

a disaster-recovery FMAP adjustment State under paragraph (1) shall apply for purposes of this title (other than with respect to disproportionate share hospital payments described in section 1923 and payments under this title that are based on the enhanced FMAP described in 2105(b)) and shall not apply with respect to payments under title IV (other than under part E of title IV) or payments under title XXI.’’. 
SEC. 2007. MEDICAID IMPROVEMENT FUND RESCISSION.

SEC. 2007. MEDICAID IMPROVEMENT FUND RESCISSION. 
(a) R ESCISSION .—Any amounts available to the Medicaid 
Improvement Fund established under section 1941 of the Social Security Act (42 U.S.C. 1396w–1) for any of fiscal years 2014 through 2018 that are available for expenditure from the Fund and that are not so obligated as of the date of the enactment of this Act are rescinded. 
(b) C
ONFORMING AMENDMENTS .—Section 1941(b)(1) of the Social 
Security Act (42 U.S.C. 1396w–1(b)(1)) is amended—

(1) in subparagraph (A), by striking ‘‘$100,000,000’’ and 
inserting ‘‘$0’’; and 
(2) in subparagraph (B), by striking ‘‘$150,000,000’’ and 
inserting ‘‘$0’’. Applicability. Definition. 
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124 STAT. 286 PUBLIC LAW 111–148—MAR. 23, 2010 
Subtitle B—Enhanced Support for the 
Children’s Health Insurance Program 
SEC. 2101. ADDITIONAL FEDERAL FINANCIAL PARTICIPATION FOR 
CHIP. 
(a) I NGENERAL .—Section 2105(b) of the Social Security Act

(42 U.S.C. 1397ee(b)) is amended by adding at the end the following: ‘‘Notwithstanding the preceding sentence, during the period that begins on October 1, 2013, and ends on September 30, 2019, the enhanced FMAP determined for a State for a fiscal year (or for any portion of a fiscal year occurring during such period) shall

be increased by 23 percentage points, but in no case shall exceed 100 percent. The increase in the enhanced FMAP under the pre-ceding sentence shall not apply with respect to determining the payment to a State under subsection (a)(1) for expenditures described in subparagraph (D)(iv), paragraphs (8), (9), (11) of sub-section (c), or clause (4) of the first sentence of section 1905(b).’’. 
(b) M
(1) I N GENERAL .—Section 2105(d) of the Social Security

Act (42 U.S.C. 1397ee(d)) is amended by adding at the end the following: 
‘‘(3) C
DREN UNTIL OCTOBER 1 , 2019.— 
‘‘(A) I N GENERAL .—During the period that begins on

the date of enactment of the Patient Protection and Afford-able Care Act and ends on September 30, 2019, a State shall not have in effect eligibility standards, methodologies, or procedures under its State child health plan (including any waiver under such plan) for children (including chil-dren provided medical assistance for which payment is made under section 2105(a)(1)(A)) that are more restrictive than the eligibility standards, methodologies, or procedures, respectively, under such plan

or procedures, respectively, under such plan (or waiver) as in effect on the date of enactment of that Act. The preceding sentence shall not be construed as preventing a State during such period from—

‘‘(i) applying eligibility standards, methodologies, 
or procedures for children under the State child health plan or under any waiver of the plan that are less restrictive than the eligibility standards, methodolo-gies, or procedures, respectively, for children under the plan or waiver that are in effect on the date of enactment of such Act; or 
‘‘(ii) imposing a limitation described in section

2112(b)(7) for a fiscal year in order to limit expendi-tures under the State child health plan to those for which Federal financial participation is available under this section for the fiscal year. ‘‘(B) A
SSURANCE OF EXCHANGE COVERAGE FOR TAR -
GETED LOW -INCOME CHILDREN UNABLE TO BE PROVIDED  
CHILD HEALTH ASSISTANCE AS A RESULT OF FUNDING SHORT -
FALLS .—In the event that allotments provided under section

2104 are insufficient to provide coverage to all children who are eligible to be targeted low-income children under the State child health plan under this title, a State shall Procedures. Time period. Time period. 
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124 STAT. 287 PUBLIC LAW 111–148—MAR. 23, 2010 
establish procedures to ensure that such children are pro-
vided coverage through an Exchange established by the State under section 1311 of the Patient Protection and Affordable Care Act.’’. (2) C
ONFORMING AMENDMENT TO TITLE XXI MEDICAID  
MAINTENANCE OF EFFORT .—Section 2105(d)(1) of the Social 
Security Act (42 U.S.C. 1397ee(d)(1)) is amended by adding before the period ‘‘, except as required under section 1902(e)(14)’’. (c) N

OENROLLMENT BONUS PAYMENTS FOR CHILDREN  
ENROLLED AFTER FISCAL YEAR 2013.—Section 2105(a)(3)(F)(iii) of 
the Social Security Act (42 U.S.C. 1397ee(a)(3)(F)(iii)) is amended by inserting ‘‘or any children enrolled on or after October 1, 2013’’ before the period. 
(d) I
NCOME ELIGIBILITY DETERMINED USING MODIFIED GROSS  
INCOME .— 
(1) S TATE PLAN REQUIREMENT .—Section 2102(b)(1)(B) of the 
Social Security Act (42 U.S.C. 1397bb(b)(1)(B)) is amended—

(A) in clause (iii), by striking ‘‘and’’ after the semicolon; (B) in clause (iv), by striking the period and inserting 
‘‘; and’’; and 
(C) by adding at the end the following: 
‘‘(v) shall, beginning January 1, 2014, use modified

gross income and household income (as defined in sec-tion 36B(d)(2) of the Internal Revenue Code of 1986) to determine eligibility for child health assistance under the State child health plan or under any waiver of such plan and for any other purpose applicable under the plan or waiver for which a determination of income is required, including with respect to the imposition of premiums and cost-sharing, consistent with section 1902(e)(14).’’. 
(2) C

(2) C
ONFORMING AMENDMENT .—Section 2107(e)(1) of the 
Social Security Act (42 U.S.C. 1397gg(e)(1)) is amended— 
(A) by redesignating subparagraphs (E) through (L) 
as subparagraphs (F) through (M), respectively; and 
(B) by inserting after subparagraph (D), the following: ‘‘(E) Section 1902(e)(14) (relating to income determined 
using modified gross income and household income).’’. 
(e) A
PPLICATION OF STREAMLINED ENROLLMENT SYSTEM .—Sec-

tion 2107(e)(1) of the Social Security Act (42 U.S.C. 1397gg(e)(1)), as amended by subsection (d)(2), is amended by adding at the end the following: 
‘‘(N) Section 1943(b) (relating to coordination with 
State Exchanges and the State Medicaid agency).’’. 
(f) CHIP E
LIGIBILITY FOR CHILDREN INELIGIBLE FOR MEDICAID  
AS A RESULT OF ELIMINATION OF DISREGARDS .—Notwithstanding

any other provision of law, a State shall treat any child who is determined to be ineligible for medical assistance under the State Medicaid plan or under a waiver of the plan as a result of the elimination of the application of an income disregard based on expense or type of income, as required under section 1902(e)(14) of the Social Security Act (as added by this Act), as a targeted low-income child under section 2110(b) (unless the child is excluded under paragraph (2) of that section) and

excluded under paragraph (2) of that section) and shall provide child health assistance to the child under the State child health plan (whether 42 USC 1397jj

note. Effective date. 
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124 STAT. 288 PUBLIC LAW 111–148—MAR. 23, 2010 
implemented under title XIX or XXI, or both, of the Social Security 
Act). 
SEC. 2102. TECHNICAL CORRECTIONS. 
(a) CHIPRA.—Effective as if included in the enactment of the 
Children’s Health Insurance Program Reauthorization Act of 2009 (Public Law 111–3) (in this section referred to as ‘‘CHIPRA’’): 
(1) Section 2104(m) of the Social Security Act, as added 
by section 102 of CHIPRA, is amended— 
(A) by redesignating paragraph (7) as paragraph (8);

and 
(B) by inserting after paragraph (6), the following: 
‘‘(7) A
DJUSTMENT OF FISCAL YEAR 2010 ALLOTMENTS TO  
ACCOUNT FOR CHANGES IN PROJECTED SPENDING FOR CERTAIN  
PREVIOUSLY APPROVED EXPANSION PROGRAMS .—For purposes of

recalculating the fiscal year 2010 allotment, in the case of one of the 50 States or the District of Columbia that has an approved State plan amendment effective January 1, 2006, to provide child health assistance through the provision of benefits under the State plan under title XIX for children from birth through age 5 whose family income does not exceed 200 percent of the poverty line, the Secretary shall increase the allotment by an amount that would be equal to the Federal share of

that would be equal to the Federal share of expenditures that would have been claimed at the enhanced FMAP rate rather than the Federal medical assist-ance percentage matching rate for such population.’’.

(2) Section 605 of CHIPRA is amended by striking ‘‘legal 
residents’’ and insert ‘‘lawfully residing in the United States’’. 
(3) Subclauses (I) and (II) of paragraph (3)(C)(i) of section 
2105(a) of the Social Security Act (42 U.S.C. 1397ee(a)(3)(ii)), as added by section 104 of CHIPRA, are each amended by striking ‘‘, respectively’’. 
(4) Section 2105(a)(3)(E)(ii) of the Social Security Act (42

U.S.C. 1397ee(a)(3)(E)(ii)), as added by section 104 of CHIPRA, is amended by striking subclause (IV). 
(5) Section 2105(c)(9)(B) of the Social Security Act (42 
U.S.C. 1397e(c)(9)(B)), as added by section 211(c)(1) of CHIPRA, is amended by striking ‘‘section 1903(a)(3)(F)’’ and inserting 
‘‘section 1903(a)(3)(G)’’. 
(6) Section 2109(b)(2)(B) of the Social Security Act (42

U.S.C. 1397ii(b)(2)(B)), as added by section 602 of CHIPRA, is amended by striking ‘‘the child population growth factor under section 2104(m)(5)(B)’’ and inserting ‘‘a high-performing State under section 2111(b)(3)(B)’’. 
(7) Section 2110(c)(9)(B)(v) of the Social Security Act (42

U.S.C. 1397jj(c)(9)(B)(v)), as added by section 505(b) of CHIPRA, is amended by striking ‘‘school or school system’’ and inserting ‘‘local educational agency (as defined under section 9101 of the Elementary and Secondary Education Act of 1965’’. 
(8) Section 211(a)(1)(B) of CHIPRA is amended— 
(A) by striking ‘‘is amended’’ and all that follows 
through ‘‘adding’’ and inserting ‘‘is amended by adding’’; and 
(B) by redesignating the new subparagraph to be added

by such section to section 1903(a)(3) of the Social Security Act as a new subparagraph (H). 
42 USC 1396b. 42 USC 1397ee. 42 USC 1396 
note. 42 USC 1397dd. Effective date. 
42 USC 1396b note. 
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124 STAT. 289 PUBLIC LAW 111–148—MAR. 23, 2010 
(b) ARRA.—Effective as if included in the enactment of section 
5006(a) of division B of the American Recovery and Reinvestment Act of 2009 (Public Law 111–5), the second sentence of section 1916A(a)(1) of the Social Security Act (42 U.S.C. 1396o–1(a)(1)) is amended by striking ‘‘or (i)’’ and inserting ‘‘, (i), or (j)’’. 
Subtitle C—Medicaid and CHIP 
Enrollment Simplification 
SEC. 2201. ENROLLMENT SIMPLIFICATION AND COORDINATION WITH

STATE HEALTH INSURANCE EXCHANGES. 
Title XIX of the Social Security Act (42 U.S.C. 1397aa et seq.) 
is amended by adding at the end the following: 
‘‘SEC. 1943. ENROLLMENT SIMPLIFICATION AND COORDINATION WITH 
‘‘(a) C ONDITION FOR PARTICIPATION IN MEDICAID .—As a condi-

tion of the State plan under this title and receipt of any Federal financial assistance under section 1903(a) for calendar quarters beginning after January 1, 2014, a State shall ensure that the requirements of subsection (b) is met. 
‘‘(b) E
NROLLMENT SIMPLIFICATION AND COORDINATION WITH 
STATE HEALTH INSURANCE EXCHANGES AND CHIP.— 
‘‘(1) I N GENERAL .—A State shall establish procedures for— 
‘‘(A) enabling individuals, through an Internet website

that meets the requirements of paragraph (4), to apply for medical assistance under the State plan or under a waiver of the plan, to be enrolled in the State plan or waiver, to renew their enrollment in the plan or waiver, and to consent to enrollment or reenrollment in the State plan through electronic signature; 
‘‘(B) enrolling, without any further determination by

the State and through such website, individuals who are identified by an Exchange established by the State under section 1311 of the Patient Protection and Affordable Care Act as being eligible for— 
‘‘(i) medical assistance under the State plan or 
under a waiver of the plan; or 
‘‘(ii) child health assistance under the State child 
health plan under title XXI; ‘‘(C) ensuring that individuals who apply for but are

determined to be ineligible for medical assistance under the State plan or a waiver or ineligible for child health assistance under the State child health plan under title XXI, are screened for eligibility for enrollment in qualified health plans offered through such an Exchange and, if applicable, premium assistance for the purchase of a quali-fied health plan under section 36B of the Internal Revenue Code of 1986 (and, if applicable, advance payment of such assistance under section 1412 of

payment of such assistance under section 1412 of the Patient Protection and Affordable Care Act), and, if eligible, enrolled in such a plan without having to submit an additional or separate application, and that such individuals receive information regarding reduced cost-sharing for eligible individuals under section 1402 of the Patient Protection and Affordable Web site. Procedures. Effective date. 42 USC 1396w–3. 42 USC 13960–1

note. 
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124 STAT. 290 PUBLIC LAW 111–148—MAR. 23, 2010 
Care Act, and any other assistance or subsidies available 
for coverage obtained through the Exchange; 
‘‘(D) ensuring that the State agency responsible for

administering the State plan under this title (in this section referred to as the ‘State Medicaid agency’), the State agency responsible for administering the State child health plan under title XXI (in this section referred to as the ‘State CHIP agency’) and an Exchange established by the State under section 1311 of the Patient Protection and Affordable Care Act utilize a secure electronic interface sufficient to allow for a determination of an individual’s eligibility for such medical

of an individual’s eligibility for such medical assistance, child health assistance, or pre-mium assistance, and enrollment in the State plan under this title, title XXI, or a qualified health plan, as appro-priate;

the State plan or under a waiver of the plan and who are also enrolled in a qualified health plan offered through such an Exchange, and for individuals who are enrolled in the State child health plan under title XXI and who are also enrolled in a qualified health plan, the provision of medical assistance or child health assistance to such individuals with the coverage provided under the qualified health plan in which they are enrolled, including services described in section 1905(a)(4)(B)

services described in section 1905(a)(4)(B) (relating to early and periodic screening, diagnostic, and treatment services defined in section 1905(r)) and provided in accordance with the requirements of section 1902(a)(43); and

‘‘(F) conducting outreach to and enrolling vulnerable 
and underserved populations eligible for medical assistance under this title XIX or for child health assistance under title XXI, including children, unaccompanied homeless youth, children and youth with special health care needs, pregnant women, racial and ethnic minorities, rural popu-lations, victims of abuse or trauma, individuals with mental health or substance-related disorders, and individuals with HIV/AIDS. ‘‘(2) A

GREEMENTS WITH STATE HEALTH INSURANCE  
EXCHANGES .—The State Medicaid agency and the State CHIP

agency may enter into an agreement with an Exchange estab-lished by the State under section 1311 of the Patient Protection and Affordable Care Act under which the State Medicaid agency or State CHIP agency may determine whether a State resident is eligible for premium assistance for the purchase of a qualified health plan under section 36B of the Internal Revenue Code of 1986 (and, if applicable, advance payment of such assistance under section 1412 of the Patient Protection and Affordable Care

of the Patient Protection and Affordable Care Act), so long as the agreement meets such conditions and requirements as the Secretary of the Treasury may pre-scribe to reduce administrative costs and the likelihood of eligi-bility errors and disruptions in coverage.

‘‘(3) S
TREAMLINED ENROLLMENT SYSTEM .—The State Med-
icaid agency and State CHIP agency shall participate in and comply with the requirements for the system established under section 1413 of the Patient Protection and Affordable Care Act (relating to streamlined procedures for enrollment through an Exchange, Medicaid, and CHIP).

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124 STAT. 291 PUBLIC LAW 111–148—MAR. 23, 2010 
‘‘(4) E NROLLMENT WEBSITE REQUIREMENTS .—The proce-

dures established by State under paragraph (1) shall include establishing and having in operation, not later than January 1, 2014, an Internet website that is linked to any website of an Exchange established by the State under section 1311 of the Patient Protection and Affordable Care Act and to the State CHIP agency (if different from the State Medicaid agency) and allows an individual who is eligible for medical assistance under the State plan or under a waiver of the plan and who is eligible

or under a waiver of the plan and who is eligible to receive premium credit assistance for the purchase of a qualified health plan under section 36B of the Internal Revenue Code of 1986 to compare the benefits, premiums, and cost-sharing applicable to the individual under the State plan or waiver with the benefits, premiums, and cost-sharing available to the individual under a qualified health plan offered through such an Exchange, including, in the case of a child, the coverage that would be

the case of a child, the coverage that would be provided for the child through the State plan or waiver with the coverage that would be provided to the child through enrollment in family coverage under that plan and as supplemental coverage by the State under the State plan or waiver.

‘‘(5) C
ONTINUED NEED FOR ASSESSMENT FOR HOME AND  
COMMUNITY -BASED SERVICES .—Nothing in paragraph (1) shall 
limit or modify the requirement that the State assess an indi-vidual for purposes of providing home and community-based services under the State plan or under any waiver of such plan for individuals described in subsection (a)(10)(A)(ii)(VI).’’. 
SEC. 2202. PERMITTING HOSPITALS TO MAKE PRESUMPTIVE ELIGI-
BILITY DETERMINATIONS FOR ALL MEDICAID ELIGIBLE POPULATIONS.

(a) I NGENERAL .—Section 1902(a)(47) of the Social Security 
Act (42 U.S.C. 1396a(a)(47)) is amended— 
(1) by striking ‘‘at the option of the State, provide’’ and 
inserting ‘‘provide— 
‘‘(A) at the option of the State,’’; 
(2) by inserting ‘‘and’’ after the semicolon; and (3) by adding at the end the following: 
‘‘(B) that any hospital that is a participating provider

under the State plan may elect to be a qualified entity for purposes of determining, on the basis of preliminary information, whether any individual is eligible for medical assistance under the State plan or under a waiver of the plan for purposes of providing the individual with medical assistance during a presumptive eligibility period, in the same manner, and subject to the same requirements, as apply to the State options with respect to populations described in section 1920, 1920A, or 1920B

described in section 1920, 1920A, or 1920B (but without regard to whether the State has elected to provide for a presumptive eligibility period under any such sections), subject to such guidance as the Secretary shall establish;’’.

(b) C
ONFORMING AMENDMENT .—Section 1903(u)(1)(D)(v) of such 
Act (42 U.S.C. 1396b(u)(1)(D)v)) is amended— 
(1) by striking ‘‘or for’’ and inserting ‘‘for’’; and (2) by inserting before the period at the end the following: 
‘‘, or for medical assistance provided to an individual during a presumptive eligibility period resulting from a determination Guidelines. Deadline.

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124 STAT. 292 PUBLIC LAW 111–148—MAR. 23, 2010 
of presumptive eligibility made by a hospital that elects under 
section 1902(a)(47)(B) to be a qualified entity for such purpose’’. (c) E
take effect on January 1, 2014, and apply to services furnished on or after that date. 
Subtitle D—Improvements to Medicaid 
Services 
SEC. 2301. COVERAGE FOR FREESTANDING BIRTH CENTER SERVICES. 
(a) I NGENERAL .—Section 1905 of the Social Security Act (42

U.S.C. 1396d), is amended— 
(A) in paragraph (27), by striking ‘‘and’’ at the end; (B) by redesignating paragraph (28) as paragraph (29); 
and 
(C) by inserting after paragraph (27) the following 
new paragraph: ‘‘(28) freestanding birth center services (as defined in sub-
section (l)(3)(A)) and other ambulatory services that are offered by a freestanding birth center (as defined in subsection (l)(3)(B)) and that are otherwise included in the plan; and’’; and

(2) in subsection (l), by adding at the end the following 
new paragraph: ‘‘(3)(A) The term ‘freestanding birth center services’ means serv-
ices furnished to an individual at a freestanding birth center (as defined in subparagraph (B)) at such center. 
‘‘(B) The term ‘freestanding birth center’ means a health 
facility— 
‘‘(i) that is not a hospital; ‘‘(ii) where childbirth is planned to occur away from the 
pregnant woman’s residence;

pregnant woman’s residence; 
‘‘(iii) that is licensed or otherwise approved by the State 
to provide prenatal labor and delivery or postpartum care and other ambulatory services that are included in the plan; and 
‘‘(iv) that complies with such other requirements relating 
to the health and safety of individuals furnished services by the facility as the State shall establish. ‘‘(C) A State shall provide separate payments to providers

administering prenatal labor and delivery or postpartum care in a freestanding birth center (as defined in subparagraph (B)), such as nurse midwives and other providers of services such as birth attendants recognized under State law, as determined appropriate by the Secretary. For purposes of the preceding sentence, the term ‘birth attendant’ means an individual who is recognized or reg-istered by the State involved to provide health care at childbirth and who provides such care within the

childbirth and who provides such care within the scope of practice under which the individual is legally authorized to perform such care under State law (or the State regulatory mechanism provided by State law), regardless of whether the individual is under the super-vision of, or associated with, a physician or other health care provider. Nothing in this subparagraph shall be construed as changing State law requirements applicable to a birth attendant.’’.

(b) C
ONFORMING AMENDMENT .—Section 1902(a)(10)(A) of the 
Social Security Act (42 U.S.C. 1396a(a)(10)(A)), is amended in the Payments. Definitions. Applicability. 
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124 STAT. 293 PUBLIC LAW 111–148—MAR. 23, 2010 
matter preceding clause (i) by striking ‘‘and (21)’’ and inserting 
‘‘, (21), and (28)’’. 
(c) E FFECTIVE DATE.— 
(1) I N GENERAL .—Except as provided in paragraph (2), the 
amendments made by this section shall take effect on the date of the enactment of this Act and shall apply to services furnished on or after such date. 
(2) E
XCEPTION IF STATE LEGISLATION REQUIRED .—In the

case of a State plan for medical assistance under title XIX of the Social Security Act which the Secretary of Health and Human Services determines requires State legislation (other than legislation appropriating funds) in order for the plan to meet the additional requirement imposed by the amendments made by this section, the State plan shall not be regarded as failing to comply with the requirements of such title solely on the basis of its failure to meet this additional requirement before the

to meet this additional requirement before the first day of the first calendar quarter beginning after the close of the first regular session of the State legislature that begins after the date of the enactment of this Act. For purposes of the previous sentence, in the case of a State that has a 2-year legislative session, each year of such session shall be deemed to be a separate regular session of the State legislature.

SEC. 2302. CONCURRENT CARE FOR CHILDREN. 
(a) I NGENERAL .—Section 1905(o)(1) of the Social Security Act 
(42 U.S.C. 1396d(o)(1)) is amended— 
(1) in subparagraph (A), by striking ‘‘subparagraph (B)’’ 
and inserting ‘‘subparagraphs (B) and (C)’’; and 
(2) by adding at the end the following new subparagraph: 
‘‘(C) A voluntary election to have payment made for hospice

care for a child (as defined by the State) shall not constitute a waiver of any rights of the child to be provided with, or to have payment made under this title for, services that are related to the treatment of the child’s condition for which a diagnosis of terminal illness has been made.’’. 
(b) A
PPLICATION TO CHIP.—Section 2110(a)(23) of the Social

Security Act (42 U.S.C. 1397jj(a)(23)) is amended by inserting ‘‘(concurrent, in the case of an individual who is a child, with care related to the treatment of the child’s condition with respect to which a diagnosis of terminal illness has been made’’ after ‘‘hospice care’’. 
SEC. 2303. STATE ELIGIBILITY OPTION FOR FAMILY PLANNING SERV-
ICES. 
(a) C OVERAGE AS OPTIONAL CATEGORICALLY NEEDY GROUP .— 
(1) I N GENERAL .—Section 1902(a)(10)(A)(ii) of the Social

Security Act (42 U.S.C. 1396a(a)(10)(A)(ii)), as amended by section 2001(e), is amended— 
(A) in subclause (XIX), by striking ‘‘or’’ at the end; (B) in subclause (XX), by adding ‘‘or’’ at the end; and (C) by adding at the end the following new subclause: 
‘‘(XXI) who are described in subsection (ii) 
(relating to individuals who meet certain income standards);’’. 
(2) G
ROUP DESCRIBED .—Section 1902 of such Act (42 U.S.C.

1396a), as amended by section 2001(d), is amended by adding at the end the following new subsection: Determination. Applicability. 42 USC 1396a 
note. 
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124 STAT. 294 PUBLIC LAW 111–148—MAR. 23, 2010 
‘‘(ii)(1) Individuals described in this subsection are individuals— 
‘‘(A) whose income does not exceed an income eligibility 
level established by the State that does not exceed the highest income eligibility level established under the State plan under this title (or under its State child health plan under title XXI) for pregnant women; and 
‘‘(B) who are not pregnant. 
‘‘(2) At the option of a State, individuals described in this

subsection may include individuals who, had individuals 
applied on or before January 1, 2007, would have been made eligible pursuant to the standards and processes imposed by that State for benefits described in clause (XV) of the matter following subparagraph (G) of section subsection (a)(10) pursu-ant to a waiver granted under section 1115. 
‘‘(3) At the option of a State, for purposes of subsection

(a)(17)(B), in determining eligibility for services under this sub-section, the State may consider only the income of the applicant or recipient.’’. 
(3) L
IMITATION ON BENEFITS .—Section 1902(a)(10) of the 
Social Security Act (42 U.S.C. 1396a(a)(10)), as amended by section 2001(a)(5)(A), is amended in the matter following subparagraph (G)— 
(A) by striking ‘‘and (XV)’’ and inserting ‘‘(XV)’’; and (B) by inserting ‘‘, and (XVI) the medical assistance

made available to an individual described in subsection (ii) shall be limited to family planning services and supplies described in section 1905(a)(4)(C) including medical diag-nosis and treatment services that are provided pursuant to a family planning service in a family planning setting’’ before the semicolon. (4) C
(A) Section 1905(a) of the Social Security Act (42 U.S.C.

1396d(a)), as amended by section 2001(e)(2)(A), is amended in the matter preceding paragraph (1)— 
(i) in clause (xiv), by striking ‘‘or’’ at the end; (ii) in clause (xv), by adding ‘‘or’’ at the end; and (iii) by inserting after clause (xv) the following: ‘‘(xvi) individuals described in section 1902(ii),’’. 
(B) Section 1903(f)(4) of such Act (42 U.S.C. 
1396b(f)(4)), as amended by section 2001(e)(2)(B), is amended by inserting ‘‘1902(a)(10)(A)(ii)(XXI),’’ after ‘‘1902(a)(10)(A)(ii)(XX),’’.

(b) P
RESUMPTIVE ELIGIBILITY .— 
(1) I N GENERAL .—Title XIX of the Social Security Act (42 
U.S.C. 1396 et seq.) is amended by inserting after section 1920B the following: 
‘‘
PRESUMPTIVE ELIGIBILITY FOR FAMILY PLANNING SERVICES  
‘‘SEC. 1920C. (a) S TATE OPTION .—State plan approved under

section 1902 may provide for making medical assistance available to an individual described in section 1902(ii) (relating to individuals who meet certain income eligibility standard) during a presumptive eligibility period. In the case of an individual described in section 1902(ii), such medical assistance shall be limited to family planning services and supplies described in 1905(a)(4)(C) and, at the State’s option, medical diagnosis and treatment services that are provided 42 USC 1396r–1c.

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124 STAT. 295 PUBLIC LAW 111–148—MAR. 23, 2010 
in conjunction with a family planning service in a family planning 
setting. 
‘‘(b) D EFINITIONS .—For purposes of this section: 
‘‘(1) P RESUMPTIVE ELIGIBILITY PERIOD .—The term ‘presump-
tive eligibility period’ means, with respect to an individual described in subsection (a), the period that— 
‘‘(A) begins with the date on which a qualified entity

determines, on the basis of preliminary information, that the individual is described in section 1902(ii); and 
‘‘(B) ends with (and includes) the earlier of— 
‘‘(i) the day on which a determination is made 
with respect to the eligibility of such individual for services under the State plan; or 
‘‘(ii) in the case of such an individual who does

not file an application by the last day of the month following the month during which the entity makes the determination referred to in subparagraph (A), such last day. 
‘‘(2) Q
UALIFIED ENTITY .— 
‘‘(A) I N GENERAL .—Subject to subparagraph (B), the 
term ‘qualified entity’ means any entity that— 
‘‘(i) is eligible for payments under a State plan 
approved under this title; and 
‘‘(ii) is determined by the State agency to be

‘‘(ii) is determined by the State agency to be 
capable of making determinations of the type described in paragraph (1)(A). ‘‘(B) R
ULE OF CONSTRUCTION .—Nothing in this para-
graph shall be construed as preventing a State from lim-iting the classes of entities that may become qualified entities in order to prevent fraud and abuse. 
‘‘(c) A
‘‘(1) I N GENERAL .—The State agency shall provide qualified 
entities with— 
‘‘(A) such forms as are necessary for an application

to be made by an individual described in subsection (a) for medical assistance under the State plan; and 
‘‘(B) information on how to assist such individuals in 
completing and filing such forms. ‘‘(2) N
OTIFICATION REQUIREMENTS .—A qualified entity that 
determines under subsection (b)(1)(A) that an individual described in subsection (a) is presumptively eligible for medical assistance under a State plan shall— 
‘‘(A) notify the State agency of the determination within

5 working days after the date on which determination is made; and 
‘‘(B) inform such individual at the time the determina-
tion is made that an application for medical assistance is required to be made by not later than the last day of the month following the month during which the deter-mination is made. ‘‘(3) A
PPLICATION FOR MEDICAL ASSISTANCE .—In the case

PPLICATION FOR MEDICAL ASSISTANCE .—In the case 
of an individual described in subsection (a) who is determined by a qualified entity to be presumptively eligible for medical assistance under a State plan, the individual shall apply for medical assistance by not later than the last day of the month following the month during which the determination is made. Deadline. Deadline.

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124 STAT. 296 PUBLIC LAW 111–148—MAR. 23, 2010 
‘‘(d) P AYMENT .—Notwithstanding any other provision of law, 
medical assistance that— 
‘‘(1) is furnished to an individual described in subsection 
(a)— 
‘‘(A) during a presumptive eligibility period; and ‘‘(B) by a entity that is eligible for payments under 
the State plan; and ‘‘(2) is included in the care and services covered by the 
State plan,

State plan, 
shall be treated as medical assistance provided by such plan for purposes of clause (4) of the first sentence of section 1905(b).’’. 
(2) C
(A) Section 1902(a)(47) of the Social Security Act (42 
U.S.C. 1396a(a)(47)), as amended by section 2202(a), is amended— 
(i) in subparagraph (A), by inserting before the

(i) in subparagraph (A), by inserting before the 
semicolon at the end the following: ‘‘and provide for making medical assistance available to individuals described in subsection (a) of section 1920C during a presumptive eligibility period in accordance with such section’’; and 
(ii) in subparagraph (B), by striking ‘‘or 1920B’’ 
and inserting ‘‘1920B, or 1920C’’. (B) Section 1903(u)(1)(D)(v) of such Act (42 U.S.C.

1396b(u)(1)(D)(v)), as amended by section 2202(b), is amended by inserting ‘‘or for medical assistance provided to an individual described in subsection (a) of section 1920C during a presumptive eligibility period under such section,’’ after ‘‘1920B during a presumptive eligibility period under such section,’’. 
(c) C
LARIFICATION OF COVERAGE OF FAMILY PLANNING SERVICES  
AND SUPPLIES .—Section 1937(b) of the Social Security Act (42 U.S.C.

1396u–7(b)), as amended by section 2001(c), is amended by adding at the end the following: 
‘‘(7) C
OVERAGE OF FAMILY PLANNING SERVICES AND SUP -
PLIES .—Notwithstanding the previous provisions of this section,

a State may not provide for medical assistance through enroll-ment of an individual with benchmark coverage or benchmark- equivalent coverage under this section unless such coverage includes for any individual described in section 1905(a)(4)(C), medical assistance for family planning services and supplies in accordance with such section.’’. (d) E
FFECTIVE DATE.—The amendments made by this section

take effect on the date of the enactment of this Act and shall apply to items and services furnished on or after such date. 
SEC. 2304. CLARIFICATION OF DEFINITION OF MEDICAL ASSISTANCE. 
Section 1905(a) of the Social Security Act (42 U.S.C. 1396d(a)) 
is amended by inserting ‘‘or the care and services themselves, or both’’ before ‘‘(if provided in or after’’. Applicability. 
42 USC 1396a note.

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124 STAT. 297 PUBLIC LAW 111–148—MAR. 23, 2010 
Subtitle E—New Options for States to 
Provide Long-Term Services and Supports 
SEC. 2401. COMMUNITY FIRST CHOICE OPTION. 
Section 1915 of the Social Security Act (42 U.S.C. 1396n) is 
amended by adding at the end the following: 
‘‘(k) S TATE PLAN OPTION TOPROVIDE HOME AND COMMUNITY - 
BASED ATTENDANT SERVICES AND SUPPORTS .— 
‘‘(1) I N GENERAL .—Subject to the succeeding provisions of

this subsection, beginning October 1, 2010, a State may provide through a State plan amendment for the provision of medical assistance for home and community-based attendant services and supports for individuals who are eligible for medical assist-ance under the State plan whose income does not exceed 150 percent of the poverty line (as defined in section 2110(c)(5)) or, if greater, the income level applicable for an individual who has been determined to require an institutional level of care

to require an institutional level of care to be eligible for nursing facility services under the State plan and with respect to whom there has been a determination that, but for the provision of such services, the individuals would require the level of care provided in a hospital, a nursing facility, an intermediate care facility for the mentally retarded, or an institution for mental diseases, the cost of which could be reimbursed under the State plan, but only if the individual chooses to

State plan, but only if the individual chooses to receive such home and community-based attendant services and supports, and only if the State meets the following requirements:

‘‘(A) A
VAILABILITY .—The State shall make available 
home and community-based attendant services and sup-ports to eligible individuals, as needed, to assist in accom-plishing activities of daily living, instrumental activities of daily living, and health-related tasks through hands- on assistance, supervision, or cueing— 
‘‘(i) under a person-centered plan of services and

supports that is based on an assessment of functional need and that is agreed to in writing by the individual or, as appropriate, the individual’s representative; 
‘‘(ii) in a home or community setting, which does 
not include a nursing facility, institution for mental diseases, or an intermediate care facility for the men-tally retarded; 
‘‘(iii) under an agency-provider model or other 
model (as defined in paragraph (6)(C )); and 
‘‘(iv) the furnishing of which—

‘‘(iv) the furnishing of which— 
‘‘(I) is selected, managed, and dismissed by 
the individual, or, as appropriate, with assistance from the individual’s representative; 
‘‘(II) is controlled, to the maximum extent pos-
sible, by the individual or where appropriate, the individual’s representative, regardless of who may act as the employer of record; and 
‘‘(III) provided by an individual who is quali-
fied to provide such services, including family members (as defined by the Secretary).

‘‘(B) I
NCLUDED SERVICES AND SUPPORTS .—In addition 
to assistance in accomplishing activities of daily living, Contracts. Effective date. 
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124 STAT. 298 PUBLIC LAW 111–148—MAR. 23, 2010 
instrumental activities of daily living, and health related 
tasks, the home and community-based attendant services and supports made available include— 
‘‘(i) the acquisition, maintenance, and enhance-
ment of skills necessary for the individual to accom-plish activities of daily living, instrumental activities of daily living, and health related tasks; 
‘‘(ii) back-up systems or mechanisms (such as the

use of beepers or other electronic devices) to ensure continuity of services and supports; and 
‘‘(iii) voluntary training on how to select, manage, 
and dismiss attendants. ‘‘(C) E
XCLUDED SERVICES AND SUPPORTS .—Subject to 
subparagraph (D), the home and community-based attend-ant services and supports made available do not include— 
‘‘(i) room and board costs for the individual; ‘‘(ii) special education and related services provided

under the Individuals with Disabilities Education Act and vocational rehabilitation services provided under the Rehabilitation Act of 1973; 
‘‘(iii) assistive technology devices and assistive 
technology services other than those under (1)(B)(ii); 
‘‘(iv) medical supplies and equipment; or ‘‘(v) home modifications. 
‘‘(D) P
ERMISSIBLE SERVICES AND SUPPORTS .—The home 
and community-based attendant services and supports may include— 
‘‘(i) expenditures for transition costs such as rent

and utility deposits, first month’s rent and utilities, bedding, basic kitchen supplies, and other necessities required for an individual to make the transition from a nursing facility, institution for mental diseases, or intermediate care facility for the mentally retarded to a community-based home setting where the indi-vidual resides; and 
‘‘(ii) expenditures relating to a need identified in

an individual’s person-centered plan of services that increase independence or substitute for human assist-ance, to the extent that expenditures would otherwise be made for the human assistance. 
‘‘(2) I
NCREASED FEDERAL FINANCIAL PARTICIPATION .—For

purposes of payments to a State under section 1903(a)(1), with respect to amounts expended by the State to provide medical assistance under the State plan for home and community- based attendant services and supports to eligible individuals in accordance with this subsection during a fiscal year quarter occurring during the period described in paragraph (1), the Federal medical assistance percentage applicable to the State (as determined under section 1905(b)) shall be increased by 6 percentage

‘‘(3) S
TATE REQUIREMENTS .—In order for a State plan 
amendment to be approved under this subsection, the State shall— 
‘‘(A) develop and implement such amendment in 
collaboration with a Development and Implementation Council established by the State that includes a majority of members with disabilities, elderly individuals, and their Establishment.

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124 STAT. 299 PUBLIC LAW 111–148—MAR. 23, 2010 
representatives and consults and collaborates with such 
individuals; 
‘‘(B) provide consumer controlled home and community-

based attendant services and supports to individuals on a statewide basis, in a manner that provides such services and supports in the most integrated setting appropriate to the individual’s needs, and without regard to the individ-ual’s age, type or nature of disability, severity of disability, or the form of home and community-based attendant serv-ices and supports that the individual requires in order to lead an independent life; 
‘‘(C) with respect to expenditures during the first full

fiscal year in which the State plan amendment is imple-mented, maintain or exceed the level of State expenditures for medical assistance that is provided under section 1905(a), section 1915, section 1115, or otherwise to individ-uals with disabilities or elderly individuals attributable to the preceding fiscal year; 
‘‘(D) establish and maintain a comprehensive, contin-
uous quality assurance system with respect to community- based attendant services and supports that—

‘‘(i) includes standards for agency-based and other 
delivery models with respect to training, appeals for denials and reconsideration procedures of an individual plan, and other factors as determined by the Secretary; 
‘‘(ii) incorporates feedback from consumers and 
their representatives, disability organizations, pro-viders, families of disabled or elderly individuals, mem-bers of the community, and others and maximizes con-sumer independence and consumer control;

‘‘(iii) monitors the health and well-being of each 
individual who receives home and community-based attendant services and supports, including a process for the mandatory reporting, investigation, and resolu-tion of allegations of neglect, abuse, or exploitation in connection with the provision of such services and supports; and 
‘‘(iv) provides information about the provisions of

the quality assurance required under clauses (i) through (iii) to each individual receiving such services; and ‘‘(E) collect and report information, as determined nec-

essary by the Secretary, for the purposes of approving the State plan amendment, providing Federal oversight, and conducting an evaluation under paragraph (5)(A), including data regarding how the State provides home and community-based attendant services and supports and other home and community-based services, the cost of such services and supports, and how the State provides individ-uals with disabilities who otherwise qualify for institutional care under the State plan or under a waiver the

care under the State plan or under a waiver the choice to instead receive home and community-based services in lieu of institutional care. ‘‘(4) C

OMPLIANCE WITH CERTAIN LAWS .—A State shall 
ensure that, regardless of whether the State uses an agency- provider model or other models to provide home and commu-nity-based attendant services and supports under a State plan Reports. Determination. 
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124 STAT. 300 PUBLIC LAW 111–148—MAR. 23, 2010 
amendment under this subsection, such services and supports 
are provided in accordance with the requirements of the Fair Labor Standards Act of 1938 and applicable Federal and State laws regarding— 
‘‘(A) withholding and payment of Federal and State 
income and payroll taxes; 
‘‘(B) the provision of unemployment and workers com-
pensation insurance; 
‘‘(C) maintenance of general liability insurance; and ‘‘(D) occupational health and safety.

‘‘(5) E
VALUATION , DATA COLLECTION , AND REPORT TO CON -
GRESS .— 
‘‘(A) E VALUATION .—The Secretary shall conduct an

evaluation of the provision of home and community-based attendant services and supports under this subsection in order to determine the effectiveness of the provision of such services and supports in allowing the individuals receiving such services and supports to lead an independent life to the maximum extent possible; the impact on the physical and emotional health of the individuals who receive such services; and an comparative analysis of the costs of services provided under the State plan

costs of services provided under the State plan amendment under this subsection and those provided under institu-tional care in a nursing facility, institution for mental diseases, or an intermediate care facility for the mentally retarded.

‘‘(B) D
ATA COLLECTION .—The State shall provide the 
Secretary with the following information regarding the provision of home and community-based attendant services and supports under this subsection for each fiscal year for which such services and supports are provided: 
‘‘(i) The number of individuals who are estimated 
to receive home and community-based attendant serv-ices and supports under this subsection during the fiscal year. 
‘‘(ii) The number of individuals that received such

services and supports during the preceding fiscal year. 
‘‘(iii) The specific number of individuals served by 
type of disability, age, gender, education level, and employment status. 
‘‘(iv) Whether the specific individuals have been 
previously served under any other home and commu-nity based services program under the State plan or under a waiver. ‘‘(C) R
EPORTS .—Not later than— 
‘‘(i) December 31, 2013, the Secretary shall submit

to Congress and make available to the public an interim report on the findings of the evaluation under subparagraph (A); and 
‘‘(ii) December 31, 2015, the Secretary shall submit 
to Congress and make available to the public a final report on the findings of the evaluation under subpara-graph (A). 
‘‘(6) D
‘‘(A) A CTIVITIES OF DAILY LIVING .—The term ‘activities

of daily living’ includes tasks such as eating, toileting, grooming, dressing, bathing, and transferring. 
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124 STAT. 301 PUBLIC LAW 111–148—MAR. 23, 2010 
‘‘(B) C ONSUMER CONTROLLED .—The term ‘consumer 
controlled’ means a method of selecting and providing serv-ices and supports that allow the individual, or where appro-priate, the individual’s representative, maximum control of the home and community-based attendant services and supports, regardless of who acts as the employer of record. 
‘‘(C) D
ELIVERY MODELS .— 
‘‘(i) A GENCY -PROVIDER MODEL .—The term ‘agency-

provider model’ means, with respect to the provision of home and community-based attendant services and supports for an individual, subject to paragraph (4), a method of providing consumer controlled services and supports under which entities contract for the provision of such services and supports. 
‘‘(ii) O
THER MODELS .—The term ‘other models’

‘‘(ii) O
THER MODELS .—The term ‘other models’ 
means, subject to paragraph (4), methods, other than an agency-provider model, for the provision of con-sumer controlled services and supports. Such models may include the provision of vouchers, direct cash pay-ments, or use of a fiscal agent to assist in obtaining services. ‘‘(D) H
EALTH -RELATED TASKS .—The term ‘health-

EALTH -RELATED TASKS .—The term ‘health- 
related tasks’ means specific tasks related to the needs of an individual, which can be delegated or assigned by licensed health-care professionals under State law to be performed by an attendant. 
‘‘(E) I
NDIVIDUAL ’S REPRESENTATIVE .—The term ‘individ-
ual’s representative’ means a parent, family member, guardian, advocate, or other authorized representative of an individual 
‘‘(F) I
NSTRUMENTAL ACTIVITIES OF DAILY LIVING .—The

NSTRUMENTAL ACTIVITIES OF DAILY LIVING .—The 
term ‘instrumental activities of daily living’ includes (but is not limited to) meal planning and preparation, managing finances, shopping for food, clothing, and other essential items, performing essential household chores, commu-nicating by phone or other media, and traveling around 
and participating in the community.’’. 
SEC. 2402. REMOVAL OF BARRIERS TO PROVIDING HOME AND COMMU-
NITY-BASED SERVICES.

NITY-BASED SERVICES. 
(a) O VERSIGHT AND ASSESSMENT OF THE ADMINISTRATION OF  
HOME AND COMMUNITY -BASED SERVICES .—The Secretary of Health 
and Human Services shall promulgate regulations to ensure that all States develop service systems that are designed to— 
(1) allocate resources for services in a manner that is

responsive to the changing needs and choices of beneficiaries receiving non-institutionally-based long-term services and sup-ports (including such services and supports that are provided under programs other the State Medicaid program), and that provides strategies for beneficiaries receiving such services to maximize their independence, including through the use of client-employed providers; 
(2) provide the support and coordination needed for a bene-

ficiary in need of such services (and their family caregivers or representative, if applicable) to design an individualized, self-directed, community-supported life; and Regulations. 42 USC 1396n 
note. 
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124 STAT. 302 PUBLIC LAW 111–148—MAR. 23, 2010 
(3) improve coordination among, and the regulation of, 
all providers of such services under federally and State-funded programs in order to— 
(A) achieve a more consistent administration of policies 
and procedures across programs in relation to the provision of such services; and 
(B) oversee and monitor all service system functions 
to assure— 
(i) coordination of, and effectiveness of, eligibility 
determinations and individual assessments;

determinations and individual assessments; 
(ii) development and service monitoring of a com-
plaint system, a management system, a system to qualify and monitor providers, and systems for role- setting and individual budget determinations; and 
(iii) an adequate number of qualified direct care 
workers to provide self-directed personal assistance services. 
(b) A
DDITIONAL STATE OPTIONS .—Section 1915(i) of the Social

Security Act (42 U.S.C. 1396n(i)) is amended by adding at the end the following new paragraphs: 
‘‘(6) S
TATE OPTION TO PROVIDE HOME AND COMMUNITY -BASED  
SERVICES TO INDIVIDUALS ELIGIBLE FOR SERVICES UNDER A  
WAIVER .— 
‘‘(A) I N GENERAL .—A State that provides home and

community-based services in accordance with this sub-section to individuals who satisfy the needs-based criteria for the receipt of such services established under paragraph (1)(A) may, in addition to continuing to provide such serv-ices to such individuals, elect to provide home and commu-nity-based services in accordance with the requirements of this paragraph to individuals who are eligible for home and community-based services under a waiver approved for the State under subsection (c), (d),

approved for the State under subsection (c), (d), or (e) or under section 1115 to provide such services, but only for those individuals whose income does not exceed 300 percent of the supplemental security income benefit rate established by section 1611(b)(1).

‘‘(B) A
PPLICATION OF SAME REQUIREMENTS FOR INDIVID -
UALS SATISFYING NEEDS -BASED CRITERIA .—Subject to 
subparagraph (C), a State shall provide home and commu-nity-based services to individuals under this paragraph in the same manner and subject to the same requirements as apply under the other paragraphs of this subsection to the provision of home and community-based services to individuals who satisfy the needs-based criteria estab-lished under paragraph (1)(A). 
‘‘(C) A

‘‘(C) A
UTHORITY TO OFFER DIFFERENT TYPE , AMOUNT , 
DURATION , OR SCOPE OF HOME AND COMMUNITY -BASED SERV -
ICES.—A State may offer home and community-based serv-

ices to individuals under this paragraph that differ in type, amount, duration, or scope from the home and community-based services offered for individuals who sat-isfy the needs-based criteria established under paragraph (1)(A), so long as such services are within the scope of services described in paragraph (4)(B) of subsection (c) for which the Secretary has the authority to approve a waiver and do not include room or board.

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124 STAT. 303 PUBLIC LAW 111–148—MAR. 23, 2010 
‘‘(7) S TATE OPTION TO OFFER HOME AND COMMUNITY -BASED  
SERVICES TO SPECIFIC , TARGETED POPULATIONS .— 
‘‘(A) I N GENERAL .—A State may elect in a State plan 
amendment under this subsection to target the provision of home and community-based services under this sub-section to specific populations and to differ the type, amount, duration, or scope of such services to such specific populations. 
‘‘(B) 5-
YEAR TERM .—

‘‘(B) 5-
YEAR TERM .— 
‘‘(i) I N GENERAL .—An election by a State under 
this paragraph shall be for a period of 5 years. 
‘‘(ii) P HASE -IN OF SERVICES AND ELIGIBILITY PER -
MITTED DURING INITIAL 5 -YEAR PERIOD .—A State

MITTED DURING INITIAL 5 -YEAR PERIOD .—A State 
making an election under this paragraph may, during the first 5-year period for which the election is made, phase-in the enrollment of eligible individuals, or the provision of services to such individuals, or both, so long as all eligible individuals in the State for such services are enrolled, and all such services are pro-vided, before the end of the initial 5-year period. ‘‘(C) R
ENEWAL .—An election by a State under this para-

graph may be renewed for additional 5-year terms if the Secretary determines, prior to beginning of each such renewal period, that the State has— 
‘‘(i) adhered to the requirements of this subsection 
and paragraph in providing services under such an election; and 
‘‘(ii) met the State’s objectives with respect to 
quality improvement and beneficiary outcomes.’’. 
(c) R
EMOVAL OF LIMITATION ON SCOPE OF SERVICES .—Para-

graph (1) of section 1915(i) of the Social Security Act (42 U.S.C. 1396n(i)), as amended by subsection (a), is amended by striking ‘‘or such other services requested by the State as the Secretary may approve’’. 
(d) O
PTIONAL ELIGIBILITY CATEGORY TOPROVIDE FULL MED-
ICAID BENEFITS TO INDIVIDUALS RECEIVING HOME AND COMMUNITY - 
BASED SERVICES UNDER A STATE PLANAMENDMENT .— 

Security Act (42 U.S.C. 1396a(a)(10)(A)(ii)), as amended by section 2304(a)(1), is amended— 
(A) in subclause (XX), by striking ‘‘or’’ at the end; (B) in subclause (XXI), by adding ‘‘or’’ at the end; 
and 
(C) by inserting after subclause (XXI), the following 
new subclause: 
‘‘(XXII) who are eligible for home and commu-

nity-based services under needs-based criteria established under paragraph (1)(A) of section 1915(i), or who are eligible for home and commu-nity-based services under paragraph (6) of such section, and who will receive home and community- based services pursuant to a State plan amend-ment under such subsection;’’. 
(2) C
(A) Section 1903(f)(4) of the Social Security Act (42

U.S.C. 1396b(f)(4)), as amended by section 2304(a)(4)(B), is amended in the matter preceding subparagraph (A), Time period. Determination. Deadline. 
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124 STAT. 304 PUBLIC LAW 111–148—MAR. 23, 2010 
by inserting ‘‘1902(a)(10)(A)(ii)(XXII),’’ after 
‘‘1902(a)(10)(A)(ii)(XXI),’’. 
(B) Section 1905(a) of the Social Security Act (42 U.S.C. 
1396d(a)), as so amended, is amended in the matter pre-ceding paragraph (1)— 
(i) in clause (xv), by striking ‘‘or’’ at the end; (ii) in clause (xvi), by adding ‘‘or’’ at the end; 
and 
(iii) by inserting after clause (xvi) the following 
new clause: 
‘‘(xvii) individuals who are eligible for home and commu-

nity-based services under needs-based criteria established under paragraph (1)(A) of section 1915(i), or who are eligible for home and community-based services under paragraph (6) of such section, and who will receive home and community- based services pursuant to a State plan amendment under such subsection,’’. (e) E
LIMINATION OF OPTION TOLIMIT NUMBER OF ELIGIBLE  
INDIVIDUALS OR LENGTH OF PERIOD FOR GRANDFATHERED INDIVID -
UALS IF ELIGIBILITY CRITERIA ISMODIFIED .—Paragraph (1) of sec-

tion 1915(i) of such Act (42 U.S.C. 1396n(i)) is amended— 
(1) by striking subparagraph (C) and inserting the fol-
lowing: 
‘‘(C) P ROJECTION OF NUMBER OF INDIVIDUALS TO BE  
PROVIDED HOME AND COMMUNITY -BASED SERVICES .—The 
State submits to the Secretary, in such form and manner, and upon such frequency as the Secretary shall specify, the projected number of individuals to be provided home and community-based services.’’; and (2) in subclause (II) of subparagraph (D)(ii), by striking

‘‘to be eligible for such services for a period of at least 12 months beginning on the date the individual first received medical assistance for such services’’ and inserting ‘‘to continue to be eligible for such services after the effective date of the modification and until such time as the individual no longer meets the standard for receipt of such services under such 
pre-modified criteria’’. (f) E
LIMINATION OF OPTION TOWAIVE STATEWIDENESS ; ADDI-

TION OF OPTION TOWAIVE COMPARABILITY .—Paragraph (3) of sec-
tion 1915(i) of such Act (42 U.S.C. 1396n(3)) is amended by striking ‘‘1902(a)(1) (relating to statewideness)’’ and inserting ‘‘1902(a)(10)(B) (relating to comparability)’’. 
(g) E
(b) through (f) take effect on the first day of the first fiscal year quarter that begins after the date of enactment of this Act. 
SEC. 2403. MONEY FOLLOWS THE PERSON REBALANCING DEMONSTRA-
TION.

TION. 
(a) E XTENSION OF DEMONSTRATION .— 
(1) I N GENERAL .—Section 6071(h) of the Deficit Reduction 
Act of 2005 (42 U.S.C. 1396a note) is amended— 
(A) in paragraph (1)(E), by striking ‘‘fiscal year 2011’’ 
and inserting ‘‘each of fiscal years 2011 through 2016’’; and 
(B) in paragraph (2), by striking ‘‘2011’’ and inserting 
‘‘2016’’. 42 USC 1396a 
note.

note. 
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124 STAT. 305 PUBLIC LAW 111–148—MAR. 23, 2010 
(2) E VALUATION .—Paragraphs (2) and (3) of section 6071(g) 
of such Act is amended are each amended by striking ‘‘2011’’ and inserting ‘‘2016’’. (b) R
EDUCTION OF INSTITUTIONAL RESIDENCY PERIOD .— 
(1) I N GENERAL .—Section 6071(b)(2) of the Deficit Reduction 
(A) in subparagraph (A)(i), by striking ‘‘, for a period

of not less than 6 months or for such longer minimum period, not to exceed 2 years, as may be specified by the State’’ and inserting ‘‘for a period of not less than 90 consecutive days’’; and 
(B) by adding at the end the following:

‘‘Any days that an individual resides in an institution on the basis of having been admitted solely for purposes of receiving short-term rehabilitative services for a period for which pay-ment for such services is limited under title XVIII shall not be taken into account for purposes of determining the 90- 
day period required under subparagraph (A)(i).’’. 
(2) E
FFECTIVE DATE .—The amendments made by this sub-

section take effect 30 days after the date of enactment of this Act. 
SEC. 2404. PROTECTION FOR RECIPIENTS OF HOME AND COMMUNITY- 
BASED SERVICES AGAINST SPOUSAL IMPOVERISHMENT. 
During the 5-year period that begins on January 1, 2014,

section 1924(h)(1)(A) of the Social Security Act (42 U.S.C. 1396r– 5(h)(1)(A)) shall be applied as though ‘‘is eligible for medical assist-ance for home and community-based services provided under sub-section (c), (d), or (i) of section 1915, under a waiver approved under section 1115, or who is eligible for such medical assistance by reason of being determined eligible under section 1902(a)(10)(C) or by reason of section 1902(f) or otherwise on the basis of a reduction of income based on costs

the basis of a reduction of income based on costs incurred for medical or other remedial care, or who is eligible for medical assistance for home and community-based attendant services and supports under section 1915(k)’’ were substituted in such section for ‘‘(at the option of the State) is described in section 1902(a)(10)(A)(ii)(VI)’’.

SEC. 2405. FUNDING TO EXPAND STATE AGING AND DISABILITY 
RESOURCE CENTERS. 
Out of any funds in the Treasury not otherwise appropriated, 
there is appropriated to the Secretary of Health and Human Serv-ices, acting through the Assistant Secretary for Aging, $10,000,000 for each of fiscal years 2010 through 2014, to carry out subsections (a)(20)(B)(iii) and (b)(8) of section 202 of the Older Americans Act of 1965 (42 U.S.C. 3012). 
SEC. 2406. SENSE OF THE SENATE REGARDING LONG-TERM CARE.

(1) Nearly 2 decades have passed since Congress seriously 
considered long-term care reform. The United States Bipartisan Commission on Comprehensive Health Care, also know as the ‘‘Pepper Commission’’, released its ‘‘Call for Action’’ blueprint for health reform in September 1990. In the 20 years since those recommendations were made, Congress has never acted on the report. 
(2) In 1999, under the United States Supreme Court’s

decision in Olmstead v. L.C., 527 U.S. 581 (1999), individuals Time period. Applicability. 42 USC 1396r–5 
note. 42 USC 1396a 
note. 
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124 STAT. 306 PUBLIC LAW 111–148—MAR. 23, 2010 
with disabilities have the right to choose to receive their long- 
term services and supports in the community, rather than in an institutional setting. 
(3) Despite the Pepper Commission and Olmstead decision, 
the long-term care provided to our Nation’s elderly and disabled has not improved. In fact, for many, it has gotten far worse. 
(4) In 2007, 69 percent of Medicaid long-term care spending

for elderly individuals and adults with physical disabilities paid for institutional services. Only 6 states spent 50 percent or more of their Medicaid long-term care dollars on home and community-based services for elderly individuals and adults with physical disabilities while 
1⁄2of the States spent less

than 25 percent. This disparity continues even though, on aver-age, it is estimated that Medicaid dollars can support nearly 3 elderly individuals and adults with physical disabilities in home and community-based services for every individual in a nursing home. Although every State has chosen to provide certain services under home and community-based waivers, these services are unevenly available within and across States, and reach a small percentage of eligible individuals. (b) S

(1) during the 111th session of Congress, Congress should 
address long-term services and supports in a comprehensive way that guarantees elderly and disabled individuals the care they need; and 
(2) long term services and supports should be made avail-
able in the community in addition to in institutions. 
Subtitle F—Medicaid Prescription Drug 
Coverage 
SEC. 2501. PRESCRIPTION DRUG REBATES.

Coverage 
SEC. 2501. PRESCRIPTION DRUG REBATES. 
(a) I NCREASE IN MINIMUM REBATE PERCENTAGE FOR SINGLE  
SOURCE DRUGS AND INNOVATOR MULTIPLE SOURCE DRUGS .— 
(1) I N GENERAL .—Section 1927(c)(1)(B) of the Social Secu-
rity Act (42 U.S.C. 1396r–8(c)(1)(B)) is amended— 
(A) in clause (i)— 
(i) in subclause (IV), by striking ‘‘and’’ at the end; (ii) in subclause (V)— 
(I) by inserting ‘‘and before January 1, 2010’’ 
after ‘‘December 31, 1995,’’; and 
(II) by striking the period at the end and

(II) by striking the period at the end and 
inserting ‘‘; and’’; and (iii) by adding at the end the following new sub-
clause: 
‘‘(VI) except as provided in clause (iii), after 
December 31, 2009, 23.1 percent.’’; and 
(B) by adding at the end the following new clause: 
‘‘(iii) M
INIMUM REBATE PERCENTAGE FOR CERTAIN  
DRUGS .— 
‘‘(I) I N GENERAL .—In the case of a single source

drug or an innovator multiple source drug described in subclause (II), the minimum rebate percentage for rebate periods specified in clause (i)(VI) is 17.1 percent. 
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124 STAT. 307 PUBLIC LAW 111–148—MAR. 23, 2010 
‘‘(II) D RUG DESCRIBED .—For purposes of sub-
clause (I), a single source drug or an innovator multiple source drug described in this subclause is any of the following drugs: 
‘‘(aa) A clotting factor for which a separate 
furnishing payment is made under section 1842(o)(5) and which is included on a list of such factors specified and updated regularly by the Secretary. 
‘‘(bb) A drug approved by the Food and

‘‘(bb) A drug approved by the Food and 
Drug Administration exclusively for pediatric indications.’’. 
(2) R
ECAPTURE OF TOTAL SAVINGS DUE TO INCREASE .—Sec-
tion 1927(b)(1) of such Act (42 U.S.C. 1396r–8(b)(1)) is amended by adding at the end the following new subparagraph: 
‘‘(C) S
PECIAL RULE FOR INCREASED MINIMUM REBATE  
PERCENTAGE .— 
‘‘(i) I N GENERAL .—In addition to the amounts

‘‘(i) I N GENERAL .—In addition to the amounts 
applied as a reduction under subparagraph (B), for rebate periods beginning on or after January 1, 2010, during a fiscal year, the Secretary shall reduce pay-ments to a State under section 1903(a) in the manner specified in clause (ii), in an amount equal to the product of— 
‘‘(I) 100 percent minus the Federal medical 
assistance percentage applicable to the rebate period for the State; and 
‘‘(II) the amounts received by the State under

‘‘(II) the amounts received by the State under 
such subparagraph that are attributable (as esti-mated by the Secretary based on utilization and other data) to the increase in the minimum rebate percentage effected by the amendments made by subsections (a)(1), (b), and (d) of section 2501 of the Patient Protection and Affordable Care Act, taking into account the additional drugs included under the amendments made by subsection (c) of section 2501 of such Act.

The Secretary shall adjust such payment reduction for a calendar quarter to the extent the Secretary determines, based upon subsequent utilization and other data, that the reduction for such quarter was greater or less than the amount of payment reduction that should have been made. 
‘‘(ii) M
ANNER OF PAYMENT REDUCTION .—The

‘‘(ii) M
ANNER OF PAYMENT REDUCTION .—The 
amount of the payment reduction under clause (i) for a State for a quarter shall be deemed an overpayment to the State under this title to be disallowed against the State’s regular quarterly draw for all Medicaid spending under section 1903(d)(2). Such a disallowance is not subject to a reconsideration under section 1116(d).’’. 
(b) I
NCREASE IN REBATE FOR OTHER DRUGS .—Section 
1927(c)(3)(B) of such Act (42 U.S.C. 1396r–8(c)(3)(B)) is amended—

(1) in clause (i), by striking ‘‘and’’ at the end; (2) in clause (ii)— 
(A) by inserting ‘‘and before January 1, 2010,’’ after 
‘‘December 31, 1993,’’; and Determination. Time period. 
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124 STAT. 308 PUBLIC LAW 111–148—MAR. 23, 2010 
(B) by striking the period and inserting ‘‘; and’’; and 
(3) by adding at the end the following new clause: 
‘‘(iii) after December 31, 2009, is 13 percent.’’. 
(c) E XTENSION OF PRESCRIPTION DRUG DISCOUNTS TO  
ENROLLEES OF MEDICAID MANAGED CAREORGANIZATIONS .— 
(1) I N GENERAL .—Section 1903(m)(2)(A) of such Act (42 
U.S.C. 1396b(m)(2)(A)) is amended—

U.S.C. 1396b(m)(2)(A)) is amended— 
(A) in clause (xi), by striking ‘‘and’’ at the end; (B) in clause (xii), by striking the period at the end 
and inserting ‘‘; and’’; and 
‘‘(xiii) such contract provides that (I) covered out-

patient drugs dispensed to individuals eligible for med-ical assistance who are enrolled with the entity shall be subject to the same rebate required by the agree-ment entered into under section 1927 as the State is subject to and that the State shall collect such rebates from manufacturers, (II) capitation rates paid to the entity shall be based on actual cost experience related to rebates and subject to the Federal regula-tions requiring actuarially sound rates, and (III) the entity shall

sound rates, and (III) the entity shall report to the State, on such timely and periodic basis as specified by the Secretary in order to include in the information submitted by the State to a manufacturer and the Secretary under section 1927(b)(2)(A), information on the total number of units of each dosage form and strength and package size by National Drug Code of each covered outpatient drug dispensed to individuals eligible for medical assistance who are enrolled with the entity and for

who are enrolled with the entity and for which the entity is responsible for coverage of such drug under this subsection (other than covered outpatient drugs that under subsection (j)(1) of section 1927 are not subject to the requirements of that section) and such other data as the Secretary determines necessary to carry out this subsection.’’.

(2) C
ONFORMING AMENDMENTS .—Section 1927 (42 U.S.C. 
1396r–8) is amended— 
(A) in subsection (b)— 
(i) in paragraph (1)(A), in the first sentence, by 
inserting ‘‘, including such drugs dispensed to individ-uals enrolled with a medicaid managed care organiza-tion if the organization is responsible for coverage of such drugs’’ before the period; and 
(ii) in paragraph (2)(A), by inserting ‘‘including

such information reported by each medicaid managed care organization,’’ after ‘‘for which payment was made under the plan during the period,’’; and (B) in subsection (j), by striking paragraph (1) and 
inserting the following: ‘‘(1) Covered outpatient drugs are not subject to the require-
ments of this section if such drugs are— 
‘‘(A) dispensed by health maintenance organizations, 
including Medicaid managed care organizations that con-tract under section 1903(m); and

‘‘(B) subject to discounts under section 340B of the 
Public Health Service Act.’’. Contracts. Reports. Determination. 
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124 STAT. 309 PUBLIC LAW 111–148—MAR. 23, 2010 
(d) A DDITIONAL REBATE FOR NEWFORMULATIONS OF EXISTING  
DRUGS .— 
(1) I N GENERAL .—Section 1927(c)(2) of the Social Security 
Act (42 U.S.C. 1396r–8(c)(2)) is amended by adding at the end the following new subparagraph: 
‘‘(C) T
REATMENT OF NEW FORMULATIONS .— 

(ii), in the case of a drug that is a new formulation, such as an extended-release formulation, of a single source drug or an innovator multiple source drug, the rebate obligation with respect to the drug under this section shall be the amount computed under this sec-tion for the new formulation of the drug or, if greater, the product of— 
‘‘(I) the average manufacturer price for each

‘‘(I) the average manufacturer price for each 
dosage form and strength of the new formulation of the single source drug or innovator multiple source drug; 
‘‘(II) the highest additional rebate (calculated 
as a percentage of average manufacturer price) under this section for any strength of the original single source drug or innovator multiple source drug; and 
‘‘(III) the total number of units of each dosage

‘‘(III) the total number of units of each dosage 
form and strength of the new formulation paid for under the State plan in the rebate period (as reported by the State). ‘‘(ii) N
O APPLICATION TO NEW FORMULATIONS OF  
ORPHAN DRUGS .—Clause (i) shall not apply to a new

formulation of a covered outpatient drug that is or has been designated under section 526 of the Federal Food, Drug, and Cosmetic Act (21 U.S.C. 360bb) for a rare disease or condition, without regard to whether the period of market exclusivity for the drug under section 527 of such Act has expired or the specific indication for use of the drug.’’. 
(2) E
(1) shall apply to drugs that are paid for by a State after December 31, 2009. (e) M

AXIMUM REBATE AMOUNT .—Section 1927(c)(2) of such Act 
(42 U.S.C. 1396r–8(c)(2)), as amended by subsection (d), is amended by adding at the end the following new subparagraph: 
‘‘(D) M
AXIMUM REBATE AMOUNT .—In no case shall the 
sum of the amounts applied under paragraph (1)(A)(ii) and this paragraph with respect to each dosage form and strength of a single source drug or an innovator multiple

source drug for a rebate period beginning after December 31, 2009, exceed 100 percent of the average manufacturer price of the drug.’’. 
(f) C
(1) I N GENERAL .—Section 340B of the Public Health Service 
Act (42 U.S.C. 256b) is amended— 
(A) in subsection (a)(2)(B)(i), by striking ‘‘1927(c)(4)’’ 
and inserting ‘‘1927(c)(3)’’; and 
(B) by striking subsection (c); and (C) redesignating subsection (d) as subsection (c). 42 USC 1396r–8 
note.

note. 
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124 STAT. 310 PUBLIC LAW 111–148—MAR. 23, 2010 
(2) E FFECTIVE DATE .—The amendments made by this sub-
section take effect on January 1, 2010. 
SEC. 2502. ELIMINATION OF EXCLUSION OF COVERAGE OF CERTAIN 
DRUGS. 
(a) I NGENERAL .—Section 1927(d) of the Social Security Act 
(42 U.S.C. 1397r–8(d)) is amended— 
(1) in paragraph (2)— 
(A) by striking subparagraphs (E), (I), and (J), respec-
tively; and 
(B) by redesignating subparagraphs (F), (G), (H), and

(K) as subparagraphs (E), (F), (G), and (H), respectively; and (2) by adding at the end the following new paragraph: ‘‘(7) N
ON-EXCLUDABLE DRUGS .—The following drugs or 
classes of drugs, or their medical uses, shall not be excluded from coverage: 
‘‘(A) Agents when used to promote smoking cessation, 
including agents approved by the Food and Drug Adminis-tration under the over-the-counter monograph process for purposes of promoting, and when used to promote, tobacco cessation.

‘‘(B) Barbiturates. ‘‘(C) Benzodiazepines.’’. 
(b) E
shall apply to services furnished on or after January 1, 2014. 
SEC. 2503. PROVIDING ADEQUATE PHARMACY REIMBURSEMENT. 
(a) P HARMACY REIMBURSEMENT LIMITS .— 
(1) I N GENERAL .—Section 1927(e) of the Social Security 
Act (42 U.S.C. 1396r–8(e)) is amended— 
(A) in paragraph (4), by striking ‘‘(or, effective January 
1, 2007, two or more)’’; and

1, 2007, two or more)’’; and 
(B) by striking paragraph (5) and inserting the fol-
lowing: ‘‘(5) U
SE OF AMP IN UPPER PAYMENT LIMITS .—The Secretary

shall calculate the Federal upper reimbursement limit estab-lished under paragraph (4) as no less than 175 percent of the weighted average (determined on the basis of utilization) of the most recently reported monthly average manufacturer prices for pharmaceutically and therapeutically equivalent mul-tiple source drug products that are available for purchase by retail community pharmacies on a nationwide basis. The Sec-retary shall implement a smoothing process for average manu-facturer prices.

process for average manu-facturer prices. Such process shall be similar to the smoothing process used in determining the average sales price of a drug or biological under section 1847A.’’.

(2) D
EFINITION OF AMP .—Section 1927(k)(1) of such Act 
(42 U.S.C. 1396r–8(k)(1)) is amended— 
(A) in subparagraph (A), by striking ‘‘by’’ and all that 
follows through the period and inserting ‘‘by— 
‘‘(i) wholesalers for drugs distributed to retail 
community pharmacies; and 
‘‘(ii) retail community pharmacies that purchase 
drugs directly from the manufacturer.’’; and (B) by striking subparagraph (B) and inserting the 
following: 42 USC 1396r–8 note. 42 USC 256b 
note.

note. 
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124 STAT. 311 PUBLIC LAW 111–148—MAR. 23, 2010 
‘‘(B) E XCLUSION OF CUSTOMARY PROMPT PAY DISCOUNTS  
AND OTHER PAYMENTS .— 
‘‘(i) I N GENERAL .—The average manufacturer price 
for a covered outpatient drug shall exclude— 
‘‘(I) customary prompt pay discounts extended 
to wholesalers; 
‘‘(II) bona fide service fees paid by manufactur-

ers to wholesalers or retail community pharmacies, including (but not limited to) distribution service fees, inventory management fees, product stocking allowances, and fees associated with administra-tive services agreements and patient care pro-grams (such as medication compliance programs and patient education programs); 
‘‘(III) reimbursement by manufacturers for

‘‘(III) reimbursement by manufacturers for 
recalled, damaged, expired, or otherwise unsalable returned goods, including (but not limited to) reimbursement for the cost of the goods and any reimbursement of costs associated with return goods handling and processing, reverse logistics, and drug destruction; and 
‘‘(IV) payments received from, and rebates or

‘‘(IV) payments received from, and rebates or 
discounts provided to, pharmacy benefit managers, managed care organizations, health maintenance organizations, insurers, hospitals, clinics, mail order pharmacies, long term care providers, manu-facturers, or any other entity that does not conduct business as a wholesaler or a retail community pharmacy. ‘‘(ii) I
NCLUSION OF OTHER DISCOUNTS AND PAY -
MENTS .—Notwithstanding clause (i), any other dis-

counts, rebates, payments, or other financial trans-actions that are received by, paid by, or passed through to, retail community pharmacies shall be included in the average manufacturer price for a covered out-patient drug.’’; and (C) in subparagraph (C), by striking ‘‘the retail phar-
macy class of trade’’ and inserting ‘‘retail community phar-macies’’. (3) D
EFINITION OF MULTIPLE SOURCE DRUG .—Section 
1927(k)(7) of such Act (42 U.S.C. 1396r–8(k)(7)) is amended—

(A) in subparagraph (A)(i)(III), by striking ‘‘the State’’ 
and inserting ‘‘the United States’’; and 
(B) in subparagraph (C)— 
(i) in clause (i), by inserting ‘‘and’’ after the semi-
colon; 
(ii) in clause (ii), by striking ‘‘; and’’ and inserting 
a period; and 
(iii) by striking clause (iii). 
(4) D EFINITIONS OF RETAIL COMMUNITY PHARMACY ; WHOLE -
SALER .—Section 1927(k) of such Act (42 U.S.C. 1396r–8(k)) 
is amended by adding at the end the following new paragraphs:

‘‘(10) R ETAIL COMMUNITY PHARMACY .—The term ‘retail 
community pharmacy’ means an independent pharmacy, a chain pharmacy, a supermarket pharmacy, or a mass merchan-diser pharmacy that is licensed as a pharmacy by the State and that dispenses medications to the general public at retail 
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124 STAT. 312 PUBLIC LAW 111–148—MAR. 23, 2010 
prices. Such term does not include a pharmacy that dispenses 
prescription medications to patients primarily through the mail, nursing home pharmacies, long-term care facility pharmacies, hospital pharmacies, clinics, charitable or not-for-profit phar-macies, government pharmacies, or pharmacy benefit man-agers. 
‘‘(11) W
HOLESALER .—The term ‘wholesaler’ means a drug

wholesaler that is engaged in wholesale distribution of prescrip-tion drugs to retail community pharmacies, including (but not limited to) manufacturers, repackers, distributors, own-label distributors, private-label distributors, jobbers, brokers, ware-houses (including manufacturer’s and distributor’s warehouses, chain drug warehouses, and wholesale drug warehouses) inde-pendent wholesale drug traders, and retail community phar-macies that conduct wholesale distributions.’’. (b) D

ISCLOSURE OF PRICE INFORMATION TO THE PUBLIC .—Sec-
tion 1927(b)(3) of such Act (42 U.S.C. 1396r–8(b)(3)) is amended— 
(1) in subparagraph (A)— 
(A) in the first sentence, by inserting after clause (iii) 
‘‘(iv) not later than 30 days after the last day

‘‘(iv) not later than 30 days after the last day 
of each month of a rebate period under the agreement, on the manufacturer’s total number of units that are used to calculate the monthly average manufacturer price for each covered outpatient drug;’’; and (B) in the second sentence, by inserting ‘‘(relating to 
the weighted average of the most recently reported monthly average manufacturer prices)’’ after ‘‘(D)(v)’’; and (2) in subparagraph (D)(v), by striking ‘‘average manufac-

turer prices’’ and inserting ‘‘the weighted average of the most recently reported monthly average manufacturer prices and the average retail survey price determined for each multiple source drug in accordance with subsection (f)’’. (c) C
LARIFICATION OF APPLICATION OF SURVEY OF RETAIL  
PRICES .—Section 1927(f)(1) of such Act (42 U.S.C. 1396r–8(b)(1)) 
(1) in subparagraph (A)(i), by inserting ‘‘with respect to 
a retail community pharmacy,’’ before ‘‘the determination’’; and

(2) in subparagraph (C)(ii), by striking ‘‘retail pharmacies’’ 
and inserting ‘‘retail community pharmacies’’. (d) E
shall take effect on the first day of the first calendar year quarter that begins at least 180 days after the date of enactment of this Act, without regard to whether or not final regulations to carry out such amendments have been promulgated by such date. 
Subtitle G—Medicaid Disproportionate 
Share Hospital (DSH) Payments

Share Hospital (DSH) Payments 
SEC. 2551. DISPROPORTIONATE SHARE HOSPITAL PAYMENTS. 
(a) I NGENERAL .—Section 1923(f) of the Social Security Act 
(42 U.S.C. 1396r–4(f)) is amended— 
(1) in paragraph (1), by striking ‘‘and (3)’’ and inserting 
‘‘, (3), and (7)’’; 
(2) in paragraph (3)(A), by striking ‘‘paragraph (6)’’ and 
inserting ‘‘paragraphs (6) and (7)’’; 42 USC 1396r–8 note.

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124 STAT. 313 PUBLIC LAW 111–148—MAR. 23, 2010 
(3) by redesignating paragraph (7) as paragraph (8); and 
(4) by inserting after paragraph (6) the following new para-
graph: 
‘‘(7) R EDUCTION OF STATE DSH ALLOTMENTS ONCE REDUC -
TION IN UNINSURED THRESHOLD REACHED .— 
‘‘(A) I N GENERAL .—Subject to subparagraph (E), the 
DSH allotment for a State for fiscal years beginning with the fiscal year described in subparagraph (C) (with respect to the State), is equal to—

‘‘(i) in the case of the first fiscal year described 
in subparagraph (C) with respect to a State, the DSH allotment that would be determined under this sub-section for the State for the fiscal year without applica-tion of this paragraph (but after the application of subparagraph (D)), reduced by the applicable percent-age determined for the State for the fiscal year under subparagraph (B)(i); and 
‘‘(ii) in the case of any subsequent fiscal year with

respect to the State, the DSH allotment determined under this paragraph for the State for the preceding fiscal year, reduced by the applicable percentage deter-mined for the State for the fiscal year under subpara-graph (B)(ii). ‘‘(B) A
PPLICABLE PERCENTAGE .—For purposes of 
subparagraph (A), the applicable percentage for a State for a fiscal year is the following: 
‘‘(i) U
NINSURED REDUCTION THRESHOLD FISCAL  
YEAR .—In the case of the first fiscal year described

in subparagraph (C) with respect to the State— 
‘‘(I) if the State is a low DSH State described 
in paragraph (5)(B), the applicable percentage is equal to 25 percent; and 
‘‘(II) if the State is any other State, the 
applicable percentage is 50 percent. ‘‘(ii) S
UBSEQUENT FISCAL YEARS IN WHICH THE  
PERCENTAGE OF UNINSURED DECREASES .—In the case

PERCENTAGE OF UNINSURED DECREASES .—In the case 
of any fiscal year after the first fiscal year described in subparagraph (C) with respect to a State, if the Secretary determines on the basis of the most recent American Community Survey of the Bureau of the Census, that the percentage of uncovered individuals residing in the State is less than the percentage of such individuals determined for the State for the pre-ceding fiscal year— 
‘‘(I) if the State is a low DSH State described

in paragraph (5)(B), the applicable percentage is equal to the product of the percentage reduction in uncovered individuals for the fiscal year from the preceding fiscal year and 25 percent; and 
applicable percentage is equal to the product of the percentage reduction in uncovered individuals for the fiscal year from the preceding fiscal year and 50 percent. 
‘‘(C) F

‘‘(C) F
ISCAL YEAR DESCRIBED .—For purposes of 
subparagraph (A), the fiscal year described in this subpara-graph with respect to a State is the first fiscal year that Determination. Determination. 
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124 STAT. 314 PUBLIC LAW 111–148—MAR. 23, 2010 
occurs after fiscal year 2012 for which the Secretary deter-
mines, on the basis of the most recent American Commu-nity Survey of the Bureau of the Census, that the percent-age of uncovered individuals residing in the State is at least 45 percent less than the percentage of such individ-uals determined for the State for fiscal year 2009. 
‘‘(D) E
XCLUSION OF PORTIONS DIVERTED FOR COVERAGE  
EXPANSIONS .—For purposes of applying the applicable

percentage reduction under subparagraph (A) to the DSH allotment for a State for a fiscal year, the DSH allotment for a State that would be determined under this subsection for the State for the fiscal year without the application of this paragraph (and prior to any such reduction) shall not include any portion of the allotment for which the Secretary has approved the State’s diversion to the costs of providing medical assistance or other health benefits coverage under a waiver that is in

benefits coverage under a waiver that is in effect on July 2009.

allotment determined for a State in accordance with this paragraph for fiscal year 2013 or any succeeding fiscal year be less than the amount equal to 35 percent of the DSH allotment determined for the State for fiscal year 2012 under this subsection (and after the application of this paragraph, if applicable), increased by the percentage change in the consumer price index for all urban consumers (all items, U.S. city average) for each previous fiscal year occurring before the fiscal year.

‘‘(F) U
NCOVERED INDIVIDUALS .—In this paragraph, the 
term ‘uncovered individuals’ means individuals with no health insurance coverage at any time during a year (as determined by the Secretary based on the most recent data available).’’. 
(b) E
FFECTIVE DATE.—The amendments made by subsection 
(a) take effect on October 1, 2011. 
Subtitle H—Improved Coordination for 
Dual Eligible Beneficiaries 
SEC. 2601. 5-YEAR PERIOD FOR DEMONSTRATION PROJECTS.

(a) I NGENERAL .—Section 1915(h) of the Social Security Act 
(42 U.S.C. 1396n(h)) is amended— 
(1) by inserting ‘‘(1)’’ after ‘‘(h)’’; (2) by inserting ‘‘, or a waiver described in paragraph 
(2)’’ after ‘‘(e)’’; and 
(3) by adding at the end the following new paragraph: 
‘‘(2)(A) Notwithstanding subsections (c)(3) and (d) (3), any

waiver under subsection (b), (c), or (d), or a waiver under section 1115, that provides medical assistance for dual eligible individuals (including any such waivers under which non dual eligible individ-

uals may be enrolled in addition to dual eligible individuals) may be conducted for a period of 5 years and, upon the request of the State, may be extended for additional 5-year periods unless the Secretary determines that for the previous waiver period the conditions for the waiver have not been met or it would no longer be cost-effective and efficient, or consistent with the purposes of this title, to extend the waiver. Determination. 42 USC 1396r–4 
note. Definition.

note. Definition. 
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124 STAT. 315 PUBLIC LAW 111–148—MAR. 23, 2010 
‘‘(B) In this paragraph, the term ‘dual eligible individual’ means 
an individual who is entitled to, or enrolled for, benefits under part A of title XVIII, or enrolled for benefits under part B of title XVIII, and is eligible for medical assistance under the State plan under this title or under a waiver of such plan.’’. 
(b) C
(1) Section 1915 of such Act (42 U.S.C. 1396n) is amended—

(A) in subsection (b), by adding at the end the following 
new sentence: ‘‘Subsection (h)(2) shall apply to a waiver under this subsection.’’; 
(B) in subsection (c)(3), in the second sentence, by 
inserting ‘‘(other than a waiver described in subsection (h)(2))’’ after ‘‘A waiver under this subsection’’; 
(C) in subsection (d)(3), in the second sentence, by

inserting ‘‘(other than a waiver described in subsection (h)(2))’’ after ‘‘A waiver under this subsection’’. (2) Section 1115 of such Act (42 U.S.C. 1315) is amended— 
(A) in subsection (e)(2), by inserting ‘‘(5 years, in the 
case of a waiver described in section 1915(h)(2))’’ after ‘‘3 years’’; and 
(B) in subsection (f)(6), by inserting ‘‘(5 years, in the 
case of a waiver described in section 1915(h)(2))’’ after ‘‘3 years’’. 
SEC. 2602. PROVIDING FEDERAL COVERAGE AND PAYMENT COORDINA-

TION FOR DUAL ELIGIBLE BENEFICIARIES. 
(a) E STABLISHMENT OF FEDERAL COORDINATED HEALTH CARE 
OFFICE .— 
(1) I N GENERAL .—Not later than March 1, 2010, the Sec-
retary of Health and Human Services (in this section referred to as the ‘‘Secretary’’) shall establish a Federal Coordinated Health Care Office. 
(2) E
STABLISHMENT AND REPORTING TO CMS ADMINIS -
TRATOR .—The Federal Coordinated Health Care Office— 
(A) shall be established within the Centers for Medi-
care & Medicaid Services; and

care & Medicaid Services; and 
(B) have as the Office a Director who shall be appointed 
by, and be in direct line of authority to, the Administrator of the Centers for Medicare & Medicaid Services. 
(b) P
URPOSE .—The purpose of the Federal Coordinated Health 
Care Office is to bring together officers and employees of the Medi-care and Medicaid programs at the Centers for Medicare & Medicaid Services in order to— 
(1) more effectively integrate benefits under the Medicare

program under title XVIII of the Social Security Act and the Medicaid program under title XIX of such Act; and 
(2) improve the coordination between the Federal Govern-
ment and States for individuals eligible for benefits under both such programs in order to ensure that such individuals get full access to the items and services to which they are entitled under titles XVIII and XIX of the Social Security Act. (c) G
OALS .—The goals of the Federal Coordinated Health Care 
Office are as follows:

Office are as follows: 
(1) Providing dual eligible individuals full access to the 
benefits to which such individuals are entitled under the Medi-care and Medicaid programs. Appointment. Deadline. 42 USC 1315b. Definition. 
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124 STAT. 316 PUBLIC LAW 111–148—MAR. 23, 2010 
(2) Simplifying the processes for dual eligible individuals 
to access the items and services they are entitled to under the Medicare and Medicaid programs. 
(3) Improving the quality of health care and long-term 
services for dual eligible individuals. 
(4) Increasing dual eligible individuals’ understanding of 
and satisfaction with coverage under the Medicare and Med-icaid programs. 
(5) Eliminating regulatory conflicts between rules under

the Medicare and Medicaid programs. 
(6) Improving care continuity and ensuring safe and effec-
tive care transitions for dual eligible individuals. 
(7) Eliminating cost-shifting between the Medicare and 
Medicaid program and among related health care providers. 
(8) Improving the quality of performance of providers of 
services and suppliers under the Medicare and Medicaid pro-grams. (d) S
PECIFIC RESPONSIBILITIES .—The specific responsibilities of

the Federal Coordinated Health Care Office are as follows: 
(1) Providing States, specialized MA plans for special needs 
individuals (as defined in section 1859(b)(6) of the Social Secu-rity Act (42 U.S.C. 1395w–28(b)(6))), physicians and other rel-evant entities or individuals with the education and tools nec-essary for developing programs that align benefits under the Medicare and Medicaid programs for dual eligible individuals. 
(2) Supporting State efforts to coordinate and align acute

care and long-term care services for dual eligible individuals with other items and services furnished under the Medicare program. 
(3) Providing support for coordination of contracting and 
oversight by States and the Centers for Medicare & Medicaid Services with respect to the integration of the Medicare and Medicaid programs in a manner that is supportive of the goals described in paragraph (3). 
(4) To consult and coordinate with the Medicare Payment

Advisory Commission established under section 1805 of the Social Security Act (42 U.S.C. 1395b–6) and the Medicaid and CHIP Payment and Access Commission established under sec-tion 1900 of such Act (42 U.S.C. 1396) with respect to policies relating to the enrollment in, and provision of, benefits to dual eligible individuals under the Medicare program under title XVIII of the Social Security Act and the Medicaid program under title XIX of such Act.

(5) To study the provision of drug coverage for new full- 
benefit dual eligible individuals (as defined in section 1935(c)(6) of the Social Security Act (42 U.S.C. 1396u–5(c)(6)), as well as to monitor and report annual total expenditures, health outcomes, and access to benefits for all dual eligible individuals. (e) R
EPORT .—The Secretary shall, as part of the budget trans-

mitted under section 1105(a) of title 31, United States Code, submit to Congress an annual report containing recommendations for legis-lation that would improve care coordination and benefits for dual eligible individuals. 
(f) D
UAL ELIGIBLE DEFINED .—In this section, the term ‘‘dual 
eligible individual’’ means an individual who is entitled to, or enrolled for, benefits under part A of title XVIII of the Social Security Act, or enrolled for benefits under part B of title XVIII

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124 STAT. 317 PUBLIC LAW 111–148—MAR. 23, 2010 
of such Act, and is eligible for medical assistance under a State 
plan under title XIX of such Act or under a waiver of such plan. 
Subtitle I—Improving the Quality of 
Medicaid for Patients and Providers 
SEC. 2701. ADULT HEALTH QUALITY MEASURES. 
Title XI of the Social Security Act (42 U.S.C. 1301 et seq.),

as amended by section 401 of the Children’s Health Insurance Program Reauthorization Act of 2009 (Public Law 111–3), is amended by inserting after section 1139A the following new section: 
‘‘SEC. 1139B. ADULT HEALTH QUALITY MEASURES. 
‘‘(a) D EVELOPMENT OF CORE SET OF HEALTH CARE QUALITY  
MEASURES FOR ADULTS ELIGIBLE FOR BENEFITS UNDER MEDICAID .—

The Secretary shall identify and publish a recommended core set of adult health quality measures for Medicaid eligible adults in the same manner as the Secretary identifies and publishes a core set of child health quality measures under section 1139A, including with respect to identifying and publishing existing adult health quality measures that are in use under public and privately spon-sored health care coverage arrangements, or that are part of reporting systems that measure both the

part of reporting systems that measure both the presence and duration

of health insurance coverage over time, that may be applicable to Medicaid eligible adults. 
‘‘(b) D
EADLINES .— 
‘‘(1) R ECOMMENDED MEASURES .—Not later than January 
1, 2011, the Secretary shall identify and publish for comment a recommended core set of adult health quality measures for Medicaid eligible adults. 
‘‘(2) D
ISSEMINATION .—Not later than January 1, 2012, the

Secretary shall publish an initial core set of adult health quality measures that are applicable to Medicaid eligible adults. 
‘‘(3) S
TANDARDIZED REPORTING .—Not later than January

TANDARDIZED REPORTING .—Not later than January 
1, 2013, the Secretary, in consultation with States, shall develop a standardized format for reporting information based on the initial core set of adult health quality measures and create procedures to encourage States to use such measures to volun-tarily report information regarding the quality of health care for Medicaid eligible adults. 
‘‘(4) R
EPORTS TO CONGRESS .—Not later than January 1,

EPORTS TO CONGRESS .—Not later than January 1, 
2014, and every 3 years thereafter, the Secretary shall include in the report to Congress required under section 1139A(a)(6) information similar to the information required under that section with respect to the measures established under this section. 
‘‘(5) E
STABLISHMENT OF MEDICAID QUALITY MEASUREMENT  
PROGRAM .— 
‘‘(A) I N GENERAL .—Not later than 12 months after the

release of the recommended core set of adult health quality measures under paragraph (1)), the Secretary shall estab-lish a Medicaid Quality Measurement Program in the same manner as the Secretary establishes the pediatric quality measures program under section 1139A(b). The aggregate amount awarded by the Secretary for grants and contracts for the development, testing, and validation of emerging Publication. Publication. Publication. 42 USC 
1320b–9b.

1320b–9b. 
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124 STAT. 318 PUBLIC LAW 111–148—MAR. 23, 2010 
and innovative evidence-based measures under such pro-
gram shall equal the aggregate amount awarded by the Secretary for grants under section 1139A(b)(4)(A) 
‘‘(B) R
EVISING , STRENGTHENING , AND IMPROVING INITIAL  
CORE MEASURES .—Beginning not later than 24 months after

the establishment of the Medicaid Quality Measurement Program, and annually thereafter, the Secretary shall pub-lish recommended changes to the initial core set of adult health quality measures that shall reflect the results of the testing, validation, and consensus process for the development of adult health quality measures. 
‘‘(c) C
ONSTRUCTION .—Nothing in this section shall be construed

as supporting the restriction of coverage, under title XIX or XXI or otherwise, to only those services that are evidence-based, or in anyway limiting available services. 
‘‘(d) A
NNUAL STATE REPORTS REGARDING STATE -SPECIFIC  
QUALITY OF CAREMEASURES APPLIED UNDER MEDICAID .— 
‘‘(1) A NNUAL STATE REPORTS .—Each State with a State 
plan or waiver approved under title XIX shall annually report (separately or as part of the annual report required under section 1139A(c)), to the Secretary on the—

‘‘(A) State-specific adult health quality measures 
applied by the State under the such plan, including meas-ures described in subsection (a)(5); and 
‘‘(B) State-specific information on the quality of health 
care furnished to Medicaid eligible adults under such plan, including information collected through external quality reviews of managed care organizations under section 1932 and benchmark plans under section 1937. ‘‘(2) P
UBLICATION .—Not later than September 30, 2014,

UBLICATION .—Not later than September 30, 2014, 
and annually thereafter, the Secretary shall collect, analyze, and make publicly available the information reported by States under paragraph (1). ‘‘(e) A
PPROPRIATION .—Out of any funds in the Treasury not 
otherwise appropriated, there is appropriated for each of fiscal years 2010 through 2014, $60,000,000 for the purpose of carrying out this section. Funds appropriated under this subsection shall remain available until expended.’’.

SEC. 2702. PAYMENT ADJUSTMENT FOR HEALTH CARE-ACQUIRED 
CONDITIONS. 
(a) I NGENERAL .—The Secretary of Health and Human Services

(in this subsection referred to as the ‘‘Secretary’’) shall identify current State practices that prohibit payment for health care- acquired conditions and shall incorporate the practices identified, or elements of such practices, which the Secretary determines appropriate for application to the Medicaid program in regulations. Such regulations shall be effective as of July 1, 2011, and shall prohibit payments to States under section 1903 of the Social Secu-rity Act for any amounts expended for

Social Secu-rity Act for any amounts expended for providing medical assistance for health care-acquired conditions specified in the regulations. The regulations shall ensure that the prohibition on payment for health care-acquired conditions shall not result in a loss of access to care or services for Medicaid beneficiaries.

(b) H
EALTH CARE-ACQUIRED CONDITION .—In this section. the 
term ‘‘health care-acquired condition’’ means a medical condition for which an individual was diagnosed that could be identified Definition. Determination. 
Regulations. 
Effective date. 42 USC 1396b–1. Deadlines. 
Public information. Publication. 
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124 STAT. 319 PUBLIC LAW 111–148—MAR. 23, 2010 
by a secondary diagnostic code described in section 1886(d)(4)(D)(iv) 
of the Social Security Act (42 U.S.C. 1395ww(d)(4)(D)(iv)). 
(c) M EDICARE PROVISIONS .—In carrying out this section, the

Secretary shall apply to State plans (or waivers) under title XIX of the Social Security Act the regulations promulgated pursuant to section 1886(d)(4)(D) of such Act (42 U.S.C. 1395ww(d)(4)(D)) relating to the prohibition of payments based on the presence of a secondary diagnosis code specified by the Secretary in such regula-tions, as appropriate for the Medicaid program. The Secretary may exclude certain conditions identified under title XVIII of the Social Security Act for non-payment under

of the Social Security Act for non-payment under title XIX of such Act when the Secretary finds the inclusion of such conditions to be inappli-cable to beneficiaries under title XIX.

SEC. 2703. STATE OPTION TO PROVIDE HEALTH HOMES FOR 
ENROLLEES WITH CHRONIC CONDITIONS. 
(a) S TATE PLAN AMENDMENT .—Title XIX of the Social Security 
Act (42 U.S.C. 1396a et seq.), as amended by sections 2201 and 2305, is amended by adding at the end the following new section: 
‘‘S
EC. 1945. S TATE OPTION TOPROVIDE COORDINATED CARE 
THROUGH A HEALTH HOME FOR INDIVIDUALS WITHCHRONIC CONDI -
TIONS .— 
‘‘(a) I NGENERAL .—Notwithstanding section 1902(a)(1) (relating

to statewideness), section 1902(a)(10)(B) (relating to comparability), and any other provision of this title for which the Secretary deter-mines it is necessary to waive in order to implement this section, beginning January 1, 2011, a State, at its option as a State plan amendment, may provide for medical assistance under this title to eligible individuals with chronic conditions who select a des-ignated provider (as described under subsection (h)(5)), a team of health care professionals (as

(h)(5)), a team of health care professionals (as described under subsection (h)(6)) operating with such a provider, or a health team (as described under subsection (h)(7)) as the individual’s health home for purposes of providing the individual with health home services.

‘‘(b) H
EALTH HOME QUALIFICATION STANDARDS .—The Secretary 
shall establish standards for qualification as a designated provider for the purpose of being eligible to be a health home for purposes of this section. 
‘‘(c) P
AYMENTS .— 
‘‘(1) I N GENERAL .—A State shall provide a designated pro-

vider, a team of health care professionals operating with such a provider, or a health team with payments for the provision of health home services to each eligible individual with chronic conditions that selects such provider, team of health care profes-sionals, or health team as the individual’s health home. Pay-ments made to a designated provider, a team of health care professionals operating with such a provider, or a health team for such services shall be treated as medical assistance for

shall be treated as medical assistance for purposes of section 1903(a), except that, during the first 8 fiscal year quarters that the State plan amendment is in effect, the Federal medical assistance percentage applicable to such payments shall be equal to 90 percent.

‘‘(2) M
ETHODOLOGY .— 
‘‘(A) I N GENERAL .—The State shall specify in the State 
plan amendment the methodology the State will use for determining payment for the provision of health home serv-ices. Such methodology for determining payment— Determination. Effective date. 42 USC 1396w–4. Applicability. 
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124 STAT. 320 PUBLIC LAW 111–148—MAR. 23, 2010 
‘‘(i) may be tiered to reflect, with respect to each 
eligible individual with chronic conditions provided such services by a designated provider, a team of health care professionals operating with such a provider, or a health team, as well as the severity or number of each such individual’s chronic conditions or the specific capabilities of the provider, team of health care profes-sionals, or health team; and

‘‘(ii) shall be established consistent with section 
1902(a)(30)(A). ‘‘(B) A
LTERNATE MODELS OF PAYMENT .—The method-
ology for determining payment for provision of health home services under this section shall not be limited to a per- member per-month basis and may provide (as proposed by the State and subject to approval by the Secretary) for alternate models of payment. ‘‘(3) P
LANNING GRANTS .— 
‘‘(A) I N GENERAL .—Beginning January 1, 2011, the Sec-

retary may award planning grants to States for purposes of developing a State plan amendment under this section. A planning grant awarded to a State under this paragraph shall remain available until expended. 
‘‘(B) S
TATE CONTRIBUTION .—A State awarded a plan-
ning grant shall contribute an amount equal to the State percentage determined under section 1905(b) (without regard to section 5001 of Public Law 111–5) for each fiscal year for which the grant is awarded. 
‘‘(C) L

‘‘(C) L
IMITATION .—The total amount of payments made 
to States under this paragraph shall not exceed $25,000,000. 
‘‘(d) H
OSPITAL REFERRALS .—A State shall include in the State 
plan amendment a requirement for hospitals that are participating providers under the State plan or a waiver of such plan to establish procedures for referring any eligible individuals with chronic condi-tions who seek or need treatment in a hospital emergency depart-ment to designated providers. 
‘‘(e) C

‘‘(e) C
OORDINATION .—A State shall consult and coordinate, as 
appropriate, with the Substance Abuse and Mental Health Services Administration in addressing issues regarding the prevention and treatment of mental illness and substance abuse among eligible individuals with chronic conditions. 
‘‘(f) M
ONITORING .—A State shall include in the State plan 
amendment— 
‘‘(1) a methodology for tracking avoidable hospital readmis-

sions and calculating savings that result from improved chronic care coordination and management under this section; and 
‘‘(2) a proposal for use of health information technology 
in providing health home services under this section and improving service delivery and coordination across the care continuum (including the use of wireless patient technology to improve coordination and management of care and patient adherence to recommendations made by their provider). ‘‘(g) R

EPORT ON QUALITY MEASURES .—As a condition for 
receiving payment for health home services provided to an eligible individual with chronic conditions, a designated provider shall report to the State, in accordance with such requirements as the Secretary shall specify, on all applicable measures for determining Effective date. 
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124 STAT. 321 PUBLIC LAW 111–148—MAR. 23, 2010 
the quality of such services. When appropriate and feasible, a 
designated provider shall use health information technology in pro-viding the State with such information. 
‘‘(h) D
‘‘(1) E LIGIBLE INDIVIDUAL WITH CHRONIC CONDITIONS .— 
term ‘eligible individual with chronic conditions’ means an individual who— 
‘‘(i) is eligible for medical assistance under the

State plan or under a waiver of such plan; and 
‘‘(ii) has at least— 
‘‘(I) 2 chronic conditions; ‘‘(II) 1 chronic condition and is at risk of 
having a second chronic condition; or 
‘‘(III) 1 serious and persistent mental health 
condition. 
‘‘(B) R

graph shall prevent the Secretary from establishing higher levels as to the number or severity of chronic or mental health conditions for purposes of determining eligibility for receipt of health home services under this section. ‘‘(2) C
HRONIC CONDITION .—The term ‘chronic condition’ has 
the meaning given that term by the Secretary and shall include, but is not limited to, the following:

‘‘(A) A mental health condition. ‘‘(B) Substance use disorder. ‘‘(C) Asthma. ‘‘(D) Diabetes. ‘‘(E) Heart disease. ‘‘(F) Being overweight, as evidenced by having a Body 
Mass Index (BMI) over 25. ‘‘(3) H
EALTH HOME .—The term ‘health home’ means a des-
ignated provider (including a provider that operates in coordina-tion with a team of health care professionals) or a health team selected by an eligible individual with chronic conditions to provide health home services. 
‘‘(4) H

‘‘(4) H
EALTH HOME SERVICES .— 
‘‘(A) I N GENERAL .—The term ‘health home services’ 
means comprehensive and timely high-quality services described in subparagraph (B) that are provided by a des-ignated provider, a team of health care professionals oper-ating with such a provider, or a health team. 
‘‘(B) S
ERVICES DESCRIBED .—The services described in 
this subparagraph are—

this subparagraph are— 
‘‘(i) comprehensive care management; ‘‘(ii) care coordination and health promotion; ‘‘(iii) comprehensive transitional care, including 
appropriate follow-up, from inpatient to other settings; 
‘‘(iv) patient and family support (including author-
ized representatives); 
‘‘(v) referral to community and social support serv-
ices, if relevant; and 
‘‘(vi) use of health information technology to link 
services, as feasible and appropriate. 
‘‘(5) D

‘‘(5) D
ESIGNATED PROVIDER .—The term ‘designated provider’ 
means a physician, clinical practice or clinical group practice, rural clinic, community health center, community mental health 
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124 STAT. 322 PUBLIC LAW 111–148—MAR. 23, 2010 
center, home health agency, or any other entity or provider 
(including pediatricians, gynecologists, and obstetricians) that is determined by the State and approved by the Secretary to be qualified to be a health home for eligible individuals with chronic conditions on the basis of documentation evidencing that the physician, practice, or clinic— 
‘‘(A) has the systems and infrastructure in place to 
provide health home services; and

provide health home services; and 
‘‘(B) satisfies the qualification standards established 
by the Secretary under subsection (b). ‘‘(6) T
EAM OF HEALTH CARE PROFESSIONALS .—The term 
‘team of health care professionals’ means a team of health professionals (as described in the State plan amendment) that may— 
‘‘(A) include physicians and other professionals, such

as a nurse care coordinator, nutritionist, social worker, behavioral health professional, or any professionals deemed appropriate by the State; and 
‘‘(B) be free standing, virtual, or based at a hospital, 
community health center, community mental health center, rural clinic, clinical practice or clinical group practice, aca-demic health center, or any entity deemed appropriate by the State and approved by the Secretary. ‘‘(7) H
EALTH TEAM .—The term ‘health team’ has the

EALTH TEAM .—The term ‘health team’ has the 
meaning given such term for purposes of section 3502 of the Patient Protection and Affordable Care Act.’’. (b) E
VALUATION .— 
(1) I NDEPENDENT EVALUATION .— 
(A) I N GENERAL .—The Secretary shall enter into a con-

tract with an independent entity or organization to conduct an evaluation and assessment of the States that have elected the option to provide coordinated care through a health home for Medicaid beneficiaries with chronic condi-tions under section 1945 of the Social Security Act (as added by subsection (a)) for the purpose of determining the effect of such option on reducing hospital admissions, emergency room visits, and admissions to skilled nursing facilities. 
(B) E

(B) E
VALUATION REPORT .—Not later than January 1, 
2017, the Secretary shall report to Congress on the evalua-tion and assessment conducted under subparagraph (A). (2) S
URVEY AND INTERIM REPORT .— 
(A) I N GENERAL .—Not later than January 1, 2014, the

Secretary of Health and Human Services shall survey States that have elected the option under section 1945 of the Social Security Act (as added by subsection (a)) and report to Congress on the nature, extent, and use of such option, particularly as it pertains to— 
(i) hospital admission rates; (ii) chronic disease management; (iii) coordination of care for individuals with 
chronic conditions; 
(iv) assessment of program implementation; (v) processes and lessons learned (as described in

subparagraph (B)); 
(vi) assessment of quality improvements and clin-
ical outcomes under such option; and 42 USC 1396w–4 note. Contracts. 
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124 STAT. 323 PUBLIC LAW 111–148—MAR. 23, 2010 
(vii) estimates of cost savings. 
(B) I MPLEMENTATION REPORTING .—A State that has 
elected the option under section 1945 of the Social Security Act (as added by subsection (a)) shall report to the Sec-retary, as necessary, on processes that have been developed and lessons learned regarding provision of coordinated care through a health home for Medicaid beneficiaries with chronic conditions under such option.

SEC. 2704. DEMONSTRATION PROJECT TO EVALUATE INTEGRATED 
CARE AROUND A HOSPITALIZATION. 
(a) A UTHORITY TOCONDUCT PROJECT .— 
(1) I N GENERAL .—The Secretary of Health and Human 
Services (in this section referred to as the ‘‘Secretary’’) shall establish a demonstration project under title XIX of the Social Security Act to evaluate the use of bundled payments for the provision of integrated care for a Medicaid beneficiary— 
(A) with respect to an episode of care that includes

a hospitalization; and 
(B) for concurrent physicians services provided during 
a hospitalization. (2) D
URATION .—The demonstration project shall begin on 
January 1, 2012, and shall end on December 31, 2016. (b) R
EQUIREMENTS .—The demonstration project shall be con-
ducted in accordance with the following: 
(1) The demonstration project shall be conducted in up

to 8 States, determined by the Secretary based on consideration of the potential to lower costs under the Medicaid program while improving care for Medicaid beneficiaries. A State selected to participate in the demonstration project may target the demonstration project to particular categories of bene-ficiaries, beneficiaries with particular diagnoses, or particular geographic regions of the State, but the Secretary shall insure that, as a whole, the demonstration project is, to the greatest

the demonstration project is, to the greatest extent possible, representative of the demographic and geographic composition of Medicaid beneficiaries nationally.

(2) The demonstration project shall focus on conditions 
where there is evidence of an opportunity for providers of services and suppliers to improve the quality of care furnished to Medicaid beneficiaries while reducing total expenditures under the State Medicaid programs selected to participate, as determined by the Secretary. 
(3) A State selected to participate in the demonstration

project shall specify the 1 or more episodes of care the State proposes to address in the project, the services to be included in the bundled payments, and the rationale for the selection of such episodes of care and services. The Secretary may modify the episodes of care as well as the services to be included in the bundled payments prior to or after approving the project. The Secretary may also vary such factors among the different States participating in the demonstration project.

(4) The Secretary shall ensure that payments made under 
the demonstration project are adjusted for severity of illness and other characteristics of Medicaid beneficiaries within a category or having a diagnosis targeted as part of the dem-onstration project. States shall ensure that Medicaid bene-ficiaries are not liable for any additional cost sharing than Determination. 42 USC 1396a 
note.

note. 
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124 STAT. 324 PUBLIC LAW 111–148—MAR. 23, 2010 
if their care had not been subject to payment under the dem-
onstration project. 
(5) Hospitals participating in the demonstration project 
shall have or establish robust discharge planning programs to ensure that Medicaid beneficiaries requiring post-acute care are appropriately placed in, or have ready access to, post- acute care settings. 
(6) The Secretary and each State selected to participate

in the demonstration project shall ensure that the demonstra-tion project does not result in the Medicaid beneficiaries whose care is subject to payment under the demonstration project being provided with less items and services for which medical assistance is provided under the State Medicaid program than the items and services for which medical assistance would have been provided to such beneficiaries under the State Med-icaid program in the absence of the demonstration project. (c) W

AIVER OF PROVISIONS .—Notwithstanding section 1115(a) 
of the Social Security Act (42 U.S.C. 1315(a)), the Secretary may waive such provisions of titles XIX, XVIII, and XI of that Act as may be necessary to accomplish the goals of the demonstration, ensure beneficiary access to acute and post-acute care, and maintain quality of care. 
(d) E
VALUATION AND REPORT .— 
(1) D ATA.—Each State selected to participate in the dem-

onstration project under this section shall provide to the Sec-retary, in such form and manner as the Secretary shall specify, relevant data necessary to monitor outcomes, costs, and quality, and evaluate the rationales for selection of the episodes of care and services specified by States under subsection (b)(3). 
(2) R
EPORT .—Not later than 1 year after the conclusion 
of the demonstration project, the Secretary shall submit a report to Congress on the results of the demonstration project.

SEC. 2705. MEDICAID GLOBAL PAYMENT SYSTEM DEMONSTRATION 
PROJECT. 
(a) I NGENERAL .—The Secretary of Health and Human Services 
(referred to in this section as the ‘‘Secretary’’) shall, in coordination with the Center for Medicare and Medicaid Innovation (as estab-

lished under section 1115A of the Social Security Act, as added by section 3021 of this Act), establish the Medicaid Global Payment System Demonstration Project under which a participating State shall adjust the payments made to an eligible safety net hospital system or network from a fee-for-service payment structure to a global capitated payment model. 
(b) D
URATION AND SCOPE .—The demonstration project con-

ducted under this section shall operate during a period of fiscal years 2010 through 2012. The Secretary shall select not more than 5 States to participate in the demonstration project. 
(c) E
LIGIBLE SAFETY NETHOSPITAL SYSTEM OR NETWORK .— 
For purposes of this section, the term ‘‘eligible safety net hospital system or network’’ means a large, safety net hospital system or network (as defined by the Secretary) that operates within a State selected by the Secretary under subsection (b). 
(d) E

(d) E
(1) T ESTING .—The Innovation Center shall test and 
evaluate the demonstration project conducted under this section Definition. Selection. 42 USC 1315a 
note. 
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124 STAT. 325 PUBLIC LAW 111–148—MAR. 23, 2010 
to examine any changes in health care quality outcomes and 
spending by the eligible safety net hospital systems or networks. 
(2) B UDGET NEUTRALITY .—During the testing period under 
paragraph (1), any budget neutrality requirements under sec-tion 1115A(b)(3) of the Social Security Act (as so added) shall not be applicable. 
(3) M
ODIFICATION .—During the testing period under para-

graph (1), the Secretary may, in the Secretary’s discretion, modify or terminate the demonstration project conducted under this section. (e) R
EPORT .—Not later than 12 months after the date of comple-

tion of the demonstration project under this section, the Secretary shall submit to Congress a report containing the results of the evaluation and testing conducted under subsection (d), together with recommendations for such legislation and administrative action as the Secretary determines appropriate. 
(f) A
UTHORIZATION OF APPROPRIATIONS .—There are authorized 
to be appropriated such sums as are necessary to carry out this section. 
SEC. 2706. PEDIATRIC ACCOUNTABLE CARE ORGANIZATION DEM-

ONSTRATION PROJECT. 
(a) A UTHORITY TOCONDUCT DEMONSTRATION .— 

Services (referred to in this section as the ‘‘Secretary’’) shall establish the Pediatric Accountable Care Organization Dem-onstration Project to authorize a participating State to allow pediatric medical providers that meet specified requirements to be recognized as an accountable care organization for pur-poses of receiving incentive payments (as described under sub-section (d)), in the same manner as an accountable care organization is recognized and provided with incentive pay-ments under

and provided with incentive pay-ments under section 1899 of the Social Security Act (as added by section 3022).

(2) D
January 1, 2012, and shall end on December 31, 2016. (b) A
PPLICATION .—A State that desires to participate in the 
demonstration project under this section shall submit to the Sec-retary an application at such time, in such manner, and containing such information as the Secretary may require. 
(c) R
(1) P ERFORMANCE GUIDELINES .—The Secretary, in consulta-

tion with the States and pediatric providers, shall establish guidelines to ensure that the quality of care delivered to individ-uals by a provider recognized as an accountable care organiza-tion under this section is not less than the quality of care that would have otherwise been provided to such individuals. 
(2) S
AVINGS REQUIREMENT .—A participating State, in con-

sultation with the Secretary, shall establish an annual minimal level of savings in expenditures for items and services covered under the Medicaid program under title XIX of the Social Security Act and the CHIP program under title XXI of such Act that must be reached by an accountable care organization in order for such organization to receive an incentive payment under subsection (d). 
(3) M
INIMUM PARTICIPATION PERIOD .—A provider desiring

to be recognized as an accountable care organization under Contracts. 42 USC 1396a 
note. 
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124 STAT. 326 PUBLIC LAW 111–148—MAR. 23, 2010 
the demonstration project shall enter into an agreement with 
the State to participate in the project for not less than a 3-year period. (d) I
NCENTIVE PAYMENT .—An accountable care organization

that meets the performance guidelines established by the Secretary under subsection (c)(1) and achieves savings greater than the annual minimal savings level established by the State under sub-section (c)(2) shall receive an incentive payment for such year equal to a portion (as determined appropriate by the Secretary) of the amount of such excess savings. The Secretary may establish an annual cap on incentive payments for an accountable care organization. 
(e) A

(e) A
SEC. 2707. MEDICAID EMERGENCY PSYCHIATRIC DEMONSTRATION 
PROJECT. 
(a) A UTHORITY TOCONDUCT DEMONSTRATION PROJECT .—The

Secretary of Health and Human Services (in this section referred to as the ‘‘Secretary’’) shall establish a demonstration project under which an eligible State (as described in subsection (c)) shall provide payment under the State Medicaid plan under title XIX of the Social Security Act to an institution for mental diseases that is not publicly owned or operated and that is subject to the require-ments of section 1867 of the Social Security Act (42 U.S.C. 1395dd) for the provision of medical

(42 U.S.C. 1395dd) for the provision of medical assistance available under such plan to individuals who—

(1) have attained age 21, but have not attained age 65; (2) are eligible for medical assistance under such plan; 
and 
(3) require such medical assistance to stabilize an emer-
gency medical condition. (b) S
TABILIZATION REVIEW .—A State shall specify in its applica-

tion described in subsection (c)(1) establish a mechanism for how it will ensure that institutions participating in the demonstration will determine whether or not such individuals have been stabilized (as defined in subsection (h)(5)). This mechanism shall commence

before the third day of the inpatient stay. States participating in the demonstration project may manage the provision of services for the stabilization of medical emergency conditions through utili-zation review, authorization, or management practices, or the application of medical necessity and appropriateness criteria applicable to behavioral health. 
(c) E
LIGIBLE STATE DEFINED .— 
(1) I N GENERAL .—An eligible State is a State that has

made an application and has been selected pursuant to para-graphs (2) and (3). 
(2) A
PPLICATION .—A State seeking to participate in the 
demonstration project under this section shall submit to the Secretary, at such time and in such format as the Secretary requires, an application that includes such information, provi-sions, and assurances, as the Secretary may require. 
(3) S
ELECTION .—A State shall be determined eligible for

the demonstration by the Secretary on a competitive basis among States with applications meeting the requirements of Commencement 
date. 42 USC 1396a 
note. 
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124 STAT. 327 PUBLIC LAW 111–148—MAR. 23, 2010 
paragraph (1). In selecting State applications for the demonstra-
tion project, the Secretary shall seek to achieve an appropriate national balance in the geographic distribution of such projects. (d) L
ENGTH OF DEMONSTRATION PROJECT .—The demonstration 
project established under this section shall be conducted for a period of 3 consecutive years. 
(e) L
IMITATIONS ON FEDERAL FUNDING .— 
(1) A PPROPRIATION .—

(1) A PPROPRIATION .— 
(A) I N GENERAL .—Out of any funds in the Treasury 
not otherwise appropriated, there is appropriated to carry out this section, $75,000,000 for fiscal year 2011. 
(B) B
UDGET AUTHORITY .—Subparagraph (A) constitutes 
budget authority in advance of appropriations Act and rep-resents the obligation of the Federal Government to provide for the payment of the amounts appropriated under that subparagraph. (2) 5-
YEAR AVAILABILITY .—Funds appropriated under para-

graph (1) shall remain available for obligation through December 31, 2015. 
(3) L
IMITATION ON PAYMENTS .—In no case may— 
(A) the aggregate amount of payments made by the 
Secretary to eligible States under this section exceed $75,000,000; or 
(B) payments be provided by the Secretary under this 
section after December 31, 2015. (4) F
UNDS ALLOCATED TO STATES .—Funds shall be allocated

to eligible States on the basis of criteria, including a State’s application and the availability of funds, as determined by the Secretary. 
(5) P
AYMENTS TO STATES .—The Secretary shall pay to each

eligible State, from its allocation under paragraph (4), an amount each quarter equal to the Federal medical assistance percentage of expenditures in the quarter for medical assistance described in subsection (a). As a condition of receiving payment, a State shall collect and report information, as determined necessary by the Secretary, for the purposes of providing Fed-eral oversight and conducting an evaluation under subsection (f)(1). (f) E
VALUATION AND REPORT TO CONGRESS .—

VALUATION AND REPORT TO CONGRESS .— 
(1) E VALUATION .—The Secretary shall conduct an evalua-
tion of the demonstration project in order to determine the impact on the functioning of the health and mental health service system and on individuals enrolled in the Medicaid program and shall include the following: 
(A) An assessment of access to inpatient mental health 
services under the Medicaid program; average lengths of 
inpatient stays; and emergency room visits.

inpatient stays; and emergency room visits. 
(B) An assessment of discharge planning by partici-
pating hospitals. 
(C) An assessment of the impact of the demonstration 
project on the costs of the full range of mental health services (including inpatient, emergency and ambulatory care). 
(D) An analysis of the percentage of consumers with 
Medicaid coverage who are admitted to inpatient facilities as a result of the demonstration project as compared to

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124 STAT. 328 PUBLIC LAW 111–148—MAR. 23, 2010 
those admitted to these same facilities through other 
means. 
(E) A recommendation regarding whether the dem-
onstration project should be continued after December 31, 2013, and expanded on a national basis. 
(2) R
EPORT .—Not later than December 31, 2013, the Sec-
retary shall submit to Congress and make available to the public a report on the findings of the evaluation under para-graph (1). (g) W
AIVER AUTHORITY .—

AIVER AUTHORITY .— 
(1) I N GENERAL .—The Secretary shall waive the limitation 
of subdivision (B) following paragraph (28) of section 1905(a) of the Social Security Act (42 U.S.C. 1396d(a)) (relating to limitations on payments for care or services for individuals under 65 years of age who are patients in an institution for mental diseases) for purposes of carrying out the demonstration project under this section. 
(2) L
IMITED OTHER WAIVER AUTHORITY .—The Secretary may

waive other requirements of titles XI and XIX of the Social Security Act (including the requirements of sections 1902(a)(1) (relating to statewideness) and 1902(1)(10)(B) (relating to com-parability)) only to extent necessary to carry out the demonstra-tion project under this section. (h) D
(1) E MERGENCY MEDICAL CONDITION .—The term ‘‘emergency

medical condition’’ means, with respect to an individual, an individual who expresses suicidal or homicidal thoughts or ges-tures, if determined dangerous to self or others. 
(2) F
EDERAL MEDICAL ASSISTANCE PERCENTAGE .—The term 
‘‘Federal medical assistance percentage’’ has the meaning given that term with respect to a State under section 1905(b) of the Social Security Act (42 U.S.C. 1396d(b)). 
(3) I
NSTITUTION FOR MENTAL DISEASES .—The term ‘‘institu-

tion for mental diseases’’ has the meaning given to that term in section 1905(i) of the Social Security Act (42 U.S.C. 1396d(i)). 
(4) M
EDICAL ASSISTANCE .—The term ‘‘medical assistance’’ 
has the meaning given that term in section 1905(a) of the Social Security Act (42 U.S.C. 1396d(a)). 
(5) S
TABILIZED .—The term ‘‘stabilized’’ means, with respect

to an individual, that the emergency medical condition no longer exists with respect to the individual and the individual is no longer dangerous to self or others. 
(6) S
TATE .—The term ‘‘State’’ has the meaning given that 
term for purposes of title XIX of the Social Security Act (42 U.S.C. 1396 et seq.). 
Subtitle J—Improvements to the Medicaid 
and CHIP Payment and Access Commis-sion (MACPAC) 
SEC. 2801. MACPAC ASSESSMENT OF POLICIES AFFECTING ALL MED-
ICAID BENEFICIARIES.

ICAID BENEFICIARIES. 
(a) I NGENERAL .—Section 1900 of the Social Security Act (42 
U.S.C. 1396) is amended— 
(1) in subsection (b)— 
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124 STAT. 329 PUBLIC LAW 111–148—MAR. 23, 2010 
(A) in paragraph (1)— 
(i) in the paragraph heading, by inserting ‘‘ FOR 
ALL STATES ’’ before ‘‘ AND ANNUAL ’’; and 
(ii) in subparagraph (A), by striking ‘‘children’s’’; (iii) in subparagraph (B), by inserting ‘‘, the Sec-
retary, and States’’ after ‘‘Congress’’; 
(iv) in subparagraph (C), by striking ‘‘March 1’’ 
and inserting ‘‘March 15’’; and 
(v) in subparagraph (D), by striking ‘‘June 1’’ and 
inserting ‘‘June 15’’; (B) in paragraph (2)—

inserting ‘‘June 15’’; (B) in paragraph (2)— 
(i) in subparagraph (A)— 
(I) in clause (i)— 
(aa) by inserting ‘‘the efficient provision 
of’’ after ‘‘expenditures for’’; and 
(bb) by striking ‘‘hospital, skilled nursing

facility, physician, Federally-qualified health center, rural health center, and other fees’’ and inserting ‘‘payments to medical, dental, and health professionals, hospitals, residential and long-term care providers, providers of home and community based services, Feder-ally-qualified health centers and rural health clinics, managed care entities, and providers of other covered items and services’’; and (II) in clause (iii), by inserting ‘‘(including how

such factors and methodologies enable such bene-ficiaries to obtain the services for which they are eligible, affect provider supply, and affect providers that serve a disproportionate share of low-income and other vulnerable populations)’’ after ‘‘bene-ficiaries’’; (ii) by redesignating subparagraphs (B) and (C) 
as subparagraphs (F) and (H), respectively; 
(iii) by inserting after subparagraph (A), the fol-
lowing: ‘‘(B) E
LIGIBILITY POLICIES .—Medicaid and CHIP eligi-

bility policies, including a determination of the degree to which Federal and State policies provide health care cov-erage to needy populations. 
‘‘(C) E
NROLLMENT AND RETENTION PROCESSES .—Med-

‘‘(C) E
icaid and CHIP enrollment and retention processes, including a determination of the degree to which Federal and State policies encourage the enrollment of individuals who are eligible for such programs and screen out individ-uals who are ineligible, while minimizing the share of 
program expenses devoted to such processes. 
‘‘(D) C
OVERAGE POLICIES .—Medicaid and CHIP benefit

OVERAGE POLICIES .—Medicaid and CHIP benefit 
and coverage policies, including a determination of the degree to which Federal and State policies provide access to the services enrollees require to improve and maintain their health and functional status. 
‘‘(E) Q
UALITY OF CARE .—Medicaid and CHIP policies 
as they relate to the quality of care provided under those programs, including a determination of the degree to which Federal and State policies achieve their stated goals and

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124 STAT. 330 PUBLIC LAW 111–148—MAR. 23, 2010 
interact with similar goals established by other purchasers 
of health care services.’’; 
(iv) by inserting after subparagraph (F) (as redesig-
nated by clause (ii) of this subparagraph), the following: ‘‘(G) I
NTERACTIONS WITH MEDICARE AND MEDICAID .—

NTERACTIONS WITH MEDICARE AND MEDICAID .— 
Consistent with paragraph (11), the interaction of policies under Medicaid and the Medicare program under title XVIII, including with respect to how such interactions affect access to services, payments, and dual eligible individuals.’’ and 
(v) in subparagraph (H) (as so redesignated), by 
inserting ‘‘and preventive, acute, and long-term serv-ices and supports’’ after ‘‘barriers’’; (C) by redesignating paragraphs (3) through (9) as

paragraphs (4) through (10), respectively; 
(D) by inserting after paragraph (2), the following new 
paragraph: ‘‘(3) R
ECOMMENDATIONS AND REPORTS OF STATE -SPECIFIC  
DATA .—MACPAC shall— 
‘‘(A) review national and State-specific Medicaid and 
CHIP data; and 
‘‘(B) submit reports and recommendations to Congress, 
the Secretary, and States based on such reviews.’’; 
(E) in paragraph (4), as redesignated by subparagraph

(C), by striking ‘‘or any other problems’’ and all that follows through the period and inserting ‘‘, as well as other factors that adversely affect, or have the potential to adversely affect, access to care by, or the health care status of, Medicaid and CHIP beneficiaries. MACPAC shall include in the annual report required under paragraph (1)(D) a description of all such areas or problems identified with respect to the period addressed in the report.’’;

(F) in paragraph (5), as so redesignated,— 
(i) in the paragraph heading, by inserting ‘‘
AND 
REGULATIONS ’’ after ‘‘ REPORTS ’’; and 
(ii) by striking ‘‘If’’ and inserting the following: 
‘‘(A) C ERTAIN SECRETARIAL REPORTS .—If’’; and 
(iii) in the second sentence, by inserting ‘‘and the 
Secretary’’ after ‘‘appropriate committees of Congress’’; and 
(iv) by adding at the end the following: 
‘‘(B) R
EGULATIONS .—MACPAC shall review Medicaid

EGULATIONS .—MACPAC shall review Medicaid 
and CHIP regulations and may comment through submis-sion of a report to the appropriate committees of Congress and the Secretary, on any such regulations that affect access, quality, or efficiency of health care.’’; 
(G) in paragraph (10), as so redesignated, by inserting 
‘‘, and shall submit with any recommendations, a report on the Federal and State-specific budget consequences of the recommendations’’ before the period; and

(H) by adding at the end the following: 
‘‘(11) C
ONSULTATION AND COORDINATION WITH MEDPAC .— 
‘‘(A) I N GENERAL .—MACPAC shall consult with the 
Medicare Payment Advisory Commission (in this paragraph referred to as ‘MedPAC’) established under section 1805 in carrying out its duties under this section, as appropriate and particularly with respect to the issues specified in Reports.

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124 STAT. 331 PUBLIC LAW 111–148—MAR. 23, 2010 
paragraph (2) as they relate to those Medicaid beneficiaries

who are dually eligible for Medicaid and the Medicare program under title XVIII, adult Medicaid beneficiaries (who are not dually eligible for Medicare), and beneficiaries under Medicare. Responsibility for analysis of and rec-ommendations to change Medicare policy regarding Medi-care beneficiaries, including Medicare beneficiaries who are dually eligible for Medicare and Medicaid, shall rest with MedPAC. 
‘‘(B) I
NFORMATION SHARING .—MACPAC and MedPAC

‘‘(B) I
NFORMATION SHARING .—MACPAC and MedPAC 
shall have access to deliberations and records of the other such entity, respectively, upon the request of the other such entity. ‘‘(12) C
ONSULTATION WITH STATES .—MACPAC shall regu-

larly consult with States in carrying out its duties under this section, including with respect to developing processes for car-rying out such duties, and shall ensure that input from States is taken into account and represented in MACPAC’s rec-ommendations and reports. 
‘‘(13) C
OORDINATE AND CONSULT WITH THE FEDERAL COORDI -
NATED HEALTH CARE OFFICE .—MACPAC shall coordinate and

consult with the Federal Coordinated Health Care Office estab-lished under section 2081 of the Patient Protection and Afford-able Care Act before making any recommendations regarding dual eligible individuals. 
‘‘(14) P
ROGRAMMATIC OVERSIGHT VESTED IN THE SEC -
RETARY .—MACPAC’s authority to make recommendations in 
accordance with this section shall not affect, or be considered to duplicate, the Secretary’s authority to carry out Federal responsibilities with respect to Medicaid and CHIP.’’;

(2) in subsection (c)(2)— 
(A) by striking subparagraphs (A) and (B) and inserting 
‘‘(A) I
N GENERAL .—The membership of MACPAC shall

include individuals who have had direct experience as enrollees or parents or caregivers of enrollees in Medicaid or CHIP and individuals with national recognition for their expertise in Federal safety net health programs, health finance and economics, actuarial science, health plans and integrated delivery systems, reimbursement for health care, health information technology, and other providers of health services, public health, and other related fields, who provide a mix of different

related fields, who provide a mix of different professions, broad geographic representation, and a balance between urban and rural representation.

include (but not be limited to) physicians, dentists, and other health professionals, employers, third-party payers, and individuals with expertise in the delivery of health services. Such membership shall also include representa-tives of children, pregnant women, the elderly, individuals with disabilities, caregivers, and dual eligible individuals, current or former representatives of State agencies respon-sible for administering Medicaid, and current or former representatives of State

and current or former representatives of State agencies responsible for admin-istering CHIP.’’.

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124 STAT. 332 PUBLIC LAW 111–148—MAR. 23, 2010 
(3) in subsection (d)(2), by inserting ‘‘and State’’ after ‘‘Fed-
eral’’; 
(4) in subsection (e)(1), in the first sentence, by inserting 
‘‘and, as a condition for receiving payments under sections 1903(a) and 2105(a), from any State agency responsible for administering Medicaid or CHIP,’’ after ‘‘United States’’; and 
(5) in subsection (f)— 
(A) in the subsection heading, by striking ‘‘A
UTHORIZA -

UTHORIZA -
TION OF APPROPRIATIONS ’’ and inserting ‘‘F UNDING ’’; 
(B) in paragraph (1), by inserting ‘‘(other than for 
fiscal year 2010)’’ before ‘‘in the same manner’’; and 
‘‘(3) F UNDING FOR FISCAL YEAR 2010 .— 
‘‘(A) I N GENERAL .—Out of any funds in the Treasury 
not otherwise appropriated, there is appropriated to MACPAC to carry out the provisions of this section for fiscal year 2010, $9,000,000. 
‘‘(B) T

‘‘(B) T
RANSFER OF FUNDS .—Notwithstanding section 
2104(a)(13), from the amounts appropriated in such section for fiscal year 2010, $2,000,000 is hereby transferred and made available in such fiscal year to MACPAC to carry out the provisions of this section. ‘‘(4) A
VAILABILITY .—Amounts made available under para-
graphs (2) and (3) to MACPAC to carry out the provisions of this section shall remain available until expended.’’. (b) C
ONFORMING MEDPAC A MENDMENTS .—Section 1805(b) of

the Social Security Act (42 U.S.C. 1395b–6(b)), is amended— 
(1) in paragraph (1)(C), by striking ‘‘March 1 of each year 
(beginning with 1998)’’ and inserting ‘‘March 15’’; 
(2) in paragraph (1)(D), by inserting ‘‘, and (beginning 
with 2012) containing an examination of the topics described in paragraph (9), to the extent feasible’’ before the period; and 
(3) by adding at the end the following: ‘‘(9) R
EVIEW AND ANNUAL REPORT ON MEDICAID AND

EVIEW AND ANNUAL REPORT ON MEDICAID AND  
COMMERCIAL TRENDS .—The Commission shall review and report

on aggregate trends in spending, utilization, and financial performance under the Medicaid program under title XIX and the private market for health care services with respect to providers for which, on an aggregate national basis, a signifi-cant portion of revenue or services is associated with the Med-icaid program. Where appropriate, the Commission shall con-duct such review in consultation with the Medicaid and CHIP Payment and Access Commission established under section 1900 (in this

established under section 1900 (in this section referred to as ‘MACPAC’).

‘‘(10) C
NATED HEALTH CARE OFFICE .—The Commission shall coordinate 
and consult with the Federal Coordinated Health Care Office established under section 2081 of the Patient Protection and Affordable Care Act before making any recommendations regarding dual eligible individuals. 
‘‘(11) I
NTERACTION OF MEDICAID AND MEDICARE .—The

NTERACTION OF MEDICAID AND MEDICARE .—The 
Commission shall consult with MACPAC in carrying out its duties under this section, as appropriate. Responsibility for analysis of and recommendations to change Medicare policy regarding Medicare beneficiaries, including Medicare bene-ficiaries who are dually eligible for Medicare and Medicaid,

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124 STAT. 333 PUBLIC LAW 111–148—MAR. 23, 2010 
shall rest with the Commission. Responsibility for analysis 
of and recommendations to change Medicaid policy regarding Medicaid beneficiaries, including Medicaid beneficiaries who are dually eligible for Medicare and Medicaid, shall rest with MACPAC.’’. 
Subtitle K—Protections for American 
Indians and Alaska Natives 
SEC. 2901. SPECIAL RULES RELATING TO INDIANS. 
(a) N OCOST-SHARING FOR INDIANS WITHINCOME AT OR BELOW

300 P ERCENT OF POVERTY ENROLLED IN COVERAGE THROUGH A  
STATE EXCHANGE .—For provisions prohibiting cost sharing for 
Indians enrolled in any qualified health plan in the individual market through an Exchange, see section 1402(d) of the Patient Protection and Affordable Care Act. 
(b) P
AYER OF LASTRESORT .—Health programs operated by the

Indian Health Service, Indian tribes, tribal organizations, and Urban Indian organizations (as those terms are defined in section 4 of the Indian Health Care Improvement Act (25 U.S.C. 1603)) shall be the payer of last resort for services provided by such Service, tribes, or organizations to individuals eligible for services through such programs, notwithstanding any Federal, State, or local law to the contrary. 
(c) F
ACILITATING ENROLLMENT OF INDIANS UNDER THE EXPRESS

LANE OPTION .—Section 1902(e)(13)(F)(ii) of the Social Security Act 
(42 U.S.C. 1396a(e)(13)(F)(ii)) is amended— 
(1) in the clause heading, by inserting ‘‘ AND INDIAN TRIBES  
AND TRIBAL ORGANIZATIONS ’’ after ‘‘ AGENCIES ’’; and 
(2) by adding at the end the following: 
‘‘(IV) The Indian Health Service, an Indian 
Tribe, Tribal Organization, or Urban Indian Organization (as defined in section 1139(c)).’’. 
(d) T
ECHNICAL CORRECTIONS .—Section 1139(c) of the Social

Security Act (42 U.S.C. 1320b–9(c)) is amended by striking ‘‘In this section’’ and inserting ‘‘For purposes of this section, title XIX, and title XXI’’. 
SEC. 2902. ELIMINATION OF SUNSET FOR REIMBURSEMENT FOR ALL 
MEDICARE PART B SERVICES FURNISHED BY CERTAIN INDIAN HOSPITALS AND CLINICS. 
(a) R EIMBURSEMENT FOR ALLMEDICARE PARTB S ERVICES FUR-
NISHED BY CERTAIN INDIAN HOSPITALS AND CLINICS .—Section

1880(e)(1)(A) of the Social Security Act (42 U.S.C. 1395qq(e)(1)(A)) is amended by striking ‘‘during the 5-year period beginning on’’ and inserting ‘‘on or after’’. 
(b) E
shall apply to items or services furnished on or after January 1, 2010. Applicability. 
42 USC 1395qq note. 25 USC 1623. 25 USC 1623.

42 USC 1395qq note. 25 USC 1623. 25 USC 1623. 
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124 STAT. 334 PUBLIC LAW 111–148—MAR. 23, 2010 
Subtitle L—Maternal and Child Health 
Services 
SEC. 2951. MATERNAL, INFANT, AND EARLY CHILDHOOD HOME VIS-
ITING PROGRAMS. 
Title V of the Social Security Act (42 U.S.C. 701 et seq.) 
is amended by adding at the end the following new section: 
‘‘SEC. 511. MATERNAL, INFANT, AND EARLY CHILDHOOD HOME VIS-
‘‘(a) P URPOSES .—The purposes of this section are— 
‘‘(1) to strengthen and improve the programs and activities

carried out under this title; 
‘‘(2) to improve coordination of services for at risk commu-
nities; and 
‘‘(3) to identify and provide comprehensive services to 
improve outcomes for families who reside in at risk commu-nities. ‘‘(b) R
EQUIREMENT FOR ALLSTATES TOASSESS STATEWIDE  
NEEDS AND IDENTIFY AT RISKCOMMUNITIES .— 
‘‘(1) I N GENERAL .—Not later than 6 months after the date

of enactment of this section, each State shall, as a condition of receiving payments from an allotment for the State under section 502 for fiscal year 2011, conduct a statewide needs assessment (which shall be separate from the statewide needs assessment required under section 505(a)) that identifies— 
‘‘(A) communities with concentrations of— 
‘‘(i) premature birth, low-birth weight infants, and 
infant mortality, including infant death due to neglect,

or other indicators of at-risk prenatal, maternal, new-born, or child health; 
‘‘(ii) poverty; ‘‘(iii) crime; ‘‘(iv) domestic violence; ‘‘(v) high rates of high-school drop-outs; ‘‘(vi) substance abuse; ‘‘(vii) unemployment; or ‘‘(viii) child maltreatment; 
‘‘(B) the quality and capacity of existing programs or 
initiatives for early childhood home visitation in the State including— 
‘‘(i) the number and types of individuals and fami-

lies who are receiving services under such programs or initiatives; 
‘‘(ii) the gaps in early childhood home visitation 
in the State; and 
‘‘(iii) the extent to which such programs or initia-
tives are meeting the needs of eligible families described in subsection (k)(2); and ‘‘(C) the State’s capacity for providing substance abuse 
treatment and counseling services to individuals and fami-lies in need of such treatment or services. ‘‘(2) C
OORDINATION WITH OTHER ASSESSMENTS .—In con-

ducting the statewide needs assessment required under para-graph (1), the State shall coordinate with, and take into account, other appropriate needs assessments conducted by Deadline. 42 USC 711. 
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124 STAT. 335 PUBLIC LAW 111–148—MAR. 23, 2010 
the State, as determined by the Secretary, including the needs

assessment required under section 505(a) (both the most recently completed assessment and any such assessment in progress), the communitywide strategic planning and needs assessments conducted in accordance with section 640(g)(1)(C) of the Head Start Act, and the inventory of current unmet needs and current community-based and prevention-focused programs and activities to prevent child abuse and neglect, and other family resource services operating in the State required under section 205(3) of

in the State required under section 205(3) of the Child Abuse Prevention and Treatment Act.

‘‘(3) S
UBMISSION TO THE SECRETARY .—Each State shall 
submit to the Secretary, in such form and manner as the Secretary shall require— 
‘‘(A) the results of the statewide needs assessment 
required under paragraph (1); and 
‘‘(B) a description of how the State intends to address

needs identified by the assessment, particularly with respect to communities identified under paragraph (1)(A), which may include applying for a grant to conduct an early childhood home visitation program in accordance with the requirements of this section. 
‘‘(c) G
RANTS FOR EARLY CHILDHOOD HOME VISITATION PRO-
GRAMS .— 
‘‘(1) A UTHORITY TO MAKE GRANTS .—In addition to any other

payments made under this title to a State, the Secretary shall make grants to eligible entities to enable the entities to deliver services under early childhood home visitation programs that satisfy the requirements of subsection (d) to eligible families in order to promote improvements in maternal and prenatal health, infant health, child health and development, parenting related to child development outcomes, school readiness, and the socioeconomic status of such families, and reductions in

status of such families, and reductions in child abuse, neglect, and injuries.

‘‘(2) A
UTHORITY TO USE INITIAL GRANT FUNDS FOR PLANNING  
OR IMPLEMENTATION .—An eligible entity that receives a grant 
under paragraph (1) may use a portion of the funds made available to the entity during the first 6 months of the period for which the grant is made for planning or implementation activities to assist with the establishment of early childhood home visitation programs that satisfy the requirements of sub-section (d). 
‘‘(3) G
RANT DURATION .—The Secretary shall determine the

period of years for which a grant is made to an eligible entity under paragraph (1). 
‘‘(4) T
ECHNICAL ASSISTANCE .—The Secretary shall provide 
an eligible entity that receives a grant under paragraph (1) with technical assistance in administering programs or activi-ties conducted in whole or in part with grant funds. ‘‘(d) R
EQUIREMENTS .—The requirements of this subsection for 
an early childhood home visitation program conducted with a grant made under this section are as follows: 
‘‘(1) Q

‘‘(1) Q
UANTIFIABLE , MEASURABLE IMPROVEMENT IN BENCH -
MARK AREAS .— 
‘‘(A) I N GENERAL .—The eligible entity establishes, sub-
ject to the approval of the Secretary, quantifiable, measur-able 3- and 5-year benchmarks for demonstrating that the Determination. 
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124 STAT. 336 PUBLIC LAW 111–148—MAR. 23, 2010 
program results in improvements for the eligible families 
participating in the program in each of the following areas: 
‘‘(i) Improved maternal and newborn health. ‘‘(ii) Prevention of child injuries, child abuse, 
neglect, or maltreatment, and reduction of emergency department visits. 
‘‘(iii) Improvement in school readiness and achieve-
ment. 
‘‘(iv) Reduction in crime or domestic violence. ‘‘(v) Improvements in family economic self-suffi-

ciency. 
‘‘(vi) Improvements in the coordination and refer-
rals for other community resources and supports. ‘‘(B) D
EMONSTRATION OF IMPROVEMENTS AFTER 3  
YEARS .— 
‘‘(i) R EPORT TO THE SECRETARY .—Not later than 
30 days after the end of the 3rd year in which the eligible entity conducts the program, the entity submits to the Secretary a report demonstrating improvement in at least 4 of the areas specified in subparagraph (A). 
‘‘(ii) C
ORRECTIVE ACTION PLAN .—If the report sub-

mitted by the eligible entity under clause (i) fails to demonstrate improvement in at least 4 of the areas specified in subparagraph (A), the entity shall develop and implement a plan to improve outcomes in each of the areas specified in subparagraph (A), subject to approval by the Secretary. The plan shall include provisions for the Secretary to monitor implementation of the plan and conduct continued oversight of the program, including through submission by the entity of regular reports to

‘‘(iii) T
ECHNICAL ASSISTANCE .— 
‘‘(I) I N GENERAL .—The Secretary shall provide 
an eligible entity required to develop and imple-ment an improvement plan under clause (ii) with technical assistance to develop and implement the plan. The Secretary may provide the technical assistance directly or through grants, contracts, or cooperative agreements. 
‘‘(II) A
DVISORY PANEL .—The Secretary shall

‘‘(II) A
DVISORY PANEL .—The Secretary shall 
establish an advisory panel for purposes of obtaining recommendations regarding the tech-nical assistance provided to entities in accordance with subclause (I). ‘‘(iv) N
O IMPROVEMENT OR FAILURE TO SUBMIT  
REPORT .—If the Secretary determines after a period

of time specified by the Secretary that an eligible entity implementing an improvement plan under clause (ii) has failed to demonstrate any improvement in the areas specified in subparagraph (A), or if the Secretary determines that an eligible entity has failed to submit the report required under clause (i), the Secretary shall terminate the entity’s grant and may include any unex-pended grant funds in grants made to nonprofit organizations under subsection (h)(2)(B). Determination.

Termination. Establishment. 
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124 STAT. 337 PUBLIC LAW 111–148—MAR. 23, 2010 
‘‘(C) F INAL REPORT .—Not later than December 31, 2015, 
the eligible entity shall submit a report to the Secretary demonstrating improvements (if any) in each of the areas specified in subparagraph (A). ‘‘(2) I
MPROVEMENTS IN OUTCOMES FOR INDIVIDUAL FAMI -
LIES.— 
‘‘(A) I N GENERAL .—The program is designed, with

respect to an eligible family participating in the program, to result in the participant outcomes described in subpara-graph (B) that the eligible entity identifies on the basis of an individualized assessment of the family, are relevant for that family. 
‘‘(B) P
ARTICIPANT OUTCOMES .—The participant out-
comes described in this subparagraph are the following: 
‘‘(i) Improvements in prenatal, maternal, and new-
born health, including improved pregnancy outcomes

‘‘(ii) Improvements in child health and develop-
ment, including the prevention of child injuries and maltreatment and improvements in cognitive, lan-guage, social-emotional, and physical developmental indicators. 
‘‘(iii) Improvements in parenting skills. ‘‘(iv) Improvements in school readiness and child 
academic achievement. 
‘‘(v) Reductions in crime or domestic violence. ‘‘(vi) Improvements in family economic self-suffi-
ciency. 
‘‘(vii) Improvements in the coordination of referrals

for, and the provision of, other community resources and supports for eligible families, consistent with State child welfare agency training. 
‘‘(3) C
ORE COMPONENTS .—The program includes the fol-
lowing core components: 
‘‘(A) S ERVICE DELIVERY MODEL OR MODELS .— 
‘‘(i) I N GENERAL .—Subject to clause (ii), the pro-
gram is conducted using 1 or more of the service delivery models described in item (aa) or (bb) of sub-clause (I) or in subclause (II) selected by the eligible entity:

home visitation model that has been in existence for at least 3 years and is research-based, grounded in relevant empirically-based knowledge, linked to program determined outcomes, associated with a national organization or institution of higher edu-cation that has comprehensive home visitation pro-gram standards that ensure high quality service delivery and continuous program quality improve-ment, and has demonstrated significant, (and in the case of the service delivery model described in

case of the service delivery model described in item (aa), sustained) positive outcomes, as described in the benchmark areas specified in paragraph (1)(A) and the participant outcomes described in paragraph (2)(B), when evaluated using well-designed and rigorous—

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124 STAT. 338 PUBLIC LAW 111–148—MAR. 23, 2010 
‘‘(aa) randomized controlled research 
designs, and the evaluation results have been published in a peer-reviewed journal; or 
‘‘(bb) quasi-experimental research designs. 
‘‘(II) The model conforms to a promising and

‘‘(II) The model conforms to a promising and 
new approach to achieving the benchmark areas specified in paragraph (1)(A) and the participant outcomes described in paragraph (2)(B), has been developed or identified by a national organization or institution of higher education, and will be evaluated through well-designed and rigorous process. ‘‘(ii) M
AJORITY OF GRANT FUNDS USED FOR EVI -
DENCE -BASED MODELS .—An eligible entity shall use not

more than 25 percent of the amount of the grant paid to the entity for a fiscal year for purposes of conducting a program using the service delivery model described in clause (i)(II). 
‘‘(iii) C
RITERIA FOR EVIDENCE OF EFFECTIVENESS  
OF MODELS .—The Secretary shall establish criteria for 
evidence of effectiveness of the service delivery models and shall ensure that the process for establishing the criteria is transparent and provides the opportunity for public comment. ‘‘(B) A

DDITIONAL REQUIREMENTS .— 
‘‘(i) The program adheres to a clear, consistent 
model that satisfies the requirements of being grounded in empirically-based knowledge related to home visiting and linked to the benchmark areas speci-fied in paragraph (1)(A) and the participant outcomes described in paragraph (2)(B) related to the purposes of the program. 
‘‘(ii) The program employs well-trained and com-

petent staff, as demonstrated by education or training, such as nurses, social workers, educators, child development specialists, or other well-trained and com-petent staff, and provides ongoing and specific training on the model being delivered. 
‘‘(iii) The program maintains high quality super-
vision to establish home visitor competencies. 
‘‘(iv) The program demonstrates strong organiza-
tional capacity to implement the activities involved.

‘‘(v) The program establishes appropriate linkages 
and referral networks to other community resources and supports for eligible families. 
‘‘(vi) The program monitors the fidelity of program 
implementation to ensure that services are delivered pursuant to the specified model. 
‘‘(4) P
RIORITY FOR SERVING HIGH -RISK POPULATIONS .—The 
eligible entity gives priority to providing services under the program to the following: 
‘‘(A) Eligible families who reside in communities in

need of such services, as identified in the statewide needs assessment required under subsection (b)(1)(A). 
‘‘(B) Low-income eligible families. ‘‘(C) Eligible families who are pregnant women who 
have not attained age 21. 
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124 STAT. 339 PUBLIC LAW 111–148—MAR. 23, 2010 
‘‘(D) Eligible families that have a history of child abuse 
or neglect or have had interactions with child welfare serv-ices. 
‘‘(E) Eligible families that have a history of substance 
abuse or need substance abuse treatment. 
‘‘(F) Eligible families that have users of tobacco prod-
ucts in the home. 
‘‘(G) Eligible families that are or have children with 
low student achievement. 
‘‘(H) Eligible families with children with developmental

delays or disabilities. 
‘‘(I) Eligible families who, or that include individuals 
who, are serving or formerly served in the Armed Forces, including such families that have members of the Armed Forces who have had multiple deployments outside of the United States. 
‘‘(e) A
PPLICATION REQUIREMENTS .—An eligible entity desiring 
a grant under this section shall submit an application to the Sec-retary for approval, in such manner as the Secretary may require, that includes the following:

‘‘(1) A description of the populations to be served by the 
entity, including specific information regarding how the entity will serve high risk populations described in subsection (d)(4). 
‘‘(2) An assurance that the entity will give priority to 
serving low-income eligible families and eligible families who reside in at risk communities identified in the statewide needs assessment required under subsection (b)(1)(A). 
‘‘(3) The service delivery model or models described in

subsection (d)(3)(A) that the entity will use under the program and the basis for the selection of the model or models. 
‘‘(4) A statement identifying how the selection of the popu-
lations to be served and the service delivery model or models that the entity will use under the program for such populations is consistent with the results of the statewide needs assessment conducted under subsection (b). 
‘‘(5) The quantifiable, measurable benchmarks established

by the State to demonstrate that the program contributes to improvements in the areas specified in subsection (d)(1)(A). 
‘‘(6) An assurance that the entity will obtain and submit 
documentation or other appropriate evidence from the organiza-tion or entity that developed the service delivery model or models used under the program to verify that the program is implemented and services are delivered according to the model specifications.

‘‘(7) Assurances that the entity will establish procedures 
to ensure that— 
‘‘(A) the participation of each eligible family in the 
program is voluntary; and 
‘‘(B) services are provided to an eligible family in 
accordance with the individual assessment for that family. ‘‘(8) Assurances that the entity will— 
‘‘(A) submit annual reports to the Secretary regarding

the program and activities carried out under the program that include such information and data as the Secretary shall require; and 
‘‘(B) participate in, and cooperate with, data and 
information collection necessary for the evaluation required 
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124 STAT. 340 PUBLIC LAW 111–148—MAR. 23, 2010 
under subsection (g)(2) and other research and evaluation 
activities carried out under subsection (h)(3). ‘‘(9) A description of other State programs that include

home visitation services, including, if applicable to the State, other programs carried out under this title with funds made available from allotments under section 502(c), programs funded under title IV, title II of the Child Abuse Prevention and Treatment Act (relating to community-based grants for the prevention of child abuse and neglect), and section 645A of the Head Start Act (relating to Early Head Start programs). 
‘‘(10) Other information as required by the Secretary. 
‘‘(f) M

‘‘(f) M
AINTENANCE OF EFFORT .—Funds provided to an eligible 
entity receiving a grant under this section shall supplement, and not supplant, funds from other sources for early childhood home visitation programs or initiatives. 
‘‘(g) E
‘‘(1) I NDEPENDENT , EXPERT ADVISORY PANEL .—The Sec-

retary, in accordance with subsection (h)(1)(A), shall appoint an independent advisory panel consisting of experts in program evaluation and research, education, and early childhood development— 
‘‘(A) to review, and make recommendations on, the 
design and plan for the evaluation required under para-graph (2) within 1 year after the date of enactment of this section; 
‘‘(B) to maintain and advise the Secretary regarding 
the progress of the evaluation; and

the progress of the evaluation; and 
‘‘(C) to comment, if the panel so desires, on the report 
submitted under paragraph (3). ‘‘(2) A
UTHORITY TO CONDUCT EVALUATION .—On the basis 
of the recommendations of the advisory panel under paragraph (1), the Secretary shall, by grant, contract, or interagency agree-ment, conduct an evaluation of the statewide needs assessments submitted under subsection (b) and the grants made under subsections (c) and (h)(3)(B). The evaluation shall include—

‘‘(A) an analysis, on a State-by-State basis, of the 
results of such assessments, including indicators of maternal and prenatal health and infant health and mor-tality, and State actions in response to the assessments; 
and 
‘‘(B) an assessment of— 
‘‘(i) the effect of early childhood home visitation 
programs on child and parent outcomes, including with respect to each of the benchmark areas specified in subsection (d)(1)(A) and the participant outcomes described in subsection (d)(2)(B);

‘‘(ii) the effectiveness of such programs on different 
populations, including the extent to which the ability of programs to improve participant outcomes varies across programs and populations; and 
‘‘(iii) the potential for the activities conducted 
under such programs, if scaled broadly, to improve health care practices, eliminate health disparities, and improve health care system quality, efficiencies, and reduce costs. Assessment. Grants. 
Contracts. Establishment.

Contracts. Establishment. 
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124 STAT. 341 PUBLIC LAW 111–148—MAR. 23, 2010 
‘‘(3) R EPORT .—Not later than March 31, 2015, the Secretary 
shall submit a report to Congress on the results of the evalua-tion conducted under paragraph (2) and shall make the report publicly available. ‘‘(h) O
THER PROVISIONS .— 
‘‘(1) I NTRA -AGENCY COLLABORATION .—The Secretary shall

ensure that the Maternal and Child Health Bureau and the Administration for Children and Families collaborate with respect to carrying out this section, including with respect to— 
‘‘(A) reviewing and analyzing the statewide needs

assessments required under subsection (b), the awarding and oversight of grants awarded under this section, the establishment of the advisory panels required under sub-sections (d)(1)(B)(iii)(II) and (g)(1), and the evaluation and report required under subsection (g); and 
‘‘(B) consulting with other Federal agencies with

responsibility for administering or evaluating programs that serve eligible families to coordinate and collaborate with respect to research related to such programs and families, including the Office of the Assistant Secretary for Planning and Evaluation of the Department of Health and Human Services, the Centers for Disease Control and Prevention, the National Institute of Child Health and Human Development of the National Institutes of Health, the Office of Juvenile Justice and Delinquency

the Office of Juvenile Justice and Delinquency Prevention of the Department of Justice, and the Institute of Education Sciences of the Department of Education. ‘‘(2) G

RANTS TO ELIGIBLE ENTITIES THAT ARE NOT STATES .— 
‘‘(A) I NDIAN TRIBES , TRIBAL ORGANIZATIONS , OR URBAN  
INDIAN ORGANIZATIONS .—The Secretary shall specify

requirements for eligible entities that are Indian Tribes (or a consortium of Indian Tribes), Tribal Organizations, or Urban Indian Organizations to apply for and conduct an early childhood home visitation program with a grant under this section. Such requirements shall, to the greatest extent practicable, be consistent with the requirements applicable to eligible entities that are States and shall require an Indian Tribe (or consortium), Tribal Organiza-tion, or Urban Indian Organization to—

‘‘(i) conduct a needs assessment similar to the 
assessment required for all States under subsection (b); and 
‘‘(ii) establish quantifiable, measurable 3- and 5- 
year benchmarks consistent with subsection (d)(1)(A). ‘‘(B) N
ONPROFIT ORGANIZATIONS .—If, as of the begin-

ning of fiscal year 2012, a State has not applied or been approved for a grant under this section, the Secretary may use amounts appropriated under paragraph (1) of subsection (j) that are available for expenditure under para-graph (3) of that subsection to make a grant to an eligible entity that is a nonprofit organization described in sub-section (k)(1)(B) to conduct an early childhood home visita-tion program in the State. The Secretary shall specify the requirements for such an organization

specify the requirements for such an organization to apply for and conduct the program which shall, to the greatest extent practicable, be consistent with the requirements applicable Requirements.

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124 STAT. 342 PUBLIC LAW 111–148—MAR. 23, 2010 
to eligible entities that are States and shall require the 
organization to— 
‘‘(i) carry out the program based on the needs 
assessment conducted by the State under subsection (b); and 
year benchmarks consistent with subsection (d)(1)(A). 
‘‘(3) R
ESEARCH AND OTHER EVALUATION ACTIVITIES .— 
‘‘(A) I N GENERAL .—The Secretary shall carry out a

continuous program of research and evaluation activities in order to increase knowledge about the implementation and effectiveness of home visiting programs, using random assignment designs to the maximum extent feasible. The Secretary may carry out such activities directly, or through grants, cooperative agreements, or contracts. 
‘‘(B) R
EQUIREMENTS .—The Secretary shall ensure 
that— 
‘‘(i) evaluation of a specific program or project is

conducted by persons or individuals not directly involved in the operation of such program or project; and 
‘‘(ii) the conduct of research and evaluation activi-
ties includes consultation with independent researchers, State officials, and developers and pro-viders of home visiting programs on topics including research design and administrative data matching. 
‘‘(4) R
EPORT AND RECOMMENDATION .—Not later than

EPORT AND RECOMMENDATION .—Not later than 
December 31, 2015, the Secretary shall submit a report to Congress regarding the programs conducted with grants under this section. The report required under this paragraph shall include— 
‘‘(A) information regarding the extent to which eligible 
entities receiving grants under this section demonstrated improvements in each of the areas specified in subsection (d)(1)(A); 
‘‘(B) information regarding any technical assistance

provided under subsection (d)(1)(B)(iii)(I), including the type of any such assistance provided; and 
‘‘(C) recommendations for such legislative or adminis-
trative action as the Secretary determines appropriate. 
‘‘(i) A
PPLICATION OF OTHER PROVISIONS OF TITLE.— 
‘‘(1) I N GENERAL .—Except as provided in paragraph (2), 
the other provisions of this title shall not apply to a grant made under this section. 
‘‘(2) E
XCEPTIONS .—The following provisions of this title

shall apply to a grant made under this section to the same extent and in the same manner as such provisions apply to allotments made under section 502(c): 
‘‘(A) Section 504(b)(6) (relating to prohibition on pay-
ments to excluded individuals and entities). 
‘‘(B) Section 504(c) (relating to the use of funds for 
the purchase of technical assistance). 
‘‘(C) Section 504(d) (relating to a limitation on adminis-
trative expenditures). 
‘‘(D) Section 506 (relating to reports and audits), but

only to the extent determined by the Secretary to be appro-priate for grants made under this section. 
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124 STAT. 343 PUBLIC LAW 111–148—MAR. 23, 2010 
‘‘(E) Section 507 (relating to penalties for false state-
ments). 
‘‘(F) Section 508 (relating to nondiscrimination). ‘‘(G) Section 509(a) (relating to the administration of 
the grant program). 
‘‘(j) A
PPROPRIATIONS .— 
‘‘(1) I N GENERAL .—Out of any funds in the Treasury not 
otherwise appropriated, there are appropriated to the Secretary to carry out this section—

‘‘(A) $100,000,000 for fiscal year 2010; ‘‘(B) $250,000,000 for fiscal year 2011; ‘‘(C) $350,000,000 for fiscal year 2012; ‘‘(D) $400,000,000 for fiscal year 2013; and ‘‘(E) $400,000,000 for fiscal year 2014. 
‘‘(2) R
ESERVATIONS .—Of the amount appropriated under 
this subsection for a fiscal year, the Secretary shall reserve— 
‘‘(A) 3 percent of such amount for purposes of making

grants to eligible entities that are Indian Tribes (or a consortium of Indian Tribes), Tribal Organizations, or Urban Indian Organizations; and 
‘‘(B) 3 percent of such amount for purposes of carrying 
out subsections (d)(1)(B)(iii), (g), and (h)(3). ‘‘(3) A
VAILABILITY .—Funds made available to an eligible

entity under this section for a fiscal year shall remain available for expenditure by the eligible entity through the end of the second succeeding fiscal year after award. Any funds that are not expended by the eligible entity during the period in which the funds are available under the preceding sentence may be used for grants to nonprofit organizations under subsection (h)(2)(B). ‘‘(k) D
‘‘(1) E LIGIBLE ENTITY .—

‘‘(1) E LIGIBLE ENTITY .— 
‘‘(A) I N GENERAL .—The term ‘eligible entity’ means a 
State, an Indian Tribe, Tribal Organization, or Urban Indian Organization, Puerto Rico, Guam, the Virgin Islands, the Northern Mariana Islands, and American Samoa. 
‘‘(B) N
ONPROFIT ORGANIZATIONS .—Only for purposes of 
awarding grants under subsection (h)(2)(B), such term shall

include a nonprofit organization with an established record of providing early childhood home visitation programs or initiatives in a State or several States. ‘‘(2) E
LIGIBLE FAMILY .—The term ‘eligible family’ means— 
‘‘(A) a woman who is pregnant, and the father of the 
child if the father is available; or 
‘‘(B) a parent or primary caregiver of a child, including

grandparents or other relatives of the child, and foster parents, who are serving as the child’s primary caregiver from birth to kindergarten entry, and including a noncusto-dial parent who has an ongoing relationship with, and at times provides physical care for, the child. ‘‘(3) I
NDIAN TRIBE ; TRIBAL ORGANIZATION .—The terms 
‘Indian Tribe’ and ‘Tribal Organization’, and ‘Urban Indian Organization’ have the meanings given such terms in section 4 of the Indian Health Care Improvement Act.’’.

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124 STAT. 344 PUBLIC LAW 111–148—MAR. 23, 2010 
SEC. 2952. SUPPORT, EDUCATION, AND RESEARCH FOR POSTPARTUM 
DEPRESSION. 
(a) R ESEARCH ON POSTPARTUM CONDITIONS .— 
(1) E XPANSION AND INTENSIFICATION OF ACTIVITIES .—The

Secretary of Health and Human Services (in this subsection and subsection (c) referred to as the ‘‘Secretary’’) is encouraged to continue activities on postpartum depression or postpartum psychosis (in this subsection and subsection (c) referred to as ‘‘postpartum conditions’’), including research to expand the understanding of the causes of, and treatments for, postpartum conditions. Activities under this paragraph shall include con-ducting and supporting the following:

(A) Basic research concerning the etiology and causes 
of the conditions. 
(B) Epidemiological studies to address the frequency 
and natural history of the conditions and the differences among racial and ethnic groups with respect to the condi-tions. 
(C) The development of improved screening and diag-
nostic techniques. 
(D) Clinical research for the development and evalua-
tion of new treatments. 
(E) Information and education programs for health

care professionals and the public, which may include a coordinated national campaign to increase the awareness and knowledge of postpartum conditions. Activities under such a national campaign may— 
(i) include public service announcements through 
television, radio, and other means; and 
(ii) focus on— 
(I) raising awareness about screening; (II) educating new mothers and their families 
about postpartum conditions to promote earlier diagnosis and treatment; and

(III) ensuring that such education includes 
complete information concerning postpartum conditions, including its symptoms, methods of coping with the illness, and treatment resources. 
(2) S
ENSE OF CONGRESS REGARDING LONGITUDINAL STUDY  
OF RELATIVE MENTAL HEALTH CONSEQUENCES FOR WOMEN OF  
RESOLVING A PREGNANCY .— 
(A) S ENSE OF CONGRESS .—It is the sense of Congress

that the Director of the National Institute of Mental Health may conduct a nationally representative longitudinal study (during the period of fiscal years 2010 through 2019) of the relative mental health consequences for women of resolving a pregnancy (intended and unintended) in various ways, including carrying the pregnancy to term and par-enting the child, carrying the pregnancy to term and placing the child for adoption, miscarriage, and having an abortion. This study may assess the

and having an abortion. This study may assess the incidence, timing, magnitude, and duration of the immediate and long-term mental health consequences (positive or negative) of these pregnancy outcomes.

(B) R
EPORT .—Subject to the completion of the study 
under subsection (a), beginning not later than 5 years after the date of the enactment of this Act, and periodically 42 USC 712 note. 
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124 STAT. 345 PUBLIC LAW 111–148—MAR. 23, 2010 
thereafter for the duration of the study, such Director 
may prepare and submit to the Congress reports on the findings of the study. 
(b) G
RANTS TOPROVIDE SERVICES TO INDIVIDUALS WITH A  
POSTPARTUM CONDITION AND THEIR FAMILIES .—Title V of the Social 
Security Act (42 U.S.C. 701 et seq.), as amended by section 2951, is amended by adding at the end the following new section: 
‘‘SEC. 512. SERVICES TO INDIVIDUALS WITH A POSTPARTUM CONDI-

TION AND THEIR FAMILIES. 
‘‘(a) I NGENERAL .—In addition to any other payments made 
under this title to a State, the Secretary may make grants to eligible entities for projects for the establishment, operation, and coordination of effective and cost-efficient systems for the delivery of essential services to individuals with or at risk for postpartum conditions and their families. 
‘‘(b) C
ERTAIN ACTIVITIES .—To the extent practicable and appro-

priate, the Secretary shall ensure that projects funded under sub-section (a) provide education and services with respect to the diag-nosis and management of postpartum conditions for individuals with or at risk for postpartum conditions and their families. The Secretary may allow such projects to include the following: 
‘‘(1) Delivering or enhancing outpatient and home-based 
health and support services, including case management and comprehensive treatment services.

‘‘(2) Delivering or enhancing inpatient care management 
services that ensure the well-being of the mother and family and the future development of the infant. 
‘‘(3) Improving the quality, availability, and organization 
of health care and support services (including transportation services, attendant care, homemaker services, day or respite care, and providing counseling on financial assistance and insurance). 
‘‘(4) Providing education about postpartum conditions to

promote earlier diagnosis and treatment. Such education may include— 
‘‘(A) providing complete information on postpartum 
conditions, symptoms, methods of coping with the illness, and treatment resources; and 
‘‘(B) in the case of a grantee that is a State, hospital, 
or birthing facility— 
‘‘(i) providing education to new mothers and 
fathers, and other family members as appropriate, con-cerning postpartum conditions before new mothers leave the health facility; and

‘‘(ii) ensuring that training programs regarding 
such education are carried out at the health facility. 
‘‘(c) I
NTEGRATION WITHOTHER PROGRAMS .—To the extent prac-
ticable and appropriate, the Secretary may integrate the grant program under this section with other grant programs carried out by the Secretary, including the program under section 330 of the Public Health Service Act. 
‘‘(d) R
EQUIREMENTS .—The Secretary shall establish require-

ments for grants made under this section that include a limit on the amount of grants funds that may be used for administration, accounting, reporting, or program oversight functions and a require-ment for each eligible entity that receives a grant to submit, for 42 USC 712. 
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124 STAT. 346 PUBLIC LAW 111–148—MAR. 23, 2010 
each grant period, a report to the Secretary that describes how 
grant funds were used during such period. 
‘‘(e) T ECHNICAL ASSISTANCE .—The Secretary may provide tech-
nical assistance to entities seeking a grant under this section in order to assist such entities in complying with the requirements of this section. 
‘‘(f) A
‘‘(1) I N GENERAL .—Except as provided in paragraph (2),

‘‘(2) E
XCEPTIONS .—The following provisions of this title 
‘‘(B) Section 504(c) (relating to the use of funds for

‘‘(D) Section 506 (relating to reports and audits), but 
ments). 
‘‘(g) D

‘‘(g) D
‘‘(1) The term ‘eligible entity’— 
‘‘(A) means a public or nonprofit private entity; and ‘‘(B) includes a State or local government, public-pri-

vate partnership, recipient of a grant under section 330H of the Public Health Service Act (relating to the Healthy Start Initiative), public or nonprofit private hospital, community-based organization, hospice, ambulatory care facility, community health center, migrant health center, public housing primary care center, or homeless health center. ‘‘(2) The term ‘postpartum condition’ means postpartum 
depression or postpartum psychosis.’’. (c) G
ENERAL PROVISIONS .—

ENERAL PROVISIONS .— 
(1) A UTHORIZATION OF APPROPRIATIONS .—To carry out this 
section and the amendment made by subsection (b), there are authorized to be appropriated, in addition to such other sums as may be available for such purpose— 
(A) $3,000,000 for fiscal year 2010; and (B) such sums as may be necessary for fiscal years 
2011 and 2012. (2) R
EPORT BY THE SECRETARY .— 
(A) S TUDY .—The Secretary shall conduct a study on 
the benefits of screening for postpartum conditions.

(B) R EPORT .—Not later than 2 years after the date 
of the enactment of this Act, the Secretary shall complete the study required by subparagraph (A) and submit a report to the Congress on the results of such study. 
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124 STAT. 347 PUBLIC LAW 111–148—MAR. 23, 2010 
SEC. 2953. PERSONAL RESPONSIBILITY EDUCATION. 
Title V of the Social Security Act (42 U.S.C. 701 et seq.), 
as amended by sections 2951 and 2952(c), is amended by adding at the end the following: 
‘‘SEC. 513. PERSONAL RESPONSIBILITY EDUCATION. 
‘‘(a) A LLOTMENTS TO STATES .— 
‘‘(1) A MOUNT .— 
‘‘(A) I N GENERAL .—For the purpose described in sub-

section (b), subject to the succeeding provisions of this section, for each of fiscal years 2010 through 2014, the Secretary shall allot to each State an amount equal to the product of— 
‘‘(i) the amount appropriated under subsection (f) 
for the fiscal year and available for allotments to States after the application of subsection (c); and 
‘‘(ii) the State youth population percentage deter-
mined under paragraph (2). 
‘‘(B) M
INIMUM ALLOTMENT .—

‘‘(B) M
INIMUM ALLOTMENT .— 
‘‘(i) I N GENERAL .—Each State allotment under this 
paragraph for a fiscal year shall be at least $250,000. 
‘‘(ii) P RO RATA ADJUSTMENTS .—The Secretary shall 
adjust on a pro rata basis the amount of the State allotments determined under this paragraph for a fiscal year to the extent necessary to comply with clause (i). ‘‘(C) A
PPLICATION REQUIRED TO ACCESS ALLOTMENTS .— 
‘‘(i) I N GENERAL .—A State shall not be paid from

its allotment for a fiscal year unless the State submits an application to the Secretary for the fiscal year and the Secretary approves the application (or requires changes to the application that the State satisfies) and meets such additional requirements as the Sec-retary may specify. 
‘‘(ii) R
EQUIREMENTS .—The State application shall

EQUIREMENTS .—The State application shall 
contain an assurance that the State has complied with the requirements of this section in preparing and submitting the application and shall include the fol-lowing as well as such additional information as the Secretary may require: 
‘‘(I) Based on data from the Centers for Dis-

ease Control and Prevention National Center for Health Statistics, the most recent pregnancy rates for the State for youth ages 10 to 14 and youth ages 15 to 19 for which data are available, the most recent birth rates for such youth populations in the State for which data are available, and trends in those rates for the most recently pre-ceding 5-year period for which such data are avail-able. 
‘‘(II) State-established goals for reducing the

‘‘(II) State-established goals for reducing the 
pregnancy rates and birth rates for such youth populations. 
‘‘(III) A description of the State’s plan for using 
the State allotments provided under this section to achieve such goals, especially among youth 42 USC 713. 
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124 STAT. 348 PUBLIC LAW 111–148—MAR. 23, 2010 
populations that are the most high-risk or vulner-
able for pregnancies or otherwise have special cir-cumstances, including youth in foster care, home-less youth, youth with HIV/AIDS, pregnant youth who are under 21 years of age, mothers who are under 21 years of age, and youth residing in areas with high birth rates for youth. 
‘‘(2) S
TATE YOUTH POPULATION PERCENTAGE .— 
‘‘(A) I N GENERAL .—For purposes of paragraph (1)(A)(ii),

the State youth population percentage is, with respect to a State, the proportion (expressed as a percentage) of— 
‘‘(i) the number of individuals who have attained 
age 10 but not attained age 20 in the State; to 
‘‘(ii) the number of such individuals in all States. 
‘‘(B) D
ETERMINATION OF NUMBER OF YOUTH .—The 
number of individuals described in clauses (i) and (ii) of subparagraph (A) in a State shall be determined on the basis of the most recent Bureau of the Census data. ‘‘(3) A

VAILABILITY OF STATE ALLOTMENTS .—Subject to para-
graph (4)(A), amounts allotted to a State pursuant to this subsection for a fiscal year shall remain available for expendi-ture by the State through the end of the second succeeding fiscal year. 
‘‘(4) A
UTHORITY TO AWARD GRANTS FROM STATE ALLOTMENTS  
TO LOCAL ORGANIZATIONS AND ENTITIES IN NONPARTICIPATING  
STATES .— 
‘‘(A) G RANTS FROM UNEXPENDED ALLOTMENTS .—If a

State does not submit an application under this section for fiscal year 2010 or 2011, the State shall no longer be eligible to submit an application to receive funds from the amounts allotted for the State for each of fiscal years 2010 through 2014 and such amounts shall be used by the Secretary to award grants under this paragraph for each of fiscal years 2012 through 2014. The Secretary also shall use any amounts from the allotments of States that submit applications under this section for a

that submit applications under this section for a fiscal year that remain unexpended as of the end of the period in which the allotments are available for expenditure under paragraph (3) for awarding grants under this paragraph.

‘‘(B) 3-
YEAR GRANTS .— 
‘‘(i) I N GENERAL .—The Secretary shall solicit 
applications to award 3-year grants in each of fiscal years 2012, 2013, and 2014 to local organizations and entities to conduct, consistent with subsection (b), pro-grams and activities in States that do not submit an application for an allotment under this section for fiscal year 2010 or 2011. 
‘‘(ii) F
AITH -BASED ORGANIZATIONS OR CONSORTIA .—

AITH -BASED ORGANIZATIONS OR CONSORTIA .— 
The Secretary may solicit and award grants under this paragraph to faith-based organizations or con-sortia. ‘‘(C) E
VALUATION .—An organization or entity awarded 
a grant under this paragraph shall agree to participate in a rigorous Federal evaluation. ‘‘(5) M
AINTENANCE OF EFFORT .—No payment shall be made 
to a State from the allotment determined for the State under this subsection or to a local organization or entity awarded

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124 STAT. 349 PUBLIC LAW 111–148—MAR. 23, 2010 
a grant under paragraph (4), if the expenditure of non-federal 
funds by the State, organization, or entity for activities, pro-grams, or initiatives for which amounts from allotments and grants under this subsection may be expended is less than the amount expended by the State, organization, or entity for such programs or initiatives for fiscal year 2009. 
‘‘(6) D
ATA COLLECTION AND REPORTING .—A State or local

ATA COLLECTION AND REPORTING .—A State or local 
organization or entity receiving funds under this section shall cooperate with such requirements relating to the collection of data and information and reporting on outcomes regarding the programs and activities carried out with such funds, as the Secretary shall specify. ‘‘(b) P
URPOSE .— 
‘‘(1) I N GENERAL .—The purpose of an allotment under sub-

section (a)(1) to a State is to enable the State (or, in the case of grants made under subsection (a)(4)(B), to enable a local organization or entity) to carry out personal responsibility education programs consistent with this subsection. 
‘‘(2) P
ERSONAL RESPONSIBILITY EDUCATION PROGRAMS .— 
‘‘(A) I N GENERAL .—In this section, the term ‘personal 
responsibility education program’ means a program that is designed to educate adolescents on— 
‘‘(i) both abstinence and contraception for the

‘‘(i) both abstinence and contraception for the 
prevention of pregnancy and sexually transmitted infections, including HIV/AIDS, consistent with the requirements of subparagraph (B); and 
‘‘(ii) at least 3 of the adulthood preparation subjects 
described in subparagraph (C). ‘‘(B) R
EQUIREMENTS .—The requirements of this 
subparagraph are the following: 
‘‘(i) The program replicates evidence-based effective

programs or substantially incorporates elements of effective programs that have been proven on the basis of rigorous scientific research to change behavior, which means delaying sexual activity, increasing condom or contraceptive use for sexually active youth, or reducing pregnancy among youth. 
‘‘(ii) The program is medically-accurate and com-
plete. 
‘‘(iii) The program includes activities to educate

youth who are sexually active regarding responsible sexual behavior with respect to both abstinence and the use of contraception. 
‘‘(iv) The program places substantial emphasis on 
both abstinence and contraception for the prevention of pregnancy among youth and sexually transmitted 
infections. 
‘‘(v) The program provides age-appropriate 
information and activities. 
‘‘(vi) The information and activities carried out

under the program are provided in the cultural context that is most appropriate for individuals in the par-ticular population group to which they are directed. ‘‘(C) A
DULTHOOD PREPARATION SUBJECTS .—The adult-
hood preparation subjects described in this subparagraph are the following: Definition. 
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124 STAT. 350 PUBLIC LAW 111–148—MAR. 23, 2010 
‘‘(i) Healthy relationships, such as positive self- 
esteem and relationship dynamics, friendships, dating, romantic involvement, marriage, and family inter-actions. 
‘‘(ii) Adolescent development, such as the develop-
ment of healthy attitudes and values about adolescent growth and development, body image, racial and ethnic diversity, and other related subjects.

‘‘(iii) Financial literacy. ‘‘(iv) Parent-child communication. ‘‘(v) Educational and career success, such as devel-
oping skills for employment preparation, job seeking, independent living, financial self-sufficiency, and work-place productivity. 
‘‘(vi) Healthy life skills, such as goal-setting, deci-
sion making, negotiation, communication and inter-personal skills, and stress management. 
‘‘(c) R
ESERVATIONS OF FUNDS .— 
‘‘(1) G RANTS TO IMPLEMENT INNOVATIVE STRATEGIES .—From

the amount appropriated under subsection (f) for the fiscal year, the Secretary shall reserve $10,000,000 of such amount for purposes of awarding grants to entities to implement innova-tive youth pregnancy prevention strategies and target services to high-risk, vulnerable, and culturally under-represented youth populations, including youth in foster care, homeless youth, youth with HIV/AIDS, pregnant women who are under 21 years of age and their partners, mothers who are under 21 years of age

partners, mothers who are under 21 years of age and their partners, and youth residing in areas with high birth rates for youth. An entity awarded a grant under this paragraph shall agree to participate in a rigorous Federal evaluation of the activities carried out with grant funds.

‘‘(2) O
THER RESERVATIONS .—From the amount appropriated 
under subsection (f) for the fiscal year that remains after the application of paragraph (1), the Secretary shall reserve the following amounts: 
‘‘(A) G
RANTS FOR INDIAN TRIBES OR TRIBAL ORGANIZA -
TIONS .—The Secretary shall reserve 5 percent of such

remainder for purposes of awarding grants to Indian tribes and tribal organizations in such manner, and subject to such requirements, as the Secretary, in consultation with Indian tribes and tribal organizations, determines appro-priate. 
‘‘(B) S
ECRETARIAL RESPONSIBILITIES .— 
‘‘(i) R ESERVATION OF FUNDS .—The Secretary shall 
reserve 10 percent of such remainder for expenditures by the Secretary for the activities described in clauses (ii) and (iii). 
‘‘(ii) P

vide, directly or through a competitive grant process, research, training and technical assistance, including dissemination of research and information regarding effective and promising practices, providing consulta-tion and resources on a broad array of teen pregnancy prevention strategies, including abstinence and contra-ception, and developing resources and materials to sup-port the activities of recipients of grants and other State, tribal, and community organizations working

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124 STAT. 351 PUBLIC LAW 111–148—MAR. 23, 2010 
to reduce teen pregnancy. In carrying out such func-
tions, the Secretary shall collaborate with a variety of entities that have expertise in the prevention of teen pregnancy, HIV and sexually transmitted infec-tions, healthy relationships, financial literacy, and other topics addressed through the personal responsi-bility education programs. 
‘‘(iii) E
VALUATION .—The Secretary shall evaluate

VALUATION .—The Secretary shall evaluate 
the programs and activities carried out with funds made available through allotments or grants under this section. 
‘‘(d) A
‘‘(1) I N GENERAL .—The Secretary shall administer this sec-
tion through the Assistant Secretary for the Administration for Children and Families within the Department of Health and Human Services. 
‘‘(2) A
PPLICATION OF OTHER PROVISIONS OF TITLE .— 
‘‘(A) I N GENERAL .—Except as provided in subparagraph

(B), the other provisions of this title shall not apply to allotments or grants made under this section. 
‘‘(B) E
shall apply to allotments and grants made under this sec-tion to the same extent and in the same manner as such provisions apply to allotments made under section 502(c): 
‘‘(i) Section 504(b)(6) (relating to prohibition on 
payments to excluded individuals and entities). 
‘‘(ii) Section 504(c) (relating to the use of funds

for the purchase of technical assistance). 
‘‘(iii) Section 504(d) (relating to a limitation on 
administrative expenditures). 
‘‘(iv) Section 506 (relating to reports and audits), 
but only to the extent determined by the Secretary to be appropriate for grants made under this section. 
‘‘(v) Section 507 (relating to penalties for false 
statements). 
‘‘(vi) Section 508 (relating to nondiscrimination). 
‘‘(e) D
EFINITIONS .—In this section:

‘‘(e) D
‘‘(1) A GE-APPROPRIATE .—The term ‘age-appropriate’, with 
respect to the information in pregnancy prevention, means topics, messages, and teaching methods suitable to particular ages or age groups of children and adolescents, based on devel-oping cognitive, emotional, and behavioral capacity typical for the age or age group. 
‘‘(2) M
EDICALLY ACCURATE AND COMPLETE .—The term

EDICALLY ACCURATE AND COMPLETE .—The term 
‘medically accurate and complete’ means verified or supported by the weight of research conducted in compliance with accepted 
scientific methods and— 
‘‘(A) published in peer-reviewed journals, where 
applicable; or 
‘‘(B) comprising information that leading professional 
organizations and agencies with relevant expertise in the field recognize as accurate, objective, and complete. ‘‘(3) I
NDIAN TRIBES ; TRIBAL ORGANIZATIONS .—The terms

NDIAN TRIBES ; TRIBAL ORGANIZATIONS .—The terms 
‘Indian tribe’ and ‘Tribal organization’ have the meanings given such terms in section 4 of the Indian Health Care Improvement Act (25 U.S.C. 1603)). 
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124 STAT. 352 PUBLIC LAW 111–148—MAR. 23, 2010 
‘‘(4) Y OUTH .—The term ‘youth’ means an individual who 
has attained age 10 but has not attained age 20. ‘‘(f) A
PPROPRIATION .—For the purpose of carrying out this sec-
tion, there is appropriated, out of any money in the Treasury not otherwise appropriated, $75,000,000 for each of fiscal years 2010 through 2014. Amounts appropriated under this subsection shall remain available until expended.’’.

SEC. 2954. RESTORATION OF FUNDING FOR ABSTINENCE EDUCATION. 
Section 510 of the Social Security Act (42 U.S.C. 710) is 
amended— 
(1) in subsection (a), by striking ‘‘fiscal year 1998 and 
each subsequent fiscal year’’ and inserting ‘‘each of fiscal years 2010 through 2014’’; and 
(2) in subsection (d)— 
(A) in the first sentence, by striking ‘‘1998 through 
2003’’ and inserting ‘‘2010 through 2014’’; and 
(B) in the second sentence, by inserting ‘‘(except that

such appropriation shall be made on the date of enactment of the Patient Protection and Affordable Care Act in the case of fiscal year 2010)’’ before the period. 
SEC. 2955. INCLUSION OF INFORMATION ABOUT THE IMPORTANCE 
OF HAVING A HEALTH CARE POWER OF ATTORNEY IN TRANSITION PLANNING FOR CHILDREN AGING OUT OF FOSTER CARE AND INDEPENDENT LIVING PROGRAMS. 
(a) T RANSITION PLANNING .—Section 475(5)(H) of the Social

Security Act (42 U.S.C. 675(5)(H)) is amended by inserting ‘‘includes information about the importance of designating another individual to make health care treatment decisions on behalf of the child if the child becomes unable to participate in such decisions and the child does not have, or does not want, a relative who would otherwise be authorized under State law to make such decisions, and provides the child with the option to execute a health care power of attorney, health care proxy, or

care power of attorney, health care proxy, or other similar document recognized under State law,’’ after ‘‘employment services,’’.

(b) I
NDEPENDENT LIVING EDUCATION .—Section 477(b)(3) of such 
Act (42 U.S.C. 677(b)(3)) is amended by adding at the end the following: 
‘‘(K) A certification by the chief executive officer of

the State that the State will ensure that an adolescent participating in the program under this section are pro-vided with education about the importance of designating another individual to make health care treatment decisions on behalf of the adolescent if the adolescent becomes unable to participate in such decisions and the adolescent does not have, or does not want, a relative who would otherwise be authorized under State law to make such decisions, whether a health care power of attorney,

or other similar document is recognized under State law, and how to execute such a document if the adolescent wants to do so.’’. 
(c) H
EALTH OVERSIGHT AND COORDINATION PLAN.—Section 
422(b)(15)(A) of such Act (42 U.S.C. 622(b)(15)(A)) is amended— 
(1) in clause (v), by striking ‘‘and’’ at the end; and (2) by adding at the end the following: 
‘‘(vii) steps to ensure that the components of the 
transition plan development process required under Certification.

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124 STAT. 353 PUBLIC LAW 111–148—MAR. 23, 2010 
section 475(5)(H) that relate to the health care needs 
of children aging out of foster care, including the requirements to include options for health insurance, information about a health care power of attorney, health care proxy, or other similar document recog-nized under State law, and to provide the child with the option to execute such a document, are met; and’’. 
(d) E

take effect on October 1, 2010. 
TITLE III—IMPROVING THE QUALITY 
AND EFFICIENCY OF HEALTH CARE 
Subtitle A—Transforming the Health Care 
Delivery System 
PART I—LINKING PAYMENT TO QUALITY 
OUTCOMES UNDER THE MEDICARE PROGRAM 
SEC. 3001. HOSPITAL VALUE-BASED PURCHASING PROGRAM. 
(a) P ROGRAM .— 
(1) I N GENERAL .—Section 1886 of the Social Security Act

(42 U.S.C. 1395ww), as amended by section 4102(a) of the HITECH Act (Public Law 111–5), is amended by adding at the end the following new subsection: ‘‘(o) H
OSPITAL VALUE -BASED PURCHASING PROGRAM .— 
‘‘(1) E STABLISHMENT .— 
‘‘(A) I N GENERAL .—Subject to the succeeding provisions

of this subsection, the Secretary shall establish a hospital value-based purchasing program (in this subsection referred to as the ‘Program’) under which value-based incentive payments are made in a fiscal year to hospitals that meet the performance standards under paragraph (3) for the performance period for such fiscal year (as estab-lished under paragraph (4)). 
‘‘(B) P
ROGRAM TO BEGIN IN FISCAL YEAR 2013 .—The

ROGRAM TO BEGIN IN FISCAL YEAR 2013 .—The 
Program shall apply to payments for discharges occurring on or after October 1, 2012. 
‘‘(C) A
PPLICABILITY OF PROGRAM TO HOSPITALS .— 
‘‘(i) I N GENERAL .—For purposes of this subsection, 
subject to clause (ii), the term ‘hospital’ means a sub-section (d) hospital (as defined in subsection (d)(1)(B)). 
‘‘(ii) E
XCLUSIONS .—The term ‘hospital’ shall not 
include, with respect to a fiscal year, a hospital—

‘‘(I) that is subject to the payment reduction 
under subsection (b)(3)(B)(viii)(I) for such fiscal year; 
‘‘(II) for which, during the performance period 
for such fiscal year, the Secretary has cited defi-ciencies that pose immediate jeopardy to the health or safety of patients; 42 USC 622 note. 
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124 STAT. 354 PUBLIC LAW 111–148—MAR. 23, 2010 
‘‘(III) for which there are not a minimum 
number (as determined by the Secretary) of meas-ures that apply to the hospital for the performance period for such fiscal year; or 
‘‘(IV) for which there are not a minimum 
number (as determined by the Secretary) of cases for the measures that apply to the hospital for the performance period for such fiscal year. ‘‘(iii) I
NDEPENDENT ANALYSIS .—For purposes of

NDEPENDENT ANALYSIS .—For purposes of 
determining the minimum numbers under subclauses (III) and (IV) of clause (ii), the Secretary shall have conducted an independent analysis of what numbers are appropriate. 
‘‘(iv) E
XEMPTION .—In the case of a hospital that

XEMPTION .—In the case of a hospital that 
is paid under section 1814(b)(3), the Secretary may exempt such hospital from the application of this sub-section if the State which is paid under such section submits an annual report to the Secretary describing how a similar program in the State for a participating hospital or hospitals achieves or surpasses the meas-ured results in terms of patient health outcomes and cost savings established under this subsection. 
‘‘(2) M
EASURES .—

‘‘(2) M
EASURES .— 
‘‘(A) I N GENERAL .—The Secretary shall select measures 
for purposes of the Program. Such measures shall be selected from the measures specified under subsection (b)(3)(B)(viii). 
‘‘(B) R
‘‘(i) F OR FISCAL YEAR 2013 .—For value-based incen-
tive payments made with respect to discharges occur-ring during fiscal year 2013, the Secretary shall ensure the following: 
‘‘(I) C
ONDITIONS OR PROCEDURES .—Measures

‘‘(I) C
ONDITIONS OR PROCEDURES .—Measures 
are selected under subparagraph (A) that cover at least the following 5 specific conditions or proce-dures: 
‘‘(aa) Acute myocardial infarction (AMI). ‘‘(bb) Heart failure. ‘‘(cc) Pneumonia. 
‘‘(dd) Surgeries, as measured by the Sur-
gical Care Improvement Project (formerly referred to as ‘Surgical Infection Prevention’ for discharges occurring before July 2006). 
‘‘(ee) Healthcare-associated infections, as

‘‘(ee) Healthcare-associated infections, as 
measured by the prevention metrics and tar-gets established in the HHS Action Plan to Prevent Healthcare-Associated Infections (or any successor plan) of the Department of Health and Human Services. ‘‘(II) HCAHPS.—Measures selected under 
subparagraph (A) shall be related to the Hospital Consumer Assessment of Healthcare Providers and Systems survey (HCAHPS). ‘‘(ii) I
NCLUSION OF EFFICIENCY MEASURES .—For

NCLUSION OF EFFICIENCY MEASURES .—For 
value-based incentive payments made with respect to 
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124 STAT. 355 PUBLIC LAW 111–148—MAR. 23, 2010 
discharges occurring during fiscal year 2014 or a subse-
quent fiscal year, the Secretary shall ensure that meas-ures selected under subparagraph (A) include efficiency measures, including measures of ‘Medicare spending per beneficiary’. Such measures shall be adjusted for factors such as age, sex, race, severity of illness, and other factors that the Secretary determines appro-priate. ‘‘(C) L
IMITATIONS .—

IMITATIONS .— 
‘‘(i) T IME REQUIREMENT FOR PRIOR REPORTING AND  
NOTICE .—The Secretary may not select a measure 
under subparagraph (A) for use under the Program with respect to a performance period for a fiscal year (as established under paragraph (4)) unless such measure has been specified under subsection (b)(3)(B)(viii) and included on the Hospital Compare Internet website for at least 1 year prior to the begin-ning of such performance period. 
‘‘(ii) M

‘‘(ii) M
EASURE NOT APPLICABLE UNLESS HOSPITAL  
FURNISHES SERVICES APPROPRIATE TO THE MEASURE .— 
A measure selected under subparagraph (A) shall not apply to a hospital if such hospital does not furnish services appropriate to such measure. ‘‘(D) R
EPLACING MEASURES .—Subclause (VI) of sub-
section (b)(3)(B)(viii) shall apply to measures selected under subparagraph (A) in the same manner as such subclause applies to measures selected under such subsection. ‘‘(3) P
ERFORMANCE STANDARDS .—

ERFORMANCE STANDARDS .— 
‘‘(A) E STABLISHMENT .—The Secretary shall establish 
performance standards with respect to measures selected under paragraph (2) for a performance period for a fiscal year (as established under paragraph (4)). 
‘‘(B) A
CHIEVEMENT AND IMPROVEMENT .—The perform-
ance standards established under subparagraph (A) shall include levels of achievement and improvement. 
‘‘(C) T
IMING .—The Secretary shall establish and

IMING .—The Secretary shall establish and 
announce the performance standards under subparagraph (A) not later than 60 days prior to the beginning of the performance period for the fiscal year involved. 
‘‘(D) C
ONSIDERATIONS IN ESTABLISHING STANDARDS .— 
In establishing performance standards with respect to measures under this paragraph, the Secretary shall take into account appropriate factors, such as— 
‘‘(i) practical experience with the measures

‘‘(i) practical experience with the measures 
involved, including whether a significant proportion of hospitals failed to meet the performance standard during previous performance periods; 
‘‘(ii) historical performance standards; ‘‘(iii) improvement rates; and ‘‘(iv) the opportunity for continued improvement. 
‘‘(4) P
ERFORMANCE PERIOD .—For purposes of the Program,

ERFORMANCE PERIOD .—For purposes of the Program, 
the Secretary shall establish the performance period for a fiscal year. Such performance period shall begin and end prior to the beginning of such fiscal year. 
‘‘(5) H
OSPITAL PERFORMANCE SCORE .— 
Secretary shall develop a methodology for assessing the

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124 STAT. 356 PUBLIC LAW 111–148—MAR. 23, 2010 
total performance of each hospital based on performance 
standards with respect to the measures selected under paragraph (2) for a performance period (as established under paragraph (4)). Using such methodology, the Sec-retary shall provide for an assessment (in this subsection referred to as the ‘hospital performance score’) for each hospital for each performance period. 
‘‘(B) A
PPLICATION .— 
‘‘(i) A PPROPRIATE DISTRIBUTION .—The Secretary

‘‘(i) A PPROPRIATE DISTRIBUTION .—The Secretary 
shall ensure that the application of the methodology developed under subparagraph (A) results in an appro-priate distribution of value-based incentive payments under paragraph (6) among hospitals achieving dif-ferent levels of hospital performance scores, with hos-pitals achieving the highest hospital performance scores receiving the largest value-based incentive pay-ments. 
‘‘(ii) H
IGHER OF ACHIEVEMENT OR IMPROVEMENT .—

‘‘(ii) H
IGHER OF ACHIEVEMENT OR IMPROVEMENT .— 
The methodology developed under subparagraph (A) shall provide that the hospital performance score is determined using the higher of its achievement or improvement score for each measure. 
‘‘(iii) W
EIGHTS .—The methodology developed under 
subparagraph (A) shall provide for the assignment of weights for categories of measures as the Secretary determines appropriate. 
‘‘(iv) N
O MINIMUM PERFORMANCE STANDARD .—The

‘‘(iv) N
O MINIMUM PERFORMANCE STANDARD .—The 
Secretary shall not set a minimum performance standard in determining the hospital performance score for any hospital. 
‘‘(v) R
EFLECTION OF MEASURES APPLICABLE TO THE  
HOSPITAL .—The hospital performance score for a hos-
pital shall reflect the measures that apply to the hos-pital. 
‘‘(6) C
ALCULATION OF VALUE -BASED INCENTIVE PAYMENTS .— 
‘‘(A) I N GENERAL .—In the case of a hospital that the

Secretary determines meets (or exceeds) the performance standards under paragraph (3) for the performance period for a fiscal year (as established under paragraph (4)), the 
Secretary shall increase the base operating DRG payment amount (as defined in paragraph (7)(D)), as determined after application of paragraph (7)(B)(i), for a hospital for each discharge occurring in such fiscal year by the value- based incentive payment amount. 
‘‘(B) V
ALUE -BASED INCENTIVE PAYMENT AMOUNT .—The

ALUE -BASED INCENTIVE PAYMENT AMOUNT .—The 
value-based incentive payment amount for each discharge of a hospital in a fiscal year shall be equal to the product of— 
‘‘(i) the base operating DRG payment amount (as 
defined in paragraph (7)(D)) for the discharge for the hospital for such fiscal year; and 
‘‘(ii) the value-based incentive payment percentage 
specified under subparagraph (C) for the hospital for such fiscal year. ‘‘(C) V
ALUE -BASED INCENTIVE PAYMENT PERCENTAGE .— Determination.

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124 STAT. 357 PUBLIC LAW 111–148—MAR. 23, 2010 
‘‘(i) I N GENERAL .—The Secretary shall specify a 
value-based incentive payment percentage for a hos-pital for a fiscal year. 
‘‘(ii) R
EQUIREMENTS .—In specifying the value- 
based incentive payment percentage for each hospital for a fiscal year under clause (i), the Secretary shall ensure that— 
‘‘(I) such percentage is based on the hospital 
performance score of the hospital under paragraph (5); and

‘‘(II) the total amount of value-based incentive 
payments under this paragraph to all hospitals in such fiscal year is equal to the total amount available for value-based incentive payments for such fiscal year under paragraph (7)(A), as esti-mated by the Secretary. 
‘‘(7) F
UNDING FOR VALUE -BASED INCENTIVE PAYMENTS .— 
‘‘(A) A MOUNT .—The total amount available for value-

based incentive payments under paragraph (6) for all hos-pitals for a fiscal year shall be equal to the total amount of reduced payments for all hospitals under subparagraph (B) for such fiscal year, as estimated by the Secretary. 
‘‘(B) A
DJUSTMENT TO PAYMENTS .— 
‘‘(i) I N GENERAL .—The Secretary shall reduce the

base operating DRG payment amount (as defined in subparagraph (D)) for a hospital for each discharge in a fiscal year (beginning with fiscal year 2013) by an amount equal to the applicable percent (as defined in subparagraph (C)) of the base operating DRG pay-ment amount for the discharge for the hospital for such fiscal year. The Secretary shall make such reduc-tions for all hospitals in the fiscal year involved, regardless of whether or not the hospital has been determined by the Secretary to

hospital has been determined by the Secretary to have earned a value- based incentive payment under paragraph (6) for such fiscal year.

‘‘(ii) N
O EFFECT ON OTHER PAYMENTS .—Payments 
described in items (aa) and (bb) of subparagraph (D)(i)(II) for a hospital shall be determined as if this subsection had not been enacted. ‘‘(C) A
PPLICABLE PERCENT DEFINED .—For purposes of 
subparagraph (B), the term ‘applicable percent’ means—

‘‘(i) with respect to fiscal year 2013, 1.0 percent; ‘‘(ii) with respect to fiscal year 2014, 1.25 percent; ‘‘(iii) with respect to fiscal year 2015, 1.5 percent; ‘‘(iv) with respect to fiscal year 2016, 1.75 percent; 
and 
‘‘(v) with respect to fiscal year 2017 and succeeding 
fiscal years, 2 percent. ‘‘(D) B
ASE OPERATING DRG PAYMENT AMOUNT  
DEFINED .— 

(ii), in this subsection, the term ‘base operating DRG payment amount’ means, with respect to a hospital for a fiscal year— 
‘‘(I) the payment amount that would otherwise 
be made under subsection (d) (determined without 
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124 STAT. 358 PUBLIC LAW 111–148—MAR. 23, 2010 
regard to subsection (q)) for a discharge if this 
subsection did not apply; reduced by 
‘‘(II) any portion of such payment amount that 
is attributable to— 
‘‘(aa) payments under paragraphs (5)(A), 
(5)(B), (5)(F), and (12) of subsection (d); and 
‘‘(bb) such other payments under sub-
section (d) determined appropriate by the Sec-retary. 
‘‘(ii) S
PECIAL RULES FOR CERTAIN HOSPITALS .— 
‘‘(I) S OLE COMMUNITY HOSPITALS AND MEDI -

CARE -DEPENDENT , SMALL RURAL HOSPITALS .—In the 
case of a medicare-dependent, small rural hospital (with respect to discharges occurring during fiscal year 2012 and 2013) or a sole community hospital, in applying subparagraph (A)(i), the payment amount that would otherwise be made under sub-section (d) shall be determined without regard to subparagraphs (I) and (L) of subsection (b)(3) and subparagraphs (D) and (G) of subsection (d)(5). 
‘‘(II) H

‘‘(II) H
OSPITALS PAID UNDER SECTION 1814 .— 
In the case of a hospital that is paid under section 1814(b)(3), the term ‘base operating DRG payment amount’ means the payment amount under such section. 
‘‘(8) A
NNOUNCEMENT OF NET RESULT OF ADJUSTMENTS .—

NNOUNCEMENT OF NET RESULT OF ADJUSTMENTS .— 
Under the Program, the Secretary shall, not later than 60 days prior to the fiscal year involved, inform each hospital of the adjustments to payments to the hospital for discharges occurring in such fiscal year under paragraphs (6) and (7)(B)(i). 
‘‘(9) N
O EFFECT IN SUBSEQUENT FISCAL YEARS .—The value-

O EFFECT IN SUBSEQUENT FISCAL YEARS .—The value- 
based incentive payment under paragraph (6) and the payment reduction under paragraph (7)(B)(i) shall each apply only with respect to the fiscal year involved, and the Secretary shall not take into account such value-based incentive payment or payment reduction in making payments to a hospital under this section in a subsequent fiscal year. 
‘‘(10) P
UBLIC REPORTING .— 
‘‘(A) H OSPITAL SPECIFIC INFORMATION .—

‘‘(A) H OSPITAL SPECIFIC INFORMATION .— 
‘‘(i) I N GENERAL .—The Secretary shall make 
information available to the public regarding the performance of individual hospitals under the Program, including— 
‘‘(I) the performance of the hospital with 
respect to each measure that applies to the hos-pital; 
‘‘(II) the performance of the hospital with 
respect to each condition or procedure; and 
‘‘(III) the hospital performance score assessing 
the total performance of the hospital. ‘‘(ii) O

PPORTUNITY TO REVIEW AND SUBMIT CORREC -
TIONS .—The Secretary shall ensure that a hospital has 
the opportunity to review, and submit corrections for, the information to be made public with respect to the hospital under clause (i) prior to such information being made public. Deadline.

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124 STAT. 359 PUBLIC LAW 111–148—MAR. 23, 2010 
‘‘(iii) W EBSITE .—Such information shall be posted 
on the Hospital Compare Internet website in an easily understandable format. ‘‘(B) A
GGREGATE INFORMATION .—The Secretary shall 
periodically post on the Hospital Compare Internet website aggregate information on the Program, including— 
‘‘(i) the number of hospitals receiving value-based

incentive payments under paragraph (6) and the range and total amount of such value-based incentive pay-ments; and 
‘‘(ii) the number of hospitals receiving less than 
the maximum value-based incentive payment available to the hospital for the fiscal year involved and the range and amount of such payments. 
‘‘(11) I
‘‘(A) A PPEALS .—The Secretary shall establish a process

by which hospitals may appeal the calculation of a hos-pital’s performance assessment with respect to the perform-ance standards established under paragraph (3)(A) and the hospital performance score under paragraph (5). The Secretary shall ensure that such process provides for reso-lution of such appeals in a timely manner. 
‘‘(B) L
IMITATION ON REVIEW .—Except as provided in

IMITATION ON REVIEW .—Except as provided in 
subparagraph (A), there shall be no administrative or judicial review under section 1869, section 1878, or other-wise of the following: 
‘‘(i) The methodology used to determine the amount 
of the value-based incentive payment under paragraph (6) and the determination of such amount. 
‘‘(ii) The determination of the amount of funding

available for such value-based incentive payments under paragraph (7)(A) and the payment reduction under paragraph (7)(B)(i). 
‘‘(iii) The establishment of the performance stand-
ards under paragraph (3) and the performance period under paragraph (4). 
‘‘(iv) The measures specified under subsection 
(b)(3)(B)(viii) and the measures selected under para-graph (2). 
‘‘(v) The methodology developed under paragraph

‘‘(v) The methodology developed under paragraph 
(5) that is used to calculate hospital performance scores and the calculation of such scores. 
‘‘(vi) The validation methodology specified in sub-
section (b)(3)(B)(viii)(XI). ‘‘(C) C
ONSULTATION WITH SMALL HOSPITALS .—The Sec-
retary shall consult with small rural and urban hospitals on the application of the Program to such hospitals. ‘‘(12) P
ROMULGATION OF REGULATIONS .—The Secretary shall

ROMULGATION OF REGULATIONS .—The Secretary shall 
promulgate regulations to carry out the Program, including the selection of measures under paragraph (2), the methodology developed under paragraph (5) that is used to calculate hospital performance scores, and the methodology used to determine the amount of value-based incentive payments under paragraph (6).’’. 
(2) A
MENDMENTS FOR REPORTING OF HOSPITAL QUALITY  
INFORMATION .—Section 1886(b)(3)(B)(viii) of the Social Security

Act (42 U.S.C. 1395ww(b)(3)(B)(viii)) is amended— Web posting. 
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124 STAT. 360 PUBLIC LAW 111–148—MAR. 23, 2010 
(A) in subclause (II), by adding at the end the following 
sentence: ‘‘The Secretary may require hospitals to submit data on measures that are not used for the determination of value-based incentive payments under subsection (o).’’; 
(B) in subclause (V), by striking ‘‘beginning with fiscal 
year 2008’’ and inserting ‘‘for fiscal years 2008 through 2012’’; 
(C) in subclause (VII), in the first sentence, by striking

‘‘data submitted’’ and inserting ‘‘information regarding measures submitted’’; and 
(D) by adding at the end the following new subclauses: 
‘‘(VIII) Effective for payments beginning with fiscal year 2013, 
with respect to quality measures for outcomes of care, the Secretary shall provide for such risk adjustment as the Secretary determines to be appropriate to maintain incentives for hospitals to treat patients with severe illnesses or conditions.

‘‘(IX)(aa) Subject to item (bb), effective for payments beginning 
with fiscal year 2013, each measure specified by the Secretary under this clause shall be endorsed by the entity with a contract under section 1890(a). 
‘‘(bb) In the case of a specified area or medical topic determined

appropriate by the Secretary for which a feasible and practical measure has not been endorsed by the entity with a contract under section 1890(a), the Secretary may specify a measure that is not so endorsed as long as due consideration is given to measures that have been endorsed or adopted by a consensus organization identified by the Secretary. 
‘‘(X) To the extent practicable, the Secretary shall, with input

from consensus organizations and other stakeholders, take steps to ensure that the measures specified by the Secretary under this clause are coordinated and aligned with quality measures applicable to— 
‘‘(aa) physicians under section 1848(k); and ‘‘(bb) other providers of services and suppliers under this 
title.??? ‘‘(XI) The Secretary shall establish a process to validate meas-

ures specified under this clause as appropriate. Such process shall include the auditing of a number of randomly selected hospitals sufficient to ensure validity of the reporting program under this clause as a whole and shall provide a hospital with an opportunity to appeal the validation of measures reported by such hospital.’’. 
(3) W
EBSITE IMPROVEMENTS .—Section 1886(b)(3)(B) of the

Social Security Act (42 U.S.C. 1395ww(b)(3)(B)), as amended by section 4102(b) of the HITECH Act (Public Law 111–5), is amended by adding at the end the following new clause: ‘‘(x)(I) The Secretary shall develop standard Internet website

reports tailored to meet the needs of various stakeholders such as hospitals, patients, researchers, and policymakers. The Secretary shall seek input from such stakeholders in determining the type of information that is useful and the formats that best facilitate the use of the information. 
‘‘(II) The Secretary shall modify the Hospital Compare Internet 
website to make the use and navigation of that website readily available to individuals accessing it.’’. 
(4) GAO 
STUDY AND REPORT .—

(4) GAO 
STUDY AND REPORT .— 
(A) S TUDY .—The Comptroller General of the United 
States shall conduct a study on the performance of the Web posting. Reports. Validation 
process. Effective date. 
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124 STAT. 361 PUBLIC LAW 111–148—MAR. 23, 2010 
hospital value-based purchasing program established under 
section 1886(o) of the Social Security Act, as added by paragraph (1). Such study shall include an analysis of the impact of such program on— 
(i) the quality of care furnished to Medicare bene-
ficiaries, including diverse Medicare beneficiary popu-lations (such as diverse in terms of race, ethnicity, and socioeconomic status); 
(ii) expenditures under the Medicare program,

(ii) expenditures under the Medicare program, 
including any reduced expenditures under Part A of title XVIII of such Act that are attributable to the improvement in the delivery of inpatient hospital serv-ices by reason of such hospital value-based purchasing program; 
(iii) the quality performance among safety net hos-
pitals and any barriers such hospitals face in meeting the performance standards applicable under such hos-pital value-based purchasing program; and

(iv) the quality performance among small rural 
and small urban hospitals and any barriers such hos-pitals face in meeting the performance standards applicable under such hospital value-based purchasing program. (B) R
EPORTS .— 
(i) I NTERIM REPORT .—Not later than October 1,

(i) I NTERIM REPORT .—Not later than October 1, 
2015, the Comptroller General of the United States shall submit to Congress an interim report containing the results of the study conducted under subparagraph (A), together with recommendations for such legislation and administrative action as the Comptroller General determines appropriate. 
(ii) F
INAL REPORT .—Not later than July 1, 2017,

INAL REPORT .—Not later than July 1, 2017, 
the Comptroller General of the United States shall submit to Congress a report containing the results of the study conducted under subparagraph (A), together with recommendations for such legislation and administrative action as the Comptroller General determines appropriate. 
(5) HHS 
(A) S TUDY .—The Secretary of Health and Human Serv-

ices shall conduct a study on the performance of the hos-pital value-based purchasing program established under section 1886(o) of the Social Security Act, as added by paragraph (1). Such study shall include an analysis— 
(i) of ways to improve the hospital value-based 
purchasing program and ways to address any unin-tended consequences that may occur as a result of such program; 
(ii) of whether the hospital value-based purchasing

program resulted in lower spending under the Medi-care program under title XVIII of such Act or other financial savings to hospitals; 
(iii) the appropriateness of the Medicare program 
sharing in any savings generated through the hospital value-based purchasing program; and 
(iv) any other area determined appropriate by the 
Secretary.

Secretary. 
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124 STAT. 362 PUBLIC LAW 111–148—MAR. 23, 2010 
(B) R EPORT .—Not later than January 1, 2016, the Sec-
retary of Health and Human Services shall submit to Con-gress a report containing the results of the study conducted under subparagraph (A), together with recommendations for such legislation and administrative action as the Sec-retary determines appropriate. 
(b) V
ALUE -BASED PURCHASING DEMONSTRATION PROGRAMS .— 
(1) V ALUE -BASED PURCHASING DEMONSTRATION PROGRAM

FOR INPATIENT CRITICAL ACCESS HOSPITALS .— 
(A) E STABLISHMENT .— 
(i) I N GENERAL .—Not later than 2 years after the

date of enactment of this Act, the Secretary of Health and Human Services (in this subsection referred to as the ‘‘Secretary’’) shall establish a demonstration pro-gram under which the Secretary establishes a value- based purchasing program under the Medicare pro-gram under title XVIII of the Social Security Act for critical access hospitals (as defined in paragraph (1) of section 1861(mm) of such Act (42 U.S.C. 1395x(mm))) with respect to inpatient critical access hospital serv-ices (as

inpatient critical access hospital serv-ices (as defined in paragraph (2) of such section) in order to test innovative methods of measuring and rewarding quality and efficient health care furnished by such hospitals.

(ii) D
URATION .—The demonstration program under 
this paragraph shall be conducted for a 3-year period. 
(iii) S ITES.—The Secretary shall conduct the dem-
onstration program under this paragraph at an appro-priate number (as determined by the Secretary) of critical access hospitals. The Secretary shall ensure that such hospitals are representative of the spectrum of such hospitals that participate in the Medicare pro-gram. (B) W
AIVER AUTHORITY .—The Secretary may waive

AIVER AUTHORITY .—The Secretary may waive 
such requirements of titles XI and XVIII of the Social Security Act as may be necessary to carry out the dem-onstration program under this paragraph. 
(C) B
UDGET NEUTRALITY REQUIREMENT .—In conducting 
the demonstration program under this section, the Sec-

retary shall ensure that the aggregate payments made by the Secretary do not exceed the amount which the Secretary would have paid if the demonstration program under this section was not implemented. 
(D) R
EPORT .—Not later than 18 months after the 
completion of the demonstration program under this para-graph, the Secretary shall submit to Congress a report on the demonstration program together with— 
(i) recommendations on the establishment of a

(i) recommendations on the establishment of a 
permanent value-based purchasing program under the Medicare program for critical access hospitals with respect to inpatient critical access hospital services; and 
(ii) recommendations for such other legislation and 
administrative action as the Secretary determines appropriate. Deadline. 42 USC 1395ww 
note.

note. 
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124 STAT. 363 PUBLIC LAW 111–148—MAR. 23, 2010 
(2) V ALUE -BASED PURCHASING DEMONSTRATION PROGRAM  
FOR HOSPITALS EXCLUDED FROM HOSPITAL VALUE -BASED PUR -
CHASING PROGRAM AS A RESULT OF INSUFFICIENT NUMBERS OF  
MEASURES AND CASES .— 

date of enactment of this Act, the Secretary shall estab-lish a demonstration program under which the Sec-retary establishes a value-based purchasing program under the Medicare program under title XVIII of the Social Security Act for applicable hospitals (as defined in clause (ii)) with respect to inpatient hospital services (as defined in section 1861(b) of the Social Security Act (42 U.S.C. 1395x(b))) in order to test innovative methods of measuring and rewarding quality and effi-cient health

and rewarding quality and effi-cient health care furnished by such hospitals.

(ii) A
PPLICABLE HOSPITAL DEFINED .—For purposes 
of this paragraph, the term ‘‘applicable hospital’’ means a hospital described in subclause (III) or (IV) of section 1886(o)(1)(C)(ii) of the Social Security Act, as added by subsection (a)(1). 
(iii) D
URATION .—The demonstration program 
under this paragraph shall be conducted for a 3-year period. 
(iv) S
ITES.—The Secretary shall conduct the dem-

(iv) S
onstration program under this paragraph at an appro-priate number (as determined by the Secretary) of applicable hospitals. The Secretary shall ensure that such hospitals are representative of the spectrum of such hospitals that participate in the Medicare pro-gram. (B) W

(C) B
UDGET NEUTRALITY REQUIREMENT .—In conducting

the demonstration program under this section, the Sec-retary shall ensure that the aggregate payments made by the Secretary do not exceed the amount which the Secretary would have paid if the demonstration program under this section was not implemented. 
(D) R
EPORT .—Not later than 18 months after the

(D) R
permanent value-based purchasing program under the Medicare program for applicable hospitals with respect to inpatient hospital services; and 
(ii) recommendations for such other legislation and

administrative action as the Secretary determines appropriate. 
SEC. 3002. IMPROVEMENTS TO THE PHYSICIAN QUALITY REPORTING 
SYSTEM. 
(a) E XTENSION .—Section 1848(m) of the Social Security Act 
(42 U.S.C. 1395w–4(m)) is amended— Deadline. 
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124 STAT. 364 PUBLIC LAW 111–148—MAR. 23, 2010 
(1) in paragraph (1)— 
(A) in subparagraph (A), in the matter preceding clause 
(i), by striking ‘‘2010’’ and inserting ‘‘2014’’; and 
(B) in subparagraph (B)— 
(i) in clause (i), by striking ‘‘and’’ at the end; (ii) in clause (ii), by striking the period at the 
end and inserting a semicolon; and 
(iii) by adding at the end the following new clauses: ‘‘(iii) for 2011, 1.0 percent; and ‘‘(iv) for 2012, 2013, and 2014, 0.5 percent.’’;

(2) in paragraph (3)— 
(i), by inserting ‘‘(or, for purposes of subsection (a)(8), for the quality reporting period for the year)’’ after ‘‘reporting period’’; and 
(B) in subparagraph (C)(i), by inserting ‘‘, or, for pur-
poses of subsection (a)(8), for a quality reporting period for the year’’ after ‘‘(a)(5), for a reporting period for a year’’; (3) in paragraph (5)(E)(iv), by striking ‘‘subsection (a)(5)(A)’’

and inserting ‘‘paragraphs (5)(A) and (8)(A) of subsection (a)’’; and 
(4) in paragraph (6)(C)— 
(A) in clause (i)(II), by striking ‘‘, 2009, 2010, and 
2011’’ and inserting ‘‘and subsequent years’’; and 
(B) in clause (iii)— 
(i) by inserting ‘‘(a)(8)’’ after ‘‘(a)(5)’’; and (ii) by striking ‘‘under subparagraph (D)(iii) of such 
subsection’’ and inserting ‘‘under subsection (a)(5)(D)(iii) or the quality reporting period under sub-section (a)(8)(D)(iii), respectively’’. 
(b) I

(b) I
NCENTIVE PAYMENT ADJUSTMENT FOR QUALITY  
REPORTING .—Section 1848(a) of the Social Security Act (42 U.S.C. 
1395w–4(a)) is amended by adding at the end the following new paragraph: 
‘‘(8) I
NCENTIVES FOR QUALITY REPORTING .— 
‘‘(A) A DJUSTMENT .— 
‘‘(i) I N GENERAL .—With respect to covered profes-

sional services furnished by an eligible professional during 2015 or any subsequent year, if the eligible professional does not satisfactorily submit data on quality measures for covered professional services for the quality reporting period for the year (as determined under subsection (m)(3)(A)), the fee schedule amount for such services furnished by such professional during the year (including the fee schedule amount for pur-poses of determining a payment based on such amount) shall be equal

a payment based on such amount) shall be equal to the applicable percent of the fee schedule amount that would otherwise apply to such services under this subsection (determined after application of paragraphs (3), (5), and (7), but without regard to this paragraph).

‘‘(ii) A
PPLICABLE PERCENT .—For purposes of clause 
(i), the term ‘applicable percent’ means— 
‘‘(I) for 2015, 98.5 percent; and ‘‘(II) for 2016 and each subsequent year, 98 
percent. 
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124 STAT. 365 PUBLIC LAW 111–148—MAR. 23, 2010 
‘‘(B) A PPLICATION .— 
‘‘(i) P HYSICIAN REPORTING SYSTEM RULES .—Para-
graphs (5), (6), and (8) of subsection (k) shall apply for purposes of this paragraph in the same manner as they apply for purposes of such subsection. 
‘‘(ii) I
NCENTIVE PAYMENT VALIDATION RULES .— 
Clauses (ii) and (iii) of subsection (m)(5)(D) shall apply for purposes of this paragraph in a similar manner as they apply for purposes of such subsection. ‘‘(C) D

EFINITIONS .—For purposes of this paragraph: 
‘‘(i) E LIGIBLE PROFESSIONAL ; COVERED PROFES -
SIONAL SERVICES .—The terms ‘eligible professional’ and 
‘covered professional services’ have the meanings given such terms in subsection (k)(3). 
‘‘(ii) P
HYSICIAN REPORTING SYSTEM .—The term 
‘physician reporting system’ means the system estab-lished under subsection (k). 
‘‘(iii) Q
UALITY REPORTING PERIOD .—The term

‘‘(iii) Q
UALITY REPORTING PERIOD .—The term 
‘quality reporting period’ means, with respect to a year, a period specified by the Secretary.’’. 
(c) M
AINTENANCE OF CERTIFICATION PROGRAMS .— 
(1) I N GENERAL .—Section 1848(k)(4) of the Social Security

Act (42 U.S.C. 1395w–4(k)(4)) is amended by inserting ‘‘or through a Maintenance of Certification program operated by a specialty body of the American Board of Medical Specialties that meets the criteria for such a registry’’ after ‘‘Database)’’. 
(2) E
(1) shall apply for years after 2010. (d) I
NTEGRATION OF PHYSICIAN QUALITY REPORTING AND EHR 
REPORTING .—Section 1848(m) of the Social Security Act (42 U.S.C.

1395w–4(m)) is amended by adding at the end the following new paragraph: 
‘‘(7) I
NTEGRATION OF PHYSICIAN QUALITY REPORTING AND  
EHR REPORTING .—Not later than January 1, 2012, the Secretary 
shall develop a plan to integrate reporting on quality measures under this subsection with reporting requirements under sub-section (o) relating to the meaningful use of electronic health records. Such integration shall consist of the following: 
‘‘(A) The selection of measures, the reporting of which

would both demonstrate— 
‘‘(i) meaningful use of an electronic health record 
for purposes of subsection (o); and 
‘‘(ii) quality of care furnished to an individual. 
‘‘(B) Such other activities as specified by the Sec-
retary.’’. 
(e) F
EEDBACK .—Section 1848(m)(5) of the Social Security Act 
(42 U.S.C. 1395w–4(m)(5)) is amended by adding at the end the following new subparagraph: 
‘‘(H) F
EEDBACK .—The Secretary shall provide timely

EEDBACK .—The Secretary shall provide timely 
feedback to eligible professionals on the performance of the eligible professional with respect to satisfactorily submitting data on quality measures under this sub-section.’’. 
(f) A
PPEALS .—Such section is further amended— 
(1) in subparagraph (E), by striking ‘‘There shall’’ and 
inserting ‘‘Except as provided in subparagraph (I), there shall’’; and Plan. 42 USC 1395w–4 
note.

note. 
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124 STAT. 366 PUBLIC LAW 111–148—MAR. 23, 2010 
‘‘(I) I NFORMAL APPEALS PROCESS .—The Secretary shall, 
by not later than January 1, 2011, establish and have in place an informal process for eligible professionals to seek a review of the determination that an eligible profes-sional did not satisfactorily submit data on quality meas-ures under this subsection.’’. 
SEC. 3003. IMPROVEMENTS TO THE PHYSICIAN FEEDBACK PROGRAM.

(a) I NGENERAL .—Section 1848(n) of the Social Security Act 
(42 U.S.C. 1395w–4(n)) is amended— 
(A) in subparagraph (A)— 
(i) by striking ‘‘ GENERAL .—The Secretary’’ and 
inserting ‘‘ GENERAL .— 
‘‘(i) E STABLISHMENT .—The Secretary’’; 
(ii) in clause (i), as added by clause (i), by striking 
‘‘the ‘Program’)’’ and all that follows through the period at the end of the second sentence and inserting ‘‘the ‘Program’).’’; and

(iii) by adding at the end the following new clauses: ‘‘(ii) R
EPORTS ON RESOURCES .—The Secretary shall 
use claims data under this title (and may use other data) to provide confidential reports to physicians (and, as determined appropriate by the Secretary, to groups of physicians) that measure the resources involved in furnishing care to individuals under this title. 
‘‘(iii) I
NCLUSION OF CERTAIN INFORMATION .—If

‘‘(iii) I
NCLUSION OF CERTAIN INFORMATION .—If 
determined appropriate by the Secretary, the Secretary may include information on the quality of care fur-nished to individuals under this title by the physician (or group of physicians) in such reports.’’; and (B) in subparagraph (B), by striking ‘‘subparagraph 
(A)’’ and inserting ‘‘subparagraph (A)(ii)’’; (2) in paragraph (4)— 
(A) in the heading, by inserting ‘‘
INITIAL ’’ after ‘‘ FOCUS ’’; 
and

and 
(B) in the matter preceding subparagraph (A), by 
inserting ‘‘initial’’ after ‘‘focus the’’; (3) in paragraph (6), by adding at the end the following 
new sentence: ‘‘For adjustments for reports on utilization under paragraph (9), see subparagraph (D) of such paragraph.’’; and 
(4) by adding at the end the following new paragraphs: ‘‘(9) R
EPORTS ON UTILIZATION .— 
‘‘(A) D EVELOPMENT OF EPISODE GROUPER .— 
‘‘(i) I N GENERAL .—The Secretary shall develop an

episode grouper that combines separate but clinically related items and services into an episode of care for an individual, as appropriate. 
‘‘(ii) T
IMELINE FOR DEVELOPMENT .—The episode 
grouper described in subparagraph (A) shall be devel-oped by not later than January 1, 2012. 
‘‘(iii) P
UBLIC AVAILABILITY .—The Secretary shall 
make the details of the episode grouper described in subparagraph (A) available to the public. 
‘‘(iv) E
NDORSEMENT .—The Secretary shall seek

‘‘(iv) E
NDORSEMENT .—The Secretary shall seek 
endorsement of the episode grouper described in Deadline. 
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124 STAT. 367 PUBLIC LAW 111–148—MAR. 23, 2010 
subparagraph (A) by the entity with a contract under 
section 1890(a). ‘‘(B) R
EPORTS ON UTILIZATION .—Effective beginning 
with 2012, the Secretary shall provide reports to physicians that compare, as determined appropriate by the Secretary, patterns of resource use of the individual physician to such patterns of other physicians. 
‘‘(C) A
NALYSIS OF DATA .—The Secretary shall, for pur-

poses of preparing reports under this paragraph, establish methodologies as appropriate, such as to— 
‘‘(i) attribute episodes of care, in whole or in part, 
to physicians; 
‘‘(ii) identify appropriate physicians for purposes 
of comparison under subparagraph (B); and 
‘‘(iii) aggregate episodes of care attributed to a 
physician under clause (i) into a composite measure per individual. ‘‘(D) D
ATA ADJUSTMENT .—In preparing reports under

ATA ADJUSTMENT .—In preparing reports under 
this paragraph, the Secretary shall make appropriate adjustments, including adjustments— 
‘‘(i) to account for differences in socioeconomic and 
demographic characteristics, ethnicity, and health status of individuals (such as to recognize that less healthy individuals may require more intensive inter-ventions); and 
‘‘(ii) to eliminate the effect of geographic adjust-
ments in payment rates (as described in subsection (e)). ‘‘(E) P

UBLIC AVAILABILITY OF METHODOLOGY .—The Sec-
retary shall make available to the public— 
‘‘(i) the methodologies established under subpara-
graph (C); 
‘‘(ii) information regarding any adjustments made 
to data under subparagraph (D); and 
‘‘(iii) aggregate reports with respect to physicians. 
‘‘(F) D EFINITION OF PHYSICIAN .—In this paragraph: 
‘‘(i) I N GENERAL .—The term ‘physician’ has the 
meaning given that term in section 1861(r)(1). 
‘‘(ii) T REATMENT OF GROUPS .—Such term includes,

as the Secretary determines appropriate, a group of physicians. ‘‘(G) L
IMITATIONS ON REVIEW .—There shall be no 
administrative or judicial review under section 1869, sec-tion 1878, or otherwise of the establishment of the method-ology under subparagraph (C), including the determination of an episode of care under such methodology. ‘‘(10) C
OORDINATION WITH OTHER VALUE -BASED PURCHASING  
REFORMS .—The Secretary shall coordinate the Program with

the value-based payment modifier established under subsection (p) and, as the Secretary determines appropriate, other similar provisions of this title.’’. (b) C
ONFORMING AMENDMENT .—Section 1890(b) of the Social 
Security Act (42 U.S.C. 1395aaa(b)) is amended by adding at the end the following new paragraph: 
‘‘(6) R
EVIEW AND ENDORSEMENT OF EPISODE GROUPER UNDER  
THE PHYSICIAN FEEDBACK PROGRAM .—The entity shall provide 
for the review and, as appropriate, the endorsement of the

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124 STAT. 368 PUBLIC LAW 111–148—MAR. 23, 2010 
episode grouper developed by the Secretary under section 
1848(n)(9)(A). Such review shall be conducted on an expedited basis.’’. 
SEC. 3004. QUALITY REPORTING FOR LONG-TERM CARE HOSPITALS, 
INPATIENT REHABILITATION HOSPITALS, AND HOSPICE PROGRAMS. 
(a) L ONG-TERM CAREHOSPITALS .—Section 1886(m) of the Social 
Security Act (42 U.S.C. 1395ww(m)), as amended by section 3401(c), is amended by adding at the end the following new paragraph: 
‘‘(5) Q

‘‘(5) Q
UALITY REPORTING .— 
‘‘(A) R EDUCTION IN UPDATE FOR FAILURE TO REPORT .— 
‘‘(i) I N GENERAL .—Under the system described in

paragraph (1), for rate year 2014 and each subsequent rate year, in the case of a long-term care hospital that does not submit data to the Secretary in accord-ance with subparagraph (C) with respect to such a rate year, any annual update to a standard Federal rate for discharges for the hospital during the rate year, and after application of paragraph (3), shall be reduced by 2 percentage points. 
‘‘(ii) S
PECIAL RULE .—The application of this

‘‘(ii) S
PECIAL RULE .—The application of this 
subparagraph may result in such annual update being less than 0.0 for a rate year, and may result in payment rates under the system described in paragraph (1) for a rate year being less than such payment rates for the preceding rate year. ‘‘(B) N
ONCUMULATIVE APPLICATION .—Any reduction

ONCUMULATIVE APPLICATION .—Any reduction 
under subparagraph (A) shall apply only with respect to the rate year involved and the Secretary shall not take into account such reduction in computing the payment amount under the system described in paragraph (1) for a subsequent rate year. 
‘‘(C) S
UBMISSION OF QUALITY DATA .—For rate year 2014

UBMISSION OF QUALITY DATA .—For rate year 2014 
and each subsequent rate year, each long-term care hospital shall submit to the Secretary data on quality measures specified under subparagraph (D). Such data shall be sub-mitted in a form and manner, and at a time, specified by the Secretary for purposes of this subparagraph. 
‘‘(D) Q
UALITY MEASURES .— 
‘‘(i) I N GENERAL .—Subject to clause (ii), any

‘‘(i) I N GENERAL .—Subject to clause (ii), any 
measure specified by the Secretary under this subpara-graph must have been endorsed by the entity with a contract under section 1890(a). 
‘‘(ii) E
XCEPTION .—In the case of a specified area

XCEPTION .—In the case of a specified area 
or medical topic determined appropriate by the Sec-retary for which a feasible and practical measure has not been endorsed by the entity with a contract under section 1890(a), the Secretary may specify a measure that is not so endorsed as long as due consideration is given to measures that have been endorsed or adopted by a consensus organization identified by the Secretary. 
‘‘(iii) T
IME FRAME .—Not later than October 1, 2012,

IME FRAME .—Not later than October 1, 2012, 
the Secretary shall publish the measures selected under this subparagraph that will be applicable with respect to rate year 2014. 
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124 STAT. 369 PUBLIC LAW 111–148—MAR. 23, 2010 
‘‘(E) P UBLIC AVAILABILITY OF DATA SUBMITTED .—The

Secretary shall establish procedures for making data sub-mitted under subparagraph (C) available to the public. Such procedures shall ensure that a long-term care hospital has the opportunity to review the data that is to be made public with respect to the hospital prior to such data being made public. The Secretary shall report quality measures that relate to services furnished in inpatient settings in long-term care hospitals on the Internet website of the Centers for Medicare & Medicaid

(b) I
NPATIENT REHABILITATION HOSPITALS .—Section 1886(j) of 
the Social Security Act (42 U.S.C. 1395ww(j)) is amended— 
(1) by redesignating paragraph (7) as paragraph (8); and (2) by inserting after paragraph (6) the following new para-
graph: 
‘‘(7) Q
‘‘(i) I N GENERAL .—For purposes of fiscal year 2014

and each subsequent fiscal year, in the case of a rehabilitation facility that does not submit data to the Secretary in accordance with subparagraph (C) with respect to such a fiscal year, after determining the increase factor described in paragraph (3)(C), and after application of paragraph (3)(D), the Secretary shall reduce such increase factor for payments for dis-charges occurring during such fiscal year by 2 percent-age points. 
‘‘(ii) S

‘‘(ii) S
subparagraph may result in the increase factor described in paragraph (3)(C) being less than 0.0 for a fiscal year, and may result in payment rates under this subsection for a fiscal year being less than such payment rates for the preceding fiscal year. ‘‘(B) N

under subparagraph (A) shall apply only with respect to the fiscal year involved and the Secretary shall not take into account such reduction in computing the payment amount under this subsection for a subsequent fiscal year. 
‘‘(C) S
UBMISSION OF QUALITY DATA .—For fiscal year

UBMISSION OF QUALITY DATA .—For fiscal year 
2014 and each subsequent rate year, each rehabilitation facility shall submit to the Secretary data on quality meas-ures specified under subparagraph (D). Such data shall be submitted in a form and manner, and at a time, specified by the Secretary for purposes of this subparagraph. 
‘‘(D) Q

or medical topic determined appropriate by the Sec-retary for which a feasible and practical measure has not been endorsed by the entity with a contract under section 1890(a), the Secretary may specify a measure that is not so endorsed as long as due consideration is given to measures that have been endorsed or Web posting. Review. Procedures.

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124 STAT. 370 PUBLIC LAW 111–148—MAR. 23, 2010 
adopted by a consensus organization identified by the 
‘‘(iii) T IME FRAME .—Not later than October 1, 2012, 
the Secretary shall publish the measures selected under this subparagraph that will be applicable with respect to fiscal year 2014. ‘‘(E) P
UBLIC AVAILABILITY OF DATA SUBMITTED .—The

Secretary shall establish procedures for making data sub-mitted under subparagraph (C) available to the public. Such procedures shall ensure that a rehabilitation facility has the opportunity to review the data that is to be made public with respect to the facility prior to such data being made public. The Secretary shall report quality measures that relate to services furnished in inpatient settings in rehabilitation facilities on the Internet website of the Cen-ters for Medicare & Medicaid

(c) H
OSPICE PROGRAMS .—Section 1814(i) of the Social Security 
Act (42 U.S.C. 1395f(i)) is amended— 
(1) by redesignating paragraph (5) as paragraph (6); and (2) by inserting after paragraph (4) the following new para-
graph: 
‘‘(5) Q

and each subsequent fiscal year, in the case of a hospice program that does not submit data to the Secretary in accordance with subparagraph (C) with respect to such a fiscal year, after determining the market basket percentage increase under paragraph (1)(C)(ii)(VII) or paragraph (1)(C)(iii), as applicable, and after applica-tion of paragraph (1)(C)(iv), with respect to the fiscal year, the Secretary shall reduce such market basket percentage increase by 2 percentage points. 
‘‘(ii) S

‘‘(ii) S
subparagraph may result in the market basket percent-age increase under paragraph (1)(C)(ii)(VII) or para-graph (1)(C)(iii), as applicable, being less than 0.0 for a fiscal year, and may result in payment rates under this subsection for a fiscal year being less than such payment rates for the preceding fiscal year. ‘‘(B) N

2014 and each subsequent fiscal year, each hospice program shall submit to the Secretary data on quality measures specified under subparagraph (D). Such data shall be sub-mitted in a form and manner, and at a time, specified by the Secretary for purposes of this subparagraph. 
‘‘(D) Q

measure specified by the Secretary under this subpara-graph must have been endorsed by the entity with a contract under section 1890(a). Web posting. Review. Procedures. Publication. 
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124 STAT. 371 PUBLIC LAW 111–148—MAR. 23, 2010 
‘‘(ii) E XCEPTION .—In the case of a specified area 
‘‘(iii) T

‘‘(iii) T

Secretary shall establish procedures for making data sub-mitted under subparagraph (C) available to the public. Such procedures shall ensure that a hospice program has the opportunity to review the data that is to be made public with respect to the hospice program prior to such data being made public. The Secretary shall report quality measures that relate to hospice care provided by hospice programs on the Internet website of the Centers for Medi-care & Medicaid Services.’’.

SEC. 3005. QUALITY REPORTING FOR PPS-EXEMPT CANCER HOS-
PITALS. 
Section 1866 of the Social Security Act (42 U.S.C. 1395cc) 
(1) in subsection (a)(1)— 
(A) in subparagraph (U), by striking ‘‘and’’ at the end; (B) in subparagraph (V), by striking the period at 
the end and inserting ‘‘, and’’; and 
(C) by adding at the end the following new subpara-
graph: 
‘‘(W) in the case of a hospital described in section

1886(d)(1)(B)(v), to report quality data to the Secretary in accordance with subsection (k).’’; and (2) by adding at the end the following new subsection: 
‘‘(k) Q
UALITY REPORTING BY CANCER HOSPITALS .— 
‘‘(1) I N GENERAL .—For purposes of fiscal year 2014 and 
each subsequent fiscal year, a hospital described in section 1886(d)(1)(B)(v) shall submit data to the Secretary in accord-ance with paragraph (2) with respect to such a fiscal year. 
‘‘(2) S

‘‘(2) S
UBMISSION OF QUALITY DATA .—For fiscal year 2014 
and each subsequent fiscal year, each hospital described in such section shall submit to the Secretary data on quality measures specified under paragraph (3). Such data shall be submitted in a form and manner, and at a time, specified by the Secretary for purposes of this subparagraph. 
‘‘(3) Q
‘‘(A) I N GENERAL .—Subject to subparagraph (B), any

measure specified by the Secretary under this paragraph must have been endorsed by the entity with a contract under section 1890(a). 
‘‘(B) E
XCEPTION .—In the case of a specified area or 
medical topic determined appropriate by the Secretary for which a feasible and practical measure has not been Web posting. Review. Procedures. Publication.

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124 STAT. 372 PUBLIC LAW 111–148—MAR. 23, 2010 
endorsed by the entity with a contract under section 
1890(a), the Secretary may specify a measure that is not so endorsed as long as due consideration is given to meas-ures that have been endorsed or adopted by a consensus organization identified by the Secretary. 
‘‘(C) T

the Secretary shall publish the measures selected under this paragraph that will be applicable with respect to fiscal year 2014. ‘‘(4) P
UBLIC AVAILABILITY OF DATA SUBMITTED .—The Sec-

retary shall establish procedures for making data submitted under paragraph (4) available to the public. Such procedures shall ensure that a hospital described in section 1886(d)(1)(B)(v) has the opportunity to review the data that is to be made public with respect to the hospital prior to such data being made public. The Secretary shall report quality measures of process, structure, outcome, patients’ perspective on care, effi-ciency, and costs of care that relate to services furnished in such

of care that relate to services furnished in such hospitals on the Internet website of the Centers for Medi-care & Medicaid Services.’’.

SEC. 3006. PLANS FOR A VALUE-BASED PURCHASING PROGRAM FOR 
SKILLED NURSING FACILITIES AND HOME HEALTH AGENCIES. 
(a) S KILLED NURSING FACILITIES .— 

Services (in this section referred to as the ‘‘Secretary’’) shall develop a plan to implement a value-based purchasing program for payments under the Medicare program under title XVIII of the Social Security Act for skilled nursing facilities (as defined in section 1819(a) of such Act (42 U.S.C. 1395i–3(a))). 
(2) D
ETAILS .—In developing the plan under paragraph (1), 
the Secretary shall consider the following issues: 
(A) The ongoing development, selection, and modifica-

tion process for measures (including under section 1890 of the Social Security Act (42 U.S.C. 1395aaa) and section 1890A such Act, as added by section 3014), to the extent feasible and practicable, of all dimensions of quality and efficiency in skilled nursing facilities. 
(i) I
N GENERAL .—Subject to clause (ii), any measure 
specified by the Secretary under subparagraph (A)(iii) must have been endorsed by the entity with a contract under section 1890(a). 
(ii) E

(ii) E
or medical topic determined appropriate by the Sec-retary for which a feasible and practical measure has not been endorsed by the entity with a contract under section 1890(a), the Secretary may specify a measure that is not so endorsed as long as due consideration is given to measures that have been endorsed or adopted by a consensus organization identified by the Secretary. (B) The reporting, collection, and validation of quality 
data.

data. 
(C) The structure of value-based payment adjustments, 
including the determination of thresholds or improvements in quality that would substantiate a payment adjustment, Web posting. Review. Procedures. Publication. 
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124 STAT. 373 PUBLIC LAW 111–148—MAR. 23, 2010 
the size of such payments, and the sources of funding 
for the value-based bonus payments. 
(D) Methods for the public disclosure of information 
on the performance of skilled nursing facilities. 
(E) Any other issues determined appropriate by the 
Secretary. (3) C
ONSULTATION .—In developing the plan under para-
graph (1), the Secretary shall— 
(A) consult with relevant affected parties; and (B) consider experience with such demonstrations that

the Secretary determines are relevant to the value-based purchasing program described in paragraph (1). (4) R
EPORT TO CONGRESS .—Not later than October 1, 2011, 
the Secretary shall submit to Congress a report containing the plan developed under paragraph (1). (b) H
OME HEALTH AGENCIES .— 

Services (in this section referred to as the ‘‘Secretary’’) shall develop a plan to implement a value-based purchasing program for payments under the Medicare program under title XVIII of the Social Security Act for home health agencies (as defined in section 1861(o) of such Act (42 U.S.C. 1395x(o))). 
(2) D

tion process for measures (including under section 1890 of the Social Security Act (42 U.S.C. 1395aaa) and section 1890A such Act, as added by section 3014), to the extent feasible and practicable, of all dimensions of quality and efficiency in home health agencies. 
(B) The reporting, collection, and validation of quality 
data. 
(C) The structure of value-based payment adjustments,

including the determination of thresholds or improvements in quality that would substantiate a payment adjustment, the size of such payments, and the sources of funding for the value-based bonus payments. 
on the performance of home health agencies. 
graph (1), the Secretary shall—

(A) consult with relevant affected parties; and (B) consider experience with such demonstrations that 
the Secretary shall submit to Congress a report containing the plan developed under paragraph (1). 
SEC. 3007. VALUE-BASED PAYMENT MODIFIER UNDER THE PHYSICIAN 
FEE SCHEDULE.

FEE SCHEDULE. 
Section 1848 of the Social Security Act (42 U.S.C. 1395w– 
4) is amended— 
(1) in subsection (b)(1), by inserting ‘‘subject to subsection 
(p),’’ after ‘‘1998,’’; and 
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124 STAT. 374 PUBLIC LAW 111–148—MAR. 23, 2010 
‘‘(p) E STABLISHMENT OF VALUE -BASED PAYMENT MODIFIER .— 
‘‘(1) I N GENERAL .—The Secretary shall establish a payment

modifier that provides for differential payment to a physician or a group of physicians under the fee schedule established under subsection (b) based upon the quality of care furnished compared to cost (as determined under paragraphs (2) and (3), respectively) during a performance period. Such payment modifier shall be separate from the geographic adjustment fac-tors established under subsection (e). 
‘‘(2) Q
UALITY .— 
‘‘(A) I N GENERAL .—For purposes of paragraph (1),

quality of care shall be evaluated, to the extent practicable, based on a composite of measures of the quality of care furnished (as established by the Secretary under subpara-graph (B)). 
‘‘(B) M
EASURES .— 
‘‘(i) The Secretary shall establish appropriate

‘‘(i) The Secretary shall establish appropriate 
measures of the quality of care furnished by a physi-cian or group of physicians to individuals enrolled under this part, such as measures that reflect health outcomes. Such measures shall be risk adjusted as determined appropriate by the Secretary. 
‘‘(ii) The Secretary shall seek endorsement of the 
measures established under this subparagraph by the entity with a contract under section 1890(a). 
‘‘(3) C

be evaluated, to the extent practicable, based on a composite of appropriate measures of costs established by the Secretary (such as the composite measure under the methodology estab-lished under subsection (n)(9)(C)(iii)) that eliminate the effect of geographic adjustments in payment rates (as described in subsection (e)), and take into account risk factors (such as socioeconomic and demographic characteristics, ethnicity, and health status of individuals (such as to recognize that less

of individuals (such as to recognize that less healthy individuals may require more intensive interventions) and other factors determined appropriate by the Secretary.

‘‘(4) I
‘‘(A) P UBLICATION OF MEASURES , DATES OF IMPLEMENTA -
TION , PERFORMANCE PERIOD .—Not later than January 1, 
2012, the Secretary shall publish the following: 
‘‘(i) The measures of quality of care and costs estab-
lished under paragraphs (2) and (3), respectively. 
‘‘(ii) The dates for implementation of the payment 
modifier (as determined under subparagraph (B)). 
‘‘(iii) The initial performance period (as specified 
under subparagraph (B)(ii)). ‘‘(B) D

EADLINES FOR IMPLEMENTATION .— 
‘‘(i) I NITIAL IMPLEMENTATION .—Subject to the pre-
ceding provisions of this subparagraph, the Secretary shall begin implementing the payment modifier estab-lished under this subsection through the rulemaking process during 2013 for the physician fee schedule established under subsection (b). 
‘‘(ii) I
NITIAL PERFORMANCE PERIOD .— 
‘‘(I) I N GENERAL .—The Secretary shall specify

‘‘(I) I N GENERAL .—The Secretary shall specify 
an initial performance period for application of Deadline. 
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124 STAT. 375 PUBLIC LAW 111–148—MAR. 23, 2010 
the payment modifier established under this sub-
section with respect to 2015. 
‘‘(II) P ROVISION OF INFORMATION DURING INI -
TIAL PERFORMANCE PERIOD .—During the initial

TIAL PERFORMANCE PERIOD .—During the initial 
performance period, the Secretary shall, to the extent practicable, provide information to physi-cians and groups of physicians about the quality of care furnished by the physician or group of physicians to individuals enrolled under this part compared to cost (as determined under paragraphs (2) and (3), respectively) with respect to the performance period. ‘‘(iii) A
PPLICATION .—The Secretary shall apply the

PPLICATION .—The Secretary shall apply the 
payment modifier established under this subsection for items and services furnished— 
‘‘(I) beginning on January 1, 2015, with respect 
to specific physicians and groups of physicians the Secretary determines appropriate; and 
‘‘(II) beginning not later than January 1, 2017, 
with respect to all physicians and groups of physi-cians. 
‘‘(C) B
UDGET NEUTRALITY .—The payment modifier

‘‘(C) B
UDGET NEUTRALITY .—The payment modifier 
established under this subsection shall be implemented in a budget neutral manner. ‘‘(5) S
YSTEMS -BASED CARE .—The Secretary shall, as appro-
priate, apply the payment modifier established under this sub-section in a manner that promotes systems-based care. 
‘‘(6) C
ONSIDERATION OF SPECIAL CIRCUMSTANCES OF CERTAIN  
PROVIDERS .—In applying the payment modifier under this sub-

section, the Secretary shall, as appropriate, take into account the special circumstances of physicians or groups of physicians in rural areas and other underserved communities. 
‘‘(7) A
PPLICATION .—For purposes of the initial application

of the payment modifier established under this subsection during the period beginning on January 1, 2015, and ending on December 31, 2016, the term ‘physician’ has the meaning given such term in section 1861(r). On or after January 1, 2017, the Secretary may apply this subsection to eligible profes-sionals (as defined in subsection (k)(3)(B)) as the Secretary 
determines appropriate. 
‘‘(8) D
EFINITIONS .—For purposes of this subsection: 
‘‘(A) C OSTS .—The term ‘costs’ means expenditures per

individual as determined appropriate by the Secretary. In making the determination under the preceding sentence, the Secretary may take into account the amount of growth in expenditures per individual for a physician compared to the amount of such growth for other physicians. 
‘‘(B) P
ERFORMANCE PERIOD .—The term ‘performance 
period’ means a period specified by the Secretary. ‘‘(9) C
REFORMS .—The Secretary shall coordinate the value-based pay-

ment modifier established under this subsection with the Physi-cian Feedback Program under subsection (n) and, as the Sec-retary determines appropriate, other similar provisions of this title. Determination. Effective date. 
Determination. Time period. Applicability. Deadline. Effective date. 
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124 STAT. 376 PUBLIC LAW 111–148—MAR. 23, 2010 
‘‘(10) L IMITATIONS ON REVIEW .—There shall be no adminis-
trative or judicial review under section 1869, section 1878, or otherwise of— 
‘‘(A) the establishment of the value-based payment 
modifier under this subsection; 
‘‘(B) the evaluation of quality of care under paragraph 
(2), including the establishment of appropriate measures of the quality of care under paragraph (2)(B); 
‘‘(C) the evaluation of costs under paragraph (3),

including the establishment of appropriate measures of costs under such paragraph; 
‘‘(D) the dates for implementation of the value-based 
payment modifier; 
‘‘(E) the specification of the initial performance period 
and any other performance period under paragraphs (4)(B)(ii) and (8)(B), respectively; 
‘‘(F) the application of the value-based payment modi-
fier under paragraph (7); and 
‘‘(G) the determination of costs under paragraph 
(8)(A).’’.

(8)(A).’’. 
SEC. 3008. PAYMENT ADJUSTMENT FOR CONDITIONS ACQUIRED IN 
HOSPITALS. 
(a) I NGENERAL .—Section 1886 of the Social Security Act (42 
U.S.C. 1395ww), as amended by section 3001, is amended by adding at the end the following new subsection: 
‘‘(p) A
DJUSTMENT TO HOSPITAL PAYMENTS FOR HOSPITAL  
ACQUIRED CONDITIONS .— 
‘‘(1) I N GENERAL .—In order to provide an incentive for

applicable hospitals to reduce hospital acquired conditions under this title, with respect to discharges from an applicable hospital occurring during fiscal year 2015 or a subsequent fiscal year, the amount of payment under this section or section 1814(b)(3), as applicable, for such discharges during the fiscal year shall be equal to 99 percent of the amount of payment that would otherwise apply to such discharges under this sec-tion or section 1814(b)(3) (determined after the application of

1814(b)(3) (determined after the application of subsections (o) and (q) and section 1814(l)(4) but without regard to this subsection).

‘‘(2) A
PPLICABLE HOSPITALS .— 
‘‘(A) I N GENERAL .—For purposes of this subsection, the 
term ‘applicable hospital’ means a subsection (d) hospital that meets the criteria described in subparagraph (B). 
‘‘(B) C
RITERIA DESCRIBED .— 
‘‘(i) I N GENERAL .—The criteria described in this

subparagraph, with respect to a subsection (d) hospital, is that the subsection (d) hospital is in the top quartile of all subsection (d) hospitals, relative to the national average, of hospital acquired conditions during the applicable period, as determined by the Secretary. 
‘‘(ii) R
ISK ADJUSTMENT .—In carrying out clause (i), 
the Secretary shall establish and apply an appropriate risk adjustment methodology. ‘‘(C) E
XEMPTION .—In the case of a hospital that is

XEMPTION .—In the case of a hospital that is 
paid under section 1814(b)(3), the Secretary may exempt such hospital from the application of this subsection if the State which is paid under such section submits an Deadline. Reports. Determined. Definition. 
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124 STAT. 377 PUBLIC LAW 111–148—MAR. 23, 2010 
annual report to the Secretary describing how a similar 
program in the State for a participating hospital or hos-pitals achieves or surpasses the measured results in terms of patient health outcomes and cost savings established under this subsection. ‘‘(3) H
OSPITAL ACQUIRED CONDITIONS .—For purposes of this

subsection, the term ‘hospital acquired condition’ means a condi-tion identified for purposes of subsection (d)(4)(D)(iv) and any other condition determined appropriate by the Secretary that an individual acquires during a stay in an applicable hospital, as determined by the Secretary. 
‘‘(4) A
PPLICABLE PERIOD .—In this subsection, the term 
‘applicable period’ means, with respect to a fiscal year, a period specified by the Secretary. 
‘‘(5) R
EPORTING TO HOSPITALS .—Prior to fiscal year 2015

and each subsequent fiscal year, the Secretary shall provide confidential reports to applicable hospitals with respect to hos-pital acquired conditions of the applicable hospital during the applicable period. 
‘‘(6) R
EPORTING HOSPITAL SPECIFIC INFORMATION .— 
‘‘(A) I N GENERAL .—The Secretary shall make informa-
tion available to the public regarding hospital acquired conditions of each applicable hospital. 
‘‘(B) O

‘‘(B) O
TIONS .—The Secretary shall ensure that an applicable hos-
pital has the opportunity to review, and submit corrections for, the information to be made public with respect to the hospital under subparagraph (A) prior to such informa-tion being made public. 
‘‘(C) W
EBSITE .—Such information shall be posted on 
the Hospital Compare Internet website in an easily under-standable format. ‘‘(7) L
IMITATIONS ON REVIEW .—There shall be no adminis-

trative or judicial review under section 1869, section 1878, or otherwise of the following: 
‘‘(A) The criteria described in paragraph (2)(A). ‘‘(B) The specification of hospital acquired conditions 
under paragraph (3). 
‘‘(C) The specification of the applicable period under 
paragraph (4). 
‘‘(D) The provision of reports to applicable hospitals 
under paragraph (5) and the information made available to the public under paragraph (6).’’. 
(b) S

(b) S
TUDY AND REPORT ON EXPANSION OF HEALTHCARE  
ACQUIRED CONDITIONS POLICY TO OTHER PROVIDERS .— 
(1) S TUDY .—The Secretary of Health and Human Services

shall conduct a study on expanding the healthcare acquired conditions policy under subsection (d)(4)(D) of section 1886 of the Social Security Act (42 U.S.C. 1395ww) to payments made to other facilities under the Medicare program under title XVIII of the Social Security Act, including such payments made to inpatient rehabilitation facilities, long-term care hos-pitals (as described in subsection(d)(1)(B)(iv) of such section), hospital outpatient departments, and other hospitals excluded from

departments, and other hospitals excluded from the inpatient prospective payment system under such section, skilled nursing facilities, ambulatory surgical centers, and health clinics. Such study shall include an analysis of Public information. Definition.

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124 STAT. 378 PUBLIC LAW 111–148—MAR. 23, 2010 
how such policies could impact quality of patient care, patient 
safety, and spending under the Medicare program. 
(2) R EPORT .—Not later than January 1, 2012, the Secretary 
shall submit to Congress a report containing the results of the study conducted under paragraph (1), together with rec-ommendations for such legislation and administrative action as the Secretary determines appropriate. 
PART II—NATIONAL STRATEGY TO IMPROVE

PART II—NATIONAL STRATEGY TO IMPROVE 
HEALTH CARE QUALITY 
SEC. 3011. NATIONAL STRATEGY. 
Title III of the Public Health Service Act (42 U.S.C. 241 et 
seq.) is amended by adding at the end the following: 
‘‘PART S—HEALTH CARE QUALITY PROGRAMS 
‘‘Subpart I—National Strategy for Quality 
Improvement in Health Care 
‘‘SEC. 399HH. NATIONAL STRATEGY FOR QUALITY IMPROVEMENT IN 
HEALTH CARE. 
‘‘(a) E STABLISHMENT OF NATIONAL STRATEGY AND PRIORITIES .—

‘‘(1) N ATIONAL STRATEGY .—The Secretary, through a trans-
parent collaborative process, shall establish a national strategy to improve the delivery of health care services, patient health outcomes, and population health. 
‘‘(2) I
DENTIFICATION OF PRIORITIES .— 
‘‘(A) I N GENERAL .—The Secretary shall identify 
national priorities for improvement in developing the strategy under paragraph (1). 
‘‘(B) R
EQUIREMENTS .—The Secretary shall ensure that

EQUIREMENTS .—The Secretary shall ensure that 
priorities identified under subparagraph (A) will— 
‘‘(i) have the greatest potential for improving the 
health outcomes, efficiency, and patient-centeredness of health care for all populations, including children and vulnerable populations; 
‘‘(ii) identify areas in the delivery of health care 
services that have the potential for rapid improvement in the quality and efficiency of patient care;

‘‘(iii) address gaps in quality, efficiency, compara-
tive effectiveness information, and health outcomes measures and data aggregation techniques; 
‘‘(iv) improve Federal payment policy to emphasize 
quality and efficiency; 
‘‘(v) enhance the use of health care data to improve 
quality, efficiency, transparency, and outcomes; 
‘‘(vi) address the health care provided to patients 
with high-cost chronic diseases; 
‘‘(vii) improve research and dissemination of strate-

gies and best practices to improve patient safety and reduce medical errors, preventable admissions and re-admissions, and health care-associated infections; 
‘‘(viii) reduce health disparities across health dis-
parity populations (as defined in section 485E) and geographic areas; and 42 USC 280j. 
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124 STAT. 379 PUBLIC LAW 111–148—MAR. 23, 2010 
‘‘(ix) address other areas as determined appro-
priate by the Secretary. ‘‘(C) C
ONSIDERATIONS .—In identifying priorities under 
subparagraph (A), the Secretary shall take into consider-ation the recommendations submitted by the entity with a contract under section 1890(a) of the Social Security Act and other stakeholders. 
‘‘(D) C
OORDINATION WITH STATE AGENCIES .—The Sec-

retary shall collaborate, coordinate, and consult with State agencies responsible for administering the Medicaid pro-gram under title XIX of the Social Security Act and the Children’s Health Insurance Program under title XXI of such Act with respect to developing and disseminating strategies, goals, models, and timetables that are consistent with the national priorities identified under subparagraph (A). 
‘‘(b) S
TRATEGIC PLAN.—

‘‘(b) S
TRATEGIC PLAN.— 
‘‘(1) I N GENERAL .—The national strategy shall include a 
comprehensive strategic plan to achieve the priorities described in subsection (a). 
‘‘(2) R
EQUIREMENTS .—The strategic plan shall include 
provisions for addressing, at a minimum, the following: 
‘‘(A) Coordination among agencies within the Depart-

ment, which shall include steps to minimize duplication of efforts and utilization of common quality measures, where available. Such common quality measures shall be measures identified by the Secretary under section 1139A or 1139B of the Social Security Act or endorsed under section 1890 of such Act. 
‘‘(B) Agency-specific strategic plans to achieve national 
priorities. 
‘‘(C) Establishment of annual benchmarks for each rel-
evant agency to achieve national priorities.

evant agency to achieve national priorities. 
‘‘(D) A process for regular reporting by the agencies 
to the Secretary on the implementation of the strategic plan. 
‘‘(E) Strategies to align public and private payers with 
regard to quality and patient safety efforts. 
‘‘(F) Incorporating quality improvement and measure-
ment in the strategic plan for health information technology required by the American Recovery and Reinvestment Act of 2009 (Public Law 111–5). 
‘‘(c) P

‘‘(c) P
ERIODIC UPDATE OF NATIONAL STRATEGY .—The Secretary 
shall update the national strategy not less than annually. Any such update shall include a review of short- and long-term goals. 
‘‘(d) S
UBMISSION AND AVAILABILITY OF NATIONAL STRATEGY AND  
UPDATES .— 
‘‘(1) D EADLINE FOR INITIAL SUBMISSION OF NATIONAL  
STRATEGY .—Not later than January 1, 2011, the Secretary shall 
submit to the relevant committees of Congress the national strategy described in subsection (a). 
‘‘(2) U
PDATES .—

‘‘(2) U
PDATES .— 
‘‘(A) I N GENERAL .—The Secretary shall submit to the 
relevant committees of Congress an annual update to the strategy described in paragraph (1). 
‘‘(B) I
NFORMATION SUBMITTED .—Each update submitted 
under subparagraph (A) shall include— 
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124 STAT. 380 PUBLIC LAW 111–148—MAR. 23, 2010 
‘‘(i) a review of the short- and long-term goals 
of the national strategy and any gaps in such strategy; 
‘‘(ii) an analysis of the progress, or lack of progress, 
in meeting such goals and any barriers to such progress; 
‘‘(iii) the information reported under section 1139A 
of the Social Security Act, consistent with the reporting requirements of such section; and 
‘‘(iv) in the case of an update required to be sub-

mitted on or after January 1, 2014, the information reported under section 1139B(b)(4) of the Social Secu-rity Act, consistent with the reporting requirements of such section. ‘‘(C) S
ATISFACTION OF OTHER REPORTING REQUIRE -
MENTS .—Compliance with the requirements of clauses (iii) 
and (iv) of subparagraph (B) shall satisfy the reporting requirements under sections 1139A(a)(6) and 1139B(b)(4), respectively, of the Social Security Act. 
‘‘(e) H

‘‘(e) H
EALTH CAREQUALITY INTERNET WEBSITE .—Not later than 
January 1, 2011, the Secretary shall create an Internet website to make public information regarding— 
‘‘(1) the national priorities for health care quality improve-
ment established under subsection (a)(2); 
‘‘(2) the agency-specific strategic plans for health care 
quality described in subsection (b)(2)(B); and 
‘‘(3) other information, as the Secretary determines to be 
appropriate.’’.

appropriate.’’. 
SEC. 3012. INTERAGENCY WORKING GROUP ON HEALTH CARE 
QUALITY. 
(a) I NGENERAL .—The President shall convene a working group 
to be known as the Interagency Working Group on Health Care Quality (referred to in this section as the ‘‘Working Group’’). 
(b) G
OALS .—The goals of the Working Group shall be to achieve 
(1) Collaboration, cooperation, and consultation between

Federal departments and agencies with respect to developing and disseminating strategies, goals, models, and timetables that are consistent with the national priorities identified under section 399HH(a)(2) of the Public Health Service Act (as added by section 3011). 
(2) Avoidance of inefficient duplication of quality improve-
ment efforts and resources, where practicable, and a stream-lined process for quality reporting and compliance require-ments.

(3) Assess alignment of quality efforts in the public sector 
with private sector initiatives. (c) C
OMPOSITION .— 
(1) I N GENERAL .—The Working Group shall be composed 
of senior level representatives of—

of senior level representatives of— 
(A) the Department of Health and Human Services; (B) the Centers for Medicare & Medicaid Services; (C) the National Institutes of Health; (D) the Centers for Disease Control and Prevention; (E) the Food and Drug Administration; (F) the Health Resources and Services Administration; (G) the Agency for Healthcare Research and Quality; President. Establishment. 42 USC 280j 
note. Deadline. 
Public information.

Public information. 
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124 STAT. 381 PUBLIC LAW 111–148—MAR. 23, 2010 
(H) the Office of the National Coordinator for Health 
Information Technology; 
(I) the Substance Abuse and Mental Health Services 
Administration; 
(J) the Administration for Children and Families; (K) the Department of Commerce; (L) the Office of Management and Budget; (M) the United States Coast Guard; (N) the Federal Bureau of Prisons; 
(O) the National Highway Traffic Safety Administra-
tion;

tion; 
(P) the Federal Trade Commission; (Q) the Social Security Administration; (R) the Department of Labor; (S) the United States Office of Personnel Management; (T) the Department of Defense; (U) the Department of Education; (V) the Department of Veterans Affairs; (W) the Veterans Health Administration; and (X) any other Federal agencies and departments with 
activities relating to improving health care quality and safety, as determined by the President. (2) C
HAIR AND VICE -CHAIR .—

HAIR AND VICE -CHAIR .— 
(A) C HAIR .—The Working Group shall be chaired by 
the Secretary of Health and Human Services. 
(B) V ICE CHAIR .—Members of the Working Group, other 
than the Secretary of Health and Human Services, shall serve as Vice Chair of the Group on a rotating basis, as determined by the Group. 
(d) R
EPORT TO CONGRESS .—Not later than December 31, 2010,

and annually thereafter, the Working Group shall submit to the relevant Committees of Congress, and make public on an Internet website, a report describing the progress and recommendations of the Working Group in meeting the goals described in subsection (b). 
SEC. 3013. QUALITY MEASURE DEVELOPMENT. 
(a) P UBLIC HEALTH SERVICE ACT.—Title IX of the Public Health 
Service Act (42 U.S.C. 299 et seq.) is amended—

Service Act (42 U.S.C. 299 et seq.) is amended— 
(1) by redesignating part D as part E; (2) by redesignating sections 931 through 938 as sections 
941 through 948, respectively; 
(3) in section 948(1), as so redesignated, by striking ‘‘931’’ 
and inserting ‘‘941’’; and 
(4) by inserting after section 926 the following: 
‘‘PART D—HEALTH CARE QUALITY 
IMPROVEMENT 
‘‘Subpart I—Quality Measure Development 
‘‘SEC. 931. QUALITY MEASURE DEVELOPMENT.

‘‘SEC. 931. QUALITY MEASURE DEVELOPMENT. 
‘‘(a) Q UALITY MEASURE .—In this subpart, the term ‘quality 
measure’ means a standard for measuring the performance and improvement of population health or of health plans, providers of services, and other clinicians in the delivery of health care services. Definition. 42 USC 299b–31. 42 USC 
299c—299c–7. Public 
information. Web posting.

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124 STAT. 382 PUBLIC LAW 111–148—MAR. 23, 2010 
‘‘(b) I DENTIFICATION OF QUALITY MEASURES .— 
‘‘(1) I DENTIFICATION .—The Secretary, in consultation with

the Director of the Agency for Healthcare Research and Quality and the Administrator of the Centers for Medicare & Medicaid Services, shall identify, not less often than triennially, gaps where no quality measures exist and existing quality measures that need improvement, updating, or expansion, consistent with the national strategy under section 399HH, to the extent avail-able, for use in Federal health programs. In identifying such gaps and existing quality measures that need improvement, the

quality measures that need improvement, the Secretary shall take into consideration—

‘‘(A) the gaps identified by the entity with a contract 
under section 1890(a) of the Social Security Act and other stakeholders; 
‘‘(B) quality measures identified by the pediatric 
quality measures program under section 1139A of the Social Security Act; and 
‘‘(C) quality measures identified through the Medicaid 
Quality Measurement Program under section 1139B of the Social Security Act. ‘‘(2) P
UBLICATION .—The Secretary shall make available to

the public on an Internet website a report on any gaps identified under paragraph (1) and the process used to make such identi-fication. ‘‘(c) G
RANTS OR CONTRACTS FOR QUALITY MEASURE DEVELOP -
MENT .— 
‘‘(1) I N GENERAL .—The Secretary shall award grants, con-
tracts, or intergovernmental agreements to eligible entities for purposes of developing, improving, updating, or expanding quality measures identified under subsection (b). 
‘‘(2) P
RIORITIZATION IN THE DEVELOPMENT OF QUALITY MEAS -

URES .—In awarding grants, contracts, or agreements under 
this subsection, the Secretary shall give priority to the develop-ment of quality measures that allow the assessment of— 
‘‘(A) health outcomes and functional status of patients; ‘‘(B) the management and coordination of health care 
across episodes of care and care transitions for patients across the continuum of providers, health care settings, and health plans; 
‘‘(C) the experience, quality, and use of information

provided to and used by patients, caregivers, and author-ized representatives to inform decisionmaking about treat-ment options, including the use of shared decisionmaking tools and preference sensitive care (as defined in section 936); 
‘‘(D) the meaningful use of health information tech-
nology; 
‘‘(E) the safety, effectiveness, patient-centeredness, 
appropriateness, and timeliness of care; 
‘‘(F) the efficiency of care; ‘‘(G) the equity of health services and health disparities

across health disparity populations (as defined in section 485E) and geographic areas; 
‘‘(H) patient experience and satisfaction; ‘‘(I) the use of innovative strategies and methodologies 
identified under section 933; and Public 
information. Web posting. Reports. Consultation. 
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124 STAT. 383 PUBLIC LAW 111–148—MAR. 23, 2010 
‘‘(J) other areas determined appropriate by the Sec-
retary. ‘‘(3) E
LIGIBLE ENTITIES .—To be eligible for a grant or con-
tract under this subsection, an entity shall— 
‘‘(A) have demonstrated expertise and capacity in the 
development and evaluation of quality measures; 
‘‘(B) have adopted procedures to include in the quality 
measure development process— 
‘‘(i) the views of those providers or payers whose

performance will be assessed by the measure; and 
‘‘(ii) the views of other parties who also will use 
the quality measures (such as patients, consumers, and health care purchasers); ‘‘(C) collaborate with the entity with a contract under

section 1890(a) of the Social Security Act and other stake-holders, as practicable, and the Secretary so that quality measures developed by the eligible entity will meet the requirements to be considered for endorsement by the entity with a contract under such section 1890(a); 
‘‘(D) have transparent policies regarding governance 
and conflicts of interest; and 
‘‘(E) submit an application to the Secretary at such 
time and in such manner, as the Secretary may require. ‘‘(4) U

SE OF FUNDS .—An entity that receives a grant, con-
tract, or agreement under this subsection shall use such award to develop quality measures that meet the following require-ments: 
‘‘(A) Such measures support measures required to be 
reported under the Social Security Act, where applicable, and in support of gaps and existing quality measures that need improvement, as described in subsection (b)(1)(A). 
‘‘(B) Such measures support measures developed under

section 1139A of the Social Security Act and the Medicaid Quality Measurement Program under section 1139B of such Act, where applicable. 
‘‘(C) To the extent practicable, data on such quality 
measures is able to be collected using health information technologies. 
‘‘(D) Each quality measure is free of charge to users 
of such measure. 
‘‘(E) Each quality measure is publicly available on an 
Internet website. 
‘‘(d) O
THER ACTIVITIES BY THE SECRETARY .—The Secretary may

use amounts available under this section to update and test, where applicable, quality measures endorsed by the entity with a contract under section 1890(a) of the Social Security Act or adopted by the Secretary. 
‘‘(e) C
OORDINATION OF GRANTS .—The Secretary shall ensure 
that grants or contracts awarded under this section are coordinated with grants and contracts awarded under sections 1139A(5) and 1139B(4)(A) of the Social Security Act.’’. 
(b) S

(b) S
OCIAL SECURITY ACT.—Section 1890A of the Social Security 
Act, as added by section 3014(b), is amended by adding at the end the following new subsection: 
‘‘(e) D
EVELOPMENT OF QUALITY MEASURES .—The Administrator 
of the Center for Medicare & Medicaid Services shall through contracts develop quality measures (as determined appropriate by Requirements.

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124 STAT. 384 PUBLIC LAW 111–148—MAR. 23, 2010 
the Administrator) for use under this Act. In developing such meas-
ures, the Administrator shall consult with the Director of the Agency for Healthcare Research and Quality.’’. 
(c) F
UNDING .—There are authorized to be appropriated to the

Secretary of Health and Human Services to carry out this section, $75,000,000 for each of fiscal years 2010 through 2014. Of the amounts appropriated under the preceding sentence in a fiscal year, not less than 50 percent of such amounts shall be used pursuant to subsection (e) of section 1890A of the Social Security Act, as added by subsection (b), with respect to programs under such Act. Amounts appropriated under this subsection for a fiscal year shall remain available until expended.

SEC. 3014. QUALITY MEASUREMENT. 
(a) N EWDUTIES FOR CONSENSUS -BASED ENTITY .— 
(1) M ULTI-STAKEHOLDER GROUP INPUT .—Section 1890(b) of 
the Social Security Act (42 U.S.C. 1395aaa(b)), as amended by section 3003, is amended by adding at the end the following new paragraphs: 
‘‘(7) C
ONVENING MULTI -STAKEHOLDER GROUPS .— 
‘‘(A) I N GENERAL .—The entity shall convene multi- 
stakeholder groups to provide input on— 
‘‘(i) the selection of quality measures described in

subparagraph (B), from among— 
‘‘(I) such measures that have been endorsed 
by the entity; and 
‘‘(II) such measures that have not been consid-
ered for endorsement by such entity but are used or proposed to be used by the Secretary for the collection or reporting of quality measures; and ‘‘(ii) national priorities (as identified under section

399HH of the Public Health Service Act) for improve-ment in population health and in the delivery of health care services for consideration under the national strategy established under section 399HH of the Public Health Service Act. ‘‘(B) Q
‘‘(i) I N GENERAL .—Subject to clause (ii), the quality 
measures described in this subparagraph are quality measures— 
‘‘(I) for use pursuant to sections 1814(i)(5)(D),

1833(i)(7), 1833(t)(17), 1848(k)(2)(C), 1866(k)(3), 1881(h)(2)(A)(iii), 1886(b)(3)(B)(viii), 1886(j)(7)(D), 1886(m)(5)(D), 1886(o)(2), and 1895(b)(3)(B)(v); 
‘‘(II) for use in reporting performance informa-
tion to the public; and 
‘‘(III) for use in health care programs other 
than for use under this Act. ‘‘(ii) E
XCLUSION .—Data sets (such as the outcome

XCLUSION .—Data sets (such as the outcome 
and assessment information set for home health serv-ices and the minimum data set for skilled nursing facility services) that are used for purposes of classifica-tion systems used in establishing payment rates under this title shall not be quality measures described in this subparagraph. ‘‘(C) R
EQUIREMENT FOR TRANSPARENCY IN PROCESS .—

EQUIREMENT FOR TRANSPARENCY IN PROCESS .— 
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124 STAT. 385 PUBLIC LAW 111–148—MAR. 23, 2010 
‘‘(i) I N GENERAL .—In convening multi-stakeholder 
groups under subparagraph (A) with respect to the selection of quality measures, the entity shall provide for an open and transparent process for the activities conducted pursuant to such convening. 
‘‘(ii) S
ELECTION OF ORGANIZATIONS PARTICIPATING  
IN MULTI -STAKEHOLDER GROUPS .—The process

IN MULTI -STAKEHOLDER GROUPS .—The process 
described in clause (i) shall ensure that the selection of representatives comprising such groups provides for 
public nominations for, and the opportunity for public comment on, such selection. ‘‘(D) M
ULTI-STAKEHOLDER GROUP DEFINED .—In this

ULTI-STAKEHOLDER GROUP DEFINED .—In this 
paragraph, the term ‘multi-stakeholder group’ means, with respect to a quality measure, a voluntary collaborative of organizations representing a broad group of stakeholders interested in or affected by the use of such quality measure. ‘‘(8) T
RANSMISSION OF MULTI -STAKEHOLDER INPUT .—Not

RANSMISSION OF MULTI -STAKEHOLDER INPUT .—Not 
later than February 1 of each year (beginning with 2012), the entity shall transmit to the Secretary the input of multi- stakeholder groups provided under paragraph (7).’’. 
(2) A
NNUAL REPORT .—Section 1890(b)(5)(A) of the Social 
Security Act (42 U.S.C. 1395aaa(b)(5)(A)) is amended— 
(A) in clause (ii), by striking ‘‘and’’ at the end; (B) in clause (iii), by striking the period at the end 
and inserting a semicolon; and

and inserting a semicolon; and 
(C) by adding at the end the following new clauses: 
‘‘(iv) gaps in endorsed quality measures, which 
shall include measures that are within priority areas identified by the Secretary under the national strategy established under section 399HH of the Public Health Service Act, and where quality measures are unavail-able or inadequate to identify or address such gaps; 
‘‘(v) areas in which evidence is insufficient to sup-

port endorsement of quality measures in priority areas identified by the Secretary under the national strategy established under section 399HH of the Public Health Service Act and where targeted research may address such gaps; and 
‘‘(vi) the matters described in clauses (i) and (ii) 
of paragraph (7)(A).’’. 
(b) M
ULTI-STAKEHOLDER GROUP INPUT INTO SELECTION OF  
QUALITY MEASURES .—Title XVIII of the Social Security Act (42

U.S.C. 1395 et seq.) is amended by inserting after section 1890 the following: 
‘‘
QUALITY MEASUREMENT  
‘‘SEC. 1890A. (a) M ULTI-STAKEHOLDER GROUP INPUT INTO 
SELECTION OF QUALITY MEASURES .—The Secretary shall establish 
a pre-rulemaking process under which the following steps occur with respect to the selection of quality measures described in section 1890(b)(7)(B): 
‘‘(1) I
NPUT .—Pursuant to section 1890(b)(7), the entity with

a contract under section 1890 shall convene multi-stakeholder groups to provide input to the Secretary on the selection of quality measures described in subparagraph (B) of such para-graph. Regulations. Deadlines. 
42 USC 1395aaa–1. Deadline. 
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124 STAT. 386 PUBLIC LAW 111–148—MAR. 23, 2010 
‘‘(2) P UBLIC AVAILABILITY OF MEASURES CONSIDERED FOR  
SELECTION .—Not later than December 1 of each year (beginning 
with 2011), the Secretary shall make available to the public a list of quality measures described in section 1890(b)(7)(B) that the Secretary is considering under this title. 
‘‘(3) T
RANSMISSION OF MULTI -STAKEHOLDER INPUT .—Pursu-

ant to section 1890(b)(8), not later than February 1 of each year (beginning with 2012), the entity shall transmit to the Secretary the input of multi-stakeholder groups described in paragraph (1). 
‘‘(4) C
ONSIDERATION OF MULTI -STAKEHOLDER INPUT .—The

ONSIDERATION OF MULTI -STAKEHOLDER INPUT .—The 
Secretary shall take into consideration the input from multi- stakeholder groups described in paragraph (1) in selecting quality measures described in section 1890(b)(7)(B) that have been endorsed by the entity with a contract under section 1890 and measures that have not been endorsed by such entity. 
‘‘(5) R
ATIONALE FOR USE OF QUALITY MEASURES .—The Sec-

retary shall publish in the Federal Register the rationale for the use of any quality measure described in section 1890(b)(7)(B) that has not been endorsed by the entity with a contract under section 1890. 
‘‘(6) A
SSESSMENT OF IMPACT .—Not later than March 1, 
2012, and at least once every three years thereafter, the Sec-retary shall— 
‘‘(A) conduct an assessment of the quality impact of

the use of endorsed measures described in section 1890(b)(7)(B); and 
‘‘(B) make such assessment available to the public. 
‘‘(b) P
ROCESS FOR DISSEMINATION OF MEASURES USED BY THE  
SECRETARY .— 
‘‘(1) I N GENERAL .—The Secretary shall establish a process 
for disseminating quality measures used by the Secretary. Such process shall include the following: 
‘‘(A) The incorporation of such measures, where

‘‘(A) The incorporation of such measures, where 
applicable, in workforce programs, training curricula, and any other means of dissemination determined appropriate by the Secretary. 
‘‘(B) The dissemination of such quality measures 
through the national strategy developed under section 399HH of the Public Health Service Act. ‘‘(2) E
XISTING METHODS .—To the extent practicable, the

XISTING METHODS .—To the extent practicable, the 
Secretary shall utilize and expand existing dissemination methods in disseminating quality measures under the process established under paragraph (1). ‘‘(c) R
EVIEW OF QUALITY MEASURES USED BY THE SECRETARY .— 
‘‘(1) I N GENERAL .—The Secretary shall— 
‘‘(A) periodically (but in no case less often than once 
every 3 years) review quality measures described in section 1890(b)(7)(B); and 
‘‘(B) with respect to each such measure, determine

whether to— 
‘‘(i) maintain the use of such measure; or ‘‘(ii) phase out such measure. 
‘‘(2) C
ONSIDERATIONS .—In conducting the review under 
paragraph (1), the Secretary shall take steps to— 
‘‘(A) seek to avoid duplication of measures used; and Public 
information. Federal Register, 
publication. 
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124 STAT. 387 PUBLIC LAW 111–148—MAR. 23, 2010 
‘‘(B) take into consideration current innovative meth-
odologies and strategies for quality improvement practices in the delivery of health care services that represent best practices for such quality improvement and measures endorsed by the entity with a contract under section 1890 since the previous review by the Secretary. 
‘‘(d) R
ULE OF CONSTRUCTION .—Nothing in this section shall

preclude a State from using the quality measures identified under sections 1139A and 1139B.’’. 
(c) F
UNDING .—For purposes of carrying out the amendments

made by this section, the Secretary shall provide for the transfer, from the Federal Hospital Insurance Trust Fund under section 1817 of the Social Security Act (42 U.S.C. 1395i) and the Federal Supplementary Medical Insurance Trust Fund under section 1841 of such Act (42 U.S.C. 1395t), in such proportion as the Secretary determines appropriate, of $20,000,000, to the Centers for Medicare & Medicaid Services Program Management Account for each of fiscal years 2010 through 2014. Amounts

each of fiscal years 2010 through 2014. Amounts transferred under the preceding sentence shall remain available until expended.

SEC. 3015. DATA COLLECTION; PUBLIC REPORTING. 
seq.), as amended by section 3011, is further amended by adding at the end the following: 
‘‘SEC. 399II. COLLECTION AND ANALYSIS OF DATA FOR QUALITY AND 
RESOURCE USE MEASURES. 
‘‘(a) I NGENERAL .—The Secretary shall collect and aggregate

consistent data on quality and resource use measures from informa-tion systems used to support health care delivery to implement the public reporting of performance information, as described in section 399JJ, and may award grants or contracts for this purpose. The Secretary shall ensure that such collection, aggregation, and analysis systems span an increasingly broad range of patient popu-lations, providers, and geographic areas over time. 
‘‘(b) G
RANTS OR CONTRACTS FOR DATACOLLECTION .—

‘‘(b) G
RANTS OR CONTRACTS FOR DATACOLLECTION .— 
‘‘(1) I N GENERAL .—The Secretary may award grants or con-
tracts to eligible entities to support new, or improve existing, efforts to collect and aggregate quality and resource use meas-ures described under subsection (c). 
‘‘(2) E
‘‘(A) be— 
‘‘(i) a multi-stakeholder entity that coordinates the

development of methods and implementation plans for the consistent reporting of summary quality and cost information; 
‘‘(ii) an entity capable of submitting such summary 
data for a particular population and providers, such as a disease registry, regional collaboration, health plan collaboration, or other population-wide source; or 
‘‘(iii) a Federal Indian Health Service program or

a health program operated by an Indian tribe (as defined in section 4 of the Indian Health Care Improve-ment Act); ‘‘(B) promote the use of the systems that provide data 
to improve and coordinate patient care; 42 USC 280j–1. 
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124 STAT. 388 PUBLIC LAW 111–148—MAR. 23, 2010 
‘‘(C) support the provision of timely, consistent quality 
and resource use information to health care providers, and other groups and organizations as appropriate, with an opportunity for providers to correct inaccurate measures; and 
‘‘(D) agree to report, as determined by the Secretary, 
measures on quality and resource use to the public in accordance with the public reporting process established under section 399JJ. 
‘‘(c) C

‘‘(c) C
ONSISTENT DATA AGGREGATION .—The Secretary may 
award grants or contracts under this section only to entities that enable summary data that can be integrated and compared across multiple sources. The Secretary shall provide standards for the protection of the security and privacy of patient data. 
‘‘(d) M
ATCHING FUNDS .—The Secretary may not award a grant

or contract under this section to an entity unless the entity agrees that it will make available (directly or through contributions from other public or private entities) non-Federal contributions toward the activities to be carried out under the grant or contract in an amount equal to $1 for each $5 of Federal funds provided under the grant or contract. Such non-Federal matching funds may be provided directly or through donations from public or private entities and may be in cash or in-kind,

private entities and may be in cash or in-kind, fairly evaluated, including plant, equipment, or services.

‘‘(e) A
UTHORIZATION OF APPROPRIATIONS .—To carry out this sec-
tion, there are authorized to be appropriated such sums as may be necessary for fiscal years 2010 through 2014. 
‘‘SEC. 399JJ. PUBLIC REPORTING OF PERFORMANCE INFORMATION. 
‘‘(a) D EVELOPMENT OF PERFORMANCE WEBSITES .—The Secretary

shall make available to the public, through standardized Internet websites, performance information summarizing data on quality measures. Such information shall be tailored to respond to the differing needs of hospitals and other institutional health care pro-viders, physicians and other clinicians, patients, consumers, researchers, policymakers, States, and other stakeholders, as the Secretary may specify. 
‘‘(b) I
NFORMATION ON CONDITIONS .—The performance informa-

tion made publicly available on an Internet website, as described in subsection (a), shall include information regarding clinical condi-tions to the extent such information is available, and the informa-tion shall, where appropriate, be provider-specific and sufficiently disaggregated and specific to meet the needs of patients with dif-ferent clinical conditions. 
‘‘(c) C
ONSULTATION .— 
‘‘(1) I N GENERAL .—In carrying out this section, the Sec-

retary shall consult with the entity with a contract under section 1890(a) of the Social Security Act, and other entities, as appropriate, to determine the type of information that is useful to stakeholders and the format that best facilitates use of the reports and of performance reporting Internet websites. 
‘‘(2) C
ONSULTATION WITH STAKEHOLDERS .—The entity with

ONSULTATION WITH STAKEHOLDERS .—The entity with 
a contract under section 1890(a) of the Social Security Act shall convene multi-stakeholder groups, as described in such section, to review the design and format of each Internet website made available under subsection (a) and shall transmit Web posting. 42 USC 280j–2. Standards. 
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124 STAT. 389 PUBLIC LAW 111–148—MAR. 23, 2010 
to the Secretary the views of such multi-stakeholder groups 
with respect to each such design and format. ‘‘(d) C
OORDINATION .—Where appropriate, the Secretary shall 
coordinate the manner in which data are presented through Internet websites described in subsection (a) and for public reporting of other quality measures by the Secretary, including such quality measures under title XVIII of the Social Security Act. 
‘‘(e) A

‘‘(e) A
tion, there are authorized to be appropriated such sums as may be necessary for fiscal years 2010 through 2014.’’. 
PART III—ENCOURAGING DEVELOPMENT OF 
NEW PATIENT CARE MODELS 
SEC. 3021. ESTABLISHMENT OF CENTER FOR MEDICARE AND MED-
ICAID INNOVATION WITHIN CMS. 
(a) I NGENERAL .—Title XI of the Social Security Act is amended 
by inserting after section 1115 the following new section:

‘‘CENTER FOR MEDICARE AND MEDICAID INNOVATION  
‘‘SEC. 1115A. (a) C ENTER FOR MEDICARE AND MEDICAID INNOVA -
TION ESTABLISHED .— 
‘‘(1) I N GENERAL .—There is created within the Centers for

Medicare & Medicaid Services a Center for Medicare and Med-icaid Innovation (in this section referred to as the ‘CMI’) to carry out the duties described in this section. The purpose of the CMI is to test innovative payment and service delivery models to reduce program expenditures under the applicable titles while preserving or enhancing the quality of care fur-nished to individuals under such titles. In selecting such models, the Secretary shall give preference to models that also improve the

give preference to models that also improve the coordination, quality, and efficiency of health care services furnished to applicable individuals defined in paragraph (4)(A).

‘‘(2) D
EADLINE .—The Secretary shall ensure that the CMI 
is carrying out the duties described in this section by not later than January 1, 2011. 
‘‘(3) C
ONSULTATION .—In carrying out the duties under this 
section, the CMI shall consult representatives of relevant Fed-eral agencies, and clinical and analytical experts with expertise in medicine and health care management. The CMI shall use open door forums or other mechanisms to seek input from interested parties. 
‘‘(4) D

‘‘(4) D
‘‘(A) A PPLICABLE INDIVIDUAL .—The term ‘applicable 
individual’ means— 
‘‘(i) an individual who is entitled to, or enrolled 
for, benefits under part A of title XVIII or enrolled for benefits under part B of such title; 
‘‘(ii) an individual who is eligible for medical assist-
ance under title XIX, under a State plan or waiver; or 
‘‘(iii) an individual who meets the criteria of both 
clauses (i) and (ii). ‘‘(B) A

PPLICABLE TITLE .—The term ‘applicable title’ 
means title XVIII, title XIX, or both. 42 USC 1315a. 
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124 STAT. 390 PUBLIC LAW 111–148—MAR. 23, 2010 
‘‘(b) T ESTING OF MODELS (PHASE I).— 
‘‘(1) I N GENERAL .—The CMI shall test payment and service 
delivery models in accordance with selection criteria under paragraph (2) to determine the effect of applying such models under the applicable title (as defined in subsection (a)(4)(B)) on program expenditures under such titles and the quality of care received by individuals receiving benefits under such title. 
‘‘(2) S

‘‘(2) S
ELECTION OF MODELS TO BE TESTED .— 
‘‘(A) I N GENERAL .—The Secretary shall select models 
to be tested from models where the Secretary determines that there is evidence that the model addresses a defined population for which there are deficits in care leading to poor clinical outcomes or potentially avoidable expendi-tures. The models selected under the preceding sentence may include the models described in subparagraph (B). 
‘‘(B) O
PPORTUNITIES .—The models described in this

PPORTUNITIES .—The models described in this 
subparagraph are the following models: 
‘‘(i) Promoting broad payment and practice reform 
in primary care, including patient-centered medical home models for high-need applicable individuals, med-ical homes that address women’s unique health care needs, and models that transition primary care prac-tices away from fee-for-service based reimbursement and toward comprehensive payment or salary-based payment.

‘‘(ii) Contracting directly with groups of providers 
of services and suppliers to promote innovative care delivery models, such as through risk-based com-prehensive payment or salary-based payment. 
‘‘(iii) Utilizing geriatric assessments and com-
prehensive care plans to coordinate the care (including through interdisciplinary teams) of applicable individ-uals with multiple chronic conditions and at least one of the following: 
‘‘(I) An inability to perform 2 or more activities

of daily living. 
‘‘(II) Cognitive impairment, including 
dementia. 
‘‘(iv) Promote care coordination between providers 
of services and suppliers that transition health care providers away from fee-for-service based reimburse-ment and toward salary-based payment. 
‘‘(v) Supporting care coordination for chronically-

ill applicable individuals at high risk of hospitalization through a health information technology-enabled pro-vider network that includes care coordinators, a chronic disease registry, and home tele-health technology. 
‘‘(vi) Varying payment to physicians who order

‘‘(vi) Varying payment to physicians who order 
advanced diagnostic imaging services (as defined in section 1834(e)(1)(B)) according to the physician’s adherence to appropriateness criteria for the ordering of such services, as determined in consultation with physician specialty groups and other relevant stake-holders. Determination.

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124 STAT. 391 PUBLIC LAW 111–148—MAR. 23, 2010 
‘‘(vii) Utilizing medication therapy management 
services, such as those described in section 935 of the Public Health Service Act. 
‘‘(viii) Establishing community-based health teams 
to support small-practice medical homes by assisting the primary care practitioner in chronic care manage-ment, including patient self-management, activities. 
‘‘(ix) Assisting applicable individuals in making

informed health care choices by paying providers of services and suppliers for using patient decision-sup-port tools, including tools that meet the standards developed and identified under section 936(c)(2)(A) of the Public Health Service Act, that improve applicable individual and caregiver understanding of medical treatment options. 
‘‘(x) Allowing States to test and evaluate fully inte-

grating care for dual eligible individuals in the State, including the management and oversight of all funds under the applicable titles with respect to such individ-uals. 
‘‘(xi) Allowing States to test and evaluate systems 
of all-payer payment reform for the medical care of residents of the State, including dual eligible individ-uals. 
‘‘(xii) Aligning nationally recognized, evidence-

based guidelines of cancer care with payment incen-tives under title XVIII in the areas of treatment plan-ning and follow-up care planning for applicable individ-uals described in clause (i) or (iii) of subsection (a)(4)(A) with cancer, including the identification of gaps in applicable quality measures. 
‘‘(xiii) Improving post-acute care through con-

tinuing care hospitals that offer inpatient rehabilita-tion, long-term care hospitals, and home health or skilled nursing care during an inpatient stay and the 30 days immediately following discharge. 
‘‘(xiv) Funding home health providers who offer 
chronic care management services to applicable individuals in cooperation with interdisciplinary teams. 
‘‘(xv) Promoting improved quality and reduced cost

by developing a collaborative of high-quality, low-cost health care institutions that is responsible for— 
‘‘(I) developing, documenting, and dissemi-
nating best practices and proven care methods; 
‘‘(II) implementing such best practices and 
proven care methods within such institutions to demonstrate further improvements in quality and efficiency; and 
‘‘(III) providing assistance to other health care

institutions on how best to employ such best prac-tices and proven care methods to improve health care quality and lower costs. ‘‘(xvi) Facilitate inpatient care, including intensive 
care, of hospitalized applicable individuals at their local hospital through the use of electronic monitoring by specialists, including intensivists and critical care specialists, based at integrated health systems.

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124 STAT. 392 PUBLIC LAW 111–148—MAR. 23, 2010 
‘‘(xvii) Promoting greater efficiencies and timely 
access to outpatient services (such as outpatient phys-ical therapy services) through models that do not require a physician or other health professional to refer the service or be involved in establishing the plan of care for the service, when such service is fur-nished by a health professional who has the authority to furnish the service under existing State law.

‘‘(xviii) Establishing comprehensive payments to 
Healthcare Innovation Zones, consisting of groups of providers that include a teaching hospital, physicians, and other clinical entities, that, through their struc-ture, operations, and joint-activity deliver a full spec-trum of integrated and comprehensive health care serv-ices to applicable individuals while also incorporating innovative methods for the clinical training of future health care professionals. ‘‘(C) A

DDITIONAL FACTORS FOR CONSIDERATION .—In 
selecting models for testing under subparagraph (A), the CMI may consider the following additional factors: 
‘‘(i) Whether the model includes a regular process 
for monitoring and updating patient care plans in a manner that is consistent with the needs and pref-erences of applicable individuals. 
‘‘(ii) Whether the model places the applicable indi-

vidual, including family members and other informal caregivers of the applicable individual, at the center of the care team of the applicable individual. 
‘‘(iii) Whether the model provides for in-person 
contact with applicable individuals. 
‘‘(iv) Whether the model utilizes technology, such 
as electronic health records and patient-based remote monitoring systems, to coordinate care over time and across settings. 
‘‘(v) Whether the model provides for the mainte-

nance of a close relationship between care coordinators, primary care practitioners, specialist physicians, community-based organizations, and other providers of services and suppliers. 
‘‘(vi) Whether the model relies on a team-based 
approach to interventions, such as comprehensive care assessments, care planning, and self-management coaching. 
‘‘(vii) Whether, under the model, providers of serv-

ices and suppliers are able to share information with patients, caregivers, and other providers of services and suppliers on a real time basis. 
‘‘(3) B
UDGET NEUTRALITY .— 
‘‘(A) I NITIAL PERIOD .—The Secretary shall not require, 
as a condition for testing a model under paragraph (1), that the design of such model ensure that such model is budget neutral initially with respect to expenditures under the applicable title. 
‘‘(B) T
ERMINATION OR MODIFICATION .—The Secretary

ERMINATION OR MODIFICATION .—The Secretary 
shall terminate or modify the design and implementation of a model unless the Secretary determines (and the Chief Actuary of the Centers for Medicare & Medicaid Services, Determination. 
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124 STAT. 393 PUBLIC LAW 111–148—MAR. 23, 2010 
with respect to program spending under the applicable 
title, certifies), after testing has begun, that the model is expected to— 
‘‘(i) improve the quality of care (as determined 
by the Administrator of the Centers for Medicare & Medicaid Services) without increasing spending under the applicable title; 
‘‘(ii) reduce spending under the applicable title 
without reducing the quality of care; or 
‘‘(iii) improve the quality of care and reduce

‘‘(iii) improve the quality of care and reduce 
spending. 
Such termination may occur at any time after such testing has begun and before completion of the testing. ‘‘(4) E
‘‘(A) I N GENERAL .—The Secretary shall conduct an 
evaluation of each model tested under this subsection. Such evaluation shall include an analysis of— 
‘‘(i) the quality of care furnished under the model,

including the measurement of patient-level outcomes and patient-centeredness criteria determined appro-priate by the Secretary; and 
‘‘(ii) the changes in spending under the applicable 
titles by reason of the model. ‘‘(B) I
NFORMATION .—The Secretary shall make the

NFORMATION .—The Secretary shall make the 
results of each evaluation under this paragraph available to the public in a timely fashion and may establish require-ments for States and other entities participating in the testing of models under this section to collect and report information that the Secretary determines is necessary to monitor and evaluate such models. 
‘‘(c) E
XPANSION OF MODELS (PHASE II).—Taking into account

the evaluation under subsection (b)(4), the Secretary may, through rulemaking, expand (including implementation on a nationwide basis) the duration and the scope of a model that is being tested under subsection (b) or a demonstration project under section 1866C, to the extent determined appropriate by the Secretary, if— 
‘‘(1) the Secretary determines that such expansion is 
expected to— 
‘‘(A) reduce spending under applicable title without 
reducing the quality of care; or

reducing the quality of care; or 
‘‘(B) improve the quality of care and reduce spending; 
and ‘‘(2) the Chief Actuary of the Centers for Medicare & Med-
icaid Services certifies that such expansion would reduce pro-gram spending under applicable titles. ‘‘(d) I
‘‘(1) W AIVER AUTHORITY .—The Secretary may waive such

requirements of titles XI and XVIII and of sections 1902(a)(1), 1902(a)(13), and 1903(m)(2)(A)(iii) as may be necessary solely for purposes of carrying out this section with respect to testing models described in subsection (b). 
‘‘(2) L
‘‘(A) the selection of models for testing or expansion 
under this section; Certification. Determination. Public

information. Determination. 
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124 STAT. 394 PUBLIC LAW 111–148—MAR. 23, 2010 
‘‘(B) the selection of organizations, sites, or participants 
to test those models selected; 
‘‘(C) the elements, parameters, scope, and duration of 
such models for testing or dissemination; 
‘‘(D) determinations regarding budget neutrality under 
subsection (b)(3); 
‘‘(E) the termination or modification of the design and 
implementation of a model under subsection (b)(3)(B); and 
‘‘(F) determinations about expansion of the duration

and scope of a model under subsection (c), including the determination that a model is not expected to meet criteria described in paragraph (1) or (2) of such subsection. ‘‘(3) A
DMINISTRATION .—Chapter 35 of title 44, United States 
Code, shall not apply to the testing and evaluation of models or expansion of such models under this section. ‘‘(e) A
PPLICATION TO CHIP.—The Center may carry out activi-

ties under this section with respect to title XXI in the same manner as provided under this section with respect to the program under the applicable titles. 
‘‘(f) F
UNDING .— 
‘‘(1) I N GENERAL .—There are appropriated, from amounts 
in the Treasury not otherwise appropriated— 
‘‘(A) $5,000,000 for the design, implementation, and 
evaluation of models under subsection (b) for fiscal year 2010; 
‘‘(B) $10,000,000,000 for the activities initiated under

this section for the period of fiscal years 2011 through 2019; and 
‘‘(C) the amount described in subparagraph (B) for 
the activities initiated under this section for each subse-quent 10-year fiscal period (beginning with the 10-year fiscal period beginning with fiscal year 2020). 
Amounts appropriated under the preceding sentence shall remain available until expended. 
‘‘(2) U
SE OF CERTAIN FUNDS .—Out of amounts appropriated

under subparagraphs (B) and (C) of paragraph (1), not less than $25,000,000 shall be made available each such fiscal year to design, implement, and evaluate models under subsection (b). ‘‘(g) R
EPORT TO CONGRESS .—Beginning in 2012, and not less

than once every other year thereafter, the Secretary shall submit to Congress a report on activities under this section. Each such report shall describe the models tested under subsection (b), including the number of individuals described in subsection (a)(4)(A)(i) and of individuals described in subsection (a)(4)(A)(ii) participating in such models and payments made under applicable

titles for services on behalf of such individuals, any models chosen for expansion under subsection (c), and the results from evaluations under subsection (b)(4). In addition, each such report shall provide such recommendations as the Secretary determines are appropriate for legislative action to facilitate the development and expansion of successful payment models.’’. 
(b) M
EDICAID CONFORMING AMENDMENT .—Section 1902(a) of

the Social Security Act (42 U.S.C. 1396a(a)), as amended by section 8002(b), is amended— 
(1) in paragraph (81), by striking ‘‘and’’ at the end; Determination. 
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124 STAT. 395 PUBLIC LAW 111–148—MAR. 23, 2010 
(2) in paragraph (82), by striking the period at the end 
(3) by inserting after paragraph (82) the following new 
‘‘(83) provide for implementation of the payment models

specified by the Secretary under section 1115A(c) for implementation on a nationwide basis unless the State dem-onstrates to the satisfaction of the Secretary that implementa-tion would not be administratively feasible or appropriate to the health care delivery system of the State.’’. (c) R
EVISIONS TO HEALTH CARE QUALITY DEMONSTRATION PRO-
GRAM .—Subsections (b) and (f) of section 1866C of the Social Secu-
rity Act (42 U.S.C. 1395cc–3) are amended by striking ‘‘5-year’’ each place it appears.

SEC. 3022. MEDICARE SHARED SAVINGS PROGRAM. 
Title XVIII of the Social Security Act (42 U.S.C. 1395 et seq.) 
‘‘SHARED SAVINGS PROGRAM  
‘‘SEC. 1899. (a) E STABLISHMENT .— 
‘‘(1) I N GENERAL .—Not later than January 1, 2012, the

Secretary shall establish a shared savings program (in this section referred to as the ‘program’) that promotes account-ability for a patient population and coordinates items and serv-ices under parts A and B, and encourages investment in infra-structure and redesigned care processes for high quality and efficient service delivery. Under such program— 
‘‘(A) groups of providers of services and suppliers

meeting criteria specified by the Secretary may work together to manage and coordinate care for Medicare fee- for-service beneficiaries through an accountable care organization (referred to in this section as an ‘ACO’); and 
‘‘(B) ACOs that meet quality performance standards 
established by the Secretary are eligible to receive pay-ments for shared savings under subsection (d)(2). 
‘‘(b) E
LIGIBLE ACO S.— 

this subsection, as determined appropriate by the Secretary, the following groups of providers of services and suppliers which have established a mechanism for shared governance are eligible to participate as ACOs under the program under this section: 
‘‘(A) ACO professionals in group practice arrangements. ‘‘(B) Networks of individual practices of ACO profes-
sionals. 
‘‘(C) Partnerships or joint venture arrangements 
between hospitals and ACO professionals.

between hospitals and ACO professionals. 
‘‘(D) Hospitals employing ACO professionals. ‘‘(E) Such other groups of providers of services and 
suppliers as the Secretary determines appropriate. ‘‘(2) R
EQUIREMENTS .—An ACO shall meet the following 
requirements: 
‘‘(A) The ACO shall be willing to become accountable 
for the quality, cost, and overall care of the Medicare fee-for-service beneficiaries assigned to it. Deadline. 42 USC 1395jjj.

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124 STAT. 396 PUBLIC LAW 111–148—MAR. 23, 2010 
‘‘(B) The ACO shall enter into an agreement with the 
Secretary to participate in the program for not less than a 3-year period (referred to in this section as the ‘agreement period’). 
‘‘(C) The ACO shall have a formal legal structure that 
would allow the organization to receive and distribute pay-ments for shared savings under subsection (d)(2) to partici-pating providers of services and suppliers.

‘‘(D) The ACO shall include primary care ACO profes-
sionals that are sufficient for the number of Medicare fee- for-service beneficiaries assigned to the ACO under sub-section (c). At a minimum, the ACO shall have at least 5,000 such beneficiaries assigned to it under subsection (c) in order to be eligible to participate in the ACO program. 
‘‘(E) The ACO shall provide the Secretary with such

information regarding ACO professionals participating in the ACO as the Secretary determines necessary to support the assignment of Medicare fee-for-service beneficiaries to an ACO, the implementation of quality and other reporting requirements under paragraph (3), and the determination of payments for shared savings under subsection (d)(2). 
‘‘(F) The ACO shall have in place a leadership and 
management structure that includes clinical and adminis-trative systems.

‘‘(G) The ACO shall define processes to promote evi-
dence-based medicine and patient engagement, report on quality and cost measures, and coordinate care, such as through the use of telehealth, remote patient monitoring, and other such enabling technologies. 
‘‘(H) The ACO shall demonstrate to the Secretary that 
it meets patient-centeredness criteria specified by the Sec-retary, such as the use of patient and caregiver assessments or the use of individualized care plans. ‘‘(3) Q

UALITY AND OTHER REPORTING REQUIREMENTS .— 
‘‘(A) I N GENERAL .—The Secretary shall determine 
appropriate measures to assess the quality of care fur-nished by the ACO, such as measures of— 
‘‘(i) clinical processes and outcomes; ‘‘(ii) patient and, where practicable, caregiver 
experience of care; and 
‘‘(iii) utilization (such as rates of hospital admis-
sions for ambulatory care sensitive conditions). ‘‘(B) R
EPORTING REQUIREMENTS .—An ACO shall submit

EPORTING REQUIREMENTS .—An ACO shall submit 
data in a form and manner specified by the Secretary on measures the Secretary determines necessary for the ACO to report in order to evaluate the quality of care furnished by the ACO. Such data may include care transi-tions across health care settings, including hospital dis-charge planning and post-hospital discharge follow-up by ACO professionals, as the Secretary determines appro-priate. 
‘‘(C) Q
UALITY PERFORMANCE STANDARDS .—The Sec-

‘‘(C) Q
retary shall establish quality performance standards to assess the quality of care furnished by ACOs. The Secretary shall seek to improve the quality of care furnished by Determinations. Contracts. 
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124 STAT. 397 PUBLIC LAW 111–148—MAR. 23, 2010 
ACOs over time by specifying higher standards, new meas-
ures, or both for purposes of assessing such quality of care. 
‘‘(D) O
THER REPORTING REQUIREMENTS .—The Secretary

may, as the Secretary determines appropriate, incorporate reporting requirements and incentive payments related to the physician quality reporting initiative (PQRI) under sec-tion 1848, including such requirements and such payments related to electronic prescribing, electronic health records, and other similar initiatives under section 1848, and may use alternative criteria than would otherwise apply under such section for determining whether to make such pay-ments. The incentive payments

to make such pay-ments. The incentive payments described in the preceding sentence shall not be taken into consideration when calcu-lating any payments otherwise made under subsection (d). ‘‘(4) N

O DUPLICATION IN PARTICIPATION IN SHARED SAVINGS  
PROGRAMS .—A provider of services or supplier that participates 
in any of the following shall not be eligible to participate in an ACO under this section: 
‘‘(A) A model tested or expanded under section 1115A 
that involves shared savings under this title, or any other program or demonstration project that involves such shared savings. 
‘‘(B) The independence at home medical practice pilot 
program under section 1866E. 
‘‘(c) A

‘‘(c) A
SSIGNMENT OF MEDICARE FEE-FOR-SERVICE BENEFICIARIES  
TOACO S.—The Secretary shall determine an appropriate method 
to assign Medicare fee-for-service beneficiaries to an ACO based on their utilization of primary care services provided under this title by an ACO professional described in subsection (h)(1)(A). 
‘‘(d) P
AYMENTS AND TREATMENT OF SAVINGS .— 
‘‘(1) P AYMENTS .— 
‘‘(A) I N GENERAL .—Under the program, subject to para-

graph (3), payments shall continue to be made to providers of services and suppliers participating in an ACO under the original Medicare fee-for-service program under parts A and B in the same manner as they would otherwise be made except that a participating ACO is eligible to receive payment for shared savings under paragraph (2) if— 
‘‘(i) the ACO meets quality performance standards 
established by the Secretary under subsection (b)(3); and 
‘‘(ii) the ACO meets the requirement under

‘‘(ii) the ACO meets the requirement under 
subparagraph (B)(i). ‘‘(B) S
AVINGS REQUIREMENT AND BENCHMARK .— 
‘‘(i) D ETERMINING SAVINGS .—In each year of the

agreement period, an ACO shall be eligible to receive payment for shared savings under paragraph (2) only if the estimated average per capita Medicare expendi-tures under the ACO for Medicare fee-for-service bene-ficiaries for parts A and B services, adjusted for bene-ficiary characteristics, is at least the percent specified by the Secretary below the applicable benchmark under clause (ii). The Secretary shall determine the appro-priate percent described in the preceding sentence to account

described in the preceding sentence to account for normal variation in expenditures under Determination.

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124 STAT. 398 PUBLIC LAW 111–148—MAR. 23, 2010 
this title, based upon the number of Medicare fee- 
for-service beneficiaries assigned to an ACO. 
‘‘(ii) E STABLISH AND UPDATE BENCHMARK .—The

Secretary shall estimate a benchmark for each agree-ment period for each ACO using the most recent avail-able 3 years of per-beneficiary expenditures for parts A and B services for Medicare fee-for-service bene-ficiaries assigned to the ACO. Such benchmark shall be adjusted for beneficiary characteristics and such other factors as the Secretary determines appropriate and updated by the projected absolute amount of growth in national per capita expenditures for parts A and B services under the

expenditures for parts A and B services under the original Medicare fee- for-service program, as estimated by the Secretary. Such benchmark shall be reset at the start of each agreement period.

ance with respect to the quality performance standards estab-lished by the Secretary under subsection (b)(3), if an ACO meets the requirements under paragraph (1), a percent (as determined appropriate by the Secretary) of the difference between such estimated average per capita Medicare expendi-tures in a year, adjusted for beneficiary characteristics, under the ACO and such benchmark for the ACO may be paid to the ACO as shared savings and the remainder of such difference shall be retained by

remainder of such difference shall be retained by the program under this title. The Secretary shall establish limits on the total amount of shared savings that may be paid to an ACO under this paragraph.

‘‘(3) M
ONITORING AVOIDANCE OF AT -RISK PATIENTS .—If the 
Secretary determines that an ACO has taken steps to avoid patients at risk in order to reduce the likelihood of increasing costs to the ACO the Secretary may impose an appropriate sanction on the ACO, including termination from the program. 
‘‘(4) T
ERMINATION .—The Secretary may terminate an agree-
ment with an ACO if it does not meet the quality performance standards established by the Secretary under subsection (b)(3). ‘‘(e) A

Code, shall not apply to the program. 
‘‘(f) W AIVER AUTHORITY .—The Secretary may waive such 
requirements of sections 1128A and 1128B and title XVIII of this Act as may be necessary to carry out the provisions of this section. 
‘‘(g) L
IMITATIONS ON REVIEW .—There shall be no administrative 
or judicial review under section 1869, section 1878, or otherwise of—

‘‘(1) the specification of criteria under subsection (a)(1)(B); ‘‘(2) the assessment of the quality of care furnished by 
an ACO and the establishment of performance standards under subsection (b)(3); 
‘‘(3) the assignment of Medicare fee-for-service beneficiaries 
to an ACO under subsection (c); 
‘‘(4) the determination of whether an ACO is eligible for

shared savings under subsection (d)(2) and the amount of such shared savings, including the determination of the estimated average per capita Medicare expenditures under the ACO for Medicare fee-for-service beneficiaries assigned to the ACO and the average benchmark for the ACO under subsection (d)(1)(B); Limitations. 
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124 STAT. 399 PUBLIC LAW 111–148—MAR. 23, 2010 
‘‘(5) the percent of shared savings specified by the Secretary 
under subsection (d)(2) and any limit on the total amount of shared savings established by the Secretary under such subsection; and 
‘‘(6) the termination of an ACO under subsection (d)(4). 
‘‘(h) D
‘‘(1) ACO PROFESSIONAL .—The term ‘ACO professional’ 
means—

means— 
‘‘(A) a physician (as defined in section 1861(r)(1)); and ‘‘(B) a practitioner described in section 
1842(b)(18)(C)(i). ‘‘(2) H
OSPITAL .—The term ‘hospital’ means a subsection 
(d) hospital (as defined in section 1886(d)(1)(B)). 
‘‘(3) M EDICARE FEE -FOR-SERVICE BENEFICIARY .—The term

‘Medicare fee-for-service beneficiary’ means an individual who is enrolled in the original Medicare fee-for-service program under parts A and B and is not enrolled in an MA plan under part C, an eligible organization under section 1876, or a PACE program under section 1894.’’. 
SEC. 3023. NATIONAL PILOT PROGRAM ON PAYMENT BUNDLING. 
Title XVIII of the Social Security Act, as amended by section 
3021, is amended by inserting after section 1886C the following new section: 
‘‘

‘‘
NATIONAL PILOT PROGRAM ON PAYMENT BUNDLING  
‘‘SEC. 1866D. (a) I MPLEMENTATION .— 
‘‘(1) I N GENERAL .—The Secretary shall establish a pilot 
program for integrated care during an episode of care provided 
to an applicable beneficiary around a hospitalization in order to improve the coordination, quality, and efficiency of health care services under this title. 
‘‘(2) D
‘‘(A) A PPLICABLE BENEFICIARY .—The term ‘applicable 
beneficiary’ means an individual who—

beneficiary’ means an individual who— 
‘‘(i) is entitled to, or enrolled for, benefits under 
part A and enrolled for benefits under part B of such title, but not enrolled under part C or a PACE program under section 1894; and 
‘‘(ii) is admitted to a hospital for an applicable 
condition. ‘‘(B) A
PPLICABLE CONDITION .—The term ‘applicable

PPLICABLE CONDITION .—The term ‘applicable 
condition’ means 1 or more of 8 conditions selected by the Secretary. In selecting conditions under the preceding sentence, the Secretary shall take into consideration the following factors: 
‘‘(i) Whether the conditions selected include a mix 
of chronic and acute conditions. 
‘‘(ii) Whether the conditions selected include a mix 
of surgical and medical conditions. 
‘‘(iii) Whether a condition is one for which there

is evidence of an opportunity for providers of services and suppliers to improve the quality of care furnished while reducing total expenditures under this title. 
‘‘(iv) Whether a condition has significant variation 
in— 
‘‘(I) the number of readmissions; and 42 USC 1395cc–4. 
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124 STAT. 400 PUBLIC LAW 111–148—MAR. 23, 2010 
‘‘(II) the amount of expenditures for post-acute 
care spending under this title. ‘‘(v) Whether a condition is high-volume and has 
high post-acute care expenditures under this title. 
‘‘(vi) Which conditions the Secretary determines 
are most amenable to bundling across the spectrum of care given practice patterns under this title. ‘‘(C) A
PPLICABLE SERVICES .—The term ‘applicable serv-
ices’ means the following:

ices’ means the following: 
‘‘(i) Acute care inpatient services. ‘‘(ii) Physicians’ services delivered in and outside 
of an acute care hospital setting. 
‘‘(iii) Outpatient hospital services, including emer-
gency department services. 
‘‘(iv) Post-acute care services, including home 
health services, skilled nursing services, inpatient rehabilitation services, and inpatient hospital services furnished by a long-term care hospital. 
‘‘(v) Other services the Secretary determines appro-

priate. ‘‘(D) E
PISODE OF CARE .— 
‘‘(i) I N GENERAL .—Subject to clause (ii), the term 
‘episode of care’ means, with respect to an applicable condition and an applicable beneficiary, the period that includes— 
‘‘(I) the 3 days prior to the admission of the 
applicable beneficiary to a hospital for the applicable condition; 
‘‘(II) the length of stay of the applicable bene-
ficiary in such hospital; and 
‘‘(III) the 30 days following the discharge of

‘‘(III) the 30 days following the discharge of 
the applicable beneficiary from such hospital. ‘‘(ii) E
STABLISHMENT OF PERIOD BY THE SEC -
RETARY .—The Secretary, as appropriate, may establish 
a period (other than the period described in clause (i)) for an episode of care under the pilot program. ‘‘(E) P
HYSICIANS ’ SERVICES .—The term ‘physicians’ 
services’ has the meaning given such term in section 1861(q). 
‘‘(F) P
ILOT PROGRAM .—The term ‘pilot program’ means

ILOT PROGRAM .—The term ‘pilot program’ means 
the pilot program under this section. 
‘‘(G) P ROVIDER OF SERVICES .—The term ‘provider of 
services’ has the meaning given such term in section 1861(u). 
‘‘(H) R
EADMISSION .—The term ‘readmission’ has the 
meaning given such term in section 1886(q)(5)(E). 
‘‘(I) S UPPLIER .—The term ‘supplier’ has the meaning 
given such term in section 1861(d). ‘‘(3) D
EADLINE FOR IMPLEMENTATION .—The Secretary shall

EADLINE FOR IMPLEMENTATION .—The Secretary shall 
establish the pilot program not later than January 1, 2013. ‘‘(b) D
EVELOPMENTAL PHASE .— 
‘‘(1) D ETERMINATION OF PATIENT ASSESSMENT  
INSTRUMENT .—The Secretary shall determine which patient 
assessment instrument (such as the Continuity Assessment Record and Evaluation (CARE) tool) shall be used under the pilot program to evaluate the applicable condition of an applicable beneficiary for purposes of determining the most

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124 STAT. 401 PUBLIC LAW 111–148—MAR. 23, 2010 
clinically appropriate site for the provision of post-acute care 
to the applicable beneficiary. 
‘‘(2) D EVELOPMENT OF QUALITY MEASURES FOR AN EPISODE  
OF CARE AND FOR POST -ACUTE CARE .— 
‘‘(A) I N GENERAL .—The Secretary, in consultation with 
the Agency for Healthcare Research and Quality and the entity with a contract under section 1890(a) of the Social Security Act, shall develop quality measures for use in the pilot program—

‘‘(i) for episodes of care; and ‘‘(ii) for post-acute care. 
‘‘(B) S
ITE-NEUTRAL POST -ACUTE CARE QUALITY MEAS -
URES .—Any quality measures developed under subpara-
graph (A)(ii) shall be site-neutral. 
‘‘(C) C OORDINATION WITH QUALITY MEASURE DEVELOP -
MENT AND ENDORSEMENT PROCEDURES .—The Secretary

MENT AND ENDORSEMENT PROCEDURES .—The Secretary 
shall ensure that the development of quality measures under subparagraph (A) is done in a manner that is con-sistent with the measures developed and endorsed under section 1890 and 1890A that are applicable to all post- acute care settings. 
‘‘(c) D
ETAILS .— 
‘‘(1) D URATION .— 
pilot program shall be conducted for a period of 5 years. 
‘‘(B) E XTENSION .—The Secretary may extend the dura-

tion of the pilot program for providers of services and suppliers participating in the pilot program as of the day before the end of the 5-year period described in subpara-graph (A), for a period determined appropriate by the Sec-retary, if the Secretary determines that such extension will result in improving or not reducing the quality of patient care and reducing spending under this title. ‘‘(2) P
ARTICIPATING PROVIDERS OF SERVICES AND SUP -
PLIERS .—

PLIERS .— 
‘‘(A) I N GENERAL .—An entity comprised of providers 
of services and suppliers, including a hospital, a physician group, a skilled nursing facility, and a home health agency, who are otherwise participating under this title, may submit an application to the Secretary to provide applicable services to applicable individuals under this section. 
‘‘(B) R
EQUIREMENTS .—The Secretary shall develop

EQUIREMENTS .—The Secretary shall develop 
requirements for entities to participate in the pilot program under this section. Such requirements shall ensure that applicable beneficiaries have an adequate choice of pro-viders of services and suppliers under the pilot program. ‘‘(3) P
‘‘(A) I N GENERAL .— 
‘‘(i) E STABLISHMENT OF PAYMENT METHODS .—The

‘‘(i) E STABLISHMENT OF PAYMENT METHODS .—The 
Secretary shall develop payment methods for the pilot program for entities participating in the pilot program. Such payment methods may include bundled payments and bids from entities for episodes of care. The Sec-retary shall make payments to the entity for services covered under this section. 
‘‘(ii) N
O ADDITIONAL PROGRAM EXPENDITURES .— 
Payments under this section for applicable items and Determination.

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124 STAT. 402 PUBLIC LAW 111–148—MAR. 23, 2010 
services under this title (including payment for services 
described in subparagraph (B)) for applicable bene-ficiaries for a year shall be established in a manner that does not result in spending more for such entity for such beneficiaries than would otherwise be expended for such entity for such beneficiaries for such year if the pilot program were not implemented, as estimated by the Secretary. ‘‘(B) I
NCLUSION OF CERTAIN SERVICES .—A payment

NCLUSION OF CERTAIN SERVICES .—A payment 
methodology tested under the pilot program shall include payment for the furnishing of applicable services and other appropriate services, such as care coordination, medication reconciliation, discharge planning, transitional care serv-ices, and other patient-centered activities as determined appropriate by the Secretary. 
‘‘(C) B
UNDLED PAYMENTS .— 
‘‘(i) I N GENERAL .—A bundled payment under the 
pilot program shall—

pilot program shall— 
‘‘(I) be comprehensive, covering the costs of 
applicable services and other appropriate services furnished to an individual during an episode of care (as determined by the Secretary); and 
‘‘(II) be made to the entity which is partici-
pating in the pilot program. ‘‘(ii) R
EQUIREMENT FOR PROVISION OF APPLICABLE  
SERVICES AND OTHER APPROPRIATE SERVICES .—

SERVICES AND OTHER APPROPRIATE SERVICES .— 
Applicable services and other appropriate services for which payment is made under this subparagraph shall be furnished or directed by the entity which is partici-pating in the pilot program. ‘‘(D) P
AYMENT FOR POST -ACUTE CARE SERVICES AFTER  
THE EPISODE OF CARE .—The Secretary shall establish proce-

dures, in the case where an applicable beneficiary requires continued post-acute care services after the last day of the episode of care, under which payment for such services shall be made. ‘‘(4) Q
‘‘(A) I N GENERAL .—The Secretary shall establish

quality measures (including quality measures of process, outcome, and structure) related to care provided by entities participating in the pilot program. Quality measures estab-lished under the preceding sentence shall include measures of the following: 
‘‘(i) Functional status improvement. ‘‘(ii) Reducing rates of avoidable hospital readmis-
sions. 
‘‘(iii) Rates of discharge to the community. ‘‘(iv) Rates of admission to an emergency room 
after a hospitalization.

after a hospitalization. 
‘‘(v) Incidence of health care acquired infections. ‘‘(vi) Efficiency measures. ‘‘(vii) Measures of patient-centeredness of care. ‘‘(viii) Measures of patient perception of care. ‘‘(ix) Other measures, including measures of 
patient outcomes, determined appropriate by the Sec-retary. ‘‘(B) R
EPORTING ON QUALITY MEASURES .— Procedures.

EPORTING ON QUALITY MEASURES .— Procedures. 
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124 STAT. 403 PUBLIC LAW 111–148—MAR. 23, 2010 
‘‘(i) I N GENERAL .—A entity shall submit data to 
the Secretary on quality measures established under subparagraph (A) during each year of the pilot program (in a form and manner, subject to clause (iii), specified by the Secretary). 
‘‘(ii) S
UBMISSION OF DATA THROUGH ELECTRONIC  
HEALTH RECORD .—To the extent practicable, the Sec-

retary shall specify that data on measures be submitted under clause (i) through the use of an qualified elec-tronic health record (as defined in section 3000(13) of the Public Health Service Act (42 U.S.C. 300jj– 11(13)) in a manner specified by the Secretary. 
‘‘(d) W
AIVER .—The Secretary may waive such provisions of this 
title and title XI as may be necessary to carry out the pilot program. 
‘‘(e) I NDEPENDENT EVALUATION AND REPORTS ON PILOT PRO-
GRAM .—

GRAM .— 
‘‘(1) I NDEPENDENT EVALUATION .—The Secretary shall con-
duct an independent evaluation of the pilot program, including the extent to which the pilot program has— 
‘‘(A) improved quality measures established under sub-
section (c)(4)(A); 
‘‘(B) improved health outcomes; ‘‘(C) improved applicable beneficiary access to care; 
and 
‘‘(D) reduced spending under this title. 
‘‘(2) R
EPORTS .— 
‘‘(A) I NTERIM REPORT .—Not later than 2 years after

the implementation of the pilot program, the Secretary shall submit to Congress a report on the initial results of the independent evaluation conducted under paragraph (1). 
‘‘(B) F
INAL REPORT .—Not later than 3 years after the 
implementation of the pilot program, the Secretary shall submit to Congress a report on the final results of the independent evaluation conducted under paragraph (1). 
‘‘(f) C
ONSULTATION .—The Secretary shall consult with rep-

resentatives of small rural hospitals, including critical access hos-pitals (as defined in section 1861(mm)(1)), regarding their participa-tion in the pilot program. Such consultation shall include consider-ation of innovative methods of implementing bundled payments in hospitals described in the preceding sentence, taking into consid-eration any difficulties in doing so as a result of the low volume of services provided by such hospitals. 
‘‘(g) I
MPLEMENTATION PLAN.—

‘‘(g) I
MPLEMENTATION PLAN.— 
‘‘(1) I N GENERAL .—Not later than January 1, 2016, the 
Secretary shall submit a plan for the implementation of an expansion of the pilot program if the Secretary determines that such expansion will result in improving or not reducing the quality of patient care and reducing spending under this title. ‘‘(h) A
DMINISTRATION .—Chapter 35 of title 44, United States

Code, shall not apply to the selection, testing, and evaluation of models or the expansion of such models under this section.’’. Deadline. 
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124 STAT. 404 PUBLIC LAW 111–148—MAR. 23, 2010 
SEC. 3024. INDEPENDENCE AT HOME DEMONSTRATION PROGRAM. 
Title XVIII of the Social Security Act is amended by inserting 
after section 1866D, as inserted by section 3023, the following new section: 
‘‘
INDEPENDENCE AT HOME MEDICAL PRACTICE DEMONSTRATION  
PROGRAM  
‘‘SEC. 1866D. (a) E STABLISHMENT .— 
‘‘(1) I N GENERAL .—The Secretary shall conduct a dem-

onstration program (in this section referred to as the ‘dem-onstration program’) to test a payment incentive and service delivery model that utilizes physician and nurse practitioner directed home-based primary care teams designed to reduce expenditures and improve health outcomes in the provision of items and services under this title to applicable beneficiaries (as defined in subsection (d)). 
‘‘(2) R
EQUIREMENT .—The demonstration program shall test

whether a model described in paragraph (1), which is account-able for providing comprehensive, coordinated, continuous, and accessible care to high-need populations at home and coordi-nating health care across all treatment settings, results in— 
‘‘(A) reducing preventable hospitalizations; ‘‘(B) preventing hospital readmissions; ‘‘(C) reducing emergency room visits; ‘‘(D) improving health outcomes commensurate with 
the beneficiaries’ stage of chronic illness;

the beneficiaries’ stage of chronic illness; 
‘‘(E) improving the efficiency of care, such as by 
reducing duplicative diagnostic and laboratory tests; 
‘‘(F) reducing the cost of health care services covered 
under this title; and 
‘‘(G) achieving beneficiary and family caregiver satis-
faction. 
‘‘(b) I
NDEPENDENCE AT HOME MEDICAL PRACTICE .— 
‘‘(1) I NDEPENDENCE AT HOME MEDICAL PRACTICE DEFINED .— 
In this section: 
‘‘(A) I N GENERAL .—The term ‘independence at home

medical practice’ means a legal entity that— 
‘‘(i) is comprised of an individual physician or nurse

practitioner or group of physicians and nurse practi-tioners that provides care as part of a team that includes physicians, nurses, physician assistants, phar-macists, and other health and social services staff as appropriate who have experience providing home-based primary care to applicable beneficiaries, make in-home visits, and are available 24 hours per day, 7 days per week to carry out plans of care that are tailored to the individual beneficiary’s chronic conditions and designed to

beneficiary’s chronic conditions and designed to achieve the results in subsection (a);

‘‘(ii) is organized at least in part for the purpose 
of providing physicians’ services; 
‘‘(iii) has documented experience in providing 
home-based primary care services to high-cost chron-ically ill beneficiaries, as determined appropriate by the Secretary; 42 USC 
1395cc–5. 
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124 STAT. 405 PUBLIC LAW 111–148—MAR. 23, 2010 
‘‘(iv) furnishes services to at least 200 applicable 
beneficiaries (as defined in subsection (d)) during each year of the demonstration program; 
‘‘(v) has entered into an agreement with the Sec-
retary; 
‘‘(vi) uses electronic health information systems, 
remote monitoring, and mobile diagnostic technology; and 
‘‘(vii) meets such other criteria as the Secretary 
determines to be appropriate to participate in the dem-onstration program.

The entity shall report on quality measures (in such form, manner, and frequency as specified by the Secretary, which may be for the group, for providers of services and sup-pliers, or both) and report to the Secretary (in a form, manner, and frequency as specified by the Secretary) such data as the Secretary determines appropriate to monitor and evaluate the demonstration program. 
‘‘(B) P
HYSICIAN .—The term ‘physician’ includes, except

HYSICIAN .—The term ‘physician’ includes, except 
as the Secretary may otherwise provide, any individual who furnishes services for which payment may be made as physicians’ services and has the medical training or experience to fulfill the physician’s role described in subparagraph (A)(i). ‘‘(2) P
ARTICIPATION OF NURSE PRACTITIONERS AND PHYSICIAN  
ASSISTANTS .—Nothing in this section shall be construed to pre-

vent a nurse practitioner or physician assistant from partici-pating in, or leading, a home-based primary care team as part of an independence at home medical practice if— 
‘‘(A) all the requirements of this section are met; ‘‘(B) the nurse practitioner or physician assistant, as 
the case may be, is acting consistent with State law; and 
‘‘(C) the nurse practitioner or physician assistant has

the medical training or experience to fulfill the nurse practitioner or physician assistant role described in para-graph (1)(A)(i). ‘‘(3) I
NCLUSION OF PROVIDERS AND PRACTITIONERS .—

NCLUSION OF PROVIDERS AND PRACTITIONERS .— 
Nothing in this subsection shall be construed as preventing an independence at home medical practice from including a provider of services or a participating practitioner described in section 1842(b)(18)(C) that is affiliated with the practice under an arrangement structured so that such provider of services or practitioner participates in the demonstration pro-gram and shares in any savings under the demonstration pro-gram. 
‘‘(4) Q

‘‘(4) Q
UALITY AND PERFORMANCE STANDARDS .—The Sec-
retary shall develop quality performance standards for independence at home medical practices participating in the demonstration program. ‘‘(c) P
‘‘(1) E STABLISHMENT OF TARGET SPENDING LEVEL .—The Sec-
retary shall establish an estimated annual spending target, for the amount the Secretary estimates would have been spent in the absence of the demonstration, for items and services Reports. 
Determination.

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124 STAT. 406 PUBLIC LAW 111–148—MAR. 23, 2010 
covered under parts A and B furnished to applicable bene-

ficiaries for each qualifying independence at home medical prac-tice under this section. Such spending targets shall be deter-mined on a per capita basis. Such spending targets shall include a risk corridor that takes into account normal variation in expenditures for items and services covered under parts A and B furnished to such beneficiaries with the size of the corridor being related to the number of applicable beneficiaries furnished services by each independence at home medical prac-tice.

by each independence at home medical prac-tice. The spending targets may also be adjusted for other factors as the Secretary determines appropriate.

quality measures, a qualifying independence at home medical practice is eligible to receive an incentive payment under this section if actual expenditures for a year for the applicable beneficiaries it enrolls are less than the estimated spending target established under paragraph (1) for such year. An incen-tive payment for such year shall be equal to a portion (as determined by the Secretary) of the amount by which actual expenditures (including incentive payments under this para-graph) for

incentive payments under this para-graph) for applicable beneficiaries under parts A and B for such year are estimated to be less than 5 percent less than the estimated spending target for such year, as determined under paragraph (1). ‘‘(d) A

PPLICABLE BENEFICIARIES .— 
‘‘(1) D EFINITION .—In this section, the term ‘applicable bene-
ficiary’ means, with respect to a qualifying independence at home medical practice, an individual who the practice has determined— 
‘‘(A) is entitled to benefits under part A and enrolled 
for benefits under part B; 
‘‘(B) is not enrolled in a Medicare Advantage plan 
under part C or a PACE program under section 1894; 
‘‘(C) has 2 or more chronic illnesses, such as congestive

heart failure, diabetes, other dementias designated by the Secretary, chronic obstructive pulmonary disease, ischemic heart disease, stroke, Alzheimer’s Disease and neurodegenerative diseases, and other diseases and condi-tions designated by the Secretary which result in high costs under this title; 
‘‘(D) within the past 12 months has had a nonelective 
hospital admission; 
‘‘(E) within the past 12 months has received acute 
or subacute rehabilitation services;

or subacute rehabilitation services; 
‘‘(F) has 2 or more functional dependencies requiring 
the assistance of another person (such as bathing, dressing, toileting, walking, or feeding); and 
‘‘(G) meets such other criteria as the Secretary deter-
mines appropriate. ‘‘(2) P
ATIENT ELECTION TO PARTICIPATE .—The Secretary

ATIENT ELECTION TO PARTICIPATE .—The Secretary 
shall determine an appropriate method of ensuring that applicable beneficiaries have agreed to enroll in an independ-ence at home medical practice under the demonstration pro-gram. Enrollment in the demonstration program shall be vol-untary. 
‘‘(3) B
ENEFICIARY ACCESS TO SERVICES .—Nothing in this 
section shall be construed as encouraging physicians or nurse Determination.

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124 STAT. 407 PUBLIC LAW 111–148—MAR. 23, 2010 
practitioners to limit applicable beneficiary access to services 
covered under this title and applicable beneficiaries shall not be required to relinquish access to any benefit under this title as a condition of receiving services from an independence at home medical practice. ‘‘(e) I
‘‘(1) S TARTING DATE .—The demonstration program shall

begin no later than January 1, 2012. An agreement with an independence at home medical practice under the demonstra-tion program may cover not more than a 3-year period. 
‘‘(2) N
O PHYSICIAN DUPLICATION IN DEMONSTRATION PARTICI -
PATION .—The Secretary shall not pay an independence at home 
medical practice under this section that participates in section 1899. 
‘‘(3) N
O BENEFICIARY DUPLICATION IN DEMONSTRATION  
PARTICIPATION .—The Secretary shall ensure that no applicable

beneficiary enrolled in an independence at home medical prac-tice under this section is participating in the programs under section 1899. 
‘‘(4) P
REFERENCE .—In approving an independence at home 
medical practice, the Secretary shall give preference to practices that are— 
‘‘(A) located in high-cost areas of the country; ‘‘(B) have experience in furnishing health care services 
to applicable beneficiaries in the home; and 
‘‘(C) use electronic medical records, health information

technology, and individualized plans of care. ‘‘(5) L
IMITATION ON NUMBER OF PRACTICES .—In selecting 
qualified independence at home medical practices to participate under the demonstration program, the Secretary shall limit the number of such practices so that the number of applicable beneficiaries that may participate in the demonstration pro-gram does not exceed 10,000. 
‘‘(6) W
AIVER .—The Secretary may waive such provisions

AIVER .—The Secretary may waive such provisions 
of this title and title XI as the Secretary determines necessary in order to implement the demonstration program. 
‘‘(7) A
Code, shall not apply to this section. ‘‘(f) E
VALUATION AND MONITORING .— 
‘‘(1) I N GENERAL .—The Secretary shall evaluate each

independence at home medical practice under the demonstra-tion program to assess whether the practice achieved the results described in subsection (a). 
‘‘(2) M
ONITORING APPLICABLE BENEFICIARIES .—The Sec-
retary may monitor data on expenditures and quality of services under this title after an applicable beneficiary discontinues receiving services under this title through a qualifying independence at home medical practice. ‘‘(g) R
EPORTS TO CONGRESS .—The Secretary shall conduct an

independent evaluation of the demonstration program and submit to Congress a final report, including best practices under the dem-onstration program. Such report shall include an analysis of the demonstration program on coordination of care, expenditures under this title, applicable beneficiary access to services, and the quality of health care services provided to applicable beneficiaries. 
‘‘(h) F
UNDING .—For purposes of administering and carrying

out the demonstration program, other than for payments for items 
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124 STAT. 408 PUBLIC LAW 111–148—MAR. 23, 2010 
and services furnished under this title and incentive payments

under subsection (c), in addition to funds otherwise appropriated, there shall be transferred to the Secretary for the Center for Medi-care & Medicaid Services Program Management Account from the Federal Hospital Insurance Trust Fund under section 1817 and the Federal Supplementary Medical Insurance Trust Fund under section 1841 (in proportions determined appropriate by the Sec-retary) $5,000,000 for each of fiscal years 2010 through 2015. Amounts transferred under this subsection for a fiscal

transferred under this subsection for a fiscal year shall be available until expended.

‘‘(i) T
ERMINATION .— 
‘‘(1) M ANDATORY TERMINATION .—The Secretary shall termi-
nate an agreement with an independence at home medical practice if— 
‘‘(A) the Secretary estimates or determines that such 
practice will not receive an incentive payment for the second of 2 consecutive years under the demonstration program; or 
‘‘(B) such practice fails to meet quality standards 
during any year of the demonstration program. ‘‘(2) P
ERMISSIVE TERMINATION .—The Secretary may termi-

nate an agreement with an independence at home medical practice for such other reasons determined appropriate by the Secretary.’’. 
SEC. 3025. HOSPITAL READMISSIONS REDUCTION PROGRAM. 
U.S.C. 1395ww), as amended by sections 3001 and 3008, is amended by adding at the end the following new subsection: 
‘‘(q) H
OSPITAL READMISSIONS REDUCTION PROGRAM .—

OSPITAL READMISSIONS REDUCTION PROGRAM .— 
‘‘(1) I N GENERAL .—With respect to payment for discharges

from an applicable hospital (as defined in paragraph (5)(C)) occurring during a fiscal year beginning on or after October 1, 2012, in order to account for excess readmissions in the hospital, the Secretary shall reduce the payments that would otherwise be made to such hospital under subsection (d) (or section 1814(b)(3), as the case may be) for such a discharge by an amount equal to the product of— 
‘‘(A) the base operating DRG payment amount (as

‘‘(A) the base operating DRG payment amount (as 
defined in paragraph (2)) for the discharge; and 
‘‘(B) the adjustment factor (described in paragraph 
(3)(A)) for the hospital for the fiscal year. ‘‘(2) B
ASE OPERATING DRG PAYMENT AMOUNT DEFINED .— 
‘‘(A) I N GENERAL .—Except as provided in subparagraph 
(B), in this subsection, the term ‘base operating DRG pay-ment amount’ means, with respect to a hospital for a fiscal year— 
‘‘(i) the payment amount that would otherwise be

‘‘(i) the payment amount that would otherwise be 
made under subsection (d) (determined without regard to subsection (o)) for a discharge if this subsection did not apply; reduced by 
‘‘(ii) any portion of such payment amount that 
is attributable to payments under paragraphs (5)(A), (5)(B), (5)(F), and (12) of subsection (d). ‘‘(B) S
‘‘(i) S OLE COMMUNITY HOSPITALS AND MEDICARE - 
DEPENDENT , SMALL RURAL HOSPITALS .—In the case of Definition.

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124 STAT. 409 PUBLIC LAW 111–148—MAR. 23, 2010 
a medicare-dependent, small rural hospital (with 
respect to discharges occurring during fiscal years 2012 and 2013) or a sole community hospital, in applying subparagraph (A)(i), the payment amount that would otherwise be made under subsection (d) shall be deter-mined without regard to subparagraphs (I) and (L) of subsection (b)(3) and subparagraphs (D) and (G) of subsection (d)(5). 
‘‘(ii) H
OSPITALS PAID UNDER SECTION 1814 .—In the

OSPITALS PAID UNDER SECTION 1814 .—In the 
case of a hospital that is paid under section 1814(b)(3), the Secretary may exempt such hospitals provided that States paid under such section submit an annual report to the Secretary describing how a similar program in the State for a participating hospital or hospitals achieves or surpasses the measured results in terms of patient health outcomes and cost savings established herein with respect to this section. 
‘‘(3) A
DJUSTMENT FACTOR .—

‘‘(3) A
DJUSTMENT FACTOR .— 
‘‘(A) I N GENERAL .—For purposes of paragraph (1), the 
adjustment factor under this paragraph for an applicable hospital for a fiscal year is equal to the greater of— 
‘‘(i) the ratio described in subparagraph (B) for 
the hospital for the applicable period (as defined in paragraph (5)(D)) for such fiscal year; or 
‘‘(ii) the floor adjustment factor specified in 
subparagraph (C). ‘‘(B) R
ATIO.—The ratio described in this subparagraph

ATIO.—The ratio described in this subparagraph 
for a hospital for an applicable period is equal to 1 minus the ratio of— 
‘‘(i) the aggregate payments for excess readmis-
sions (as defined in paragraph (4)(A)) with respect to an applicable hospital for the applicable period; and 
‘‘(ii) the aggregate payments for all discharges (as 
defined in paragraph (4)(B)) with respect to such applicable hospital for such applicable period. ‘‘(C) F
LOOR ADJUSTMENT FACTOR .—For purposes of

LOOR ADJUSTMENT FACTOR .—For purposes of 
subparagraph (A), the floor adjustment factor specified in this subparagraph for— 
‘‘(i) fiscal year 2013 is 0.99; ‘‘(ii) fiscal year 2014 is 0.98; or ‘‘(iii) fiscal year 2015 and subsequent fiscal years 
is 0.97. 
‘‘(4) A
GGREGATE PAYMENTS , EXCESS READMISSION RATIO  
DEFINED .—For purposes of this subsection: 
‘‘(A) A GGREGATE PAYMENTS FOR EXCESS READMIS -
SIONS .—The term ‘aggregate payments for excess readmis-

sions’ means, for a hospital for an applicable period, the sum, for applicable conditions (as defined in paragraph (5)(A)), of the product, for each applicable condition, of— 
‘‘(i) the base operating DRG payment amount for 
such hospital for such applicable period for such condi-tion; 
‘‘(ii) the number of admissions for such condition 
for such hospital for such applicable period; and 
‘‘(iii) the excess readmissions ratio (as defined in

subparagraph (C)) for such hospital for such applicable period minus 1. Reports. Deadline. 
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124 STAT. 410 PUBLIC LAW 111–148—MAR. 23, 2010 
‘‘(B) A GGREGATE PAYMENTS FOR ALL DISCHARGES .—The 
term ‘aggregate payments for all discharges’ means, for a hospital for an applicable period, the sum of the base operating DRG payment amounts for all discharges for all conditions from such hospital for such applicable period. 
‘‘(C) E
XCESS READMISSION RATIO .— 
‘‘(i) I N GENERAL .—Subject to clause (ii), the term

‘excess readmissions ratio’ means, with respect to an applicable condition for a hospital for an applicable period, the ratio (but not less than 1.0) of— 
‘‘(I) the risk adjusted readmissions based on 
actual readmissions, as determined consistent with a readmission measure methodology that has been endorsed under paragraph (5)(A)(ii)(I), for an applicable hospital for such condition with respect to such applicable period; to 
‘‘(II) the risk adjusted expected readmissions

‘‘(II) the risk adjusted expected readmissions 
(as determined consistent with such a method-ology) for such hospital for such condition with respect to such applicable period. ‘‘(ii) E
XCLUSION OF CERTAIN READMISSIONS .—For

XCLUSION OF CERTAIN READMISSIONS .—For 
purposes of clause (i), with respect to a hospital, excess readmissions shall not include readmissions for an applicable condition for which there are fewer than a minimum number (as determined by the Secretary) of discharges for such applicable condition for the applicable period and such hospital. 
‘‘(5) D
‘‘(A) A PPLICABLE CONDITION .—The term ‘applicable

condition’ means, subject to subparagraph (B), a condition or procedure selected by the Secretary among conditions and procedures for which— 
‘‘(i) readmissions (as defined in subparagraph (E)) 
that represent conditions or procedures that are high volume or high expenditures under this title (or other criteria specified by the Secretary); and 
‘‘(ii) measures of such readmissions— 
‘‘(I) have been endorsed by the entity with 
a contract under section 1890(a); and

a contract under section 1890(a); and 
‘‘(II) such endorsed measures have exclusions 
for readmissions that are unrelated to the prior discharge (such as a planned readmission or transfer to another applicable hospital). 
‘‘(B) E
XPANSION OF APPLICABLE CONDITIONS .—Begin-

ning with fiscal year 2015, the Secretary shall, to the extent practicable, expand the applicable conditions beyond the 3 conditions for which measures have been endorsed as described in subparagraph (A)(ii)(I) as of the date of the enactment of this subsection to the additional 4 condi-tions that have been identified by the Medicare Payment Advisory Commission in its report to Congress in June 2007 and to other conditions and procedures as determined appropriate by the Secretary. In expanding

appropriate by the Secretary. In expanding such applicable conditions, the Secretary shall seek the endorsement described in subparagraph (A)(ii)(I) but may apply such measures without such an endorsement in the case of a specified area or medical topic determined appropriate by Effective date.

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124 STAT. 411 PUBLIC LAW 111–148—MAR. 23, 2010 
the Secretary for which a feasible and practical measure 
has not been endorsed by the entity with a contract under section 1890(a) as long as due consideration is given to measures that have been endorsed or adopted by a con-sensus organization identified by the Secretary. 
‘‘(C) A
PPLICABLE HOSPITAL .—The term ‘applicable hos-
pital’ means a subsection (d) hospital or a hospital that is paid under section 1814(b)(3), as the case may be. 
‘‘(D) A

‘‘(D) A
PPLICABLE PERIOD .—The term ‘applicable period’ 
means, with respect to a fiscal year, such period as the Secretary shall specify. 
‘‘(E) R
EADMISSION .—The term ‘readmission’ means, in

the case of an individual who is discharged from an applicable hospital, the admission of the individual to the same or another applicable hospital within a time period specified by the Secretary from the date of such discharge. Insofar as the discharge relates to an applicable condition for which there is an endorsed measure described in subparagraph (A)(ii)(I), such time period (such as 30 days) shall be consistent with the time period specified for such measure. ‘‘(6) R

tion available to the public regarding readmission rates of each subsection (d) hospital under the program. 
‘‘(B) O
TIONS .—The Secretary shall ensure that a subsection (d)

hospital has the opportunity to review, and submit correc-tions for, the information to be made public with respect to the hospital under subparagraph (A) prior to such information being made public. 
‘‘(C) W
trative or judicial review under section 1869, section 1878, or otherwise of the following:

‘‘(A) The determination of base operating DRG payment 
amounts. 
‘‘(B) The methodology for determining the adjustment 
factor under paragraph (3), including excess readmissions ratio under paragraph (4)(C), aggregate payments for excess readmissions under paragraph (4)(A), and aggregate payments for all discharges under paragraph (4)(B), and applicable periods and applicable conditions under para-graph (5). 
‘‘(C) The measures of readmissions as described in 
paragraph (5)(A)(ii). ‘‘(8) R

EADMISSION RATES FOR ALL PATIENTS .— 
‘‘(A) C ALCULATION OF READMISSION .—The Secretary

shall calculate readmission rates for all patients (as defined in subparagraph (D)) for a specified hospital (as defined in subparagraph (D)(ii)) for an applicable condition (as defined in paragraph (5)(B)) and other conditions deemed appropriate by the Secretary for an applicable period (as defined in paragraph (5)(D)) in the same manner as used to calculate such readmission rates for hospitals with Public information.

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124 STAT. 412 PUBLIC LAW 111–148—MAR. 23, 2010 
respect to this title and posted on the CMS Hospital Com-
pare website. 
‘‘(B) P OSTING OF HOSPITAL SPECIFIC ALL PATIENT  
READMISSION RATES .—The Secretary shall make informa-

tion on all patient readmission rates calculated under subparagraph (A) available on the CMS Hospital Compare website in a form and manner determined appropriate by the Secretary. The Secretary may also make other information determined appropriate by the Secretary avail-able on such website. 
‘‘(C) H
OSPITAL SUBMISSION OF ALL PATIENT DATA .— 
‘‘(i) Except as provided for in clause (ii), each speci-

fied hospital (as defined in subparagraph (D)(ii)) shall submit to the Secretary, in a form, manner and time specified by the Secretary, data and information deter-mined necessary by the Secretary for the Secretary to calculate the all patient readmission rates described in subparagraph (A). 
‘‘(ii) Instead of a specified hospital submitting to

the Secretary the data and information described in clause (i), such data and information may be submitted to the Secretary, on behalf of such a specified hospital, by a state or an entity determined appropriate by the Secretary. ‘‘(D) D
‘‘(i) The term ‘all patients’ means patients who 
are treated on an inpatient basis and discharged from a specified hospital (as defined in clause (ii)). 
‘‘(ii) The term ‘specified hospital’ means a sub-

section (d) hospital, hospitals described in clauses (i) through (v) of subsection (d)(1)(B) and, as determined feasible and appropriate by the Secretary, other hos-pitals not otherwise described in this subparagraph.’’. 
(b) Q
UALITY IMPROVEMENT .—Part S of title III of the Public 
Health Service Act, as amended by section 3015, is further amended by adding at the end the following: 
‘‘SEC. 399KK. QUALITY IMPROVEMENT PROGRAM FOR HOSPITALS

WITH A HIGH SEVERITY ADJUSTED READMISSION RATE. 
‘‘(a) E STABLISHMENT .— 
‘‘(1) I N GENERAL .—Not later than 2 years after the date 
of enactment of this section, the Secretary shall make available a program for eligible hospitals to improve their readmission rates through the use of patient safety organizations (as defined in section 921(4)). 
‘‘(2) E
LIGIBLE HOSPITAL DEFINED .—In this subsection, the

term ‘eligible hospital’ means a hospital that the Secretary determines has a high rate of risk adjusted readmissions for the conditions described in section 1886(q)(8)(A) of the Social Security Act and has not taken appropriate steps to reduce such readmissions and improve patient safety as evidenced through historically high rates of readmissions, as determined by the Secretary. 
‘‘(3) R
ISK ADJUSTMENT .—The Secretary shall utilize appro-

priate risk adjustment measures to determine eligible hospitals. ‘‘(b) R
EPORT TO THE SECRETARY .—As determined appropriate 
by the Secretary, eligible hospitals and patient safety organizations Determination. Deadline. 42 USC 280j–3. Web posting. 
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124 STAT. 413 PUBLIC LAW 111–148—MAR. 23, 2010 
working with those hospitals shall report to the Secretary on the 
processes employed by the hospital to improve readmission rates and the impact of such processes on readmission rates.’’. 
SEC. 3026. COMMUNITY-BASED CARE TRANSITIONS PROGRAM. 
(a) I NGENERAL .—The Secretary shall establish a Community-

Based Care Transitions Program under which the Secretary pro-vides funding to eligible entities that furnish improved care transi-tion services to high-risk Medicare beneficiaries. 
(b) D
(1) E LIGIBLE ENTITY .—The term ‘‘eligible entity’’ means the 
(A) A subsection (d) hospital (as defined in section

1886(d)(1)(B) of the Social Security Act (42 U.S.C. 1395ww(d)(1)(B))) identified by the Secretary as having a high readmission rate, such as under section 1886(q) of the Social Security Act, as added by section 3025. 
(B) An appropriate community-based organization that

provides care transition services under this section across a continuum of care through arrangements with subsection (d) hospitals (as so defined) to furnish the services described in subsection (c)(2)(B)(i) and whose governing body includes sufficient representation of multiple health care stake-holders (including consumers). (2) H
IGH-RISK MEDICARE BENEFICIARY .—The term ‘‘high-

IGH-RISK MEDICARE BENEFICIARY .—The term ‘‘high- 
risk Medicare beneficiary’’ means a Medicare beneficiary who has attained a minimum hierarchical condition category score, as determined by the Secretary, based on a diagnosis of multiple chronic conditions or other risk factors associated with a hos-pital readmission or substandard transition into post-hos-pitalization care, which may include 1 or more of the following:

(A) Cognitive impairment. (B) Depression. (C) A history of multiple readmissions. (D) Any other chronic disease or risk factor as deter-
mined by the Secretary. (3) M
EDICARE BENEFICIARY .—The term ‘‘Medicare bene-
ficiary’’ means an individual who is entitled to benefits under part A of title XVIII of the Social Security Act (42 U.S.C. 1395 et seq.) and enrolled under part B of such title, but not enrolled under part C of such title. 
(4) P
ROGRAM .—The term ‘‘program’’ means the program

ROGRAM .—The term ‘‘program’’ means the program 
conducted under this section. 
(5) R EADMISSION .—The term ‘‘readmission’’ has the 
meaning given such term in section 1886(q)(5)(E) of the Social Security Act, as added by section 3025. 
(6) S
ECRETARY .—The term ‘‘Secretary’’ means the Secretary 
of Health and Human Services. (c) R
(1) D URATION .— 
(A) I N GENERAL .—The program shall be conducted for 
a 5-year period, beginning January 1, 2011.

a 5-year period, beginning January 1, 2011. 
(B) E XPANSION .—The Secretary may expand the dura-
tion and the scope of the program, to the extent determined appropriate by the Secretary, if the Secretary determines (and the Chief Actuary of the Centers for Medicare & Medicaid Services, with respect to spending under this Determination. Certification. 42 USC 1395b–1 
note.

note. 
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124 STAT. 414 PUBLIC LAW 111–148—MAR. 23, 2010 
title, certifies) that such expansion would reduce spending 
under this title without reducing quality. (2) A
PPLICATION ; PARTICIPATION .— 
(A) I N GENERAL .— 
(i) A PPLICATION .—An eligible entity seeking to 
participate in the program shall submit an application to the Secretary at such time, in such manner, and containing such information as the Secretary may require. 
(ii) P
ARTNERSHIP .—If an eligible entity is a hos-

pital, such hospital shall enter into a partnership with a community-based organization to participate in the program. (B) I
NTERVENTION PROPOSAL .—Subject to subparagraph 
(C), an application submitted under subparagraph (A)(i) shall include a detailed proposal for at least 1 care transi-tion intervention, which may include the following: 
(i) Initiating care transition services for a high-

risk Medicare beneficiary not later than 24 hours prior to the discharge of the beneficiary from the eligible entity. 
(ii) Arranging timely post-discharge follow-up serv-
ices to the high-risk Medicare beneficiary to provide the beneficiary (and, as appropriate, the primary care-giver of the beneficiary) with information regarding responding to symptoms that may indicate additional health problems or a deteriorating condition. 
(iii) Providing the high-risk Medicare beneficiary

(and, as appropriate, the primary caregiver of the bene-ficiary) with assistance to ensure productive and timely interactions between patients and post-acute and out-patient providers. 
(iv) Assessing and actively engaging with a high- 
risk Medicare beneficiary (and, as appropriate, the pri-mary caregiver of the beneficiary) through the provi-sion of self-management support and relevant informa-tion that is specific to the beneficiary’s condition.

(v) Conducting comprehensive medication review 
and management (including, if appropriate, counseling and self-management support). (C) L
IMITATION .—A care transition intervention pro-
posed under subparagraph (B) may not include payment for services required under the discharge planning process described in section 1861(ee) of the Social Security Act (42 U.S.C. 1395x(ee)). (3) S
ELECTION .—In selecting eligible entities to participate

in the program, the Secretary shall give priority to eligible entities that— 
(A) participate in a program administered by the 
Administration on Aging to provide concurrent care transi-tions interventions with multiple hospitals and practi-tioners; or 
(B) provide services to medically underserved popu-
lations, small communities, and rural areas. 
(d) I
MPLEMENTATION .—Notwithstanding any other provision of

law, the Secretary may implement the provisions of this section by program instruction or otherwise. 
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124 STAT. 415 PUBLIC LAW 111–148—MAR. 23, 2010 
(e) W AIVER AUTHORITY .—The Secretary may waive such 
requirements of titles XI and XVIII of the Social Security Act as may be necessary to carry out the program. 
(f) F
UNDING .—For purposes of carrying out this section, the

Secretary of Health and Human Services shall provide for the transfer, from the Federal Hospital Insurance Trust Fund under section 1817 of the Social Security Act (42 U.S.C. 1395i) and the Federal Supplementary Medical Insurance Trust Fund under sec-tion 1841 of such Act (42 U.S.C. 1395t), in such proportion as the Secretary determines appropriate, of $500,000,000, to the Cen-ters for Medicare & Medicaid Services Program Management Account for the period of fiscal years 2011 through 2015.

for the period of fiscal years 2011 through 2015. Amounts transferred under the preceding sentence shall remain available until expended.

SEC. 3027. EXTENSION OF GAINSHARING DEMONSTRATION. 
(a) I NGENERAL .—Subsection (d)(3) of section 5007 of the Deficit 
Reduction Act of 2005 (Public Law 109–171) is amended by inserting ‘‘(or September 30, 2011, in the case of a demonstration project in operation as of October 1, 2008)’’ after ‘‘December 31, 2009’’. 
(b) F
UNDING .— 
(1) I N GENERAL .—Subsection (f)(1) of such section is 
amended by inserting ‘‘and for fiscal year 2010, $1,600,000,’’ after ‘‘$6,000,000,’’. 
(2) A

(2) A
VAILABILITY .—Subsection (f)(2) of such section is 
amended by striking ‘‘2010’’ and inserting ‘‘2014 or until expended’’. (c) R
EPORTS .— 
(1) Q UALITY IMPROVEMENT AND SAVINGS .—Subsection (e)(3) 
of such section is amended by striking ‘‘December 1, 2008’’ and inserting ‘‘March 31, 2011’’. 
(2) F
INAL REPORT .—Subsection (e)(4) of such section is 
amended by striking ‘‘May 1, 2010’’ and inserting ‘‘March 31, 2013’’. 
Subtitle B—Improving Medicare for 
Patients and Providers

Patients and Providers 
PART I—ENSURING BENEFICIARY ACCESS TO 
PHYSICIAN CARE AND OTHER SERVICES 
SEC. 3101. INCREASE IN THE PHYSICIAN PAYMENT UPDATE. 
Section 1848(d) of the Social Security Act (42 U.S.C. 1395w– 
4(d)) is amended by adding at the end the following new paragraph: 
‘‘(10) U PDATE FOR 2010 .— 
‘‘(A) I N GENERAL .—Subject to paragraphs (7)(B), (8)(B),

and (9)(B), in lieu of the update to the single conversion factor established in paragraph (1)(C) that would otherwise apply for 2010, the update to the single conversion factor shall be 0.5 percent. 
‘‘(B) N
O EFFECT ON COMPUTATION OF CONVERSION  
FACTOR FOR 2011 AND SUBSEQUENT YEARS .—The conversion 
factor under this subsection shall be computed under para-graph (1)(A) for 2011 and subsequent years as if subpara-graph (A) had never applied.’’. 42 USC 1395ww note.

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124 STAT. 416 PUBLIC LAW 111–148—MAR. 23, 2010 
SEC. 3102. EXTENSION OF THE WORK GEOGRAPHIC INDEX FLOOR AND 
REVISIONS TO THE PRACTICE EXPENSE GEOGRAPHIC ADJUSTMENT UNDER THE MEDICARE PHYSICIAN FEE SCHEDULE. 
(a) E XTENSION OF WORK GPCI F LOOR .—Section 1848(e)(1)(E) 
of the Social Security Act (42 U.S.C. 1395w–4(e)(1)(E)) is amended by striking ‘‘before January 1, 2010’’ and inserting ‘‘before January 1, 2011’’. 
(b) P
RACTICE EXPENSE GEOGRAPHIC ADJUSTMENT FOR 2010 AND

SUBSEQUENT YEARS .—Section 1848(e)(1) of the Social Security Act 
(42 U.S.C. 1395w4(e)(1)) is amended— 
(1) in subparagraph (A), by striking ‘‘and (G)’’ and inserting 
‘‘(G), and (H)’’; and 
‘‘(H) P RACTICE EXPENSE GEOGRAPHIC ADJUSTMENT FOR  
2010 AND SUBSEQUENT YEARS .— 
‘‘(i) F OR 2010 .—Subject to clause (iii), for services

furnished during 2010, the employee wage and rent portions of the practice expense geographic index described in subparagraph (A)(i) shall reflect 
3⁄4of 
the difference between the relative costs of employee wages and rents in each of the different fee schedule areas and the national average of such employee wages and rents. 
‘‘(ii) F
OR 2011 .—Subject to clause (iii), for services 
furnished during 2011, the employee wage and rent

portions of the practice expense geographic index described in subparagraph (A)(i) shall reflect 
1⁄2of 
‘‘(iii) H
OLD HARMLESS .—The practice expense por-

tion of the geographic adjustment factor applied in a fee schedule area for services furnished in 2010 or 2011 shall not, as a result of the application of clause (i) or (ii), be reduced below the practice expense portion of the geographic adjustment factor under subpara-graph (A)(i) (as calculated prior to the application of such clause (i) or (ii), respectively) for such area for such year. 
‘‘(iv) A
NALYSIS .—The Secretary shall analyze cur-

rent methods of establishing practice expense geographic adjustments under subparagraph (A)(i) and evaluate data that fairly and reliably establishes distinctions in the costs of operating a medical practice in the different fee schedule areas. Such analysis shall include an evaluation of the following: 
‘‘(I) The feasibility of using actual data or reli-

able survey data developed by medical organiza-tions on the costs of operating a medical practice, including office rents and non-physician staff wages, in different fee schedule areas. 
‘‘(II) The office expense portion of the practice 
expense geographic adjustment described in subparagraph (A)(i), including the extent to which 42 USC 1395w–4.

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124 STAT. 417 PUBLIC LAW 111–148—MAR. 23, 2010 
types of office expenses are determined in local 
markets instead of national markets. 
‘‘(III) The weights assigned to each of the cat-
egories within the practice expense geographic adjustment described in subparagraph (A)(i). ‘‘(v) R
EVISION FOR 2012 AND SUBSEQUENT YEARS .—

EVISION FOR 2012 AND SUBSEQUENT YEARS .— 
As a result of the analysis described in clause (iv), the Secretary shall, not later than January 1, 2012, make appropriate adjustments to the practice expense geographic adjustment described in subparagraph (A)(i) to ensure accurate geographic adjustments across fee schedule areas, including— 
‘‘(I) basing the office rents component and its 
weight on office expenses that vary among fee schedule areas; and 
‘‘(II) considering a representative range of

‘‘(II) considering a representative range of 
professional and non-professional personnel 
employed in a medical office based on the use of the American Community Survey data or other reliable data for wage adjustments. 
Such adjustments shall be made without regard to adjustments made pursuant to clauses (i) and (ii) and shall be made in a budget neutral manner.’’. 
SEC. 3103. EXTENSION OF EXCEPTIONS PROCESS FOR MEDICARE 
THERAPY CAPS. 
Section 1833(g)(5) of the Social Security Act (42 U.S.C.

1395l(g)(5)) is amended by striking ‘‘December 31, 2009’’ and inserting ‘‘December 31, 2010’’. 
SEC. 3104. EXTENSION OF PAYMENT FOR TECHNICAL COMPONENT OF 
CERTAIN PHYSICIAN PATHOLOGY SERVICES. 
Section 542(c) of the Medicare, Medicaid, and SCHIP Benefits

Improvement and Protection Act of 2000 (as enacted into law by section 1(a)(6) of Public Law 106–554), as amended by section 732 of the Medicare Prescription Drug, Improvement, and Mod-ernization Act of 2003 (42 U.S.C. 1395w–4 note), section 104 of division B of the Tax Relief and Health Care Act of 2006 (42 U.S.C. 1395w–4 note), section 104 of the Medicare, Medicaid, and SCHIP Extension Act of 2007 (Public Law 110–173), and section 136 of the Medicare Improvements for Patients and Providers

Medicare Improvements for Patients and Providers Act of 2008 (Public Law 110–275), is amended by striking ‘‘and 2009’’ and inserting ‘‘2009, and 2010’’.

SEC. 3105. EXTENSION OF AMBULANCE ADD-ONS. 
(a) G ROUND AMBULANCE .—Section 1834(l)(13)(A) of the Social 
Security Act (42 U.S.C. 1395m(l)(13)(A)) is amended— 
(1) in the matter preceding clause (i)— 
(A) by striking ‘‘2007, and for’’ and inserting ‘‘2007, 
for’’; and 
(B) by striking ‘‘2010’’ and inserting ‘‘2010, and for 
such services furnished on or after April 1, 2010, and before January 1, 2011,’’; and (2) in each of clauses (i) and (ii), by inserting ‘‘, and on

or after April 1, 2010, and before January 1, 2011’’ after ‘‘January 1, 2010’’ each place it appears. (b) A
IRAMBULANCE .—Section 146(b)(1) of the Medicare 
Improvements for Patients and Providers Act of 2008 (Public Law 42 USC 1395m note. Deadline. 
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124 STAT. 418 PUBLIC LAW 111–148—MAR. 23, 2010 
110–275) is amended by striking ‘‘December 31, 2009’’ and inserting 
‘‘December 31, 2009, and during the period beginning on April 1, 2010, and ending on January 1, 2011’’. 
(c) S
UPER RURAL AMBULANCE .—Section 1834(l)(12)(A) of the 
Social Security Act (42 U.S.C. 1395m(l)(12)(A)) is amended by striking ‘‘2010’’ and inserting ‘‘2010, and on or after April 1, 2010, and before January 1, 2011’’.

SEC. 3106. EXTENSION OF CERTAIN PAYMENT RULES FOR LONG-TERM 
CARE HOSPITAL SERVICES AND OF MORATORIUM ON THE ESTABLISHMENT OF CERTAIN HOSPITALS AND FACILITIES. 
(a) E XTENSION OF CERTAIN PAYMENT RULES .—Section 114(c)

of the Medicare, Medicaid, and SCHIP Extension Act of 2007 (42 U.S.C. 1395ww note), as amended by section 4302(a) of the Amer-ican Recovery and Reinvestment Act (Public Law 111–5), is further amended by striking ‘‘3-year period’’ each place it appears and inserting ‘‘4-year period’’. 
(b) E
XTENSION OF MORATORIUM .—Section 114(d)(1) of such Act 
(42 U.S.C. 1395ww note), in the matter preceding subparagraph (A), is amended by striking ‘‘3-year period’’ and inserting ‘‘4-year period’’.

SEC. 3107. EXTENSION OF PHYSICIAN FEE SCHEDULE MENTAL HEALTH 
ADD-ON. 
Section 138(a)(1) of the Medicare Improvements for Patients 
and Providers Act of 2008 (Public Law 110–275) is amended by striking ‘‘December 31, 2009’’ and inserting ‘‘December 31, 2010’’. 
SEC. 3108. PERMITTING PHYSICIAN ASSISTANTS TO ORDER POST-HOS-
PITAL EXTENDED CARE SERVICES. 
(a) O RDERING POST-HOSPITAL EXTENDED CARESERVICES .— 
(1) I N GENERAL .—Section 1814(a)(2) of the Social Security

Act (42 U.S.C. 1395f(a)(2)), in the matter preceding subpara-graph (A), is amended by striking ‘‘or clinical nurse specialist’’ and inserting ‘‘, a clinical nurse specialist, or a physician assist-ant (as those terms are defined in section 1861(aa)(5))’’ after ‘‘nurse practitioner’’. 
(2) C
ONFORMING AMENDMENT .—Section 1814(a) of the

ONFORMING AMENDMENT .—Section 1814(a) of the 
Social Security Act (42 U.S.C. 1395f(a)) is amended, in the second sentence, by striking ‘‘or clinical nurse specialist’’ and inserting ‘‘clinical nurse specialist, or physician assistant’’ after ‘‘nurse practitioner,’’. (b) E
shall apply to items and services furnished on or after January 1, 2011. 
SEC. 3109. EXEMPTION OF CERTAIN PHARMACIES FROM ACCREDITA-
TION REQUIREMENTS.

TION REQUIREMENTS. 
(a) I NGENERAL .—Section 1834(a)(20) of the Social Security 
Act (42 U.S.C. 1395m(a)(20)), as added by section 154(b)(1)(A) of the Medicare Improvements for Patients and Providers Act of 2008 (Public Law 100–275), is amended— 
(1) in subparagraph (F)(i)— 
(A) by inserting ‘‘and subparagraph (G)’’ after ‘‘clause 
(ii)’’; and 
(B) by inserting ‘‘, except that the Secretary shall not 
require a pharmacy to have submitted to the Secretary 42 USC 1395f note. 42 USC 1395w–4

note. 
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124 STAT. 419 PUBLIC LAW 111–148—MAR. 23, 2010 
such evidence of accreditation prior to January 1, 2011’’ 
before the semicolon at the end; and (2) by adding at the end the following new subparagraph: 
‘‘(G) A
PPLICATION OF ACCREDITATION REQUIREMENT TO  
CERTAIN PHARMACIES .— 
‘‘(i) I N GENERAL .—With respect to items and serv-
ices furnished on or after January 1, 2011, in imple-menting quality standards under this paragraph— 
‘‘(I) subject to subclause (II), in applying such

standards and the accreditation requirement of subparagraph (F)(i) with respect to pharmacies described in clause (ii) furnishing such items and services, such standards and accreditation require-ment shall not apply to such pharmacies; and 
‘‘(II) the Secretary may apply to such phar-
macies an alternative accreditation requirement established by the Secretary if the Secretary deter-mines such alternative accreditation requirement is more appropriate for such pharmacies. ‘‘(ii) P

HARMACIES DESCRIBED .—A pharmacy 
described in this clause is a pharmacy that meets each of the following criteria: 
‘‘(I) The total billings by the pharmacy for 
such items and services under this title are less than 5 percent of total pharmacy sales, as deter-mined based on the average total pharmacy sales for the previous 3 calendar years, 3 fiscal years, or other yearly period specified by the Secretary. 
‘‘(II) The pharmacy has been enrolled under

‘‘(II) The pharmacy has been enrolled under 
section 1866(j) as a supplier of durable medical equipment, prosthetics, orthotics, and supplies, has been issued (which may include the renewal of) a provider number for at least 5 years, and for which a final adverse action (as defined in section 424.57(a) of title 42, Code of Federal Regulations) has not been imposed in the past 5 years. 
‘‘(III) The pharmacy submits to the Secretary

‘‘(III) The pharmacy submits to the Secretary 
an attestation, in a form and manner, and at a time, specified by the Secretary, that the pharmacy meets the criteria described in subclauses (I) and (II). Such attestation shall be subject to section 1001 of title 18, United States Code. 
‘‘(IV) The pharmacy agrees to submit materials 
as requested by the Secretary, or during the course of an audit conducted on a random sample of phar-macies selected annually, to verify that the phar-

macy meets the criteria described in subclauses (I) and (II). Materials submitted under the pre-ceding sentence shall include a certification by an accountant on behalf of the pharmacy or the submission of tax returns filed by the pharmacy during the relevant periods, as requested by the Secretary.’’. 
(b) A
DMINISTRATION .—Notwithstanding any other provision of 
law, the Secretary may implement the amendments made by sub-section (a) by program instruction or otherwise. 42 USC 1395m

note. Criteria. 
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124 STAT. 420 PUBLIC LAW 111–148—MAR. 23, 2010 
(c) R ULE OF CONSTRUCTION .—Nothing in the provisions of or 
amendments made by this section shall be construed as affecting the application of an accreditation requirement for pharmacies to qualify for bidding in a competitive acquisition area under section 1847 of the Social Security Act (42 U.S.C. 1395w–3). 
SEC. 3110. PART B SPECIAL ENROLLMENT PERIOD FOR DISABLED 
TRICARE BENEFICIARIES. 
(a) I NGENERAL .—

(1) I N GENERAL .—Section 1837 of the Social Security Act 
(42 U.S.C. 1395p) is amended by adding at the end the following new subsection: ‘‘(l)(1) In the case of any individual who is a covered beneficiary

(as defined in section 1072(5) of title 10, United States Code) at the time the individual is entitled to part A under section 226(b) or section 226A and who is eligible to enroll but who has elected not to enroll (or to be deemed enrolled) during the individ-ual’s initial enrollment period, there shall be a special enrollment period described in paragraph (2). 
‘‘(2) The special enrollment period described in this paragraph,

with respect to an individual, is the 12-month period beginning on the day after the last day of the initial enrollment period of the individual or, if later, the 12-month period beginning with the month the individual is notified of enrollment under this section. 
‘‘(3) In the case of an individual who enrolls during the special

enrollment period provided under paragraph (1), the coverage period under this part shall begin on the first day of the month in which the individual enrolls, or, at the option of the individual, the first month after the end of the individual’s initial enrollment period. 
‘‘(4) An individual may only enroll during the special enrollment 
period provided under paragraph (1) one time during the individ-ual’s lifetime. 
‘‘(5) The Secretary shall ensure that the materials relating

to coverage under this part that are provided to an individual described in paragraph (1) prior to the individual’s initial enrollment period contain information concerning the impact of not enrolling under this part, including the impact on health care benefits under the TRICARE program under chapter 55 of title 10, United States 
Code. 
‘‘(6) The Secretary of Defense shall collaborate with the Sec-

retary of Health and Human Services and the Commissioner of Social Security to provide for the accurate identification of individ-uals described in paragraph (1). The Secretary of Defense shall provide such individuals with notification with respect to this sub-section. The Secretary of Defense shall collaborate with the Sec-retary of Health and Human Services and the Commissioner of Social Security to ensure appropriate follow up pursuant to any notification provided under the preceding

(2) E
(1) shall apply to elections made with respect to initial enroll-ment periods that end after the date of the enactment of this Act. (b) W
AIVER OF INCREASE OF PREMIUM .—Section 1839(b) of the 
Social Security Act (42 U.S.C. 1395r(b)) is amended by striking ‘‘section 1837(i)(4)’’ and inserting ‘‘subsection (i)(4) or (l) of section 1837’’. 42 USC 1395p 
note. 42 USC 1395m 
note.

note. 
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124 STAT. 421 PUBLIC LAW 111–148—MAR. 23, 2010 
SEC. 3111. PAYMENT FOR BONE DENSITY TESTS. 
(a) P AYMENT .— 
(1) I N GENERAL .—Section 1848 of the Social Security Act 
(42 U.S.C. 1395w–4) is amended— 
(i) in paragraph (4)(B), by inserting ‘‘, and for 
2010 and 2011, dual-energy x-ray absorptiometry serv-ices (as described in paragraph (6))’’ before the period at the end; and 
(ii) by adding at the end the following new para-
graph: 
‘‘(6) T

graph: 
‘‘(6) T
REATMENT OF BONE MASS SCANS .—For dual-energy 
x-ray absorptiometry services (identified in 2006 by HCPCS 
codes 76075 and 76077 (and any succeeding codes)) furnished during 2010 and 2011, instead of the payment amount that would otherwise be determined under this section for such years, the payment amount shall be equal to 70 percent of the product of— 
‘‘(A) the relative value for the service (as determined 
in subsection (c)(2)) for 2006;

in subsection (c)(2)) for 2006; 
‘‘(B) the conversion factor (established under subsection 
(d)) for 2006; and 
‘‘(C) the geographic adjustment factor (established 
under subsection (e)(2)) for the service for the fee schedule area for 2010 and 2011, respectively.’’; and 
(B) in subsection (c)(2)(B)(iv)— 
(i) in subclause (II), by striking ‘‘and’’ at the end; (ii) in subclause (III), by striking the period at 
the end and inserting ‘‘; and’’; and

the end and inserting ‘‘; and’’; and 
clause: 
‘‘(IV) subsection (b)(6) shall not be taken into 
account in applying clause (ii)(II) for 2010 or 2011.’’. 
(2) I
MPLEMENTATION .—Notwithstanding any other provi-
sion of law, the Secretary may implement the amendments made by paragraph (1) by program instruction or otherwise. (b) S
TUDY AND REPORT BY THE INSTITUTE OF MEDICINE .— 

Services is authorized to enter into an agreement with the Institute of Medicine of the National Academies to conduct a study on the ramifications of Medicare payment reductions for dual-energy x-ray absorptiometry (as described in section 1848(b)(6) of the Social Security Act, as added by subsection (a)(1)) during 2007, 2008, and 2009 on beneficiary access to bone mass density tests. 
(2) R
EPORT .—An agreement entered into under paragraph

(1) shall provide for the Institute of Medicine to submit to the Secretary and to Congress a report containing the results of the study conducted under such paragraph. 
SEC. 3112. REVISION TO THE MEDICARE IMPROVEMENT FUND. 
Section 1898(b)(1)(A) of the Social Security Act (42 U.S.C. 
1395iii) is amended by striking ‘‘$22,290,000,000’’ and inserting ‘‘$0’’. 42 USC 1395w–4 
note.

note. 
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124 STAT. 422 PUBLIC LAW 111–148—MAR. 23, 2010 
SEC. 3113. TREATMENT OF CERTAIN COMPLEX DIAGNOSTIC LABORA-
TORY TESTS. 
(a) D EMONSTRATION PROJECT .— 

Services (in this section referred to as the ‘‘Secretary’’) shall conduct a demonstration project under part B title XVIII of the Social Security Act under which separate payments are made under such part for complex diagnostic laboratory tests provided to individuals under such part. Under the demonstra-tion project, the Secretary shall establish appropriate payment rates for such tests. 
(2) C
OVERED COMPLEX DIAGNOSTIC LABORATORY TEST

(2) C
OVERED COMPLEX DIAGNOSTIC LABORATORY TEST  
DEFINED .—In this section, the term ‘‘complex diagnostic labora-
tory test’’ means a diagnostic laboratory test— 
(A) that is an analysis of gene protein expression, 
topographic genotyping, or a cancer chemotherapy sensi-tivity assay; 
(B) that is determined by the Secretary to be a labora-
tory test for which there is not an alternative test having equivalent performance characteristics; 
(C) which is billed using a Health Care Procedure

Coding System (HCPCS) code other than a not otherwise classified code under such Coding System; 
(D) which is approved or cleared by the Food and 
Drug Administration or is covered under title XVIII of the Social Security Act; and 
(E) is described in section 1861(s)(3) of the Social Secu-
rity Act (42 U.S.C. 1395x(s)(3)). (3) S
EPARATE PAYMENT DEFINED .—In this section, the term

‘‘separate payment’’ means direct payment to a laboratory (including a hospital-based or independent laboratory) that per-forms a complex diagnostic laboratory test with respect to a specimen collected from an individual during a period in which the individual is a patient of a hospital if the test is performed after such period of hospitalization and if separate payment would not otherwise be made under title XVIII of the Social Security Act by reason of sections 1862(a)(14) and

Act by reason of sections 1862(a)(14) and 1866(a)(1)(H)(i) of the such Act (42 U.S.C. 1395y(a)(14); 42 U.S.C. 1395cc(a)(1)(H)(i)). (b) D

URATION .—Subject to subsection (c)(2), the Secretary shall 
conduct the demonstration project under this section for the 2- year period beginning on July 1, 2011. 
(c) P
AYMENTS AND LIMITATION .—Payments under the dem-
onstration project under this section shall— 
(1) be made from the Federal Supplemental Medical Insur-
ance Trust Fund under section 1841 of the Social Security Act (42 U.S.C. 1395t); and 
(2) may not exceed $100,000,000. 
(d) R

(d) R
EPORT .—Not later than 2 years after the completion of 
the demonstration project under this section, the Secretary shall submit to Congress a report on the project. Such report shall include— 
(1) an assessment of the impact of the demonstration 
project on access to care, quality of care, health outcomes, and expenditures under title XVIII of the Social Security Act (including any savings under such title); and 42 USC 1395 l 
note.

note. 
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124 STAT. 423 PUBLIC LAW 111–148—MAR. 23, 2010 
(2) such recommendations as the Secretary determines 
appropriate. (e) I
MPLEMENTATION FUNDING .—For purposes of administering

this section (including preparing and submitting the report under subsection (d)), the Secretary shall provide for the transfer, from the Federal Supplemental Medical Insurance Trust Fund under section 1841 of the Social Security Act (42 U.S.C. 1395t), to the Centers for Medicare & Medicaid Services Program Management Account, of $5,000,000. Amounts transferred under the preceding sentence shall remain available until expended. 
SEC. 3114. IMPROVED ACCESS FOR CERTIFIED NURSE-MIDWIFE SERV-

ICES. 
Section 1833(a)(1)(K) of the Social Security Act (42 U.S.C. 
1395l(a)(1)(K)) is amended by inserting ‘‘(or 100 percent for services furnished on or after January 1, 2011)’’ after ‘‘1992, 65 percent’’. 
PART II—RURAL PROTECTIONS 
SEC. 3121. EXTENSION OF OUTPATIENT HOLD HARMLESS PROVISION. 
(a) I NGENERAL .—Section 1833(t)(7)(D)(i) of the Social Security 
Act (42 U.S.C. 1395l(t)(7)(D)(i)) is amended— 
(1) in subclause (II)— 
(A) in the first sentence, by striking ‘‘2010’’and

inserting ‘‘2011’’; and 
(B) in the second sentence, by striking ‘‘or 2009’’ and 
inserting ‘‘, 2009, or 2010’’; and 
(2) in subclause (III), by striking ‘‘January 1, 2010’’ and 
inserting ‘‘January 1, 2011’’. (b) P
ERMITTING ALLSOLE COMMUNITY HOSPITALS TOBE 
ELIGIBLE FOR HOLD HARMLESS .—Section 1833(t)(7)(D)(i)(III) of the

Social Security Act (42 U.S.C. 1395l(t)(7)(D)(i)(III)) is amended by adding at the end the following new sentence: ‘‘In the case of covered OPD services furnished on or after January 1, 2010, and before January 1, 2011, the preceding sentence shall be applied without regard to the 100-bed limitation.’’. 
SEC. 3122. EXTENSION OF MEDICARE REASONABLE COSTS PAYMENTS 
FOR CERTAIN CLINICAL DIAGNOSTIC LABORATORY TESTS FURNISHED TO HOSPITAL PATIENTS IN CERTAIN RURAL AREAS.

Section 416(b) of the Medicare Prescription Drug, Improvement, 
and Modernization Act of 2003 (42 U.S.C. 1395l–4), as amended by section 105 of division B of the Tax Relief and Health Care Act of 2006 (42 U.S.C. 1395l note) and section 107 of the Medicare, Medicaid, and SCHIP Extension Act of 2007 (42 U.S.C. 1395l note), is amended by inserting ‘‘or during the 1-year period beginning on July 1, 2010’’ before the period at the end. 
SEC. 3123. EXTENSION OF THE RURAL COMMUNITY HOSPITAL DEM-

ONSTRATION PROGRAM. 
(a) O NE-YEAR EXTENSION .—Section 410A of the Medicare 
Prescription Drug, Improvement, and Modernization Act of 2003 (Public Law 108–173; 117 Stat. 2272) is amended by adding at the end the following new subsection: 
‘‘(g) O
NE-YEAREXTENSION OF DEMONSTRATION PROGRAM .— 
‘‘(1) I N GENERAL .—Subject to the succeeding provisions of 
this subsection, the Secretary shall conduct the demonstration 42 USC 1395ww note. 42 USC 1395 l 
note. Time period. 
Applicability.

Applicability. 
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124 STAT. 424 PUBLIC LAW 111–148—MAR. 23, 2010 
program under this section for an additional 1-year period 
(in this section referred to as the ‘1-year extension period’) that begins on the date immediately following the last day of the initial 5-year period under subsection (a)(5). 
‘‘(2) E
XPANSION OF DEMONSTRATION STATES .—Notwith-

standing subsection (a)(2), during the 1-year extension period, the Secretary shall expand the number of States with low population densities determined by the Secretary under such subsection to 20. In determining which States to include in such expansion, the Secretary shall use the same criteria and data that the Secretary used to determine the States under such subsection for purposes of the initial 5-year period. 
‘‘(3) I

‘‘(3) I
NCREASE IN MAXIMUM NUMBER OF HOSPITALS PARTICI -
PATING IN THE DEMONSTRATION PROGRAM .—Notwithstanding 
subsection (a)(4), during the 1-year extension period, not more than 30 rural community hospitals may participate in the dem-onstration program under this section. 
‘‘(4) N
O AFFECT ON HOSPITALS IN DEMONSTRATION PROGRAM  
ON DATE OF ENACTMENT .—In the case of a rural community

hospital that is participating in the demonstration program under this section as of the last day of the initial 5-year period, the Secretary shall provide for the continued participa-tion of such rural community hospital in the demonstration program during the 1-year extension period unless the rural community hospital makes an election, in such form and manner as the Secretary may specify, to discontinue such participation.’’. (b) C
ONFORMING AMENDMENTS .—Subsection (a)(5) of section

410A of the Medicare Prescription Drug, Improvement, and Mod-ernization Act of 2003 (Public Law 108–173; 117 Stat. 2272) is amended by inserting ‘‘(in this section referred to as the ‘initial 5-year period’) and, as provided in subsection (g), for the 1-year extension period’’ after ‘‘5-year period’’. 
(c) T
ECHNICAL AMENDMENTS .— 
(1) Subsection (b) of section 410A of the Medicare Prescrip-
tion Drug, Improvement, and Modernization Act of 2003 (Public Law 108–173; 117 Stat. 2272) is amended—

(A) in paragraph (1)(B)(ii), by striking ‘‘2)’’ and 
inserting ‘‘2))’’; and 
(B) in paragraph (2), by inserting ‘‘cost’’ before 
‘‘reporting period’’ the first place such term appears in each of subparagraphs (A) and (B). (2) Subsection (f)(1) of section 410A of the Medicare 
Prescription Drug, Improvement, and Modernization Act of 2003 (Public Law 108–173; 117 Stat. 2272) is amended— 
(A) in subparagraph (A)(ii), by striking ‘‘paragraph (2)’’ 
and inserting ‘‘subparagraph (B)’’; and

and inserting ‘‘subparagraph (B)’’; and 
(B) in subparagraph (B), by striking ‘‘paragraph (1)(B)’’ 
and inserting ‘‘subparagraph (A)(ii)’’. 
SEC. 3124. EXTENSION OF THE MEDICARE-DEPENDENT HOSPITAL 
(MDH) PROGRAM. 
(a) E XTENSION OF PAYMENT METHODOLOGY .—Section 
1886(d)(5)(G) of the Social Security Act (42 U.S.C. 1395ww(d)(5)(G)) is amended— 
(1) in clause (i), by striking ‘‘October 1, 2011’’ and inserting 
‘‘October 1, 2012’’; and

‘‘October 1, 2012’’; and 
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124 STAT. 425 PUBLIC LAW 111–148—MAR. 23, 2010 
(2) in clause (ii)(II), by striking ‘‘October 1, 2011’’ and 
inserting ‘‘October 1, 2012’’. (b) C
(1) E XTENSION OF TARGET AMOUNT .—Section 1886(b)(3)(D) 
of the Social Security Act (42 U.S.C. 1395ww(b)(3)(D)) is amended— 
(A) in the matter preceding clause (i), by striking 
‘‘October 1, 2011’’ and inserting ‘‘October 1, 2012’’; and 
(B) in clause (iv), by striking ‘‘through fiscal year 2011’’

and inserting ‘‘through fiscal year 2012’’. (2) P
ERMITTING HOSPITALS TO DECLINE RECLASSIFICATION .— 
Section 13501(e)(2) of the Omnibus Budget Reconciliation Act of 1993 (42 U.S.C. 1395ww note) is amended by striking ‘‘through fiscal year 2011’’ and inserting ‘‘through fiscal year 2012’’. 
SEC. 3125. TEMPORARY IMPROVEMENTS TO THE MEDICARE 
INPATIENT HOSPITAL PAYMENT ADJUSTMENT FOR LOW- VOLUME HOSPITALS. 
Section 1886(d)(12) of the Social Security Act (42 U.S.C. 
1395ww(d)(12)) is amended—

1395ww(d)(12)) is amended— 
(1) in subparagraph (A), by inserting ‘‘or (D)’’ after 
‘‘subparagraph (B)’’; 
(2) in subparagraph (B), in the matter preceding clause 
(i), by striking ‘‘The Secretary’’ and inserting ‘‘For discharges occurring in fiscal years 2005 through 2010 and for discharges occurring in fiscal year 2013 and subsequent fiscal years, the Secretary’’; 
(3) in subparagraph (C)(i)— 
(A) by inserting ‘‘(or, with respect to fiscal years 2011

and 2012, 15 road miles)’’ after ‘‘25 road miles’’; and 
(B) by inserting ‘‘(or, with respect to fiscal years 2011 
and 2012, 1,500 discharges of individuals entitled to, or enrolled for, benefits under part A)’’ after ‘‘800 discharges’’; and (4) by adding at the end the following new subparagraph: 
‘‘(D) T
EMPORARY APPLICABLE PERCENTAGE INCREASE .—

For discharges occurring in fiscal years 2011 and 2012, the Secretary shall determine an applicable percentage increase for purposes of subparagraph (A) using a contin-uous linear sliding scale ranging from 25 percent for low- volume hospitals with 200 or fewer discharges of individ-uals entitled to, or enrolled for, benefits under part A in the fiscal year to 0 percent for low-volume hospitals with greater than 1,500 discharges of such individuals in the fiscal year.’’.

SEC. 3126. IMPROVEMENTS TO THE DEMONSTRATION PROJECT ON 
COMMUNITY HEALTH INTEGRATION MODELS IN CERTAIN RURAL COUNTIES. 
(a) R EMOVAL OF LIMITATION ON NUMBER OF ELIGIBLE COUNTIES  
SELECTED .—Subsection (d)(3) of section 123 of the Medicare 
Improvements for Patients and Providers Act of 2008 (42 U.S.C. 1395i–4 note) is amended by striking ‘‘not more than 6’’. 
(b) R
EMOVAL OF REFERENCES TO RURAL HEALTH CLINIC SERV-
ICES AND INCLUSION OF PHYSICIANS ’ SERVICES IN SCOPE OF DEM-

ONSTRATION PROJECT .—Such section 123 is amended— 
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124 STAT. 426 PUBLIC LAW 111–148—MAR. 23, 2010 
(1) in subsection (d)(4)(B)(i)(3), by striking subclause (III); 
and 
(2) in subsection (j)— 
(A) in paragraph (8), by striking subparagraph (B) 
and inserting the following: 
‘‘(B) Physicians’ services (as defined in section 1861(q) 
of the Social Security Act (42 U.S.C. 1395x(q)).’’; 
(B) by striking paragraph (9); and (C) by redesignating paragraph (10) as paragraph (9). 
SEC. 3127. MEDPAC STUDY ON ADEQUACY OF MEDICARE PAYMENTS

FOR HEALTH CARE PROVIDERS SERVING IN RURAL AREAS. 
(a) S TUDY .—The Medicare Payment Advisory Commission shall 
conduct a study on the adequacy of payments for items and services furnished by providers of services and suppliers in rural areas under the Medicare program under title XVIII of the Social Security Act (42 U.S.C. 1395 et seq.). Such study shall include an analysis of— 
(1) any adjustments in payments to providers of services

and suppliers that furnish items and services in rural areas; 
(2) access by Medicare beneficiaries to items and services 
in rural areas; 
(3) the adequacy of payments to providers of services and 
suppliers that furnish items and services in rural areas; and 
(4) the quality of care furnished in rural areas. 
(b) R
EPORT .—Not later than January 1, 2011, the Medicare

Payment Advisory Commission shall submit to Congress a report containing the results of the study conducted under subsection (a). Such report shall include recommendations on appropriate modi-fications to any adjustments in payments to providers of services and suppliers that furnish items and services in rural areas, together with recommendations for such legislation and administra-tive action as the Medicare Payment Advisory Commission deter-mines appropriate.

SEC. 3128. TECHNICAL CORRECTION RELATED TO CRITICAL ACCESS 
HOSPITAL SERVICES. 
(a) I NGENERAL .—Subsections (g)(2)(A) and (l)(8) of section 1834 
of the Social Security Act (42 U.S.C. 1395m) are each amended by inserting ‘‘101 percent of’’ before ‘‘the reasonable costs’’. 
(b) E
FFECTIVE DATE.—The amendments made by subsection

(a) shall take effect as if included in the enactment of section 405(a) of the Medicare Prescription Drug, Improvement, and Mod-ernization Act of 2003 (Public Law 108–173; 117 Stat. 2266). 
SEC. 3129. EXTENSION OF AND REVISIONS TO MEDICARE RURAL HOS-
PITAL FLEXIBILITY PROGRAM. 
(a) A UTHORIZATION .—Section 1820(j) of the Social Security Act 
(42 U.S.C. 1395i–4(j)) is amended— 
(1) by striking ‘‘2010, and for’’ and inserting ‘‘2010, for’’; 
and

and 
(2) by inserting ‘‘and for making grants to all States under 
subsection (g), such sums as may be necessary in each of fiscal years 2011 and 2012, to remain available until expended’’ before the period at the end. (b) U
SE OF FUNDS .—Section 1820(g)(3) of the Social Security 
Act (42 U.S.C. 1395i–4(g)(3)) is amended— 42 USC 1395m note.

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124 STAT. 427 PUBLIC LAW 111–148—MAR. 23, 2010 
(1) in subparagraph (A), by inserting ‘‘and to assist such 
hospitals in participating in delivery system reforms under the provisions of and amendments made by the Patient Protec-tion and Affordable Care Act, such as value-based purchasing programs, accountable care organizations under section 1899,

the National pilot program on payment bundling under section 1866D, and other delivery system reform programs determined appropriate by the Secretary’’ before the period at the end; and 
(2) in subparagraph (E)— 
(A) by striking ‘‘, and to offset’’ and inserting ‘‘, to 
offset’’; and 
(B) by inserting ‘‘and to participate in delivery system

reforms under the provisions of and amendments made by the Patient Protection and Affordable Care Act, such as value-based purchasing programs, accountable care organizations under section 1899, the National pilot pro-gram on payment bundling under section 1866D, and other delivery system reform programs determined appropriate by the Secretary’’ before the period at the end. 
(c) E
shall apply to grants made on or after January 1, 2010.

PART III—IMPROVING PAYMENT ACCURACY 
SEC. 3131. PAYMENT ADJUSTMENTS FOR HOME HEALTH CARE. 
(a) R EBASING HOME HEALTH PROSPECTIVE PAYMENT AMOUNT .— 
(1) I N GENERAL .—Section 1895(b)(3)(A) of the Social Secu-
rity Act (42 U.S.C. 1395fff(b)(3)(A)) is amended— 
(A) in clause (i)(III), by striking ‘‘For periods’’ and 
inserting ‘‘Subject to clause (iii), for periods’’; and 
‘‘(iii) A DJUSTMENT FOR 2013 AND SUBSEQUENT  
YEARS .—

for 2013 and subsequent years, the amount (or amounts) that would otherwise be applicable under clause (i)(III) shall be adjusted by a percentage determined appropriate by the Secretary to reflect such factors as changes in the number of visits in an episode, the mix of services in an episode, the level of intensity of services in an episode, the average cost of providing care per episode, and other factors that the Secretary considers to be relevant. In conducting the analysis under the

be relevant. In conducting the analysis under the preceding sentence, the Secretary may consider differences between hospital-based and free-standing agencies, between for-profit and nonprofit agencies, and between the resource costs of urban and rural agencies. Such adjustment shall be made before the update under subparagraph (B) is applied for the year.

‘‘(II) T
RANSITION .—The Secretary shall provide 
for a 4-year phase-in (in equal increments) of the adjustment under subclause (I), with such adjust-ment being fully implemented for 2016. During each year of such phase-in, the amount of any 42 USC 1395i–4 note. 
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124 STAT. 428 PUBLIC LAW 111–148—MAR. 23, 2010 
adjustment under subclause (I) for the year may 
not exceed 3.5 percent of the amount (or amounts) applicable under clause (i)(III) as of the date of enactment of the Patient Protection and Affordable Care Act.’’. 
(2) M
EDPAC STUDY AND REPORT .— 
(A) S TUDY .—The Medicare Payment Advisory Commis-

sion shall conduct a study on the implementation of the amendments made by paragraph (1). Such study shall include an analysis of the impact of such amendments on— 
(i) access to care; (ii) quality outcomes; (iii) the number of home health agencies; and (iv) rural agencies, urban agencies, for-profit agen-
cies, and nonprofit agencies. (B) R
EPORT .—Not later than January 1, 2015, the

EPORT .—Not later than January 1, 2015, the 
Medicare Payment Advisory Commission shall submit to Congress a report on the study conducted under subpara-graph (A), together with recommendations for such legisla-tion and administrative action as the Commission deter-mines appropriate. 
(b) P
ROGRAM -SPECIFIC OUTLIER CAP.—Section 1895(b) of the 
Social Security Act (42 U.S.C. 1395fff(b)) is amended— 
(1) in paragraph (3)(C), by striking ‘‘the aggregate’’ and

all that follows through the period at the end and inserting ‘‘5 percent of the total payments estimated to be made based on the prospective payment system under this subsection for the period.’’; and 
(2) in paragraph (5)— 
(A) by striking ‘‘O
UTLIERS .—The Secretary’’ and 
inserting the following: ‘‘O UTLIERS .— 
Secretary’’; 
(B) in subparagraph (A), as added by subparagraph

(A), by striking ‘‘5 percent’’ and inserting ‘‘2.5 percent’’; and 
graph: 
‘‘(B) P
ROGRAM SPECIFIC OUTLIER CAP .—The estimated

ROGRAM SPECIFIC OUTLIER CAP .—The estimated 
total amount of additional payments or payment adjust-ments made under subparagraph (A) with respect to a home health agency for a year (beginning with 2011) may not exceed an amount equal to 10 percent of the estimated total amount of payments made under this section (without regard to this paragraph) with respect to the home health 
agency for the year.’’. 
(c) A
PPLICATION OF THE MEDICARE RURAL HOME HEALTH ADD-

ON POLICY .—Section 421 of the Medicare Prescription Drug, 
Improvement, and Modernization Act of 2003 (Public Law 108– 173; 117 Stat. 2283), as amended by section 5201(b) of the Deficit Reduction Act of 2005 (Public Law 109–171; 120 Stat. 46), is amended— 
(1) in the section heading, by striking ‘‘
ONE-YEAR ’’ and 
inserting ‘‘ TEMPORARY ’’; and 
(2) in subsection (a)— 42 USC 1395fff 
note.

note. 
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124 STAT. 429 PUBLIC LAW 111–148—MAR. 23, 2010 
(A) by striking ‘‘, and episodes’’ and inserting ‘‘, epi-
sodes’’; 
(B) by inserting ‘‘and episodes and visits ending on 
or after April 1, 2010, and before January 1, 2016,’’ after ‘‘January 1, 2007,’’; and 
(C) by inserting ‘‘(or, in the case of episodes and visits 
ending on or after April 1, 2010, and before January 1, 2016, 3 percent)’’ before the period at the end. 
(d) S
TUDY AND REPORT ON THE DEVELOPMENT OF HOME HEALTH

PAYMENT REFORMS IN ORDER TOENSURE ACCESS TO CARE AND  
QUALITY SERVICES .— 
Services (in this section referred to as the ‘‘Secretary’’) shall conduct a study to evaluate the costs and quality of care among efficient home health agencies relative to other such agencies in providing ongoing access to care and in treating Medicare beneficiaries with varying severity levels of illness. Such study shall include an analysis of the following:

(A) Methods to revise the home health prospective 
payment system under section 1895 of the Social Security Act (42 U.S.C. 1395fff) to more accurately account for the costs related to patient severity of illness or to improving beneficiary access to care, including— 
(i) payment adjustments for services that may be 
under- or over-valued; 
(ii) necessary changes to reflect the resource use

relative to providing home health services to low- income Medicare beneficiaries or Medicare bene-ficiaries living in medically underserved areas; 
(iii) ways the outlier payment may be improved 
to more accurately reflect the cost of treating Medicare beneficiaries with high severity levels of illness; 
(iv) the role of quality of care incentives and pen-
alties in driving provider and patient behavior; 
(v) improvements in the application of a wage 
index; and

index; and 
(vi) other areas determined appropriate by the Sec-
retary. (B) The validity and reliability of responses on the 
OASIS instrument with particular emphasis on questions that relate to higher payment under the home health prospective payment system and higher outcome scores under Home Care Compare. 
(C) Additional research or payment revisions under 
the home health prospective payment system that may be necessary to set the payment rates for home health

services based on costs of high-quality and efficient home health agencies or to improve Medicare beneficiary access to care. 
(D) A timetable for implementation of any appropriate 
changes based on the analysis of the matters described in subparagraphs (A), (B), and (C). 
(E) Other areas determined appropriate by the Sec-
retary. (2) C
ONSIDERATIONS .—In conducting the study under para-
graph (1), the Secretary shall consider whether certain factors 42 USC 1395fff 
note.

note. 
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124 STAT. 430 PUBLIC LAW 111–148—MAR. 23, 2010 
should be used to measure patient severity of illness and access 
to care, such as— 
(A) population density and relative patient access to 
care; 
(B) variations in service costs for providing care to 
individuals who are dually eligible under the Medicare and Medicaid programs; 
(C) the presence of severe or chronic diseases, as evi-
denced by multiple, discontinuous home health episodes; 
(D) poverty status, as evidenced by the receipt of

Supplemental Security Income under title XVI of the Social Security Act; 
(E) the absence of caregivers; (F) language barriers; (G) atypical transportation costs; (H) security costs; and (I) other factors determined appropriate by the Sec-
retary. (3) R
EPORT .—Not later than March 1, 2011, the Secretary

shall submit to Congress a report on the study conducted under paragraph (1), together with recommendations for such legisla-tion and administrative action as the Secretary determines appropriate. 
(4) C
ONSULTATIONS .—In conducting the study under para-
graph (1) and preparing the report under paragraph (3), the Secretary shall consult with—

(A) stakeholders representing home health agencies; (B) groups representing Medicare beneficiaries; (C) the Medicare Payment Advisory Commission; (D) the Inspector General of the Department of Health 
and Human Services; and 
(E) the Comptroller General of the United States. 
SEC. 3132. HOSPICE REFORM. 
(a) H OSPICE CAREPAYMENT REFORMS .— 
(1) I N GENERAL .—Section 1814(i) of the Social Security 
Act (42 U.S.C. 1395f(i)), as amended by section 3004(c), is amended—

(A) by redesignating paragraph (6) as paragraph (7); 
and 
(B) by inserting after paragraph (5) the following new 
paragraph: ‘‘(6)(A) The Secretary shall collect additional data and 
information as the Secretary determines appropriate to revise payments for hospice care under this subsection pursuant to subparagraph (D) and for other purposes as determined appro-priate by the Secretary. The Secretary shall begin to collect such data by not later than January 1, 2011.

‘‘(B) The additional data and information to be collected 
under subparagraph (A) may include data and information on— 
‘‘(i) charges and payments; ‘‘(ii) the number of days of hospice care which are 
attributable to individuals who are entitled to, or enrolled for, benefits under part A; and 
‘‘(iii) with respect to each type of service included in 
hospice care— Deadline. Data and 
information collection.

information collection. 
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124 STAT. 431 PUBLIC LAW 111–148—MAR. 23, 2010 
‘‘(I) the number of days of hospice care attributable 
to the type of service; 
‘‘(II) the cost of the type of service; and ‘‘(III) the amount of payment for the type of service; 
‘‘(iv) charitable contributions and other revenue of the 
hospice program; 
‘‘(v) the number of hospice visits; ‘‘(vi) the type of practitioner providing the visit; and ‘‘(vii) the length of the visit and other basic information

with respect to the visit. ‘‘(C) The Secretary may collect the additional data and 
information under subparagraph (A) on cost reports, claims, or other mechanisms as the Secretary determines to be appro-priate. 
‘‘(D)(i) Notwithstanding the preceding paragraphs of this

subsection, not earlier than October 1, 2013, the Secretary shall, by regulation, implement revisions to the methodology for determining the payment rates for routine home care and other services included in hospice care under this part, as the Secretary determines to be appropriate. Such revisions may be based on an analysis of data and information collected under subparagraph (A). Such revisions may include adjust-ments to per diem payments that reflect changes in resource intensity in

that reflect changes in resource intensity in providing such care and services during the course of the entire episode of hospice care.

‘‘(ii) Revisions in payment implemented pursuant to clause 
(i) shall result in the same estimated amount of aggregate expenditures under this title for hospice care furnished in the fiscal year in which such revisions in payment are implemented as would have been made under this title for such care in such fiscal year if such revisions had not been implemented. 
‘‘(E) The Secretary shall consult with hospice programs

and the Medicare Payment Advisory Commission regarding the additional data and information to be collected under subparagraph (A) and the payment revisions under subpara-graph (D).’’. 
(2) C
ONFORMING AMENDMENTS .—Section 1814(i)(1)(C) of the 
Social Security Act (42 U.S.C. 1395f(i)(1)(C)) is amended— 
(A) in clause (ii)— 
(i) in the matter preceding subclause (I), by

(i) in the matter preceding subclause (I), by 
inserting ‘‘(before the first fiscal year in which the payment revisions described in paragraph (6)(D) are implemented)’’ after ‘‘subsequent fiscal year’’; and 
(ii) in subclause (VII), by inserting ‘‘(before the 
first fiscal year in which the payment revisions described in paragraph (6)(D) are implemented), sub-
ject to clause (iv),’’ after ‘‘subsequent fiscal year’’; and (B) by adding at the end the following new clause:

‘‘(iii) With respect to routine home care and other 
services included in hospice care furnished during fiscal years subsequent to the first fiscal year in which pay-ment revisions described in paragraph (6)(D) are imple-mented, the payment rates for such care and services shall be the payment rates in effect under this clause during the preceding fiscal year increased by, subject to clause (iv), the market basket percentage increase Deadline. 
Regulation.

Regulation. 
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124 STAT. 432 PUBLIC LAW 111–148—MAR. 23, 2010 
(as defined in section 1886(b)(3)(B)(iii)) for the fiscal 
year.’’. 
(b) A DOPTION OF MEDPAC H OSPICE PROGRAM ELIGIBILITY RE-
CERTIFICATION RECOMMENDATIONS .—Section 1814(a)(7) of the Social 
Security Act (42 U.S.C. 1395f(a)(7)) is amended— 
(1) in subparagraph (B), by striking ‘‘and’’ at the end; 
and 
‘‘(D) on and after January 1, 2011— 
‘‘(i) a hospice physician or nurse practitioner has

a face-to-face encounter with the individual to deter-mine continued eligibility of the individual for hospice care prior to the 180th-day recertification and each subsequent recertification under subparagraph (A)(ii) and attests that such visit took place (in accordance with procedures established by the Secretary); and 
‘‘(ii) in the case of hospice care provided an indi-

vidual for more than 180 days by a hospice program for which the number of such cases for such program comprises more than a percent (specified by the Sec-retary) of the total number of such cases for all pro-grams under this title, the hospice care provided to such individual is medically reviewed (in accordance with procedures established by the Secretary); and’’. 
SEC. 3133. IMPROVEMENT TO MEDICARE DISPROPORTIONATE SHARE 
HOSPITAL (DSH) PAYMENTS.

HOSPITAL (DSH) PAYMENTS. 
Section 1886 of the Social Security Act (42 U.S.C. 1395ww), 
as amended by sections 3001, 3008, and 3025, is amended— 
(1) in subsection (d)(5)(F)(i), by striking ‘‘For’’ and inserting 
‘‘Subject to subsection (r), for’’; and 
‘‘(r) A DJUSTMENTS TO MEDICARE DSH P AYMENTS .— 
‘‘(1) E MPIRICALLY JUSTIFIED DSH PAYMENTS .—For fiscal year

2015 and each subsequent fiscal year, instead of the amount of disproportionate share hospital payment that would other-wise be made under subsection (d)(5)(F) to a subsection (d) hospital for the fiscal year, the Secretary shall pay to the subsection (d) hospital 25 percent of such amount (which rep-resents the empirically justified amount for such payment, as determined by the Medicare Payment Advisory Commission in its March 2007 Report to the Congress). 
‘‘(2) A

‘‘(2) A
DDITIONAL PAYMENT .—In addition to the payment 
made to a subsection (d) hospital under paragraph (1), for fiscal year 2015 and each subsequent fiscal year, the Secretary shall pay to such subsection (d) hospitals an additional amount equal to the product of the following factors: 
‘‘(A) F
ACTOR ONE .—A factor equal to the difference 
between— 
‘‘(i) the aggregate amount of payments that would

be made to subsection (d) hospitals under subsection (d)(5)(F) if this subsection did not apply for such fiscal year (as estimated by the Secretary); and 
‘‘(ii) the aggregate amount of payments that are 
made to subsection (d) hospitals under paragraph (1) for such fiscal year (as so estimated). ‘‘(B) F
ACTOR TWO .— 
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124 STAT. 433 PUBLIC LAW 111–148—MAR. 23, 2010 
‘‘(i) F ISCAL YEARS 2015 , 2016, AND 2017 .—For each 
of fiscal years 2015, 2016, and 2017, a factor equal to 1 minus the percent change (divided by 100) in the percent of individuals under the age of 65 who are uninsured, as determined by comparing the percent of such individuals— 
‘‘(I) who are uninsured in 2012, the last year

‘‘(I) who are uninsured in 2012, the last year 
before coverage expansion under the Patient Protection and Affordable Care Act (as calculated by the Secretary based on the most recent esti-mates available from the Director of the Congres-sional Budget Office before a vote in either House on such Act that, if determined in the affirmative, would clear such Act for enrollment); and 
‘‘(II) who are uninsured in the most recent 
period for which data is available (as so cal-culated). ‘‘(ii) 2018

AND SUBSEQUENT YEARS .—For fiscal year 
2018 and each subsequent fiscal year, a factor equal to 1 minus the percent change (divided by 100) in the percent of individuals who are uninsured, as deter-mined by comparing the percent of individuals— 
‘‘(I) who are uninsured in 2012 (as estimated 
by the Secretary, based on data from the Census Bureau or other sources the Secretary determines appropriate, and certified by the Chief Actuary of the Centers for Medicare & Medicaid Services); and

period for which data is available (as so estimated and certified). 
‘‘(C) F
ACTOR THREE .—A factor equal to the percent, 
for each subsection (d) hospital, that represents the quotient of— 
‘‘(i) the amount of uncompensated care for such

‘‘(i) the amount of uncompensated care for such 
hospital for a period selected by the Secretary (as estimated by the Secretary, based on appropriate data (including, in the case where the Secretary determines that alternative data is available which is a better proxy for the costs of subsection (d) hospitals for treating the uninsured, the use of such alternative data)); and 
‘‘(ii) the aggregate amount of uncompensated care

for all subsection (d) hospitals that receive a payment under this subsection for such period (as so estimated, based on such data). 
‘‘(3) L
‘‘(A) Any estimate of the Secretary for purposes of 
determining the factors described in paragraph (2). 
‘‘(B) Any period selected by the Secretary for such 
purposes.’’.

purposes.’’. 
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124 STAT. 434 PUBLIC LAW 111–148—MAR. 23, 2010 
SEC. 3134. MISVALUED CODES UNDER THE PHYSICIAN FEE SCHEDULE. 
(a) I NGENERAL .—Section 1848(c)(2) of the Social Security Act 
(42 U.S.C. 1395w–4(c)(2)) is amended by adding at the end the following new subparagraphs: 
‘‘(K) P
OTENTIALLY MISVALUED CODES .— 
‘‘(i) I N GENERAL .—The Secretary shall— 
‘‘(I) periodically identify services as being 
potentially misvalued using criteria specified in clause (ii); and

‘‘(II) review and make appropriate adjustments 
to the relative values established under this para-graph for services identified as being potentially misvalued under subclause (I). ‘‘(ii) I
DENTIFICATION OF POTENTIALLY MISVALUED  
CODES .—For purposes of identifying potentially

CODES .—For purposes of identifying potentially 
misvalued services pursuant to clause (i)(I), the Sec-retary shall examine (as the Secretary determines to be appropriate) codes (and families of codes as appro-priate) for which there has been the fastest growth; codes (and families of codes as appropriate) that have experienced substantial changes in practice expenses;

codes for new technologies or services within an appro-priate period (such as 3 years) after the relative values are initially established for such codes; multiple codes that are frequently billed in conjunction with fur-nishing a single service; codes with low relative values, particularly those that are often billed multiple times for a single treatment; codes which have not been subject to review since the implementation of the RBRVS (the so-called ‘Harvard-valued codes’); and such other

so-called ‘Harvard-valued codes’); and such other codes determined to be appropriate by the Sec-retary.

‘‘(iii) R
EVIEW AND ADJUSTMENTS .— 
‘‘(I) The Secretary may use existing processes 
to receive recommendations on the review and appropriate adjustment of potentially misvalued services described in clause (i)(II). 
‘‘(II) The Secretary may conduct surveys, other 
data collection activities, studies, or other analyses as the Secretary determines to be appropriate to facilitate the review and appropriate adjustment described in clause (i)(II). 
‘‘(III) The Secretary may use analytic contrac-

tors to identify and analyze services identified under clause (i)(I), conduct surveys or collect data, and make recommendations on the review and appropriate adjustment of services described in clause (i)(II). 
‘‘(IV) The Secretary may coordinate the review 
and appropriate adjustment described in clause (i)(II) with the periodic review described in subparagraph (B). 
‘‘(V) As part of the review and adjustment

‘‘(V) As part of the review and adjustment 
described in clause (i)(II), including with respect to codes with low relative values described in clause (ii), the Secretary may make appropriate coding revisions (including using existing processes 
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124 STAT. 435 PUBLIC LAW 111–148—MAR. 23, 2010 
for consideration of coding changes) which may 
include consolidation of individual services into bundled codes for payment under the fee schedule under subsection (b). 
‘‘(VI) The provisions of subparagraph (B)(ii)(II) 
shall apply to adjustments to relative value units made pursuant to this subparagraph in the same manner as such provisions apply to adjustments under subparagraph (B)(ii)(II). 
‘‘(L) V
ALIDATING RELATIVE VALUE UNITS .—

‘‘(L) V
ALIDATING RELATIVE VALUE UNITS .— 
‘‘(i) I N GENERAL .—The Secretary shall establish a 
process to validate relative value units under the fee schedule under subsection (b). 
‘‘(ii) C
OMPONENTS AND ELEMENTS OF WORK .—The

‘‘(ii) C
OMPONENTS AND ELEMENTS OF WORK .—The 
process described in clause (i) may include validation of work elements (such as time, mental effort and professional judgment, technical skill and physical effort, and stress due to risk) involved with furnishing a service and may include validation of the pre-, post- , and intra-service components of work. 
‘‘(iii) S
COPE OF CODES .—The validation of work

‘‘(iii) S
COPE OF CODES .—The validation of work 
relative value units shall include a sampling of codes for services that is the same as the codes listed under subparagraph (K)(ii). 
‘‘(iv) M
ETHODS .—The Secretary may conduct the 
validation under this subparagraph using methods described in subclauses (I) through (V) of subparagraph (K)(iii) as the Secretary determines to be appropriate. 
‘‘(v) A
DJUSTMENTS .—The Secretary shall make

‘‘(v) A
DJUSTMENTS .—The Secretary shall make 
appropriate adjustments to the work relative value units under the fee schedule under subsection (b). The provisions of subparagraph (B)(ii)(II) shall apply to adjustments to relative value units made pursuant to this subparagraph in the same manner as such provisions apply to adjustments under subparagraph (B)(ii)(II).’’. 
(b) I
(1) A DMINISTRATION .— 
(A) Chapter 35 of title 44, United States Code and

the provisions of the Federal Advisory Committee Act (5 U.S.C. App.) shall not apply to this section or the amend-ment made by this section. 
(B) Notwithstanding any other provision of law, the 
Secretary may implement subparagraphs (K) and (L) of 1848(c)(2) of the Social Security Act, as added by subsection (a), by program instruction or otherwise. 
(C) Section 4505(d) of the Balanced Budget Act of 
1997 is repealed. 
(D) Except for provisions related to confidentiality of

information, the provisions of the Federal Acquisition Regu-lation shall not apply to this section or the amendment made by this section. (2) F
OCUSING CMS RESOURCES ON POTENTIALLY OVERVALUED  
CODES .—Section 1868(a) of the Social Security Act (42 U.S.C. 
1395ee(a)) is repealed. Repeal. Repeal. 42 USC 1395w–4 
note. 
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124 STAT. 436 PUBLIC LAW 111–148—MAR. 23, 2010 
SEC. 3135. MODIFICATION OF EQUIPMENT UTILIZATION FACTOR FOR 
ADVANCED IMAGING SERVICES. 
(a) A DJUSTMENT IN PRACTICE EXPENSE TOREFLECT HIGHER  
PRESUMED UTILIZATION .—Section 1848 of the Social Security Act 
(1) in subsection (b)(4)— 
(A) in subparagraph (B), by striking ‘‘subparagraph 
(A)’’ and inserting ‘‘this paragraph’’; and 
(B) by adding at the end the following new subpara-
graph:

graph: 
‘‘(C) A DJUSTMENT IN PRACTICE EXPENSE TO REFLECT  
HIGHER PRESUMED UTILIZATION .—Consistent with the meth-
odology for computing the number of practice expense rel-ative value units under subsection (c)(2)(C)(ii) with respect to advanced diagnostic imaging services (as defined in sec-tion 1834(e)(1)(B)) furnished on or after January 1, 2010, the Secretary shall adjust such number of units so it reflects— 
‘‘(i) in the case of services furnished on or after

January 1, 2010, and before January 1, 2013, a 65 percent (rather than 50 percent) presumed rate of utili-zation of imaging equipment; 
‘‘(ii) in the case of services furnished on or after 
January 1, 2013, and before January 1, 2014, a 70 percent (rather than 50 percent) presumed rate of utili-zation of imaging equipment; and 
‘‘(iii) in the case of services furnished on or after 
January 1, 2014, a 75 percent (rather than 50 percent) presumed rate of utilization of imaging equipment.’’; and

(2) in subsection (c)(2)(B)(v), by adding at the end the 
following new subclauses: 
‘‘(III) C
HANGE IN PRESUMED UTILIZATION LEVEL  
OF CERTAIN ADVANCED DIAGNOSTIC IMAGING SERV -
ICES FOR 2010 THROUGH 2012 .—Effective for fee

ICES FOR 2010 THROUGH 2012 .—Effective for fee 
schedules established beginning with 2010 and ending with 2012, reduced expenditures attrib-utable to the presumed rate of utilization of imaging equipment of 65 percent under subsection (b)(4)(C)(i) instead of a presumed rate of utilization of such equipment of 50 percent. 
‘‘(IV) C
ICES FOR 2013 .—Effective for fee schedules estab-

lished for 2013, reduced expenditures attributable to the presumed rate of utilization of imaging equipment of 70 percent under subsection (b)(4)(C)(ii) instead of a presumed rate of utiliza-tion of such equipment of 50 percent. 
‘‘(V) C
ICES FOR 2014 AND SUBSEQUENT YEARS .—Effective 
for fee schedules established beginning with 2014, reduced expenditures attributable to the presumed Time periods.

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124 STAT. 437 PUBLIC LAW 111–148—MAR. 23, 2010 
rate of utilization of imaging equipment of 75 per-
cent under subsection (b)(4)(C)(iii) instead of a pre-sumed rate of utilization of such equipment of 50 percent.’’. 
(b) A
DJUSTMENT IN TECHNICAL COMPONENT ‘‘DISCOUNT ’’ ON 
SINGLE -SESSION IMAGING TO CONSECUTIVE BODY PARTS .—Section 
1848 of the Social Security Act (42 U.S.C. 1395w–4), as amended by subsection (a), is amended— 
(1) in subsection (b)(4), by adding at the end the following

new subparagraph: 
‘‘(D) A
DJUSTMENT IN TECHNICAL COMPONENT DISCOUNT  
ON SINGLE -SESSION IMAGING INVOLVING CONSECUTIVE BODY  
PARTS .—For services furnished on or after July 1, 2010,

the Secretary shall increase the reduction in payments attributable to the multiple procedure payment reduction applicable to the technical component for imaging under the final rule published by the Secretary in the Federal Register on November 21, 2005 (part 405 of title 42, Code of Federal Regulations) from 25 percent to 50 percent.’’; and (2) in subsection (c)(2)(B)(v), by adding at the end the 
following new subclause: 
‘‘(VI) A
DDITIONAL REDUCED PAYMENT FOR MUL -

‘‘(VI) A
TIPLE IMAGING PROCEDURES .—Effective for fee 
schedules established beginning with 2010 (but not applied for services furnished prior to July 1, 2010), reduced expenditures attributable to the increase in the multiple procedure payment reduc-tion from 25 to 50 percent (as described in sub-section (b)(4)(D)).’’. 
(c) A
NALYSIS BY THE CHIEF ACTUARY OF THE CENTERS FOR  
MEDICARE & M EDICAID SERVICES .—Not later than January 1, 2013,

the Chief Actuary of the Centers for Medicare & Medicaid Services shall make publicly available an analysis of whether, for the period of 2010 through 2019, the cumulative expenditure reductions under title XVIII of the Social Security Act that are attributable to the 
adjustments under the amendments made by this section are pro-jected to exceed $3,000,000,000. 
SEC. 3136. REVISION OF PAYMENT FOR POWER-DRIVEN WHEELCHAIRS. 
(a) I NGENERAL .—Section 1834(a)(7)(A) of the Social Security

Act (42 U.S.C. 1395m(a)(7)(A)) is amended— 
(1) in clause (i)— 
(A) in subclause (II), by inserting ‘‘subclause (III) and’’ 
after ‘‘Subject to’’; and 
(B) by adding at the end the following new subclause: 
‘‘(III) S PECIAL RULE FOR POWER -DRIVEN WHEEL -
CHAIRS .—For purposes of payment for power- 
driven wheelchairs, subclause (II) shall be applied by substituting ‘15 percent’ and ‘6 percent’ for ‘10 percent’ and ‘7.5 percent’, respectively.’’; and 
(2) in clause (iii)—

(2) in clause (iii)— 
COMPLEX , REHABILITA -
TIVE’’ before ‘‘ POWER -DRIVEN ’’; and 
(B) by inserting ‘‘complex, rehabilitative’’ before 
‘‘power-driven’’. Deadline. 
Public information. Time period. 
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124 STAT. 438 PUBLIC LAW 111–148—MAR. 23, 2010 
(b) T ECHNICAL AMENDMENT .—Section 1834(a)(7)(C)(ii)(II) of the 
Social Security Act (42 U.S.C. 1395m(a)(7)(C)(ii)(II)) is amended by striking ‘‘(A)(ii) or’’. 
(c) E
FFECTIVE DATE.— 
(1) I N GENERAL .—Subject to paragraph (2), the amendments 
made by subsection (a) shall take effect on January 1, 2011, and shall apply to power-driven wheelchairs furnished on or after such date. 
(2) A
PPLICATION TO COMPETITIVE BIDDING .—The amend-

ments made by subsection (a) shall not apply to payment made for items and services furnished pursuant to contracts entered into under section 1847 of the Social Security Act (42 U.S.C. 1395w–3) prior to January 1, 2011, pursuant to the implementa-tion of subsection (a)(1)(B)(i)(I) of such section 1847. 
SEC. 3137. HOSPITAL WAGE INDEX IMPROVEMENT. 
(a) E XTENSION OF SECTION 508 H OSPITAL RECLASSIFICATIONS .—

(1) I N GENERAL .—Subsection (a) of section 106 of division 
B of the Tax Relief and Health Care Act of 2006 (42 U.S.C. 1395 note), as amended by section 117 of the Medicare, Med-icaid, and SCHIP Extension Act of 2007 (Public Law 110– 173) and section 124 of the Medicare Improvements for Patients and Providers Act of 2008 (Public Law 110–275), is amended by striking ‘‘September 30, 2009’’ and inserting ‘‘September 30, 2010’’. 
(2) U
SE OF PARTICULAR WAGE INDEX IN FISCAL YEAR 2010 .—

For purposes of implementation of the amendment made by this subsection during fiscal year 2010, the Secretary shall use the hospital wage index that was promulgated by the Secretary in the Federal Register on August 27, 2009 (74 Fed. Reg. 43754), and any subsequent corrections. (b) P
LAN FOR REFORMING THE MEDICARE HOSPITAL WAGEINDEX  
SYSTEM .— 
(1) I N GENERAL .—Not later than December 31, 2011, the

Secretary of Health and Human Services (in this section referred to as the ‘‘Secretary’’) shall submit to Congress a report that includes a plan to reform the hospital wage index system under section 1886 of the Social Security Act. 
(2) D
ETAILS .—In developing the plan under paragraph (1),

the Secretary shall take into account the goals for reforming such system set forth in the Medicare Payment Advisory Commission June 2007 report entitled ‘‘Report to Congress: Promoting Greater Efficiency in Medicare’’, including estab-lishing a new hospital compensation index system that— 
(A) uses Bureau of Labor Statistics data, or other data 
or methodologies, to calculate relative wages for each geographic area involved; 
(B) minimizes wage index adjustments between and

(B) minimizes wage index adjustments between and 
within metropolitan statistical areas and statewide rural areas; 
(C) includes methods to minimize the volatility of wage 
index adjustments that result from implementation of policy, while maintaining budget neutrality in applying such adjustments; 
(D) takes into account the effect that implementation 
of the system would have on health care providers and on each region of the country; Deadline. Reports. 42 USC 1395ww 
note. 42 USC 1395ww

note. 42 USC 1395ww 
note. Applicability. 42 USC 1395m 
note. 
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124 STAT. 439 PUBLIC LAW 111–148—MAR. 23, 2010 
(E) addresses issues related to occupational mix, such 
as staffing practices and ratios, and any evidence on the effect on quality of care or patient safety as a result of the implementation of the system; and 
(F) provides for a transition. 
(3) C
graph (1), the Secretary shall consult with relevant affected parties. (c) U
SE OF PARTICULAR CRITERIA FOR DETERMINING RECLASSI -

FICATIONS .—Notwithstanding any other provision of law, in making

decisions on applications for reclassification of a subsection (d) hospital (as defined in paragraph (1)(B) of section 1886(d) of the Social Security Act (42 U.S.C. 1395ww(d)) for the purposes described in paragraph (10)(D)(v) of such section for fiscal year 2011 and each subsequent fiscal year (until the first fiscal year beginning on or after the date that is 1 year after the Secretary of Health and Human Services submits the report to Congress under sub-section (b)), the Geographic

Congress under sub-section (b)), the Geographic Classification Review Board established under paragraph (10) of such section shall use the average hourly wage comparison criteria used in making such decisions as of Sep-tember 30, 2008. The preceding sentence shall be effected in a budget neutral manner.

SEC. 3138. TREATMENT OF CERTAIN CANCER HOSPITALS. 
Section 1833(t) of the Social Security Act (42 U.S.C. 1395l(t)) 
is amended by adding at the end the following new paragraph: 
‘‘(18) A UTHORIZATION OF ADJUSTMENT FOR CANCER HOS -
PITALS .— 
‘‘(A) S TUDY .—The Secretary shall conduct a study to

determine if, under the system under this subsection, costs incurred by hospitals described in section 1886(d)(1)(B)(v) with respect to ambulatory payment classification groups exceed those costs incurred by other hospitals furnishing services under this subsection (as determined appropriate by the Secretary). In conducting the study under this subparagraph, the Secretary shall take into consideration the cost of drugs and biologicals incurred by such hospitals. 
‘‘(B) A

‘‘(B) A
UTHORIZATION OF ADJUSTMENT .—Insofar as the 
Secretary determines under subparagraph (A) that costs incurred by hospitals described in section 1886(d)(1)(B)(v) exceed those costs incurred by other hospitals furnishing services under this subsection, the Secretary shall provide for an appropriate adjustment under paragraph (2)(E) to reflect those higher costs effective for services furnished on or after January 1, 2011.’’. 
SEC. 3139. PAYMENT FOR BIOSIMILAR BIOLOGICAL PRODUCTS.

(a) I NGENERAL .—Section 1847A of the Social Security Act 
(42 U.S.C. 1395w–3a) is amended— 
(i) in subparagraph (A), by striking ‘‘or’’ at the 
end; 
(ii) in subparagraph (B), by striking the period 
at the end and inserting ‘‘; or’’; and 
(iii) by adding at the end the following new 
subparagraph: Effective date.

subparagraph: Effective date. 
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124 STAT. 440 PUBLIC LAW 111–148—MAR. 23, 2010 
‘‘(C) in the case of a biosimilar biological product (as 
defined in subsection (c)(6)(H)), the amount determined under paragraph (8).’’; and 
(B) by adding at the end the following new paragraph: 
‘‘(8) B
IOSIMILAR BIOLOGICAL PRODUCT .—The amount speci-
fied in this paragraph for a biosimilar biological product described in paragraph (1)(C) is the sum of— 
‘‘(A) the average sales price as determined using the

methodology described under paragraph (6) applied to a biosimilar biological product for all National Drug Codes assigned to such product in the same manner as such paragraph is applied to drugs described in such paragraph; and 
‘‘(B) 6 percent of the amount determined under para-
graph (4) for the reference biological product (as defined in subsection (c)(6)(I)).’’; and (2) in subsection (c)(6), by adding at the end the following 
‘‘(H) B

‘‘(H) B
IOSIMILAR BIOLOGICAL PRODUCT .—The term ‘bio-
similar biological product’ means a biological product approved under an abbreviated application for a license of a biological product that relies in part on data or informa-tion in an application for another biological product licensed under section 351 of the Public Health Service Act. 
‘‘(I) R
EFERENCE BIOLOGICAL PRODUCT .—The term ‘ref-

erence biological product’ means the biological product licensed under such section 351 that is referred to in the application described in subparagraph (H) of the biosimilar biological product.’’. 
(b) E

(a) shall apply to payments for biosimilar biological products begin-ning with the first day of the second calendar quarter after enact-ment of legislation providing for a biosimilar pathway (as deter-mined by the Secretary). 
SEC. 3140. MEDICARE HOSPICE CONCURRENT CARE DEMONSTRATION 
PROGRAM. 
(a) E STABLISHMENT .— 

Services (in this section referred to as the ‘‘Secretary’’) shall establish a Medicare Hospice Concurrent Care demonstration program at participating hospice programs under which Medi-care beneficiaries are furnished, during the same period, hos-pice care and any other items or services covered under title XVIII of the Social Security Act (42 U.S.C. 1395 et seq.) from funds otherwise paid under such title to such hospice programs. 
(2) D
URATION .—The demonstration program under this sec-

tion shall be conducted for a 3-year period. 
(3) S ITES.—The Secretary shall select not more than 15 
hospice programs at which the demonstration program under this section shall be conducted. Such hospice programs shall be located in urban and rural areas. (b) I
NDEPENDENT EVALUATION AND REPORTS .— 
(1) I NDEPENDENT EVALUATION .—The Secretary shall pro-

vide for the conduct of an independent evaluation of the dem-onstration program under this section. Such independent evaluation shall determine whether the demonstration program 42 USC 1395d note. Applicability. 
42 USC 1395w–3a note. 
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124 STAT. 441 PUBLIC LAW 111–148—MAR. 23, 2010 
has improved patient care, quality of life, and cost-effectiveness 
for Medicare beneficiaries participating in the demonstration program. 
(2) R
EPORTS .—The Secretary shall submit to Congress a 
report containing the results of the evaluation conducted under paragraph (1), together with such recommendations as the Sec-retary determines appropriate. (c) B
UDGET NEUTRALITY .—With respect to the 3-year period

of the demonstration program under this section, the Secretary shall ensure that the aggregate expenditures under title XVIII for such period shall not exceed the aggregate expenditures that would have been expended under such title if the demonstration program under this section had not been implemented. 
SEC. 3141. APPLICATION OF BUDGET NEUTRALITY ON A NATIONAL 
BASIS IN THE CALCULATION OF THE MEDICARE HOS-PITAL WAGE INDEX FLOOR. 
In the case of discharges occurring on or after October 1,

2010, for purposes of applying section 4410 of the Balanced Budget Act of 1997 (42 U.S.C. 1395ww note) and paragraph (h)(4) of section 412.64 of title 42, Code of Federal Regulations, the Secretary of Health and Human Services shall administer subsection (b) of such section 4410 and paragraph (e) of such section 412.64 in the same manner as the Secretary administered such subsection (b) and paragraph (e) for discharges occurring during fiscal year 2008 (through a uniform, national adjustment to

2008 (through a uniform, national adjustment to the area wage index).

SEC. 3142. HHS STUDY ON URBAN MEDICARE-DEPENDENT HOSPITALS. 
(a) S TUDY .— 
Services (in this section referred to as the ‘‘Secretary’’) shall conduct a study on the need for an additional payment for urban Medicare-dependent hospitals for inpatient hospital serv-ices under section 1886 of the Social Security Act (42 U.S.C. 1395ww). Such study shall include an analysis of— 
(A) the Medicare inpatient margins of urban Medicare-

dependent hospitals, as compared to other hospitals which receive 1 or more additional payments or adjustments under such section (including those payments or adjust-ments described in paragraph (2)(A)); and 
(B) whether payments to medicare-dependent, small 
rural hospitals under subsection (d)(5)(G) of such section should be applied to urban Medicare-dependent hospitals. (2) U
RBAN MEDICARE -DEPENDENT HOSPITAL DEFINED .—For

RBAN MEDICARE -DEPENDENT HOSPITAL DEFINED .—For 
purposes of this section, the term ‘‘urban Medicare-dependent hospital’’ means a subsection (d) hospital (as defined in sub-section (d)(1)(B) of such section) that— 
(A) does not receive any additional payment or adjust-
ment under such section, such as payments for indirect

medical education costs under subsection (d)(5)(B) of such section, disproportionate share payments under subsection (d)(5)(A) of such section, payments to a rural referral center under subsection (d)(5)(C) of such section, payments to a critical access hospital under section 1814(l) of such Act (42 U.S.C. 1395f(l)), payments to a sole community hospital under subsection (d)(5)(D) of such section 1886, or pay-ments to a medicare-dependent, small rural hospital under subsection (d)(5)(G) of such

rural hospital under subsection (d)(5)(G) of such section 1886; and 42 USC 1395ww note.

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124 STAT. 442 PUBLIC LAW 111–148—MAR. 23, 2010 
(B) for which more than 60 percent of its inpatient 
days or discharges during 2 of the 3 most recently audited cost reporting periods for which the Secretary has a settled cost report were attributable to inpatients entitled to bene-fits under part A of title XVIII of such Act. 
(b) R
EPORT .—Not later than 9 months after the date of enact-

ment of this Act, the Secretary 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 Secretary determines appropriate. 
SEC. 3143. PROTECTING HOME HEALTH BENEFITS. 
Nothing in the provisions of, or amendments made by, this 
Act shall result in the reduction of guaranteed home health benefits under title XVIII of the Social Security Act.

SEC. 3201. MEDICARE ADVANTAGE PAYMENT. 
(a) MA B ENCHMARK BASED ON PLAN’SCOMPETITIVE BIDS.— 
(1) I N GENERAL .—Section 1853(j) of the Social Security 
Act (42 U.S.C. 1395w–23(j)) is amended— 
(A) by striking ‘‘A MOUNTS .—For purposes’’ and 
inserting ‘‘A MOUNTS .— 
‘‘(1) I N GENERAL .—For purposes’’; 
(B) by redesignating paragraphs (1) and (2) as subpara-
graphs (A) and (B), respectively, and indenting the subpara-graphs appropriately;

(C) in subparagraph (A), as redesignated by subpara-
graph (B)— 
(i) by redesignating subparagraphs (A) and (B) 
as clauses (i) and (ii), respectively, and indenting the clauses appropriately; and 
(ii) in clause (i), as redesignated by clause (i), 
by striking ‘‘an amount equal to’’ and all that follows through the end and inserting ‘‘an amount equal to— 
‘‘(I) for years before 2007, 
1⁄12of the annual

1⁄12of the annual 
MA capitation rate under section 1853(c)(1) for the area for the year, adjusted as appropriate for the purpose of risk adjustment; 
‘‘(II) for 2007 through 2011, 
1⁄12of the 
applicable amount determined under subsection (k)(1) for the area for the year; 
‘‘(III) for 2012, the sum of— 
‘‘(aa) 
2⁄3of the quotient of— 
‘‘(AA) the applicable amount deter-
mined under subsection (k)(1) for the area for the year; and 
‘‘(BB) 12; and 
‘‘(bb)

‘‘(bb) 
1⁄3of the MA competitive benchmark 
amount (determined under paragraph (2)) for the area for the month; ‘‘(IV) for 2013, the sum of— 
‘‘(aa) 
1⁄3of the quotient of— 42 USC 1395d 
note. 
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124 STAT. 443 PUBLIC LAW 111–148—MAR. 23, 2010 
‘‘(bb) 
2⁄3of the MA competitive benchmark 
amount (as so determined) for the area for the month; ‘‘(V) for 2014, the MA competitive benchmark

amount for the area for a month in 2013 (as so determined), increased by the national per capita MA growth percentage, described in subsection (c)(6) for 2014, but not taking into account any adjustment under subparagraph (C) of such sub-section for a year before 2004; and 
‘‘(VI) for 2015 and each subsequent year, the 
MA competitive benchmark amount (as so deter-mined) for the area for the month; or’’; (iii) in clause (ii), as redesignated by clause (i),

by striking ‘‘subparagraph (A)’’ and inserting ‘‘clause (i)’’; (D) by adding at the end the following new paragraphs: 
‘‘(2) C
OMPUTATION OF MA COMPETITIVE BENCHMARK  
AMOUNT .— 
‘‘(A) I N GENERAL .—Subject to subparagraph (B) and

paragraph (3), for months in each year (beginning with 2012) for each MA payment area the Secretary shall com-pute an MA competitive benchmark amount equal to the weighted average of the unadjusted MA statutory non- drug monthly bid amount (as defined in section 1854(b)(2)(E)) for each MA plan in the area, with the weight for each plan being equal to the average number of bene-ficiaries enrolled under such plan in the reference month (as defined in section 1858(f)(4), except that, in applying

in section 1858(f)(4), except that, in applying such definition for purposes of this paragraph, ‘to compute the MA competitive benchmark amount under section 1853(j)(2)’ shall be substituted for ‘to compute the percent-age specified in subparagraph (A) and other relevant percentages under this part’).

‘‘(B) W
EIGHTING RULES .— 
‘‘(i) S INGLE PLAN RULE .—In the case of an MA 
payment area in which only a single MA plan is being offered, the weight under subparagraph (A) shall be equal to 1. 
‘‘(ii) U
SE OF SIMPLE AVERAGE AMONG MULTIPLE  
PLANS IF NO PLANS OFFERED IN PREVIOUS YEAR .—In

PLANS IF NO PLANS OFFERED IN PREVIOUS YEAR .—In 
the case of an MA payment area in which no MA plan was offered in the previous year and more than 1 MA plan is offered in the current year, the Secretary shall use a simple average of the unadjusted MA statu-tory non-drug monthly bid amount (as so defined) for purposes of computing the MA competitive benchmark amount under subparagraph (A). 
‘‘(3) C
AP ON MA COMPETITIVE BENCHMARK AMOUNT .—In no

AP ON MA COMPETITIVE BENCHMARK AMOUNT .—In no 
case shall the MA competitive benchmark amount for an area for a month in a year be greater than the applicable amount 
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124 STAT. 444 PUBLIC LAW 111–148—MAR. 23, 2010 
that would (but for the application of this subsection) be deter-
mined under subsection (k)(1) for the area for the month in the year.’’; and 
(E) in subsection (k)(2)(B)(ii)(III), by striking ‘‘(j)(1)(A)’’ 
and inserting ‘‘(j)(1)(A)(i)’’. (2) C
(A) Section 1853(k)(2) of the Social Security Act (42 
U.S.C. 1395w–23(k)(2)) is amended— 
(i) in subparagraph (A), by striking ‘‘through 2010’’

and inserting ‘‘and subsequent years’’; and 
(ii) in subparagraph (C)— 
(I) in clause (iii), by striking ‘‘and’’ at the 
end; 
(II) in clause (iv), by striking the period at 
(III) by adding at the end the following new 
clause: ‘‘(v) for 2011 and subsequent years, 0.00.’’. 
(B) Section 1854(b) of the Social Security Act (42 U.S.C. 
1395w–24(b)) is amended— 
(i) in paragraph (3)(B)(i), by striking ‘‘1853(j)(1)’’ 
and inserting ‘‘1853(j)(1)(A)’’; and

and inserting ‘‘1853(j)(1)(A)’’; and 
(ii) in paragraph (4)(B)(i), by striking ‘‘1853(j)(2)’’ 
and inserting ‘‘1853(j)(1)(B)’’. (C) Section 1858(f) of the Social Security Act (42 U.S.C. 
1395w–27(f)) is amended— 
(i) in paragraph (1), by striking ‘‘1853(j)(2)’’ and 
inserting ‘‘1853(j)(1)(B)’’; and 
(ii) in paragraph (3)(A), by striking ‘‘1853(j)(1)(A)’’ 
and inserting ‘‘1853(j)(1)(A)(i)’’. (D) Section 1860C–1(d)(1)(A) of the Social Security Act

(42 U.S.C. 1395w–29(d)(1)(A)) is amended by striking ‘‘1853(j)(1)(A)’’ and inserting ‘‘1853(j)(1)(A)(i)’’. 
(b) R
EDUCTION OF NATIONAL PERCAPITA GROWTH PERCENTAGE  
FOR 2011.—Section 1853(c)(6) of the Social Security Act (42 U.S.C. 
1395w–23(c)(6)) is amended— 
(1) in clause (v), by striking ‘‘and’’ at the end; (2) in clause (vi)— 
(A) by striking ‘‘for a year after 2002’’ and inserting 
‘‘for 2003 through 2010’’; and 
(B) by striking the period at the end and inserting 
a comma; and

a comma; and 
‘‘(vii) for 2011, 3 percentage points; and ‘‘(viii) for a year after 2011, 0 percentage points.’’. 
(c) E
NHANCEMENT OF BENEFICIARY REBATES .—Section 
1854(b)(1)(C)(i) of the Social Security Act (42 U.S.C. 1395w– 24(b)(1)(C)(i)) is amended by inserting ‘‘(or 100 percent in the case of plan years beginning on or after January 1, 2014)’’ after ‘‘75 percent’’. 
(d) B
IDDING RULES .—

(d) B
IDDING RULES .— 
(1) R EQUIREMENTS FOR INFORMATION SUBMITTED .—Section 
1854(a)(6)(A) of the Social Security Act (42 U.S.C. 1395w– 24(a)(6)(A)) is amended, in the flush matter following clause (v), by adding at the end the following sentence: ‘‘Information to be submitted under this paragraph shall be certified by a qualified member of the American Academy of Actuaries Certification. 42 USC 
1395w–27a.

1395w–27a. 
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124 STAT. 445 PUBLIC LAW 111–148—MAR. 23, 2010 
and shall meet actuarial guidelines and rules established by 
the Secretary under subparagraph (B)(v).’’. 
(2) E STABLISHMENT OF ACTUARIAL GUIDELINES .—Section 
1854(a)(6)(B) of the Social Security Act (42 U.S.C. 1395w– 24(a)(6)(B)) is amended— 
(A) in clause (i), by striking ‘‘(iii) and (iv)’’ and inserting 
‘‘(iii), (iv), and (v)’’; and 
‘‘(v) E
STABLISHMENT OF ACTUARIAL GUIDELINES .—

‘‘(v) E
STABLISHMENT OF ACTUARIAL GUIDELINES .— 
‘‘(I) I N GENERAL .—In order to establish fair 
MA competitive benchmarks under section 1853(j)(1)(A)(i), the Secretary, acting through the Chief Actuary of the Centers for Medicare & Med-icaid Services (in this clause referred to as the ‘Chief Actuary’), shall establish— 
‘‘(aa) actuarial guidelines for the submis-
sion of bid information under this paragraph; and 
‘‘(bb) bidding rules that are appropriate

‘‘(bb) bidding rules that are appropriate 
to ensure accurate bids and fair competition among MA plans. ‘‘(II) D
ENIAL OF BID AMOUNTS .—The Secretary 
shall deny monthly bid amounts submitted under subparagraph (A) that do not meet the actuarial guidelines and rules established under subclause (I). 
‘‘(III) R
EFUSAL TO ACCEPT CERTAIN BIDS DUE  
TO MISREPRESENTATIONS AND FAILURES TO ADE -
QUATELY MEET REQUIREMENTS .—In the case where

the Secretary determines that information sub-mitted by an MA organization under subparagraph (A) contains consistent misrepresentations and failures to adequately meet requirements of the organization, the Secretary may refuse to accept any additional such bid amounts from the organization for the plan year and the Chief Actuary shall, if the Chief Actuary determines that the actuaries of the organization were complicit in those misrepresentations and failures, report

those actuaries to the Actuarial Board for Coun-seling and Discipline.’’. 
(3) E
section shall apply to bid amounts submitted on or after January 1, 2012. (e) MA L
OCAL PLANSERVICE AREAS .— 
(1) I N GENERAL .—Section 1853(d) of the Social Security 
Act (42 U.S.C. 1395w–23(d)) is amended— 
(A) in the subsection heading, by striking ‘‘MA R EGION ’’ 
and inserting ‘‘MA R EGION ; MA L OCAL PLAN SERVICE  
AREA’’;

AREA’’; 
(B) in paragraph (1), by striking subparagraph (A) 
‘‘(A) with respect to an MA local plan— 
‘‘(i) for years before 2012, an MA local area (as 
defined in paragraph (2)); and 42 USC 
1395w–24 note. Determinations. 
Reports. 
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124 STAT. 446 PUBLIC LAW 111–148—MAR. 23, 2010 
‘‘(ii) for 2012 and succeeding years, a service area 
that is an entire urban or rural area, as applicable (as described in paragraph (5)); and’’; and (C) by adding at the end the following new paragraph: 
‘‘(5) MA 
LOCAL PLAN SERVICE AREA .—For 2012 and suc-
ceeding years, the service area for an MA local plan shall be an entire urban or rural area in each State as follows: 
‘‘(A) U
RBAN AREAS .—

‘‘(A) U
RBAN AREAS .— 
‘‘(i) I N GENERAL .—Subject to clause (ii) and sub-
paragraphs (C) and (D), the service area for an MA local plan in an urban area shall be the Core Based Statistical Area (in this paragraph referred to as a ‘CBSA’) or, if applicable, a conceptually similar alter-native classification, as defined by the Director of the Office of Management and Budget. 
‘‘(ii) CBSA 
COVERING MORE THAN ONE STATE .—

COVERING MORE THAN ONE STATE .— 
In the case of a CBSA (or alternative classification) that covers more than one State, the Secretary shall divide the CBSA (or alternative classification) into separate service areas with respect to each State cov-ered by the CBSA (or alternative classification). ‘‘(B) R
URAL AREAS .—Subject to subparagraphs (C) and

URAL AREAS .—Subject to subparagraphs (C) and 
(D), the service area for an MA local plan in a rural area shall be a county that does not qualify for inclusion in a CBSA (or alternative classification), as defined by the Director of the Office of Management and Budget. 
‘‘(C) R
EFINEMENTS TO SERVICE AREAS .—For 2015 and

EFINEMENTS TO SERVICE AREAS .—For 2015 and 
succeeding years, in order to reflect actual patterns of health care service utilization, the Secretary may adjust the boundaries of service areas for MA local plans in urban areas and rural areas under subparagraphs (A) and (B), respectively, but may only do so based on recent analyses of actual patterns of care. 
‘‘(D) A
DDITIONAL AUTHORITY TO MAKE LIMITED EXCEP -
TIONS TO SERVICE AREA REQUIREMENTS FOR MA LOCAL

TIONS TO SERVICE AREA REQUIREMENTS FOR MA LOCAL  
PLANS .—The Secretary may, in addition to any adjustments 
under subparagraph (C), make limited exceptions to service area requirements otherwise applicable under this part for MA local plans that have in effect (as of the date 
of enactment of the Patient Protection and Affordable Care Act)— 
‘‘(i) agreements with another MA organization or 
MA plan that preclude the offering of benefits through-out an entire service area; or

‘‘(ii) limitations in their structural capacity to sup-
port adequate networks throughout an entire service area as a result of the delivery system model of the MA local plan.’’. 
(2) C
(i) Section 1851(b)(1) of the Social Security Act 
(42 U.S.C. 1395w–21(b)(1)) is amended by striking subparagraph (C). 
(ii) Section 1853(b)(1)(B)(i) of such Act (42 U.S.C. 
1395w–23(b)(1)(B)(i))—

1395w–23(b)(1)(B)(i))— 
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124 STAT. 447 PUBLIC LAW 111–148—MAR. 23, 2010 
(I) in the matter preceding subclause (I), by 
striking ‘‘MA payment area’’ and inserting ‘‘MA local area (as defined in subsection (d)(2))’’; and 
(II) in subclause (I), by striking ‘‘MA payment 
area’’ and inserting ‘‘MA local area (as so defined)’’. (iii) Section 1853(b)(4) of such Act (42 U.S.C. 
1395w–23(b)(4)) is amended by striking ‘‘Medicare Advantage payment area’’ and inserting ‘‘MA local area (as so defined)’’.

(iv) Section 1853(c)(1) of such Act (42 U.S.C. 
1395w–23(c)(1)) is amended— 
by striking ‘‘a Medicare Advantage payment area that is’’; and 
(II) in subparagraph (D)(i), by striking ‘‘MA 
payment area’’ and inserting ‘‘MA local area (as defined in subsection (d)(2))’’. (v) Section 1854 of such Act (42 U.S.C. 1395w– 
24) is amended by striking subsection (h). (B) E
FFECTIVE DATE .—The amendments made by this

FFECTIVE DATE .—The amendments made by this 
paragraph shall take effect on January 1, 2012. 
(f) P ERFORMANCE BONUSES .— 
(1) MA PLANS .— 
(A) I N GENERAL .—Section 1853 of the Social Security 
Act (42 U.S.C. 1395w–23) is amended by adding at the end the following new subsection: 
‘‘(n) P
ERFORMANCE BONUSES .— 
‘‘(1) C ARE COORDINATION AND MANAGEMENT PERFORMANCE  
BONUS .— 
‘‘(A) I N GENERAL .—For years beginning with 2014, sub-

ject to subparagraph (B), in the case of an MA plan that conducts 1 or more programs described in subparagraph (C) with respect to the year, the Secretary shall, in addition to any other payment provided under this part, make monthly payments, with respect to coverage of an indi-vidual under this part, to the MA plan in an amount equal to the product of— 
‘‘(i) 0.5 percent of the national monthly per capita

cost for expenditures for individuals enrolled under the original medicare fee-for-service program for the year; and 
‘‘(ii) the total number of programs described in 
clauses (i) through (ix) of subparagraph (C) that the Secretary determines the plan is conducting for the year under such subparagraph. ‘‘(B) L
IMITATION .—In no case may the total amount

IMITATION .—In no case may the total amount 
of payment with respect to a year under subparagraph (A) be greater than 2 percent of the national monthly per capita cost for expenditures for individuals enrolled under the original medicare fee-for-service program for the year, as determined prior to the application of risk adjust-ment under paragraph (4). 
‘‘(C) P
ROGRAMS DESCRIBED .—The following programs 
are described in this paragraph: 
‘‘(i) Care management programs that—

‘‘(i) Care management programs that— 
‘‘(I) target individuals with 1 or more chronic 
conditions; Effective date. Payments. 42 USC 
1395w–21 note. 
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124 STAT. 448 PUBLIC LAW 111–148—MAR. 23, 2010 
‘‘(II) identify gaps in care; and 
‘‘(III) facilitate improved care by using addi-
tional resources like nurses, nurse practitioners, and physician assistants. ‘‘(ii) Programs that focus on patient education and 
self-management of health conditions, including inter-ventions that— 
‘‘(I) help manage chronic conditions; ‘‘(II) reduce declines in health status; and ‘‘(III) foster patient and provider collaboration.

‘‘(iii) Transitional care interventions that focus on 
care provided around a hospital inpatient episode, including programs that target post-discharge patient care in order to reduce unnecessary health complica-tions and readmissions. 
‘‘(iv) Patient safety programs, including provisions 
for hospital-based patient safety programs in contracts that the Medicare Advantage organization offering the MA plan has with hospitals. 
‘‘(v) Financial policies that promote systematic

‘‘(v) Financial policies that promote systematic 
coordination of care by primary care physicians across the full spectrum of specialties and sites of care, such as medical homes, capitation arrangements, or pay- for-performance programs. 
‘‘(vi) Programs that address, identify, and amelio-
rate health care disparities among principal at-risk subpopulations. 
‘‘(vii) Medication therapy management programs

‘‘(vii) Medication therapy management programs 
that are more extensive than is required under section 1860D–4(c) (as determined by the Secretary). 
‘‘(viii) Health information technology programs, 
including clinical decision support and other tools to facilitate data collection and ensure patient-centered, appropriate care. 
‘‘(ix) Such other care management and coordination 
programs as the Secretary determines appropriate. ‘‘(D) C
ONDUCT OF PROGRAM IN URBAN AND RURAL

ONDUCT OF PROGRAM IN URBAN AND RURAL  
AREAS .—An MA plan may conduct a program described 
in subparagraph (C) in a manner appropriate for an urban or rural area, as applicable. 
‘‘(E) R
EPORTING OF DATA .—Each Medicare Advantage 
organization shall provide to the Secretary the information needed to determine whether they are eligible for a care coordination and management performance bonus at a time and in a manner specified by the Secretary. 
‘‘(F) P

‘‘(F) P
ERIODIC AUDITING .—The Secretary shall provide 
for the annual auditing of programs described in subpara-graph (C) for which an MA plan receives a care coordination and management performance bonus under this paragraph. The Comptroller General shall monitor auditing activities conducted under this subparagraph. ‘‘(2) Q
UALITY PERFORMANCE BONUSES .— 
‘‘(A) Q UALITY BONUS .—For years beginning with 2014,

the Secretary shall, in addition to any other payment pro-vided under this part, make monthly payments, with respect to coverage of an individual under this part, to an MA plan that achieves at least a 3 star rating (or Effective date. Payments. Deadline. 
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124 STAT. 449 PUBLIC LAW 111–148—MAR. 23, 2010 
comparable rating) on a rating system described in 
subparagraph (C) in an amount equal to— 
‘‘(i) in the case of a plan that achieves a 3 star 
rating (or comparable rating) on such system 2 percent of the national monthly per capita cost for expenditures for individuals enrolled under the original medicare fee-for-service program for the year; and 
‘‘(ii) in the case of a plan that achieves a 4 or

5 star rating (or comparable rating on such system, 4 percent of such national monthly per capita cost for the year. ‘‘(B) I
MPROVED QUALITY BONUS .—For years beginning

with 2014, in the case of an MA plan that does not receive a quality bonus under subparagraph (A) and is an improved quality MA plan with respect to the year (as identified by the Secretary), the Secretary shall, in addition to any other payment provided under this part, make monthly payments, with respect to coverage of an individual under this part, to the MA plan in an amount equal to 1 percent of such national monthly per capita cost for the year. 
‘‘(C) U

‘‘(C) U
SE OF RATING SYSTEM .—For purposes of subpara-
graph (A), a rating system described in this paragraph is— 
‘‘(i) a rating system that uses up to 5 stars to 
rate clinical quality and enrollee satisfaction and performance at the Medicare Advantage contract or MA plan level; or 
‘‘(ii) such other system established by the Secretary 
that provides for the determination of a comparable quality performance rating to the rating system described in clause (i). ‘‘(D) D

ATA USED IN DETERMINING SCORE .— 
‘‘(i) I N GENERAL .—The rating of an MA plan under 
the rating system described in subparagraph (C) with respect to a year shall be based on based on the most recent data available. 
‘‘(ii) P
LANS THAT FAIL TO REPORT DATA .—An MA

‘‘(ii) P
LANS THAT FAIL TO REPORT DATA .—An MA 
plan which does not report data that enables the Sec-retary to rate the plan for purposes of subparagraph (A) or identify the plan for purposes of subparagraph (B) shall be counted, for purposes of such rating or identification, as having the lowest plan performance rating and the lowest percentage improvement, respec-tively. 
‘‘(3) Q
UALITY BONUS FOR NEW AND LOW ENROLLMENT MA  
PLANS .— 
‘‘(A) N EW MA PLANS .—For years beginning with 2014,

in the case of an MA plan that first submits a bid under section 1854(a)(1)(A) for 2012 or a subsequent year, only receives enrollments made during the coverage election periods described in section 1851(e), and is not able to receive a bonus under subparagraph (A) or (B) of paragraph (2) for the year, the Secretary shall, in addition to any other payment provided under this part, make monthly payments, with respect to coverage of an individual under this part, to the MA plan in an amount equal

this part, to the MA plan in an amount equal to 2 percent of national monthly per capita cost for expenditures for Effective date. Payments. Effective date.

Payments. 
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124 STAT. 450 PUBLIC LAW 111–148—MAR. 23, 2010 
individuals enrolled under the original medicare fee-for- 
service program for the year. In its fourth year of operation, the MA plan shall be paid in the same manner as other MA plans with comparable enrollment. 
‘‘(B) L
OW ENROLLMENT PLANS .—For years beginning

with 2014, in the case of an MA plan that has low enroll-ment (as defined by the Secretary) and would not otherwise be able to receive a bonus under subparagraph (A) or (B) of paragraph (2) or subparagraph (A) of this paragraph for the year (referred to in this subparagraph as a ‘low enrollment plan’), the Secretary shall use a regional or local mean of the rating of all MA plans in the region or local area, as determined appropriate by the Secretary, on measures used to determine whether MA

on measures used to determine whether MA plans are eligible for a quality or an improved quality bonus, as applicable, to determine whether the low enrollment plan is eligible for a bonus under such a subparagraph. ‘‘(4) R

ISK ADJUSTMENT .—The Secretary shall risk adjust 
a performance bonus under this subsection in the same manner as the Secretary risk adjusts beneficiary rebates described in section 1854(b)(1)(C). 
‘‘(5) N
OTIFICATION .—The Secretary, in the annual

announcement required under subsection (b)(1)(B) for 2014 and each succeeding year, shall notify the Medicare Advantage organization of any performance bonus (including a care coordination and management performance bonus under para-graph (1), a quality performance bonus under paragraph (2), and a quality bonus for new and low enrollment plans under paragraph (3)) that the organization will receive under this subsection with respect to the year. The Secretary shall provide for the publication

The Secretary shall provide for the publication of the information described in the previous sentence on the Internet website of the Centers for Medicare & Medicaid Services.’’

(B) C
ONFORMING AMENDMENT .—Section 1853(a)(1)(B) 
of the Social Security Act (42 U.S.C. 1395w–23(a)(1)(B)) is amended— 
(i) in clause (i), by inserting ‘‘and any performance 
bonus under subsection (n)’’ before the period at the end; and 
(ii) in clause (ii), by striking ‘‘(G)’’ and inserting 
‘‘(G), plus the amount (if any) of any performance bonus under subsection (n)’’. 
(2) A
PPLICATION OF PERFORMANCE BONUSES TO MA  
REGIONAL PLANS .—Section 1858 of the Social Security Act (42

U.S.C. 1395w–27a) is amended— 
(A) in subsection (f)(1), by striking ‘‘subsection (e)’’ 
and inserting ‘‘subsections (e) and (i)’’; and 
‘‘(i) A PPLICATION OF PERFORMANCE BONUSES TO MA R EGIONAL  
PLANS .—For years beginning with 2014, the Secretary shall apply

the performance bonuses under section 1853(n) (relating to bonuses for care coordination and management, quality performance, and new and low enrollment MA plans) to MA regional plans in a similar manner as such performance bonuses apply to MA plans under such subsection.’’. 
(g) G
RANDFATHERING SUPPLEMENTAL BENEFITS FOR CURRENT  
ENROLLEES AFTER IMPLEMENTATION OF COMPETITIVE BIDDING .— Effective date. Web posting. Effective date. 

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124 STAT. 451 PUBLIC LAW 111–148—MAR. 23, 2010 
Section 1853 of the Social Security Act (42 U.S.C. 1395w–23), as 
amended by subsection (f), is amended by adding at the end the following new subsection: 
‘‘(o) G
ENROLLES AFTER IMPLEMENTATION OF COMPETITIVE BIDDING .— 
‘‘(1) I DENTIFICATION OF AREAS .—The Secretary shall iden-

tify MA local areas in which, with respect to 2009, average bids submitted by an MA organization under section 1854(a) for MA local plans in the area are not greater than 75 percent of the adjusted average per capita cost for the year involved, determined under section 1876(a)(4), for the area for individuals who are not enrolled in an MA plan under this part for the year, but adjusted to exclude costs attributable to payments under section 1848(o), 1886(n), and 1886(h). 
‘‘(2) E

‘‘(2) E
LECTION TO PROVIDE REBATES TO GRANDFATHERED  
ENROLLEES .— 
‘‘(A) I N GENERAL .—For years beginning with 2012, each

Medicare Advantage organization offering an MA local plan in an area identified by the Secretary under paragraph (1) may elect to provide rebates to grandfathered enrollees under section 1854(b)(1)(C). In the case where an MA organization makes such an election, the monthly per capita dollar amount of such rebates shall not exceed the applicable amount for the year (as defined in subparagraph (B)). 
‘‘(B) A
PPLICABLE AMOUNT .—For purposes of this sub-

section, the term ‘applicable amount’ means— 
‘‘(i) for 2012, the monthly per capita dollar amount 
of such rebates provided to enrollees under the MA local plan with respect to 2011; and 
‘‘(ii) for a subsequent year, 95 percent of the 
amount determined under this subparagraph for the preceding year. 
‘‘(3) S
PECIAL RULES FOR PLANS IN IDENTIFIED AREAS .—Not-

withstanding any other provision of this part, the following shall apply with respect to each Medicare Advantage organiza-tion offering an MA local plan in an area identified by the Secretary under paragraph (1) that makes an election described in paragraph (2): 
‘‘(A) P
AYMENTS .—The amount of the monthly payment

AYMENTS .—The amount of the monthly payment 
under this section to the Medicare Advantage organization, with respect to coverage of a grandfathered enrollee under this part in the area for a month, shall be equal to— 
‘‘(i) for 2012 and 2013, the sum of— 
‘‘(I) the bid amount under section 1854(a) for 
the MA local plan; and 
‘‘(II) the applicable amount (as defined in para-
graph (2)(B)) for the MA local plan for the year. ‘‘(ii) for 2014 and subsequent years, the sum of—

‘‘(I) the MA competitive benchmark amount 
under subsection (j)(1)(A)(i) for the area for the month, adjusted, only to the extent the Secretary determines necessary, to account for induced utili-zation as a result of rebates provided to grand-fathered enrollees (except that such adjustment shall not exceed 0.5 percent of such MA competi-tive benchmark amount); and Applicability. Definition. Effective date.

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124 STAT. 452 PUBLIC LAW 111–148—MAR. 23, 2010 
‘‘(II) the applicable amount (as so defined) for 
the MA local plan for the year. 
‘‘(B) R EQUIREMENT TO SUBMIT BIDS UNDER COMPETITIVE  
BIDDING .—The Medicare Advantage organization shall

submit a single bid amount under section 1854(a) for the MA local plan. The Medicare Advantage organization shall remove from such bid amount any effects of induced demand for care that may result from the higher rebates available to grandfathered enrollees under this subsection. 
‘‘(C) N
ONAPPLICATION OF BONUS PAYMENTS AND ANY  
OTHER REBATES .—The Medicare Advantage organization

offering the MA local plan shall not be eligible for any bonus payment under subsection (n) or any rebate under this part (other than as provided under this subsection) with respect to grandfathered enrollees. 
‘‘(D) N
ONAPPLICATION OF UNIFORM BID AND PREMIUM  
AMOUNTS TO GRANDFATHERED ENROLLEES .—Section 1854(c) 
shall not apply with respect to the MA local plan. 
‘‘(E) N ONAPPLICATION OF LIMITATION ON APPLICATION  
OF PLAN REBATES TOWARD PAYMENT OF PART B PREMIUM .—

Notwithstanding clause (iii) of section 1854(b)(1)(C), in the case of a grandfathered enrollee, a rebate under such sec-tion may be used for the purpose described in clause (ii)(III) of such section. 
‘‘(F) R
ISK ADJUSTMENT .—The Secretary shall risk 
adjust rebates to grandfathered enrollees under this sub-section in the same manner as the Secretary risk adjusts beneficiary rebates described in section 1854(b)(1)(C). ‘‘(4) D
EFINITION OF GRANDFATHERED ENROLLEE .—In this

EFINITION OF GRANDFATHERED ENROLLEE .—In this 
subsection, the term ‘grandfathered enrollee’ means an indi-vidual who is enrolled (effective as of the date of enactment of this subsection) in an MA local plan in an area that is identified by the Secretary under paragraph (1).’’. (h) T
RANSITIONAL EXTRA BENEFITS .—Section 1853 of the Social 
Security Act (42 U.S.C. 1395w–23), as amended by subsections (f) and (g), is amended by adding at the end the following new subsection: 
‘‘(p) T

‘‘(p) T
RANSITIONAL EXTRA BENEFITS .— 
‘‘(1) I N GENERAL .—For years beginning with 2012, the Sec-
retary shall provide transitional rebates under section 1854(b)(1)(C) for the provision of extra benefits (as specified by the Secretary) to enrollees described in paragraph (2). 
‘‘(2) E
NROLLEES DESCRIBED .—An enrollee described in this 
paragraph is an individual who— 
‘‘(A) enrolls in an MA local plan in an applicable area; 
and 
‘‘(B) experiences a significant reduction in extra bene-

fits described in clause (ii) of section 1854(b)(1)(C) as a result of competitive bidding under this part (as determined by the Secretary). ‘‘(3) A
PPLICABLE AREAS .—In this subsection, the term 
‘applicable area’ means the following: 
‘‘(A) The 2 largest metropolitan statistical areas, if 
the Secretary determines that the total amount of such extra benefits for each enrollee for the month in those areas is greater than $100. 
‘‘(B) A county where— Definition. Effective date.

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124 STAT. 453 PUBLIC LAW 111–148—MAR. 23, 2010 
‘‘(i) the MA area-specific non-drug monthly bench-
mark amount for a month in 2011 is equal to the legacy urban floor amount (as described in subsection (c)(1)(B)(iii)), as determined by the Secretary for the area for 2011; 
‘‘(ii) the percentage of Medicare Advantage eligible 
beneficiaries in the county who are enrolled in an MA plan for 2009 is greater than 30 percent (as deter-mined by the Secretary); and

‘‘(iii) average bids submitted by an MA organiza-
tion under section 1854(a) for MA local plans in the county for 2011 are not greater than the adjusted average per capita cost for the year involved, deter-mined under section 1876(a)(4), for the county for individuals who are not enrolled in an MA plan under this part for the year, but adjusted to exclude costs attributable to payments under section 1848(o), 1886(n), and 1886(h). ‘‘(C) If the Secretary determines appropriate, a county

contiguous to an area or county described in subparagraph (A) or (B), respectively. ‘‘(4) R
EVIEW OF PLAN BIDS .—In the case of a bid submitted 
by an MA organization under section 1854(a) for an MA local plan in an applicable area, the Secretary shall review such bid in order to ensure that extra benefits (as specified by the Secretary) are provided to enrollees described in paragraph (2). 
‘‘(5) F
UNDING .—The Secretary shall provide for the transfer

from the Federal Hospital Insurance Trust Fund under section 1817 and the Federal Supplementary Medical Insurance Trust Fund established under section 1841, in such proportion as the Secretary determines appropriate, of an amount not to exceed $5,000,000,000 for the period of fiscal years 2012 through 2019 for the purpose of providing transitional rebates under section 1854(b)(1)(C) for the provision of extra benefits under this subsection.’’. (i) N

ONAPPLICATION OF COMPETITIVE BIDDING AND RELATED  
PROVISIONS AND CLARIFICATION OF MA P AYMENT AREA FOR PACE 
PROGRAMS .— 
(1) N ONAPPLICATION OF COMPETITIVE BIDDING AND RELATED  
PROVISIONS FOR PACE PROGRAMS .—Section 1894 of the Social 
Security Act (42 U.S.C. 1395eee) is amended— 
(A) by redesignating subsections (h) and (i) as sub-
sections (i) and (j), respectively; 
(B) by inserting after subsection (g) the following new 
subsection:

subsection: 
‘‘(h) N ONAPPLICATION OF COMPETITIVE BIDDING AND RELATED  
PROVISIONS UNDER PART C.—With respect to a PACE program 
under this section, the following provisions (and regulations relating to such provisions) shall not apply: 
‘‘(1) Section 1853(j)(1)(A)(i), relating to MA area-specific 
non-drug monthly benchmark amount being based on competi-tive bids. 
‘‘(2) Section 1853(d)(5), relating to the establishment of 
MA local plan service areas.

MA local plan service areas. 
‘‘(3) Section 1853(n), relating to the payment of performance 
bonuses. Determination. 
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124 STAT. 454 PUBLIC LAW 111–148—MAR. 23, 2010 
‘‘(4) Section 1853(o), relating to grandfathering supple-
mental benefits for current enrollees after implementation of competitive bidding. 
‘‘(5) Section 1853(p), relating to transitional extra benefits.’’. (2) S
PECIAL RULE FOR MA PAYMENT AREA FOR PACE PRO -
GRAMS .—Section 1853(d) of the Social Security Act (42 U.S.C. 
1395w–23(d)), as amended by subsection (e), is amended by adding at the end the following new paragraph: 
‘‘(6) S

‘‘(6) S
GRAMS .—For years beginning with 2012, in the case of a PACE 
program under section 1894, the MA payment area shall be the MA local area (as defined in paragraph (2)).’’. 
SEC. 3202. BENEFIT PROTECTION AND SIMPLIFICATION. 
(a) L IMITATION ON VARIATION OF COST SHARING FOR CERTAIN  
BENEFITS .— 
(1) I N GENERAL .—Section 1852(a)(1)(B) of the Social Secu-
rity Act (42 U.S.C. 1395w–22(a)(1)(B)) is amended—

(A) in clause (i), by inserting ‘‘, subject to clause (iii),’’ 
after ‘‘and B or’’; and 
(B) by adding at the end the following new clauses: 
‘‘(iii) L IMITATION ON VARIATION OF COST SHARING  
FOR CERTAIN BENEFITS .—Subject to clause (v), cost- 
sharing for services described in clause (iv) shall not exceed the cost-sharing required for those services under parts A and B. 
‘‘(iv) S
ERVICES DESCRIBED .—The following services 
are described in this clause:

are described in this clause: 
‘‘(I) Chemotherapy administration services. ‘‘(II) Renal dialysis services (as defined in sec-
tion 1881(b)(14)(B)). 
‘‘(III) Skilled nursing care. ‘‘(IV) Such other services that the Secretary 
determines appropriate (including services that the Secretary determines require a high level of predictability and transparency for beneficiaries). ‘‘(v) E
XCEPTION .—In the case of services described

XCEPTION .—In the case of services described 
in clause (iv) for which there is no cost-sharing required under parts A and B, cost-sharing may be required for those services in accordance with clause (i).’’. 
(2) E
section shall apply to plan years beginning on or after January 1, 2011. (b) A
PPLICATION OF REBATES , PERFORMANCE BONUSES , AND 
PREMIUMS .— 
(1) A PPLICATION OF REBATES .—Section 1854(b)(1)(C) of the

Social Security Act (42 U.S.C. 1395w–24(b)(1)(C)) is amended— 
(A) in clause (ii), by striking ‘‘ REBATE .—A rebate’’ and 
inserting ‘‘ REBATE FOR PLAN YEARS BEFORE 2012 .—For plan 
years before 2012, a rebate’’; 
(B) by redesignating clauses (iii) and (iv) as clauses 
(iv) and (v); and 
(C) by inserting after clause (ii) the following new 
clause: 
‘‘(iii) F ORM OF REBATE FOR PLAN YEAR 2012 AND  
SUBSEQUENT PLAN YEARS .—For plan years beginning

SUBSEQUENT PLAN YEARS .—For plan years beginning 
on or after January 1, 2012, a rebate required under Effective date. 42 USC 
1395w–22 note. Effective date. 
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124 STAT. 455 PUBLIC LAW 111–148—MAR. 23, 2010 
this subparagraph may not be used for the purpose 
described in clause (ii)(III) and shall be provided through the application of the amount of the rebate in the following priority order: 
‘‘(I) First, to use the most significant share

to meaningfully reduce cost-sharing otherwise applicable for benefits under the original medicare fee-for-service program under parts A and B and for qualified prescription drug coverage under part D, including the reduction of any deductibles, co-payments, and maximum limitations on out-of- pocket expenses otherwise applicable. Any reduc-tion of maximum limitations on out-of-pocket expenses under the preceding sentence shall apply to all benefits under the original medicare fee- for-service

under the original medicare fee- for-service program option. The Secretary may pro-vide guidance on meaningfully reducing cost- sharing under this subclause, except that such guidance may not require a particular amount of cost-sharing or reduction in cost-sharing.

‘‘(II) Second, to use the next most significant 
share to meaningfully provide coverage of preven-tive and wellness health care benefits (as defined by the Secretary) which are not benefits under the original medicare fee-for-service program, such as smoking cessation, a free flu shot, and an annual physical examination. 
‘‘(III) Third, to use the remaining share to

‘‘(III) Third, to use the remaining share to 
meaningfully provide coverage of other health care benefits which are not benefits under the original medicare fee-for-service program, such as eye examinations and dental coverage, and are not benefits described in subclause (II).’’. 
(2) A
PPLICATION OF PERFORMANCE BONUSES .—Section 
1853(n) of the Social Security Act, as added by section 3201(f), is amended by adding at the end the following new paragraph: 
‘‘(6) A

‘‘(6) A
PPLICATION OF PERFORMANCE BONUSES .—For plan 
years beginning on or after January 1, 2014, any performance bonus paid to an MA plan under this subsection shall be 
used for the purposes, and in the priority order, described in subclauses (I) through (III) of section 1854(b)(1)(C)(iii).’’. 
(3) A
PPLICATION OF MA MONTHLY SUPPLEMENTARY BENE -
FICIARY PREMIUM .—Section 1854(b)(2)(C) of the Social Security 
Act (42 U.S.C. 1395w–24(b)(2)(C)) is amended—

Act (42 U.S.C. 1395w–24(b)(2)(C)) is amended— 
(A) by striking ‘‘P REMIUM .—The term’’ and inserting 
‘‘PREMIUM .— 
‘‘(i) I N GENERAL .—The term’’; and 
‘‘(ii) A PPLICATION OF MA MONTHLY SUPPLEMENTARY  
BENEFICIARY PREMIUM .—For plan years beginning on

or after January 1, 2012, any MA monthly supple-mentary beneficiary premium charged to an individual enrolled in an MA plan shall be used for the purposes, and in the priority order, described in subclauses (I) through (III) of paragraph (1)(C)(iii).’’. Effective date. Effective date. Applicability. 
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124 STAT. 456 PUBLIC LAW 111–148—MAR. 23, 2010 
SEC. 3203. APPLICATION OF CODING INTENSITY ADJUSTMENT DURING 
MA PAYMENT TRANSITION. 
Section 1853(a)(1)(C) of the Social Security Act (42 U.S.C. 
1395w–23(a)(1)(C)) is amended by adding at the end the following new clause: 
‘‘(iii) A
PPLICATION OF CODING INTENSITY ADJUST -
MENT FOR 2011 AND SUBSEQUENT YEARS .— 
‘‘(I) R EQUIREMENT TO APPLY IN 2011 THROUGH  
2013.—In order to ensure payment accuracy, the

2013.—In order to ensure payment accuracy, the 
Secretary shall conduct an analysis of the dif-ferences described in clause (ii)(I). The Secretary shall ensure that the results of such analysis are incorporated into the risk scores for 2011, 2012, and 2013. 
‘‘(II) A
UTHORITY TO APPLY IN 2014 AND SUBSE -
QUENT YEARS .—The Secretary may, as appropriate, 
incorporate the results of such analysis into the risk scores for 2014 and subsequent years.’’.

SEC. 3204. SIMPLIFICATION OF ANNUAL BENEFICIARY ELECTION 
PERIODS. 
(a) A NNUAL 45-DAY PERIOD FOR DISENROLLMENT FROM MA 
PLANS TOELECT TORECEIVE BENEFITS UNDER THE ORIGINAL MEDI-
CARE FEE-FOR-SERVICE PROGRAM .— 
(1) I N GENERAL .—Section 1851(e)(2)(C) of the Social Secu-
rity Act (42 U.S.C. 1395w–1(e)(2)(C)) is amended to read as follows: 
‘‘(C) A
NNUAL 45 -DAY PERIOD FOR DISENROLLMENT FROM  
MA PLANS TO ELECT TO RECEIVE BENEFITS UNDER THE

MA PLANS TO ELECT TO RECEIVE BENEFITS UNDER THE  
ORIGINAL MEDICARE FEE -FOR-SERVICE PROGRAM .—Subject to

subparagraph (D), at any time during the first 45 days of a year (beginning with 2011), an individual who is enrolled in a Medicare Advantage plan may change the election under subsection (a)(1), but only with respect to coverage under the original medicare fee-for-service pro-gram under parts A and B, and may elect qualified prescription drug coverage in accordance with section 1860D–1.’’. (2) E
FFECTIVE DATE .—The amendment made by paragraph

(1) shall apply with respect to 2011 and succeeding years. (b) T
IMING OF THE ANNUAL , COORDINATED ELECTION PERIOD  
UNDER PARTS C AND D.—Section 1851(e)(3)(B) of the Social Security 
Act (42 U.S.C. 1395w–1(e)(3)(B)) is amended— 
(1) in clause (iii), by striking ‘‘and’’ at the end; (2) in clause (iv)— 
(A) by striking ‘‘and succeeding years’’ and inserting 
‘‘, 2008, 2009, and 2010’’; and 
(B) by striking the period at the end and inserting

‘‘; and’’; and (3) by adding at the end the following new clause: 
‘‘(v) with respect to 2012 and succeeding years, 
the period beginning on October 15 and ending on December 7 of the year before such year.’’. 42 USC 
1395w–21. 42 USC 
1395w–21 note. Effective date. 42 USC 
1395w–21. 
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124 STAT. 457 PUBLIC LAW 111–148—MAR. 23, 2010 
SEC. 3205. EXTENSION FOR SPECIALIZED MA PLANS FOR SPECIAL 
NEEDS INDIVIDUALS. 
(a) E XTENSION OF SNP A UTHORITY .—Section 1859(f)(1) of the 
Social Security Act (42 U.S.C. 1395w–28(f)(1)), as amended by sec-tion 164(a) of the Medicare Improvements for Patients and Pro-viders Act of 2008 (Public Law 110–275), is amended by striking ‘‘2011’’ and inserting ‘‘2014’’. 
(b) A
UTHORITY TOAPPLY FRAILTY ADJUSTMENT UNDER PACE

UTHORITY TOAPPLY FRAILTY ADJUSTMENT UNDER PACE 
PAYMENT RULES .—Section 1853(a)(1)(B) of the Social Security Act 
(42 U.S.C. 1395w–23(a)(1)(B)) is amended by adding at the end the following new clause: 
‘‘(iv) A
UTHORITY TO APPLY FRAILTY ADJUSTMENT  
UNDER PACE PAYMENT RULES FOR CERTAIN SPECIALIZED  
MA PLANS FOR SPECIAL NEEDS INDIVIDUALS .— 
‘‘(I) I N GENERAL .—Notwithstanding the pre-

ceding provisions of this paragraph, for plan year 2011 and subsequent plan years, in the case of a plan described in subclause (II), the Secretary may apply the payment rules under section 1894(d) (other than paragraph (3) of such section) rather than the payment rules that would otherwise apply 
under this part, but only to the extent necessary to reflect the costs of treating high concentrations of frail individuals. 
‘‘(II) P

‘‘(II) P
LAN DESCRIBED .—A plan described in 
this subclause is a specialized MA plan for special needs individuals described in section 1859(b)(6)(B)(ii) that is fully integrated with capitated contracts with States for Medicaid bene-fits, including long-term care, and that have similar average levels of frailty (as determined by the Secretary) as the PACE program.’’. 
(c) T
RANSITION AND EXCEPTION REGARDING RESTRICTION ON  
ENROLLMENT .—Section 1859(f) of the Social Security Act (42 U.S.C.

1395w–28(f)) is amended by adding at the end the following new paragraph: 
‘‘(6) T
RANSITION AND EXCEPTION REGARDING RESTRICTION  
ON ENROLLMENT .— 
‘‘(A) I N GENERAL .—Subject to subparagraph (C), the 
Secretary shall establish procedures for the transition of applicable individuals to— 
‘‘(i) a Medicare Advantage plan that is not a 
specialized MA plan for special needs individuals (as defined in subsection (b)(6)); or 
‘‘(ii) the original medicare fee-for-service program

under parts A and B. ‘‘(B) A
PPLICABLE INDIVIDUALS .—For purposes of clause 
(i), the term ‘applicable individual’ means an individual who— 
‘‘(i) is enrolled under a specialized MA plan for 
special needs individuals (as defined in subsection (b)(6)); and 
‘‘(ii) is not within the 1 or more of the classes 
of special needs individuals to which enrollment under the plan is restricted to. ‘‘(C) E
XCEPTION .—The Secretary shall provide for an

XCEPTION .—The Secretary shall provide for an 
exception to the transition described in subparagraph (A) Definition. Procedures. 
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124 STAT. 458 PUBLIC LAW 111–148—MAR. 23, 2010 
for a limited period of time for individuals enrolled under 
a specialized MA plan for special needs individuals described in subsection (b)(6)(B)(ii) who are no longer eligible for medical assistance under title XIX. 
‘‘(D) T
IMELINE FOR INITIAL TRANSITION .—The Secretary

IMELINE FOR INITIAL TRANSITION .—The Secretary 
shall ensure that applicable individuals enrolled in a specialized MA plan for special needs individuals (as defined in subsection (b)(6)) prior to January 1, 2010, are transitioned to a plan or the program described in subpara-graph (A) by not later than January 1, 2013.’’. 
(d) T
EMPORARY EXTENSION OF AUTHORITY TOOPERATE BUT  
NOSERVICE AREA EXPANSION FOR DUAL SPECIAL NEEDS PLANS  
THAT DONOTMEET CERTAIN REQUIREMENTS .—Section 164(c)(2)

of the Medicare Improvements for Patients and Providers Act of 2008 (Public Law 110–275) is amended by striking ‘‘December 31, 2010’’ and inserting ‘‘December 31, 2012’’. 
(e) A
UTHORITY TOREQUIRE SPECIAL NEEDS PLANS BENCQA 
APPROVED .—Section 1859(f) of the Social Security Act (42 U.S.C. 
1395w–28(f)), as amended by subsections (a) and (c), is amended— 
(1) in paragraph (2), by adding at the end the following 
‘‘(C) If applicable, the plan meets the requirement

described in paragraph (7).’’; (2) in paragraph (3), by adding at the end the following 
‘‘(E) If applicable, the plan meets the requirement 
described in paragraph (7).’’; (3) in paragraph (4), by adding at the end the following 
‘‘(C) If applicable, the plan meets the requirement 
described in paragraph (7).’’; and (4) by adding at the end the following new paragraph: ‘‘(7) A
UTHORITY TO REQUIRE SPECIAL NEEDS PLANS BE NCQA

UTHORITY TO REQUIRE SPECIAL NEEDS PLANS BE NCQA  
APPROVED .—For 2012 and subsequent years, the Secretary shall 
require that a Medicare Advantage organization offering a specialized MA plan for special needs individuals be approved by the National Committee for Quality Assurance (based on standards established by the Secretary).’’. (f) R
ISKADJUSTMENT .—Section 1853(a)(1)(C) of the Social Secu-
rity Act (42 U.S.C. 1395i–23(a)(1)(C)) is amended by adding at the end the following new clause:

‘‘(iii) I
MPROVEMENTS TO RISK ADJUSTMENT FOR SPE -
CIAL NEEDS INDIVIDUALS WITH CHRONIC HEALTH CONDI -
TIONS .— 
‘‘(I) I N GENERAL .—For 2011 and subsequent

years, for purposes of the adjustment under clause (i) with respect to individuals described in sub-clause (II), the Secretary shall use a risk score that reflects the known underlying risk profile and chronic health status of similar individuals. Such risk score shall be used instead of the default risk score for new enrollees in Medicare Advantage plans that are not specialized MA plans for special needs individuals (as defined in section 1859(b)(6)). 
‘‘(II) I

‘‘(II) I
NDIVIDUALS DESCRIBED .—An individual 
described in this subclause is a special needs indi-vidual described in subsection (b)(6)(B)(iii) who 42 USC 1395w–23. Standards. 42 USC 
1395w–28 note. Deadline. 
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124 STAT. 459 PUBLIC LAW 111–148—MAR. 23, 2010 
enrolls in a specialized MA plan for special needs 
individuals on or after January 1, 2011. 
‘‘(III) E VALUATION .—For 2011 and periodically

thereafter, the Secretary shall evaluate and revise the risk adjustment system under this subpara-graph in order to, as accurately as possible, account for higher medical and care coordination costs associated with frailty, individuals with mul-tiple, comorbid chronic conditions, and individuals with a diagnosis of mental illness, and also to account for costs that may be associated with higher concentrations of beneficiaries with those conditions. 
‘‘(IV) P
UBLICATION OF EVALUATION AND REVI -

‘‘(IV) P
SIONS .—The Secretary shall publish, as part of 
an announcement under subsection (b), a descrip-tion of any evaluation conducted under subclause (III) during the preceding year and any revisions made under such subclause as a result of such evaluation.’’. 
(g) T
ECHNICAL CORRECTION .—Section 1859(f)(5) of the Social

Security Act (42 U.S.C. 1395w–28(f)(5)) is amended, in the matter preceding subparagraph (A), by striking ‘‘described in subsection (b)(6)(B)(i)’’. 
SEC. 3206. EXTENSION OF REASONABLE COST CONTRACTS. 
Section 1876(h)(5)(C)(ii) of the Social Security Act (42 U.S.C. 
1395mm(h)(5)(C)(ii)) is amended, in the matter preceding subclause (I), by striking ‘‘January 1, 2010’’ and inserting ‘‘January 1, 2013’’. 
SEC. 3207. TECHNICAL CORRECTION TO MA PRIVATE FEE-FOR- 
SERVICE PLANS.

SERVICE PLANS. 
For plan year 2011 and subsequent plan years, to the extent

that the Secretary of Health and Human Services is applying the 2008 service area extension waiver policy (as modified in the April 11, 2008, Centers for Medicare & Medicaid Services’ memorandum with the subject ‘‘2009 Employer Group Waiver-Modification of the 2008 Service Area Extension Waiver Granted to Certain MA Local Coordinated Care Plans’’) to Medicare Advantage coordinated care plans, the Secretary shall extend the application of such waiver policy to employers who contract directly

waiver policy to employers who contract directly with the Secretary as a Medicare Advantage private fee-for-service plan under section 1857(i)(2) of the Social Security Act (42 U.S.C. 1395w–27(i)(2)) and that had enrollment as of October 1, 2009.

SEC. 3208. MAKING SENIOR HOUSING FACILITY DEMONSTRATION 
PERMANENT. 
(a) I NGENERAL .—Section 1859 of the Social Security Act (42 
U.S.C. 1395w–28) is amended by adding at the end the following new subsection: 
‘‘(g) S
PECIAL RULES FOR SENIOR HOUSING FACILITY PLANS .— 
‘‘(1) I N GENERAL .—In the case of a Medicare Advantage

senior housing facility plan described in paragraph (2), notwith-standing any other provision of this part to the contrary and in accordance with regulations of the Secretary, the service area of such plan may be limited to a senior housing facility in a geographic area. Applicability. 42 USC 
1395w–27 note. 
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124 STAT. 460 PUBLIC LAW 111–148—MAR. 23, 2010 
‘‘(2) M EDICARE ADVANTAGE SENIOR HOUSING FACILITY PLAN  
DESCRIBED .—For purposes of this subsection, a Medicare 
Advantage senior housing facility plan is a Medicare Advantage plan that— 
‘‘(A) restricts enrollment of individuals under this part 
to individuals who reside in a continuing care retirement community (as defined in section 1852(l)(4)(B)); 
‘‘(B) provides primary care services onsite and has

a ratio of accessible physicians to beneficiaries that the Secretary determines is adequate; 
‘‘(C) provides transportation services for beneficiaries 
to specialty providers outside of the facility; and 
‘‘(D) has participated (as of December 31, 2009) in 
a demonstration project established by the Secretary under which such a plan was offered for not less than 1 year.’’. 
(b) E
FFECTIVE DATE.—The amendment made by this section

shall take effect on January 1, 2010, and shall apply to plan years beginning on or after such date. 
SEC. 3209. AUTHORITY TO DENY PLAN BIDS. 
(a) I NGENERAL .—Section 1854(a)(5) of the Social Security Act 
(42 U.S.C. 1395w–24(a)(5)) is amended by adding at the end the following new subparagraph: 
‘‘(C) R
EJECTION OF BIDS .— 
‘‘(i) I N GENERAL .—Nothing in this section shall be

construed as requiring the Secretary to accept any or every bid submitted by an MA organization under this subsection. 
‘‘(ii) A
UTHORITY TO DENY BIDS THAT PROPOSE  
SIGNIFICANT INCREASES IN COST SHARING OR DECREASES  
IN BENEFITS .—The Secretary may deny a bid submitted 
by an MA organization for an MA plan if it proposes significant increases in cost sharing or decreases in benefits offered under the plan.’’. 
(b) A
PPLICATION UNDER PARTD.—Section 1860D–11(d) of such

Act (42 U.S.C. 1395w–111(d)) is amended by adding at the end the following new paragraph: 
‘‘(3) R
EJECTION OF BIDS .—Paragraph (5)(C) of section 
1854(a) shall apply with respect to bids submitted by a PDP sponsor under subsection (b) in the same manner as such paragraph applies to bids submitted by an MA organization under such section 1854(a).’’. (c) E
shall apply to bids submitted for contract years beginning on or after January 1, 2011.

SEC. 3210. DEVELOPMENT OF NEW STANDARDS FOR CERTAIN 
MEDIGAP PLANS. 
(a) I NGENERAL .—Section 1882 of the Social Security Act (42 
U.S.C. 1395ss) is amended by adding at the end the following new subsection: 
‘‘(y) D
EVELOPMENT OF NEWSTANDARDS FOR CERTAIN MEDICARE  
SUPPLEMENTAL POLICIES .— 
‘‘(1) I N GENERAL .—The Secretary shall request the National

Association of Insurance Commissioners to review and revise the standards for benefit packages described in paragraph (2) under subsection (p)(1), to otherwise update standards to include requirements for nominal cost sharing to encourage 42 USC 1395w–24 note. Applicability. 42 USC 
1395w–28 note. 
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124 STAT. 461 PUBLIC LAW 111–148—MAR. 23, 2010 
the use of appropriate physicians’ services under part B. Such

revisions shall be based on evidence published in peer-reviewed journals or current examples used by integrated delivery sys-tems and made consistent with the rules applicable under subsection (p)(1)(E) with the reference to the ‘1991 NAIC Model Regulation’ deemed a reference to the NAIC Model Regulation as published in the Federal Register on December 4, 1998, and as subsequently updated by the National Association of Insurance Commissioners to reflect previous changes in law and the reference

reflect previous changes in law and the reference to ‘date of enactment of this subsection’ deemed a reference to the date of enactment of the Patient Protection and Affordable Care Act. To the extent practicable, such revision shall provide for the implementation of revised standards for benefit packages as of January 1, 2015.

‘‘(2) B
ENEFIT PACKAGES DESCRIBED .—The benefit packages 
described in this paragraph are benefit packages classified as ‘C’ and ‘F’.’’. (b) C
ONFORMING AMENDMENT .—Section 1882(o)(1) of the Social 
Security Act (42 U.S.C. 1395ss(o)(1)) is amended by striking ‘‘, and (w)’’ and inserting ‘‘(w), and (y)’’. 
Subtitle D—Medicare Part D Improve-
ments for Prescription Drug Plans and MA–PD Plans 
SEC. 3301. MEDICARE COVERAGE GAP DISCOUNT PROGRAM. 
(a) C ONDITION FOR COVERAGE OF DRUGS UNDER PART D.—

Part D of Title XVIII of the Social Security Act (42 U.S.C. 1395w– 101 et seq.), is amended by adding at the end the following new section: 
‘‘
CONDITION FOR COVERAGE OF DRUGS UNDER THIS PART  
‘‘SEC. 1860D–43. (a) I NGENERAL .—In order for coverage to 
be available under this part for covered part D drugs (as defined in section 1860D–2(e)) of a manufacturer, the manufacturer must— 
‘‘(1) participate in the Medicare coverage gap discount pro-
gram under section 1860D–14A;

gram under section 1860D–14A; 
‘‘(2) have entered into and have in effect an agreement 
described in subsection (b) of such section with the Secretary; and 
‘‘(3) 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. ‘‘(b) E
FFECTIVE DATE.—Subsection (a) shall apply to covered

part D drugs dispensed under this part on or after July 1, 2010. 
‘‘(c) A UTHORIZING COVERAGE FOR DRUGS NOTCOVERED UNDER  
AGREEMENTS .—Subsection (a) shall not apply to the dispensing 
of a covered part D drug if— 
‘‘(1) the Secretary has made a determination that the avail-
ability of the drug is essential to the health of beneficiaries under this part; or Determination. Contracts. 
42 USC 1395w–153. Effective date.

42 USC 1395w–153. Effective date. 
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124 STAT. 462 PUBLIC LAW 111–148—MAR. 23, 2010 
‘‘(2) the Secretary determines that in the period beginning 
on July 1, 2010, and ending on December 31, 2010, there were extenuating circumstances. ‘‘(d) D
EFINITION OF MANUFACTURER .—In this section, the term 
‘manufacturer’ has the meaning given such term in section 1860D– 14A(g)(5).’’. 
(b) M
EDICARE COVERAGE GAPDISCOUNT PROGRAM .—Part D

EDICARE COVERAGE GAPDISCOUNT PROGRAM .—Part D 
of title XVIII of the Social Security Act (42 U.S.C. 1395w–101) is amended by inserting after section 1860D–14 the following new 
section: 
‘‘
MEDICARE COVERAGE GAP DISCOUNT PROGRAM  
‘‘SEC. 1860D–14A. (a) E STABLISHMENT .—The Secretary shall

establish a Medicare coverage gap discount program (in this section referred to as the ‘program’) by not later than July 1, 2010. Under the program, the Secretary shall enter into agreements described in subsection (b) with manufacturers and provide for the perform-ance of the duties described in subsection (c)(1). The Secretary shall establish a model agreement for use under the program by not later than April 1, 2010, in consultation with manufacturers, and allow for comment on such model

‘‘(b) T
ERMS OF AGREEMENT .— 
‘‘(1) I N GENERAL .— 
‘‘(A) A GREEMENT .—An agreement under this section 
shall require the manufacturer to provide applicable bene-ficiaries access to discounted prices for applicable drugs of the manufacturer. 
‘‘(B) P
ROVISION OF DISCOUNTED PRICES AT THE POINT - 
OF-SALE .—Except as provided in subsection (c)(1)(A)(iii),

such discounted prices 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. 
‘‘(C) T
IMING OF AGREEMENT .— 
‘‘(i) S PECIAL RULE FOR 2010 AND 2011 .—In order 
for an agreement with a manufacturer to be in effect under this section with respect to the period beginning on July 1, 2010, and ending on December 31, 2011, the manufacturer shall enter into such agreement not later than May 1, 2010. 
‘‘(ii) 2012

‘‘(ii) 2012 
AND SUBSEQUENT YEARS .—In order for 
an agreement with a manufacturer to be in effect under this section with respect to plan year 2012 or a subse-quent plan year, the manufacturer shall enter into such agreement (or such agreement shall be renewed under paragraph (4)(A)) not later than January 30 of the preceding year. 
‘‘(2) P
ROVISION OF APPROPRIATE DATA .—Each manufacturer

ROVISION 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) C
OMPLIANCE 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 sub-section (d)(3), as applicable, for purposes of administering the Determination. Deadlines. Contracts. Deadlines. 
42 USC 1395w–114a. Determination. 
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124 STAT. 463 PUBLIC LAW 111–148—MAR. 23, 2010 
program, including any determination under clause (i) of sub-
section (c)(1)(A) or procedures established under such sub-section (c)(1)(A). 
‘‘(4) L
ENGTH OF AGREEMENT .— 
‘‘(A) I N GENERAL .—An agreement under this section 
shall be effective for an initial period of not less than 18 months and shall be automatically renewed for a period of not less than 1 year unless terminated under subpara-graph (B). 
‘‘(B) T
ERMINATION .—

‘‘(B) T
‘‘(i) B Y THE SECRETARY .—The Secretary may pro-

vide 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

of the termination with sufficient time for such effective date to be repealed if the Sec-retary determines appropriate.

‘‘(ii) B
Y 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) E
FFECTIVENESS OF TERMINATION .—Any termi-

nation under this subparagraph shall not affect dis-counts for applicable drugs of the manufacturer that are due under the agreement before the effective date of its termination. 
‘‘(iv) N
OTICE 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 termi-nation. 
‘‘(c) D

‘‘(c) D
UTIES DESCRIBED AND SPECIAL RULE FOR SUPPLEMENTAL  
‘‘(1) D UTIES DESCRIBED .—The duties described in this sub-
section are the following: 
‘‘(A) A DMINISTRATION OF PROGRAM .—Administering the 
program, including— 
‘‘(i) the determination of the amount of the dis-
counted price of an applicable drug of a manufacturer; 
‘‘(ii) except as provided in clause (iii), the establish-

ment 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; 
‘‘(iii) in the case where, during the period beginning 
on July 1, 2010, and ending on December 31, 2011, Determination. Procedures. Deadline. Notice. Time period.

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124 STAT. 464 PUBLIC LAW 111–148—MAR. 23, 2010 
it is not practicable to provide such discounted prices 
at the point-of-sale (as described in clause (ii)), the establishment of procedures to provide such discounted prices as soon as practicable after the point-of-sale; 
‘‘(iv) the establishment of procedures to ensure

‘‘(iv) 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; ‘‘(v) 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 pro-grams that provide coverage or financial assistance for the purchase or provision of prescription drug cov-erage on behalf of applicable beneficiaries as the Sec-retary may specify; 
‘‘(vi) the establishment of procedures to implement 
the special rule for supplemental benefits under para-graph (2); and

‘‘(vii) providing a reasonable dispute resolution 
mechanism to resolve disagreements between manufac-turers, applicable beneficiaries, and the third party with a contract under subsection (d)(3). ‘‘(B) M
ONITORING COMPLIANCE .— 
‘‘(i) I N GENERAL .—The Secretary shall monitor 
compliance by a manufacturer with the terms of an agreement under this section. 
‘‘(ii) N
OTIFICATION .—If a third party with a con-

tract under subsection (d)(3) determines that the manufacturer is not in compliance with such agree-ment, the third party shall notify the Secretary of such noncompliance for appropriate enforcement under subsection (e). ‘‘(C) C
OLLECTION OF DATA FROM PRESCRIPTION DRUG  
PLANS AND MA –PD PLANS .—The Secretary may collect appro-

priate 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. ‘‘(2) S
PECIAL RULE FOR SUPPLEMENTAL BENEFITS .—For plan

year 2010 and each subsequent plan year, in the case where an applicable beneficiary has supplemental benefits with respect to applicable drugs under the prescription drug plan or MA–PD plan that the applicable beneficiary is enrolled in, the applicable beneficiary shall not be provided a discounted price for an applicable drug under this section until after such supplemental benefits have been applied with respect to the applicable drug. ‘‘(d) A
DMINISTRATION .—

‘‘(1) I N 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)(1). 
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124 STAT. 465 PUBLIC LAW 111–148—MAR. 23, 2010 
‘‘(2) L IMITATION .— 
‘‘(A) I N GENERAL .—Subject to subparagraph (B), in pro-
viding for such implementation, the Secretary shall not receive or distribute any funds of a manufacturer under the program. 
‘‘(B) E
XCEPTION .—The limitation under subparagraph

XCEPTION .—The limitation under subparagraph 
(A) shall not apply to the Secretary with respect to drugs dispensed during the period beginning on July 1, 2010, and ending on December 31, 2010, but only if the Secretary determines that the exception to such limitation under this subparagraph is necessary in order for the Secretary to begin implementation of this section and provide applicable beneficiaries timely access to discounted prices during such period. ‘‘(3) C

ONTRACT 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 Sec-
retary, 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 manu-
facturers, consistent with the agreement with the manufac-turer 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) P
ERFORMANCE 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) I

‘‘(5) I
MPLEMENTATION .—The Secretary may implement the 
program under this section by program instruction or otherwise. 
‘‘(6) A DMINISTRATION .—Chapter 35 of title 44, United States 
Code, shall not apply to the program under this section. ‘‘(e) E
NFORCEMENT .— 
‘‘(1) A UDITS .—Each manufacturer with an agreement in 
effect under this section shall be subject to periodic audit by the Secretary. 
‘‘(2) C
IVIL MONEY PENALTY .— 
‘‘(A) I N 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— Determination. Time period. 
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124 STAT. 466 PUBLIC LAW 111–148—MAR. 23, 2010 
‘‘(i) the amount that the manufacturer would have 
paid with respect to such discounts under the agree-ment, which will then be used to pay the discounts which the manufacturer had failed to provide; and 
‘‘(ii) 25 percent of such amount. 
‘‘(B) A
PPLICATION .—The provisions of section 1128A

PPLICATION .—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) C
LARIFICATION REGARDING AVAILABILITY OF OTHER COV-
ERED PART D D RUGS .—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) D
‘‘(1) A PPLICABLE BENEFICIARY .—The term ‘applicable bene-
ficiary’ means an individual who, on the date of dispensing an applicable drug— 
‘‘(A) is enrolled in a prescription drug plan or an MA– 
PD plan;

PD plan; 
‘‘(B) is not enrolled in a qualified retiree prescription 
drug plan; 
‘‘(C) is not entitled to an income-related subsidy under 
section 1860D–14(a); 
‘‘(D) is not subject to a reduction in premium subsidy 
under section 1839(i); and 
‘‘(E) who— 
‘‘(i) has reached or exceeded the initial coverage 
limit under section 1860D–2(b)(3) during the year; and 
‘‘(ii) has not incurred costs for covered part D

‘‘(ii) has not incurred costs for covered part D 
drugs in the year equal to the annual out-of-pocket threshold specified in section 1860D–2(b)(4)(B). 
‘‘(2) A
PPLICABLE 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(b) 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 (other than 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 prescrip-
tion drug plan or MA–PD plan that the applicable bene-ficiary 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) A
PPLICABLE NUMBER OF CALENDAR DAYS .—The term 
‘applicable number of calendar days’ means—

‘applicable number of calendar days’ means— 
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124 STAT. 467 PUBLIC LAW 111–148—MAR. 23, 2010 
‘‘(A) with respect to claims for reimbursement sub-
mitted electronically, 14 days; and 
‘‘(B) with respect to claims for reimbursement sub-
mitted otherwise, 30 days. ‘‘(4) D
ISCOUNTED PRICE .— 
‘‘(A) I N GENERAL .—The term ‘discounted price’ means 
50 percent of the negotiated price of the applicable drug of a manufacturer. 
‘‘(B) C
LARIFICATION .—Nothing in this section shall be

LARIFICATION .—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) S
PECIAL CASE FOR CERTAIN CLAIMS .—In the case

where the entire amount of the negotiated price of an individual claim for an applicable drug with respect to an applicable beneficiary does not fall at or above the initial coverage limit under section 1860D–2(b)(3) and below the annual out-of-pocket threshold specified in sec-tion 1860D–2(b)(4)(B) for the year, the manufacturer of the applicable drug shall provide the discounted price under this section on only the portion of the negotiated price of the applicable drug that falls at or above

of the applicable drug that falls at or above such initial coverage limit and below such annual out-of-pocket threshold. ‘‘(5) M

ANUFACTURER .—The term ‘manufacturer’ means any 
entity which is engaged in the production, preparation, propaga-tion, 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 chem-ical synthesis. Such term does not include a wholesale dis-tributor of drugs or a retail pharmacy licensed under State law. 
‘‘(6) N

‘‘(6) N
EGOTIATED PRICE .—The term ‘negotiated price’ has 
the meaning given such term in section 423.100 of title 42, Code of Federal Regulations (as in effect on the date of enact-ment of this section), except that such negotiated price shall not include any dispensing fee for the applicable drug. 
‘‘(7) Q
UALIFIED RETIREE PRESCRIPTION DRUG PLAN .—The 
term ‘qualified retiree prescription drug plan’ has the meaning given such term in section 1860D–22(a)(2).’’. (c) I

NCLUSION IN INCURRED COSTS .— 
(1) I N GENERAL .—Section 1860D–2(b)(4) of the Social Secu-
rity Act (42 U.S.C. 1395w–102(b)(4)) is amended— 
(A) in subparagraph (C), in the matter preceding clause 
(i), by striking ‘‘In applying’’ and inserting ‘‘Except as pro-vided in subparagraph (E), in applying’’; and 
graph: 
‘‘(E) I
NCLUSION OF COSTS OF APPLICABLE DRUGS UNDER  
MEDICARE COVERAGE GAP DISCOUNT PROGRAM .—In applying

subparagraph (A), incurred costs shall include the nego-tiated price (as defined in paragraph (6) of section 1860D– 14A(g)) of an applicable drug (as defined in paragraph (2) of such section) of a manufacturer that is furnished to an applicable beneficiary (as defined in paragraph (1) of such section) under the Medicare coverage gap discount

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124 STAT. 468 PUBLIC LAW 111–148—MAR. 23, 2010 
program under section 1860D–14A, regardless of whether 
part of such costs were paid by a manufacturer under such program.’’. (2) E
section shall apply to costs incurred on or after July 1, 2010. (d) C
ONFORMING AMENDMENT PERMITTING PRESCRIPTION DRUG 
DISCOUNTS .— 
(1) I N GENERAL .—Section 1128B(b)(3) of the Social Security 
Act (42 U.S.C. 1320a–7b(b)(3)) is amended—

Act (42 U.S.C. 1320a–7b(b)(3)) is amended— 
(A) by striking ‘‘and’’ at the end of subparagraph (G); (B) in the subparagraph (H) added by section 237(d) 
of the Medicare Prescription Drug, Improvement, and Mod-ernization Act of 2003 (Public Law 108–173; 117 Stat. 2213)— 
(i) by moving such subparagraph 2 ems to the 
left; and 
(ii) by striking the period at the end and inserting 
a semicolon; (C) in the subparagraph (H) added by section 431(a) 
of such Act (117 Stat. 2287)—

of such Act (117 Stat. 2287)— 
(i) by redesignating such subparagraph as subpara-
graph (I); 
(ii) by moving such subparagraph 2 ems to the 
left; and 
(iii) by striking the period at the end and inserting 
‘‘; and’’; and (D) by adding at the end the following new subpara-
graph: 
‘‘(J) a discount in the price of an applicable drug (as

defined in paragraph (2) of section 1860D–14A(g)) of a manufacturer that is furnished to an applicable beneficiary (as defined in paragraph (1) of such section) under the Medicare coverage gap discount program under section 
1860D–14A.’’. (2) C
ONFORMING AMENDMENT TO DEFINITION OF BEST PRICE  
UNDER MEDICAID .—Section 1927(c)(1)(C)(i)(VI) of the Social

Security Act (42 U.S.C. 1396r–8(c)(1)(C)(i)(VI)) is amended by inserting ‘‘, or any discounts provided by manufacturers under the Medicare coverage gap discount program under section 1860D–14A’’ before the period at the end. 
(3) E
section shall apply to drugs dispensed on or after July 1, 2010. 
SEC. 3302. IMPROVEMENT IN DETERMINATION OF MEDICARE PART 
D LOW-INCOME BENCHMARK PREMIUM.

D LOW-INCOME BENCHMARK PREMIUM. 
(a) I NGENERAL .—Section 1860D–14(b)(2)(B)(iii) of the Social 
Security Act (42 U.S.C. 1395w–114(b)(2)(B)(iii)) is amended by inserting ‘‘, determined without regard to any reduction in such premium as a result of any beneficiary rebate under section 1854(b)(1)(C) or bonus payment under section 1853(n)’’ before the period at the end. 
(b) E
FFECTIVE DATE.—The amendment made by subsection (a)

shall apply to premiums for months beginning on or after January 1, 2011. 42 USC 
1395w–114 note. 42 USC 
1320a–76 note. 42 USC 
1395w–102 note. 
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124 STAT. 469 PUBLIC LAW 111–148—MAR. 23, 2010 
SEC. 3303. VOLUNTARY DE MINIMIS POLICY FOR SUBSIDY ELIGIBLE 
INDIVIDUALS UNDER PRESCRIPTION DRUG PLANS AND MA–PD PLANS. 
(a) I NGENERAL .—Section 1860D–14(a) of the Social Security 
Act (42 U.S.C. 1395w–114(a)) is amended by adding at the end the following new paragraph: 
‘‘(5) W
AIVER OF DE MINIMIS PREMIUMS .—The Secretary

shall, under procedures established by the Secretary, permit a prescription drug plan or an MA–PD plan to waive the monthly beneficiary premium for a subsidy eligible individual if the amount of such premium is de minimis. If such premium is waived under the plan, the Secretary shall not reassign subsidy eligible individuals enrolled in the plan to other plans based on the fact that the monthly beneficiary premium under the plan was greater than the low-income benchmark premium amount.’’.

(b) A
UTHORIZING THE SECRETARY TOAUTO-ENROLL SUBSIDY  
ELIGIBLE INDIVIDUALS IN PLANS THAT WAIVE DEMINIMIS PRE-
MIUMS .—Section 1860D–1(b)(1) of the Social Security Act (42 U.S.C. 
1395w–101(b)(1)) is amended— 
(1) in subparagraph (C), by inserting ‘‘except as provided 
in subparagraph (D),’’ after ‘‘shall include,’’ 
‘‘(D) S PECIAL RULE FOR PLANS THAT WAIVE DE MINIMIS  
PREMIUMS .—The process established under subparagraph

(A) may include, in the case of a part D eligible individual who is a subsidy eligible individual (as defined in section 1860D–14(a)(3)) who has failed to enroll in a prescription drug plan or an MA–PD plan, for the enrollment in a prescription drug plan or MA–PD plan that has waived the monthly beneficiary premium for such subsidy eligible individual under section 1860D–14(a)(5). If there is more than one such plan available, the Secretary shall enroll such an individual under the preceding

enroll such an individual under the preceding sentence on a random basis among all such plans in the PDP region. Nothing in the previous sentence shall prevent such an individual from declining or changing such enrollment.’’.

(c) E
FFECTIVE DATE.—The amendments made by this subsection 
shall apply to premiums for months, and enrollments for plan years, beginning on or after January 1, 2011. 
SEC. 3304. SPECIAL RULE FOR WIDOWS AND WIDOWERS REGARDING 
ELIGIBILITY FOR LOW-INCOME ASSISTANCE. 
(a) I NGENERAL .—Section 1860D–14(a)(3)(B) of the Social Secu-
rity Act (42 U.S.C. 1395w–114(a)(3)(B)) is amended by adding at the end the following new clause: 
‘‘(vi) S
PECIAL RULE FOR WIDOWS AND WIDOWERS .—

‘‘(vi) S
PECIAL RULE FOR WIDOWS AND WIDOWERS .— 
Notwithstanding the preceding provisions of this subparagraph, in the case of an individual whose spouse dies during the effective period for a determina-tion or redetermination that has been made under this subparagraph, such effective period shall be extended through the date that is 1 year after the date on which the determination or redetermination would (but for the application of this clause) otherwise cease to be effective.’’. 42 USC

1395w–101 note. Procedures. 
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124 STAT. 470 PUBLIC LAW 111–148—MAR. 23, 2010 
(b) E FFECTIVE DATE.—The amendment made by subsection (a) 
shall take effect on January 1, 2011. 
SEC. 3305. IMPROVED INFORMATION FOR SUBSIDY ELIGIBLE INDIVID-
UALS REASSIGNED TO PRESCRIPTION DRUG PLANS AND MA–PD PLANS. 
Section 1860D–14 of the Social Security Act (42 U.S.C. 1395w– 
114) is amended— 
(1) by redesignating subsection (d) as subsection (e); and (2) by inserting after subsection (c) the following new sub-
section: ‘‘(d) F

ACILITATION OF REASSIGNMENTS .—Beginning not later 
than January 1, 2011, the Secretary shall, in the case of a subsidy eligible individual who is enrolled in one prescription drug plan and is subsequently reassigned by the Secretary to a new prescrip-tion drug plan, provide the individual, within 30 days of such reassignment, with— 
‘‘(1) information on formulary differences between the

individual’s former plan and the plan to which the individual is reassigned with respect to the individual’s drug regimens; and 
‘‘(2) a description of the individual’s right to request a 
coverage determination, exception, or reconsideration under sec-tion 1860D–4(g), bring an appeal under section 1860D–4(h), or resolve a grievance under section 1860D–4(f).’’. 
SEC. 3306. FUNDING OUTREACH AND ASSISTANCE FOR LOW-INCOME 
PROGRAMS. 
(a) A DDITIONAL FUNDING FOR STATE HEALTH INSURANCE PRO-

GRAMS .—Subsection (a)(1)(B) of section 119 of the Medicare 
Improvements for Patients and Providers Act of 2008 (42 U.S.C. 1395b–3 note) is amended by striking ‘‘(42 U.S.C. 1395w–23(f))’’ and all that follows through the period at the end and inserting ‘‘(42 U.S.C. 1395w–23(f)), to the Centers for Medicare & Medicaid Services Program Management Account— 
‘‘(i) for fiscal year 2009, of $7,500,000; and ‘‘(ii) for the period of fiscal years 2010 through 
2012, of $15,000,000.

2012, of $15,000,000. 
Amounts appropriated under this subparagraph shall remain available until expended.’’. 
(b) A
DDITIONAL FUNDING FOR AREA AGENCIES ON AGING .— 
Subsection (b)(1)(B) of such section 119 is amended by striking ‘‘(42 U.S.C. 1395w–23(f))’’ and all that follows through the period at the end and inserting ‘‘(42 U.S.C. 1395w–23(f)), to the Adminis-tration on Aging— 
‘‘(i) for fiscal year 2009, of $7,500,000; and ‘‘(ii) for the period of fiscal years 2010 through

Amounts appropriated under this subparagraph shall 
remain available until expended.’’. 
(c) A
DDITIONAL FUNDING FOR AGING AND DISABILITY RESOURCE  
CENTERS .—Subsection (c)(1)(B) of such section 119 is amended by 
striking ‘‘(42 U.S.C. 1395w–23(f))’’ and all that follows through the period at the end and inserting ‘‘(42 U.S.C. 1395w–23(f)), to the Administration on Aging— 
‘‘(i) for fiscal year 2009, of $5,000,000; and ‘‘(ii) for the period of fiscal years 2010 through

2012, of $10,000,000. Deadlines. 42 USC 
1395w–114 note. 
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124 STAT. 471 PUBLIC LAW 111–148—MAR. 23, 2010 
(d) A DDITIONAL FUNDING FOR CONTRACT WITH THE NATIONAL  
CENTER FOR BENEFITS AND OUTREACH ENROLLMENT .—Subsection 
(d)(2) of such section 119 is amended by striking ‘‘(42 U.S.C. 1395w– 23(f))’’ and all that follows through the period at the end and inserting ‘‘(42 U.S.C. 1395w–23(f)), to the Administration on Aging—

‘‘(i) for fiscal year 2009, of $5,000,000; and ‘‘(ii) for the period of fiscal years 2010 through 
2012, of $5,000,000. 
(e) S
ECRETARIAL AUTHORITY TOENLIST SUPPORT IN CON-
DUCTING CERTAIN OUTREACH ACTIVITIES .—Such section 119 is 
amended by adding at the end the following new subsection: 
‘‘(g) S ECRETARIAL AUTHORITY TOENLIST SUPPORT IN CON-
DUCTING CERTAIN OUTREACH ACTIVITIES .—The Secretary may

request that an entity awarded a grant under this section support the conduct of outreach activities aimed at preventing disease and promoting wellness. Notwithstanding any other provision of this section, an entity may use a grant awarded under this subsection to support the conduct of activities described in the preceding sentence.’’. 
SEC. 3307. IMPROVING FORMULARY REQUIREMENTS FOR PRESCRIP-
TION DRUG PLANS AND MA–PD PLANS WITH RESPECT TO CERTAIN CATEGORIES OR CLASSES OF DRUGS.

(a) I MPROVING FORMULARY REQUIREMENTS .—Section 1860D– 
4(b)(3)(G) of the Social Security Act is amended to read as follows: 
‘‘(G) R EQUIRED INCLUSION OF DRUGS IN CERTAIN CAT -
EGORIES AND CLASSES .— 
‘‘(i) F ORMULARY REQUIREMENTS .— 
‘‘(I) I N GENERAL .—Subject to subclause (II), 
a PDP sponsor offering a prescription drug plan shall be required to include all covered part D drugs in the categories and classes identified by the Secretary under clause (ii)(I). 
‘‘(II) E

‘‘(II) E
XCEPTIONS .—The Secretary may estab-
lish exceptions that permit a PDP sponsor offering a prescription drug plan to exclude from its for-mulary a particular covered part D drug in a cat-egory or class that is otherwise required to be included in the formulary under subclause (I) (or to otherwise limit access to such a drug, including through prior authorization or utilization manage-ment). ‘‘(ii) I
DENTIFICATION OF DRUGS IN CERTAIN CAT -
EGORIES AND CLASSES .—

‘‘(I) I N GENERAL .—Subject to clause (iv), the 
Secretary shall identify, as appropriate, categories and classes of drugs for which the Secretary deter-mines are of clinical concern. 
‘‘(II) C
RITERIA .—The Secretary shall use cri-
teria established by the Secretary in making any determination under subclause (I). 42 USC 
1395w–104.

1395w–104. 
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124 STAT. 472 PUBLIC LAW 111–148—MAR. 23, 2010 
‘‘(iii) I MPLEMENTATION .—The Secretary shall estab-
lish the criteria under clause (ii)(II) and any exceptions under clause (i)(II) through the promulgation of a regu-lation which includes a public notice and comment period. 
‘‘(iv) R
EQUIREMENT FOR CERTAIN CATEGORIES AND  
CLASSES UNTIL CRITERIA ESTABLISHED .—Until such

CLASSES UNTIL CRITERIA ESTABLISHED .—Until such 
time as the Secretary establishes the criteria under clause (ii)(II) the following categories and classes of drugs shall be identified under clause (ii)(I): 
‘‘(I) Anticonvulsants. ‘‘(II) Antidepressants. ‘‘(III) Antineoplastics. ‘‘(IV) Antipsychotics. ‘‘(V) Antiretrovirals. ‘‘(VI) Immunosuppressants for the treatment 
of transplant rejection.’’. 
(b) E

shall apply to plan year 2011 and subsequent plan years. 
SEC. 3308. REDUCING PART D PREMIUM SUBSIDY FOR HIGH-INCOME 
BENEFICIARIES. 
(a) I NCOME -RELATED INCREASE IN PARTD P REMIUM .— 
(1) I N GENERAL .—Section 1860D–13(a) of the Social Secu-
rity Act (42 U.S.C. 1395w–113(a)) is amended by adding at the end the following new paragraph: 
‘‘(7) I
NCREASE IN BASE BENEFICIARY PREMIUM BASED ON  
INCOME .— 
‘‘(A) I N GENERAL .—In the case of an individual whose

modified adjusted gross income exceeds the threshold amount applicable under paragraph (2) of section 1839(i) (including application of paragraph (5) of such section) for the calendar year, the monthly amount of the bene-ficiary premium applicable under this section for a month after December 2010 shall be increased by the monthly adjustment amount specified in subparagraph (B). 
‘‘(B) M
ONTHLY ADJUSTMENT AMOUNT .—The monthly

‘‘(B) M
ONTHLY ADJUSTMENT AMOUNT .—The monthly 
adjustment amount specified in this subparagraph for an individual for a month in a year is equal to the product of— 
‘‘(i) the quotient obtained by dividing— 
‘‘(I) the applicable percentage determined 
under paragraph (3)(C) of section 1839(i) (including application of paragraph (5) of such section) for the individual for the calendar year reduced by 25.5 percent; by 
‘‘(II) 25.5 percent; and 
‘‘(ii) the base beneficiary premium (as computed

‘‘(ii) the base beneficiary premium (as computed 
under paragraph (2)). ‘‘(C) M
ODIFIED ADJUSTED GROSS INCOME .—For purposes 
of this paragraph, the term ‘modified adjusted gross income’ has the meaning given such term in subparagraph (A) of section 1839(i)(4), determined for the taxable year applicable under subparagraphs (B) and (C) of such section. 
‘‘(D) D
ETERMINATION BY COMMISSIONER OF SOCIAL  
SECURITY .—The Commissioner of Social Security shall

make any determination necessary to carry out the income- 42 USC 1395w–104 note. Regulations. 
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124 STAT. 473 PUBLIC LAW 111–148—MAR. 23, 2010 
related increase in the base beneficiary premium under 
this paragraph. 
‘‘(E) P ROCEDURES TO ASSURE CORRECT INCOME -RELATED  
INCREASE IN BASE BENEFICIARY PREMIUM .— 
‘‘(i) D ISCLOSURE OF BASE BENEFICIARY PREMIUM .—

‘‘(i) D ISCLOSURE OF BASE BENEFICIARY PREMIUM .— 
Not later than September 15 of each year beginning with 2010, the Secretary shall disclose to the Commis-sioner of Social Security the amount of the base bene-ficiary premium (as computed under paragraph (2)) for the purpose of carrying out the income-related increase in the base beneficiary premium under this paragraph with respect to the following year. 
‘‘(ii) A
DDITIONAL DISCLOSURE .—Not later than

‘‘(ii) A
DDITIONAL DISCLOSURE .—Not later than 
October 15 of each year beginning with 2010, the Sec-retary shall disclose to the Commissioner of Social Security the following information for the purpose of carrying out the income-related increase in the base beneficiary premium under this paragraph with respect to the following year: 
‘‘(I) The modified adjusted gross income 
threshold applicable under paragraph (2) of section 1839(i) (including application of paragraph (5) of such section).

‘‘(II) The applicable percentage determined 
under paragraph (3)(C) of section 1839(i) (including application of paragraph (5) of such section). 
‘‘(III) The monthly adjustment amount speci-
fied in subparagraph (B). 
‘‘(IV) Any other information the Commissioner 
of Social Security determines necessary to carry out the income-related increase in the base bene-ficiary premium under this paragraph. 
‘‘(F) R
ULE OF CONSTRUCTION .—The formula used to

ULE OF CONSTRUCTION .—The formula used to 
determine the monthly adjustment amount specified under subparagraph (B) shall only be used for the purpose of determining such monthly adjustment amount under such subparagraph.’’. (2) C
OLLECTION OF MONTHLY ADJUSTMENT AMOUNT .—Sec-
tion 1860D–13(c) of the Social Security Act (42 U.S.C. 1395w– 113(c)) is amended— 
(A) in paragraph (1), by striking ‘‘(2) and (3)’’ and 
inserting ‘‘(2), (3), and (4)’’; and

inserting ‘‘(2), (3), and (4)’’; and 
‘‘(4) C
OLLECTION OF MONTHLY ADJUSTMENT AMOUNT .— 
‘‘(A) I N GENERAL .—Notwithstanding any provision of

this subsection or section 1854(d)(2), subject to subpara-graph (B), the amount of the income-related increase in the base beneficiary premium for an individual for a month (as determined under subsection (a)(7)) shall be paid through withholding from benefit payments in the manner provided under section 1840. 
‘‘(B) A
GREEMENTS .—In the case where the monthly ben-

efit payments of an individual that are withheld under subparagraph (A) are insufficient to pay the amount described in such subparagraph, the Commissioner of Social Security shall enter into agreements with the Sec-retary, the Director of the Office of Personnel Management, Deadlines.

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124 STAT. 474 PUBLIC LAW 111–148—MAR. 23, 2010 
and the Railroad Retirement Board as necessary in order 
to allow other agencies to collect the amount described in subparagraph (A) that was not withheld under such subparagraph.’’. 
(b) C
(1) M EDICARE .—Section 1860D–13(a)(1) of the Social Secu-
rity Act (42 U.S.C. 1395w–113(a)(1)) is amended— 
(A) by redesignating subparagraph (F) as subparagraph 
(G); 
(B) in subparagraph (G), as redesignated by subpara-

graph (A), by striking ‘‘(D) and (E)’’ and inserting ‘‘(D), (E), and (F)’’; and 
(C) by inserting after subparagraph (E) the following 
‘‘(F) I
NCREASE BASED ON INCOME .—The monthly bene-
ficiary premium shall be increased pursuant to paragraph (7).’’. (2) I
NTERNAL REVENUE CODE .—Section 6103(l)(20) of the 
Internal Revenue Code of 1986 (relating to disclosure of return information to carry out Medicare part B premium subsidy adjustment) is amended—

AND PART D BASE  
BENEFICIARY PREMIUM INCREASE ’’ after ‘‘ PART B PREMIUM  
SUBSIDY ADJUSTMENT ’’; 
(i) in the matter preceding clause (i), by inserting 
‘‘or increase under section 1860D–13(a)(7)’’ after ‘‘1839(i)’’; and 
(ii) in clause (vii), by inserting after ‘‘subsection 
(i) of such section’’ the following: ‘‘or increase under section 1860D–13(a)(7) of such Act’’; and (C) in subparagraph (B)—

(i) by striking ‘‘Return information’’ and inserting 
‘‘(i) I
N GENERAL .—Return information’’; 
(ii) by inserting ‘‘or increase under such section 
1860D–13(a)(7)’’ before the period at the end; 
(iii) as amended by clause (i), by inserting ‘‘or 
for the purpose of resolving taxpayer appeals with respect to any such premium adjustment or increase’’ before the period at the end; and 
(iv) by adding at the end the following new clause: ‘‘(ii) D

ISCLOSURE TO OTHER AGENCIES .—Officers, 
employees, and contractors of the Social Security Administration may disclose— 
‘‘(I) the taxpayer identity information and the

‘‘(I) the taxpayer identity information and the 
amount of the premium subsidy adjustment or premium increase with respect to a taxpayer described in subparagraph (A) to officers, employees, and contractors of the Centers for Medi-care and Medicaid Services, to the extent that such disclosure is necessary for the collection of the premium subsidy amount or the increased pre-mium amount, 
‘‘(II) the taxpayer identity information and the

‘‘(II) the taxpayer identity information and the 
amount of the premium subsidy adjustment or the increased premium amount with respect to 26 USC 6103. 
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124 STAT. 475 PUBLIC LAW 111–148—MAR. 23, 2010 
a taxpayer described in subparagraph (A) to offi-
cers and employees of the Office of Personnel Management and the Railroad Retirement Board, to the extent that such disclosure is necessary for the collection of the premium subsidy amount or the increased premium amount, 
‘‘(III) return information with respect to a tax-

payer described in subparagraph (A) to officers and employees of the Department of Health and Human Services to the extent necessary to resolve administrative appeals of such premium subsidy adjustment or increased premium, and 
‘‘(IV) return information with respect to a tax-

payer described in subparagraph (A) to officers and employees of the Department of Justice for use in judicial proceedings to the extent necessary to carry out the purposes described in clause (i).’’. 
SEC. 3309. ELIMINATION OF COST SHARING FOR CERTAIN DUAL 
ELIGIBLE INDIVIDUALS. 
Section 1860D–14(a)(1)(D)(i) of the Social Security Act (42

U.S.C. 1395w–114(a)(1)(D)(i)) is amended by inserting ‘‘or, effective on a date specified by the Secretary (but in no case earlier than January 1, 2012), who would be such an institutionalized individual or couple, if the full-benefit dual eligible individual were not receiving services under a home and community-based waiver authorized for a State under section 1115 or subsection (c) or (d) of section 1915 or under a State plan amendment under sub-section (i) of such section or services

under sub-section (i) of such section or services provided through enrollment in a medicaid managed care organization with a contract under section 1903(m) or under section 1932’’ after ‘‘1902(q)(1)(B))’’.

SEC. 3310. REDUCING WASTEFUL DISPENSING OF OUTPATIENT 
PRESCRIPTION DRUGS IN LONG-TERM CARE FACILITIES UNDER PRESCRIPTION DRUG PLANS AND MA–PD PLANS. 
(a) I NGENERAL .—Section 1860D–4(c) of the Social Security 
Act (42 U.S.C. 1395w–104(c)) is amended by adding at the end the following new paragraph: 
‘‘(3) R
EDUCING WASTEFUL DISPENSING OF OUTPATIENT  
PRESCRIPTION DRUGS IN LONG -TERM CARE FACILITIES .—The Sec-

retary shall require PDP sponsors of prescription drug plans to utilize specific, uniform dispensing techniques, as determined by the Secretary, in consultation with relevant stakeholders (including representatives of nursing facilities, residents of nursing facilities, pharmacists, the pharmacy industry (including retail and long-term care pharmacy), prescription drug plans, MA–PD plans, and any other stakeholders the Secretary determines appropriate), such as weekly, daily, or automated dose

such as weekly, daily, or automated dose dispensing, when dispensing covered part D drugs to enrollees who reside in a long-term care facility in order to reduce waste associated with 30-day fills.’’. (b) E

FFECTIVE DATE.—The amendment made by subsection (a) 
shall apply to plan years beginning on or after January 1, 2012. 
SEC. 3311. IMPROVED MEDICARE PRESCRIPTION DRUG PLAN AND MA– 
PD PLAN COMPLAINT SYSTEM. 
(a) I NGENERAL .—The Secretary shall develop and maintain 
a complaint system, that is widely known and easy to use, to 42 USC 1395w–154. 42 USC 
1395w–104 note.

1395w–104 note. 
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124 STAT. 476 PUBLIC LAW 111–148—MAR. 23, 2010 
collect and maintain information on MA–PD plan and prescription

drug plan complaints that are received (including by telephone, letter, e-mail, or any other means) by the Secretary (including by a regional office of the Department of Health and Human Serv-ices, the Medicare Beneficiary Ombudsman, a subcontractor, a car-rier, a fiscal intermediary, and a Medicare administrative contractor under section 1874A of the Social Security Act (42 U.S.C. 1395kk)) through the date on which the complaint is resolved. The system shall be able to report and initiate

The system shall be able to report and initiate appropriate interventions and monitoring based on substantial complaints and to guide quality improvement.

(b) M
ODEL ELECTRONIC COMPLAINT FORM.—The Secretary shall 
develop a model electronic complaint form to be used for reporting plan complaints under the system. Such form shall be prominently displayed on the front page of the Medicare.gov Internet website and on the Internet website of the Medicare Beneficiary Ombuds-man. 
(c) A
NNUAL REPORTS BY THE SECRETARY .—The Secretary shall

submit to Congress annual reports on the system. Such reports shall include an analysis of the number and types of complaints reported in the system, geographic variations in such complaints, the timeliness of agency or plan responses to such complaints, and the resolution of such complaints. 
(d) D
(1) MA–PD PLAN .—The term ‘‘MA–PD plan’’ has the 
meaning given such term in section 1860D–41(a)(9) of such Act (42 U.S.C. 1395w–151(a)(9)). 
(2) P

(2) P
RESCRIPTION DRUG PLAN .—The term ‘‘prescription drug 
plan’’ has the meaning given such term in section 1860D– 41(a)(14) of such Act (42 U.S.C. 1395w–151(a)(14)). 
(3) S
of Health and Human Services. 
(4) S YSTEM .—The term ‘‘system’’ means the plan complaint 
system developed and maintained under subsection (a). 
SEC. 3312. UNIFORM EXCEPTIONS AND APPEALS PROCESS FOR 
PRESCRIPTION DRUG PLANS AND MA–PD PLANS.

PRESCRIPTION DRUG PLANS AND MA–PD PLANS. 
(a) I NGENERAL .—Section 1860D–4(b)(3) of the Social Security 
Act (42 U.S.C. 1395w–104(b)(3)) is amended by adding at the end the following new subparagraph: 
‘‘(H) U
SE OF SINGLE , UNIFORM EXCEPTIONS AND APPEALS  
PROCESS .—Notwithstanding any other provision of this 
part, each PDP sponsor of a prescription drug plan shall— 
‘‘(i) use a single, uniform exceptions and appeals

process (including, to the extent the Secretary deter-mines feasible, a single, uniform model form for use under such process) with respect to the determination of prescription drug coverage for an enrollee under the plan; and 
‘‘(ii) provide instant access to such process by 
enrollees through a toll-free telephone number and an Internet website.’’. 
(b) E
shall apply to exceptions and appeals on or after January 1, 2012. 42 USC

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124 STAT. 477 PUBLIC LAW 111–148—MAR. 23, 2010 
SEC. 3313. OFFICE OF THE INSPECTOR GENERAL STUDIES AND 
REPORTS. 
(a) S TUDY AND ANNUAL REPORT ON PART D F ORMULARIES ’ 
INCLUSION OF DRUGS COMMONLY USED BY DUALELIGIBLES .— 
(1) S TUDY .—The Inspector General of the Department of

Health and Human Services shall conduct a study of the extent to which formularies used by prescription drug plans and MA– PD plans under part D include drugs commonly used by full- benefit dual eligible individuals (as defined in section 1935(c)(6) of the Social Security Act (42 U.S.C. 1396u–5(c)(6))). 
(2) A
NNUAL REPORTS .—Not later than July 1 of each year

(beginning with 2011), the Inspector General shall submit to Congress a report on the study conducted under paragraph (1), together with such recommendations as the Inspector Gen-eral determines appropriate. (b) S
TUDY AND REPORT ON PRESCRIPTION DRUG PRICES UNDER  
MEDICARE PARTD AND MEDICAID .— 
(1) S TUDY .— 
(A) I N GENERAL .—The Inspector General of the Depart-

ment of Health and Human Services shall conduct a study on prices for covered part D drugs under the Medicare prescription drug program under part D of title XVIII of the Social Security Act and for covered outpatient drugs under title XIX. Such study shall include the following: 
(i) A comparison, with respect to the 200 most

(i) A comparison, with respect to the 200 most 
frequently dispensed covered part D drugs under such program and covered outpatient drugs under such title (as determined by the Inspector General based on volume and expenditures), of— 
(I) the prices paid for covered part D drugs 
by PDP sponsors of prescription drug plans and Medicare Advantage organizations offering MA– PD plans; and 
(II) the prices paid for covered outpatient 
drugs by a State plan under title XIX. (ii) An assessment of—

(I) the financial impact of any discrepancies 
in such prices on the Federal Government; and 
(II) the financial impact of any such discrep-
ancies on enrollees under part D or individuals eligible for medical assistance under a State plan under title XIX. 
(B) P
RICE.—For purposes of subparagraph (A), the

RICE.—For purposes of subparagraph (A), the 
price of a covered part D drug or a covered outpatient drug shall include any rebate or discount under such pro-gram or such title, respectively, including any negotiated price concession described in section 1860D–2(d)(1)(B) of the Social Security Act (42 U.S.C. 1395w–102(d)(1)(B)) or rebate under an agreement under section 1927 of the Social Security Act (42 U.S.C. 1396r–8). 
(C) A
UTHORITY TO COLLECT ANY NECESSARY INFORMA -

(C) A
TION .—Notwithstanding any other provision of law, the 
Inspector General of the Department of Health and Human Services shall be able to collect any information related to the prices of covered part D drugs under such program 42 USC 
1395w–101 note. 
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124 STAT. 478 PUBLIC LAW 111–148—MAR. 23, 2010 
and covered outpatient drugs under such title XIX nec-
essary to carry out the comparison under subparagraph (A). (2) R
EPORT .— 
(A) I N GENERAL .—Not later than October 1, 2011, sub-

ject to subparagraph (B), the Inspector General shall submit to Congress a report containing the results of the study conducted under paragraph (1), together with rec-ommendations for such legislation and administrative action as the Inspector General determines appropriate. 
(B) L
IMITATION ON INFORMATION CONTAINED IN  
REPORT .—The report submitted under subparagraph (A)

shall not include any information that the Inspector Gen-eral determines is proprietary or is likely to negatively impact the ability of a PDP sponsor or a State plan under title XIX to negotiate prices for covered part D drugs or covered outpatient drugs, respectively. (3) D
(A) C OVERED PART D DRUG .—The term ‘‘covered part 
D drug’’ has the meaning given such term in section 1860D– 2(e) of the Social Security Act (42 U.S.C. 1395w–102(e)). 
(B) C

(B) C
OVERED OUTPATIENT DRUG .—The term ‘‘covered 
outpatient drug’’ has the meaning given such term in sec-tion 1927(k) of such Act (42 U.S.C. 1396r(k)). 
(C) MA–PD 
PLAN .—The term ‘‘MA–PD plan’’ has the 
(D) M
EDICARE ADVANTAGE ORGANIZATION .—The term 
‘‘Medicare Advantage organization’’ has the meaning given such term in section 1859(a)(1) of such Act (42 U.S.C. 1395w–28)(a)(1)). 
(E) PDP

(E) PDP 
SPONSOR .—The term ‘‘PDP sponsor’’ has the 
meaning given such term in section 1860D–41(a)(13) of such Act (42 U.S.C. 1395w–151(a)(13)). 
(F) P
RESCRIPTION DRUG PLAN .—The term ‘‘prescription 
drug plan’’ has the meaning given such term in section 1860D–41(a)(14) of such Act (42 U.S.C. 1395w–151(a)(14)). 
SEC. 3314. INCLUDING COSTS INCURRED BY AIDS DRUG ASSISTANCE

PROGRAMS AND INDIAN HEALTH SERVICE IN PROVIDING PRESCRIPTION DRUGS TOWARD THE ANNUAL OUT-OF- POCKET THRESHOLD UNDER PART D. 
(a) I NGENERAL .—Section 1860D–2(b)(4)(C) of the Social Secu-
rity Act (42 U.S.C. 1395w–102(b)(4)(C)) is amended— 
(A) by striking ‘‘such costs shall be treated as incurred 
only if’’ and inserting ‘‘subject to clause (iii), such costs shall be treated as incurred only if’’;

(B) by striking ‘‘, under section 1860D–14, or under 
a State Pharmaceutical Assistance Program’’; and 
(C) by striking the period at the end and inserting 
‘‘; and’’; and (3) by inserting after clause (ii) the following new clause: 
‘‘(iii) such costs shall be treated as incurred and 
shall not be considered to be reimbursed under clause (ii) if such costs are borne or paid—

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124 STAT. 479 PUBLIC LAW 111–148—MAR. 23, 2010 
‘‘(I) under section 1860D–14; 
‘‘(II) under a State Pharmaceutical Assistance 
Program; 
‘‘(III) by the Indian Health Service, an Indian 
tribe or tribal organization, or an urban Indian organization (as defined in section 4 of the Indian Health Care Improvement Act); or 
‘‘(IV) under an AIDS Drug Assistance Program 
under part B of title XXVI of the Public Health Service Act.’’. 
(b) E

(a) shall apply to costs incurred on or after January 1, 2011. 
SEC. 3315. IMMEDIATE REDUCTION IN COVERAGE GAP IN 2010. 
Section 1860D–2(b) of the Social Security Act (42 U.S.C. 1395w– 
102(b)) is amended— 
(1) in paragraph (3)(A), by striking ‘‘paragraph (4)’’ and 
inserting ‘‘paragraphs (4) and (7)’’; and 
(2) by adding at the end the following new paragraph: ‘‘(7) I
NCREASE IN INITIAL COVERAGE LIMIT IN 2010 .—

NCREASE IN INITIAL COVERAGE LIMIT IN 2010 .— 
‘‘(A) I N GENERAL .—For the plan year beginning on 
January 1, 2010, the initial coverage limit described in paragraph (3)(B) otherwise applicable shall be increased by $500. 
‘‘(B) A
PPLICATION .—In applying subparagraph (A)— 
‘‘(i) except as otherwise provided in this subpara-
graph, there shall be no change in the premiums, bids, or any other parameters under this part or part C; 
‘‘(ii) costs that would be treated as incurred costs

for purposes of applying paragraph (4) but for the application of subparagraph (A) shall continue to be treated as incurred costs; 
‘‘(iii) the Secretary shall establish procedures, 
which may include a reconciliation process, to fully reimburse PDP sponsors with respect to prescription drug plans and MA organizations with respect to MA– PD plans for the reduction in beneficiary cost sharing associated with the application of subparagraph (A); 
‘‘(iv) the Secretary shall develop an estimate of

the additional increased costs attributable to the application of this paragraph for increased drug utiliza-tion and financing and administrative costs and shall use such estimate to adjust payments to PDP sponsors with respect to prescription drug plans under this part and MA organizations with respect to MA–PD plans under part C; and 
‘‘(v) the Secretary shall establish procedures for

retroactive reimbursement of part D eligible individ-uals who are covered under such a plan for costs which are incurred before the date of initial implementation of subparagraph (A) and which would be reimbursed under such a plan if such implementation occurred as of January 1, 2010. ‘‘(C) N
O EFFECT ON SUBSEQUENT YEARS .—The increase

O EFFECT ON SUBSEQUENT YEARS .—The increase 
under subparagraph (A) shall only apply with respect to the plan year beginning on January 1, 2010, and the initial coverage limit for plan years beginning on or after January Applicability. Time periods. Procedures. Procedures. Effective date. 42 USC 1395w– 
102 note. 
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124 STAT. 480 PUBLIC LAW 111–148—MAR. 23, 2010 
1, 2011, shall be determined as if subparagraph (A) had 
never applied.’’. 
Subtitle E—Ensuring Medicare 
Sustainability 
SEC. 3401. REVISION OF CERTAIN MARKET BASKET UPDATES AND 
INCORPORATION OF PRODUCTIVITY IMPROVEMENTS INTO MARKET BASKET UPDATES THAT DO NOT ALREADY INCORPORATE SUCH IMPROVEMENTS. 
(a) I NPATIENT ACUTE HOSPITALS .—Section 1886(b)(3)(B) of the

Social Security Act (42 U.S.C. 1395ww(b)(3)(B)), as amended by section 3001(a)(3), is further amended— 
(1) in clause (i)(XX), by striking ‘‘clause (viii)’’ and inserting 
‘‘clauses (viii), (ix), (xi), and (xii)’’; 
(2) in the first sentence of clause (viii), by inserting ‘‘of 
such applicable percentage increase (determined without regard to clause (ix), (xi), or (xii))’’ after ‘‘one-quarter’’; 
(3) in the first sentence of clause (ix)(I), by inserting ‘‘(deter-

mined without regard to clause (viii), (xi), or (xii))’’ after ‘‘clause (i)’’ the second time it appears; and 
(4) by adding at the end the following new clauses: 
‘‘(xi)(I) For 2012 and each subsequent fiscal year, after deter-
mining the applicable percentage increase described in clause (i) and after application of clauses (viii) and (ix), such percentage increase shall be reduced by the productivity adjustment described in subclause (II).

‘‘(II) The productivity adjustment described in this subclause, 
with respect to a percentage, factor, or update for a fiscal year, year, cost reporting period, or other annual period, is a productivity adjustment equal to the 10-year moving average of changes in annual economy-wide private nonfarm business multi-factor produc-tivity (as projected by the Secretary for the 10-year period ending with the applicable fiscal year, year, cost reporting period, or other annual period).

‘‘(III) The application of subclause (I) may result in the 
applicable percentage increase described in clause (i) being less than 0.0 for a fiscal year, and may result in payment rates under this section for a fiscal year being less than such payment rates for the preceding fiscal year. 
‘‘(xii) After determining the applicable percentage increase 
described in clause (i), and after application of clauses (viii), (ix), and (xi), the Secretary shall reduce such applicable percentage increase—

‘‘(I) for each of fiscal years 2010 and 2011, by 0.25 percent-
age point; and 
‘‘(II) subject to clause (xiii), for each of fiscal years 2012 
through 2019, by 0.2 percentage point. 
The application of this clause may result in the applicable percent-
age increase described in clause (i) being less than 0.0 for a fiscal year, and may result in payment rates under this section for a fiscal year being less than such payment rates for the preceding fiscal year.

‘‘(xiii) Clause (xii) shall be applied with respect to any of fiscal 
years 2014 through 2019 by substituting ‘0.0 percentage points’ for ‘0.2 percentage point’, if for such fiscal year— 
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124 STAT. 481 PUBLIC LAW 111–148—MAR. 23, 2010 
‘‘(I) the excess (if any) of— 
‘‘(aa) the total percentage of the non-elderly insured 
population for the preceding fiscal year (based on the most recent estimates available from the Director of the Congres-sional Budget Office before a vote in either House on the Patient Protection and Affordable Care Act that, if deter-mined in the affirmative, would clear such Act for enroll-ment); over 
‘‘(bb) the total percentage of the non-elderly insured

population for such preceding fiscal year (as estimated by the Secretary); exceeds ‘‘(II) 5 percentage points.’’. 
(b) S
KILLED NURSING FACILITIES .—Section 1888(e)(5)(B) of the 
Social Security Act (42 U.S.C. 1395yy(e)(5)(B)) is amended— 
(1) by striking ‘‘ PERCENTAGE .—The term’’ and inserting 
‘‘PERCENTAGE .— 
‘‘(i) I N GENERAL .—Subject to clause (ii), the term’’; 
and 
(2) by adding at the end the following new clause: 
‘‘(ii) A DJUSTMENT .—For fiscal year 2012 and each

subsequent fiscal year, after determining the percent-age described in clause (i), the Secretary shall reduce such percentage by the productivity adjustment described in section 1886(b)(3)(B)(xi)(II). The applica-tion of the preceding sentence may result in such percentage being less than 0.0 for a fiscal year, and may result in payment rates under this subsection for a fiscal year being less than such payment rates for the preceding fiscal year.’’. 
(c) L

(c) L
ONG-TERM CAREHOSPITALS .—Section 1886(m) of the Social 
Security Act (42 U.S.C. 1395ww(m)) is amended by adding at the end the following new paragraphs: 
‘‘(3) I
MPLEMENTATION FOR RATE YEAR 2010 AND SUBSEQUENT  
YEARS .— 
‘‘(A) I N GENERAL .—In implementing the system 
described in paragraph (1) for rate year 2010 and each subsequent rate year, any annual update to a standard Federal rate for discharges for the hospital during the rate year, shall be reduced—

‘‘(i) for rate year 2012 and each subsequent rate 
year, by the productivity adjustment described in sec-tion 1886(b)(3)(B)(xi)(II); and 
‘‘(ii) for each of rate years 2010 through 2019, 
by the other adjustment described in paragraph (4). ‘‘(B) S
PECIAL RULE .—The application of this paragraph

PECIAL RULE .—The application of this paragraph 
may result in such annual update being less than 0.0 for a rate year, and may result in payment rates under the system described in paragraph (1) for a rate year being less than such payment rates for the preceding rate year. ‘‘(4) O
THER ADJUSTMENT .— 
‘‘(A) I N GENERAL .—For purposes of paragraph (3)(A)(ii), 
the other adjustment described in this paragraph is— 
‘‘(i) for each of rate years 2010 and 2011, 0.25 
percentage point; and

percentage point; and 
‘‘(ii) subject to subparagraph (B), for each of rate 
years 2012 through 2019, 0.2 percentage point. 
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124 STAT. 482 PUBLIC LAW 111–148—MAR. 23, 2010 
‘‘(B) R EDUCTION OF OTHER ADJUSTMENT .—Subpara-
graph (A)(ii) shall be applied with respect to any of rate years 2014 through 2019 by substituting ‘0.0 percentage points’ for ‘0.2 percentage point’, if for such rate year— 
‘‘(i) the excess (if any) of— 
‘‘(I) the total percentage of the non-elderly

‘‘(I) the total percentage of the non-elderly 
insured population for the preceding rate year (based on the most recent estimates available from the Director of the Congressional Budget Office before a vote in either House on the Patient Protec-tion and Affordable Care Act that, if determined in the affirmative, would clear such Act for enroll-ment); over 
‘‘(II) the total percentage of the non-elderly

‘‘(II) the total percentage of the non-elderly 
insured population for such preceding rate year (as estimated by the Secretary); exceeds ‘‘(ii) 5 percentage points.’’. 
(d) I
NPATIENT REHABILITATION FACILITIES .—Section 1886(j)(3) 
of the Social Security Act (42 U.S.C. 1395ww(j)(3)) is amended— 
(1) in subparagraph (C)— 
(A) by striking ‘‘ FACTOR .—For purposes’’ and inserting 
‘‘FACTOR .— 
‘‘(i) I N GENERAL .—For purposes’’; 
(B) by inserting ‘‘subject to clause (ii)’’ before the period

at the end of the first sentence of clause (i), as added by paragraph (1); and 
(C) by adding at the end the following new clause: 
‘‘(ii) P
RODUCTIVITY AND OTHER ADJUSTMENT .—After 
establishing the increase factor described in clause (i) for a fiscal year, the Secretary shall reduce such increase factor— 
‘‘(I) for fiscal year 2012 and each subsequent 
fiscal year, by the productivity adjustment described in section 1886(b)(3)(B)(xi)(II); and

‘‘(II) for each of fiscal years 2010 through 2019, 
by the other adjustment described in subparagraph (D). 
The application of this clause may result in the increase factor under this subparagraph being less than 0.0 for a fiscal year, and may result in payment rates under this subsection for a fiscal year being less than such payment rates for the preceding fiscal year.’’; and 
‘‘(D) O
THER ADJUSTMENT .—

‘‘(D) O
‘‘(i) I N GENERAL .—For purposes of subparagraph 
(C)(ii)(II), the other adjustment described in this subparagraph is— 
‘‘(I) for each of fiscal years 2010 and 2011, 
0.25 percentage point; and 
‘‘(II) subject to clause (ii), for each of fiscal 
years 2012 through 2019, 0.2 percentage point. ‘‘(ii) R
EDUCTION OF OTHER ADJUSTMENT .—Clause

EDUCTION OF OTHER ADJUSTMENT .—Clause 
(i)(II) shall be applied with respect to any of fiscal years 2014 through 2019 by substituting ‘0.0 percent-age points’ for ‘0.2 percentage point’, if for such fiscal year— Applicability. 
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124 STAT. 483 PUBLIC LAW 111–148—MAR. 23, 2010 
‘‘(aa) the total percentage of the non- 
elderly insured population for the preceding fiscal year (based on the most recent estimates available from the Director of the Congres-sional Budget Office before a vote in either House on the Patient Protection and Afford-able Care Act that, if determined in the affirmative, would clear such Act for enroll-ment); over 
‘‘(bb) the total percentage of the non-

‘‘(bb) the total percentage of the non- 
elderly insured population for such preceding fiscal year (as estimated by the Secretary); exceeds ‘‘(II) 5 percentage points.’’. 
(e) H
OME HEALTH AGENCIES .—Section 1895(b)(3)(B) of the 
Social Security Act (42 U.S.C. 1395fff(b)(3)(B)) is amended— 
(1) in clause (ii)(V), by striking ‘‘clause (v)’’ and inserting 
‘‘clauses (v) and (vi)’’; and 
‘‘(vi) A DJUSTMENTS .—After determining the home

‘‘(vi) A DJUSTMENTS .—After determining the home 
health market basket percentage increase under clause (iii), and after application of clause (v), the Secretary shall reduce such percentage— 
‘‘(I) for 2015 and each subsequent year, by 
the productivity adjustment described in section 1886(b)(3)(B)(xi)(II); and 
‘‘(II) for each of 2011 and 2012, by 1 percentage 
point.

point. 
The application of this clause may result in the home health market basket percentage increase under clause (iii) being less than 0.0 for a year, and may result in payment rates under the system under this sub-section for a year being less than such payment rates for the preceding year.’’. 
(f) P
SYCHIATRIC HOSPITALS .—Section 1886 of the Social Security 
Act, as amended by sections 3001, 3008, 3025, and 3133, is amended by adding at the end the following new subsection: 
‘‘(s) P

‘‘(s) P
ROSPECTIVE PAYMENT FOR PSYCHIATRIC HOSPITALS .— 
‘‘(1) R EFERENCE TO ESTABLISHMENT AND IMPLEMENTATION  
OF SYSTEM .—For provisions related to the establishment and

implementation of a prospective payment system for payments under this title for inpatient hospital services furnished by psychiatric hospitals (as described in clause (i) of subsection (d)(1)(B)) and psychiatric units (as described in the matter following clause (v) of such subsection), see section 124 of the Medicare, Medicaid, and SCHIP Balanced Budget Refine-ment Act of 1999. 
‘‘(2) I
MPLEMENTATION FOR RATE YEAR BEGINNING IN 2010  
AND SUBSEQUENT RATE YEARS .—

AND SUBSEQUENT RATE YEARS .— 
described in paragraph (1) for the rate year beginning in 2010 and any subsequent rate year, any update to a base rate for days during the rate year for a psychiatric hospital or unit, respectively, shall be reduced— 42 USC 1395ww. 
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124 STAT. 484 PUBLIC LAW 111–148—MAR. 23, 2010 
‘‘(i) for the rate year beginning in 2012 and each 
subsequent rate year, by the productivity adjustment described in section 1886(b)(3)(B)(xi)(II); and 
‘‘(ii) for each of the rate years beginning in 2010 
through 2019, by the other adjustment described in paragraph (3). ‘‘(B) S

may result in such update being less than 0.0 for a rate year, and may result in payment rates under the system described in paragraph (1) for a rate year being less than such payment rates for the preceding rate year. ‘‘(3) O
‘‘(A) I N GENERAL .—For purposes of paragraph (2)(A)(ii), 
‘‘(i) for each of the rate years beginning in 2010 
and 2011, 0.25 percentage point; and

and 2011, 0.25 percentage point; and 
‘‘(ii) subject to subparagraph (B), for each of the 
rate years beginning in 2012 through 2019, 0.2 percent-age point. ‘‘(B) R
EDUCTION OF OTHER ADJUSTMENT .—Subpara-

(g) H
OSPICE CARE.—Section 1814(i)(1)(C) of the Social Security 
Act (42 U.S.C. 1395f(i)(1)(C)), as amended by section 3132, is amended by adding at the end the following new clauses: 
‘‘(iv) After determining the market basket percentage increase

under clause (ii)(VII) or (iii), as applicable, with respect to fiscal year 2013 and each subsequent fiscal year, the Secretary shall reduce such percentage— 
‘‘(I) for 2013 and each subsequent fiscal year, by the produc-
tivity adjustment described in section 1886(b)(3)(B)(xi)(II); and 
‘‘(II) subject to clause (v), for each of fiscal years 2013 
through 2019, by 0.5 percentage point.

through 2019, by 0.5 percentage point. 
The application of this clause may result in the market basket percentage increase under clause (ii)(VII) or (iii), as applicable, being less than 0.0 for a fiscal year, and may result in payment rates under this subsection for a fiscal year being less than such payment rates for the preceding fiscal year. 
‘‘(v) Clause (iv)(II) shall be applied with respect to any of

fiscal years 2014 through 2019 by substituting ‘0.0 percentage points’ for ‘0.5 percentage point’, if for such fiscal year— 
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124 STAT. 485 PUBLIC LAW 111–148—MAR. 23, 2010 

(h) D
IALYSIS .—Section 1881(b)(14)(F) of the Social Security Act 
(42 U.S.C. 1395rr(b)(14)(F)) is amended— 
(A) by inserting ‘‘(I)’’ after ‘‘(F)(i)’’ (B) in subclause (I), as inserted by subparagraph (A)— 
(i) by striking ‘‘clause (ii)’’ and inserting ‘‘subclause 
(II) and clause (ii)’’; and 
(ii) by striking ‘‘minus 1.0 percentage point’’; and

(C) by adding at the end the following new subclause: 
‘‘(II) For 2012 and each subsequent year, after determining

the increase factor described in subclause (I), the Secretary shall reduce such increase factor by the productivity adjustment described in section 1886(b)(3)(B)(xi)(II). The application of the preceding sentence may result in such increase factor being less than 0.0 for a year, and may result in payment rates under the payment system under this paragraph for a year being less than such pay-ment rates for the preceding year.’’; and 
(2) in clause (ii)(II)—

(2) in clause (ii)(II)— 
(A) by striking ‘‘The’’ and inserting ‘‘Subject to clause 
(i)(II), the’’; and 
(B) by striking ‘‘clause (i) minus 1.0 percentage point’’ 
and inserting ‘‘clause (i)(I)’’. 
(i) O
UTPATIENT HOSPITALS .—Section 1833(t)(3) of the Social 
Security Act (42 U.S.C. 1395l(t)(3)) is amended— 
(1) in subparagraph (C)(iv), by inserting ‘‘and subparagraph 
(F) of this paragraph’’ after ‘‘(17)’’; and 
(2) by adding at the end the following new subparagraphs:

‘‘(F) P RODUCTIVITY AND OTHER ADJUSTMENT .—After 
determining the OPD fee schedule increase factor under subparagraph (C)(iv), the Secretary shall reduce such increase factor— 
‘‘(i) for 2012 and subsequent years, by the produc-
‘‘(ii) for each of 2010 through 2019, by the adjust-
ment described in subparagraph (G).

ment described in subparagraph (G). 
The application of this subparagraph may result in the increase factor under subparagraph (C)(iv) being less than 0.0 for a year, and may result in payment rates under the payment system under this subsection for a year being less than such payment rates for the preceding year. 
‘‘(G) O
‘‘(i) A DJUSTMENT .—For purposes of subparagraph 
(F)(ii), the adjustment described in this subparagraph is—

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124 STAT. 486 PUBLIC LAW 111–148—MAR. 23, 2010 
‘‘(I) for each of 2010 and 2011, 0.25 percentage 
point; and 
‘‘(II) subject to clause (ii), for each of 2012 
through 2019, 0.2 percentage point. ‘‘(ii) R
(i)(II) shall be applied with respect to any of 2014 through 2019 by substituting ‘0.0 percentage points’ for ‘0.2 percentage point’, if for such year— 
‘‘(aa) the total percentage of the non-

elderly insured population for the preceding year (based on the most recent estimates avail-able from the Director of the Congressional Budget Office before a vote in either House on the Patient Protection and Affordable Care Act that, if determined in the affirmative, would clear such Act for enrollment); over 

elderly insured population for such preceding year (as estimated by the Secretary); exceeds ‘‘(II) 5 percentage points.’’. 
(j) A
MBULANCE SERVICES .—Section 1834(l)(3) of the Social Secu-
rity Act (42 U.S.C. 1395m(l)(3)) is amended— 
(1) in subparagraph (A), by striking ‘‘and’’ at the end; (2) in subparagraph (B)— 
(A) by inserting ‘‘, subject to subparagraph (C) and 
the succeeding sentence of this paragraph,’’ after ‘‘increased’’; and

‘‘; and’’; (3) by adding at the end the following new subparagraph: 
‘‘(C) for 2011 and each subsequent year, after deter-
mining the percentage increase under subparagraph (B) for the year, reduce such percentage increase by the produc-tivity adjustment described in section 1886(b)(3)(B)(xi)(II).’’; and (4) by adding at the end the following flush sentence:

‘‘The application of subparagraph (C) may result in the percent-age increase under subparagraph (B) being less than 0.0 for a year, and may result in payment rates under the fee schedule under this subsection for a year being less than such payment rates for the preceding year.’’. (k) A
MBULATORY SURGICAL CENTER SERVICES .—Section 
1833(i)(2)(D) of the Social Security Act (42 U.S.C. 1395l(i)(2)(D)) is amended—

(1) by redesignating clause (v) as clause (vi); and (2) by inserting after clause (iv) the following new clause: 
‘‘(v) In implementing the system described in

clause (i) for 2011 and each subsequent year, any annual update under such system for the year, after application of clause (iv), shall be reduced by the productivity adjustment described in section 1886(b)(3)(B)(xi)(II). The application of the preceding sentence may result in such update being less than 0.0 for a year, and may result in payment rates under the system described in clause (i) for a year being less than such payment rates for the preceding year.’’.

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124 STAT. 487 PUBLIC LAW 111–148—MAR. 23, 2010 
(l) L ABORATORY SERVICES .—Section 1833(h)(2)(A) of the Social 
Security Act (42 U.S.C. 1395l(h)(2)(A)) is amended— 
(A) by inserting ‘‘, subject to clause (iv),’’ after ‘‘year) 
by’’; and 
(B) by striking ‘‘through 2013’’ and inserting ‘‘and 
2010’’; and (2) by adding at the end the following new clause: 
‘‘(iv) After determining the adjustment to the fee 
schedules under clause (i), the Secretary shall reduce such adjustment—

‘‘(I) for 2011 and each subsequent year, by 
‘‘(II) for each of 2011 through 2015, by 1.75 
percentage points.

Subclause (I) shall not apply in a year where the adjustment to the fee schedules determined under clause (i) is 0.0 or a percentage decrease for a year. The application of the productivity adjustment under subclause (I) shall not result in an adjustment to the fee schedules under clause (i) being less than 0.0 for a year. The application of subclause (II) may result in an adjustment to the fee schedules under clause (i) being less than 0.0 for a year, and may result in payment rates for a year

year, and may result in payment rates for a year being less than such pay-ment rates for the preceding year.’’.

(m) C
ERTAIN DURABLE MEDICAL EQUIPMENT .—Section 
1834(a)(14) of the Social Security Act (42 U.S.C. 1395m(a)(14)) is amended— 
(1) in subparagraph (K)— 
(A) by striking ‘‘2011, 2012, and 2013,’’; and (B) by inserting ‘‘and’’ after the semicolon at the end; 
(2) by striking subparagraphs (L) and (M) and inserting 
the following new subparagraph: 
‘‘(L) for 2011 and each subsequent year— 
‘‘(i) the percentage increase in the consumer price

index for all urban consumers (United States city aver-age) for the 12-month period ending with June of the previous year, reduced by— 
‘‘(ii) the productivity adjustment described in sec-
tion 1886(b)(3)(B)(xi)(II).’’; and 
(3) by adding at the end the following flush sentence: 
‘‘The application of subparagraph (L)(ii) may result in the cov-ered item update under this paragraph being less than 0.0 for a year, and may result in payment rates under this sub-

section for a year being less than such payment rates for the preceding year.’’. (n) P
ROSTHETIC DEVICES , ORTHOTICS , AND PROSTHETICS .—Sec-
tion 1834(h)(4) of the Social Security Act (42 U.S.C. 1395m(h)(4)) is amended— 
(A) in clause (ix), by striking ‘‘and’’ at the end; (B) in clause (x)— 
(i) by striking ‘‘a subsequent year’’ and inserting 
‘‘for each of 2007 through 2010’’; and

‘‘for each of 2007 through 2010’’; and 
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124 STAT. 488 PUBLIC LAW 111–148—MAR. 23, 2010 
(ii) by inserting ‘‘and’’ after the semicolon at the 
end; (C) by adding at the end the following new clause: 
‘‘(xi) for 2011 and each subsequent year— 
‘‘(I) the percentage increase in the consumer 
price index for all urban consumers (United States city average) for the 12-month period ending with June of the previous year, reduced by— 
‘‘(II) the productivity adjustment described in 
section 1886(b)(3)(B)(xi)(II).’’; and

section 1886(b)(3)(B)(xi)(II).’’; and 
(D) by adding at the end the following flush sentence: 
‘‘The application of subparagraph (A)(xi)(II) may result in the applicable percentage increase under subparagraph (A) being less than 0.0 for a year, and may result in payment rates under this subsection for a year being less than such payment rates for the preceding year.’’. (o) O
THER ITEMS .—Section 1842(s)(1) of the Social Security 
Act (42 U.S.C. 1395u(s)(1)) is amended—

Act (42 U.S.C. 1395u(s)(1)) is amended— 
(1) in the first sentence, by striking ‘‘Subject to’’ and 
inserting ‘‘(A) Subject to’’; 
(2) by striking the second sentence and inserting the fol-
‘‘(B) Any fee schedule established under this paragraph 
for such item or service shall be updated— 
‘‘(i) for years before 2011— 
‘‘(I) subject to subclause (II), by the percentage

increase in the consumer price index for all urban consumers (United States city average) for the 12- month period ending with June of the preceding year; and 
‘‘(II) for items and services described in para-
graph (2)(D) for 2009, section 1834(a)(14)(J) shall apply under this paragraph instead of the percent-age increase otherwise applicable; and ‘‘(ii) for 2011 and subsequent years— 
‘‘(I) the percentage increase in the consumer

(3) by adding at the end the following flush sentence:

‘‘The application of subparagraph (B)(ii)(II) may result in the update under this paragraph being less than 0.0 for a year, and may result in payment rates under any fee schedule estab-lished under this paragraph for a year being less than such payment rates for the preceding year.’’. (p) N
OAPPLICATION PRIOR TO APRIL 1, 2010.—Notwithstanding

the preceding provisions of this section, the amendments made by subsections (a), (c), and (d) shall not apply to discharges occurring before April 1, 2010. 
SEC. 3402. TEMPORARY ADJUSTMENT TO THE CALCULATION OF PART 
B PREMIUMS. 
Section 1839(i) of the Social Security Act (42 U.S.C. 1395r(i)) 
is amended— 42 USC 
1395ww note. 
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124 STAT. 489 PUBLIC LAW 111–148—MAR. 23, 2010 
(1) in paragraph (2), in the matter preceding subparagraph 
(A), by inserting ‘‘subject to paragraph (6),’’ after ‘‘subsection,’’; 
(2) in paragraph (3)(A)(i), by striking ‘‘The applicable’’ and 
inserting ‘‘Subject to paragraph (6), the applicable’’; 
(3) by redesignating paragraph (6) as paragraph (7); and (4) by inserting after paragraph (5) the following new para-
graph: 
‘‘(6) T
EMPORARY ADJUSTMENT TO INCOME THRESHOLDS .—

EMPORARY ADJUSTMENT TO INCOME THRESHOLDS .— 
Notwithstanding any other provision of this subsection, during the period beginning on January 1, 2011, and ending on December 31, 2019— 
‘‘(A) the threshold amount otherwise applicable under 
paragraph (2) shall be equal to such amount for 2010; and 
‘‘(B) the dollar amounts otherwise applicable under 
paragraph (3)(C)(i) shall be equal to such dollar amounts for 2010.’’. 
SEC. 3403. INDEPENDENT MEDICARE ADVISORY BOARD. 
(a) B OARD .—

(a) B OARD .— 
(1) I N GENERAL .—Title XVIII of the Social Security Act 
(42 U.S.C. 1395 et seq.), as amended by section 3022, is amended by adding at the end the following new section: 
‘‘
INDEPENDENT MEDICARE ADVISORY BOARD  
‘‘SEC. 1899A. (a) E STABLISHMENT .—There is established an 
independent board to be known as the ‘Independent Medicare Advisory Board’. 
‘‘(b) P
URPOSE .—It is the purpose of this section to, in accordance

with the following provisions of this section, reduce the per capita rate of growth in Medicare spending— 
‘‘(1) by requiring the Chief Actuary of the Centers for 
Medicare & Medicaid Services to determine in each year to which this section applies (in this section referred to as ‘a determination year’) the projected per capita growth rate under Medicare for the second year following the determination year (in this section referred to as ‘an implementation year’);

‘‘(2) if the projection for the implementation year exceeds 
the target growth rate for that year, by requiring the Board to develop and submit during the first year following the deter-mination year (in this section referred to as ‘a proposal year’) a proposal containing recommendations to reduce the Medicare per capita growth rate to the extent required by this section; and 
‘‘(3) by requiring the Secretary to implement such proposals

unless Congress enacts legislation pursuant to this section. ‘‘(c) B
OARD PROPOSALS .— 
‘‘(1) D EVELOPMENT .— 
‘‘(A) I N GENERAL .—The Board shall develop detailed 
and specific proposals related to the Medicare program in accordance with the succeeding provisions of this section. 
‘‘(B) A
DVISORY REPORTS .—Beginning January 15, 2014,

DVISORY REPORTS .—Beginning January 15, 2014, 
the Board may develop and submit to Congress advisory reports on matters related to the Medicare program, regard-less of whether or not the Board submitted a proposal for such year. Such a report may, for years prior to 2020, 42 USC 1395kkk. Time period. 
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124 STAT. 490 PUBLIC LAW 111–148—MAR. 23, 2010 
include recommendations regarding improvements to pay-
ment systems for providers of services and suppliers who are not otherwise subject to the scope of the Board’s rec-ommendations in a proposal under this section. Any advisory report submitted under this subparagraph shall not be subject to the rules for congressional consideration under subsection (d). ‘‘(2) P
ROPOSALS .— 
‘‘(A) R EQUIREMENTS .—Each proposal submitted under

this section in a proposal year shall meet each of the following requirements: 
‘‘(i) If the Chief Actuary of the Centers for Medicare

& Medicaid Services has made a determination under paragraph (7)(A) in the determination year, the pro-posal shall include recommendations so that the pro-posal as a whole (after taking into account rec-ommendations under clause (v)) will result in a net reduction in total Medicare program spending in the implementation year that is at least equal to the applicable savings target established under paragraph (7)(B) for such implementation year. In determining whether a proposal meets the

year. In determining whether a proposal meets the requirement of the pre-ceding sentence, reductions in Medicare program spending during the 3-month period immediately pre-ceding the implementation year shall be counted to the extent that such reductions are a result of the implementation of recommendations contained in the proposal for a change in the payment rate for an item or service that was effective during such period pursu-ant to subsection (e)(2)(A).

‘‘(ii) The proposal shall not include any rec-
ommendation to ration health care, raise revenues or Medicare beneficiary premiums under section 1818, 1818A, or 1839, increase Medicare beneficiary cost- sharing (including deductibles, coinsurance, and copay-ments), or otherwise restrict benefits or modify eligi-bility criteria. 
‘‘(iii) In the case of proposals submitted prior to

December 31, 2018, the proposal shall not include any recommendation that would reduce payment rates for items and services furnished, prior to December 31, 2019, by providers of services (as defined in section 1861(u)) and suppliers (as defined in section 1861(d)) scheduled, pursuant to the amendments made by sec-tion 3401 of the Patient Protection and Affordable Care Act, to receive a reduction to the inflationary payment updates of such providers of services and suppliers in excess of a

of services and suppliers in excess of a reduction due to productivity in a year in which such recommendations would take effect.

‘‘(iv) As appropriate, the proposal shall include 
recommendations to reduce Medicare payments under parts C and D, such as reductions in direct subsidy payments to Medicare Advantage and prescription drug plans specified under paragraph (1) and (2) of section 1860D–15(a) that are related to administrative expenses (including profits) for basic coverage, denying high bids or removing high bids for prescription drug

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124 STAT. 491 PUBLIC LAW 111–148—MAR. 23, 2010 
coverage from the calculation of the national average

monthly bid amount under section 1860D–13(a)(4), and reductions in payments to Medicare Advantage plans under clauses (i) and (ii) of section 1853(a)(1)(B) that are related to administrative expenses (including profits) and performance bonuses for Medicare Advan-tage plans under section 1853(n). Any such rec-ommendation shall not affect the base beneficiary pre-mium percentage specified under 1860D–13(a). 
‘‘(v) The proposal shall include recommendations

‘‘(v) The proposal shall include recommendations 
with respect to administrative funding for the Sec-retary to carry out the recommendations contained in the proposal. 
‘‘(vi) The proposal shall only include recommenda-
tions related to the Medicare program. ‘‘(B) A
DDITIONAL CONSIDERATIONS .—In developing and 
submitting each proposal under this section in a proposal year, the Board shall, to the extent feasible— 
‘‘(i) give priority to recommendations that extend 
Medicare solvency;

Medicare solvency; 
‘‘(ii) include recommendations that— 
‘‘(I) improve the health care delivery system 
and health outcomes, including by promoting integrated care, care coordination, prevention and wellness, and quality and efficiency improvement; and 
‘‘(II) protect and improve Medicare bene-
ficiaries’ access to necessary and evidence-based items and services, including in rural and frontier areas; ‘‘(iii) include recommendations that target reduc-

tions in Medicare program spending to sources of excess cost growth; 
‘‘(iv) consider the effects on Medicare beneficiaries 
of changes in payments to providers of services (as defined in section 1861(u)) and suppliers (as defined in section 1861(d)); 
‘‘(v) consider the effects of the recommendations 
on providers of services and suppliers with actual or projected negative cost margins or payment updates; and 
‘‘(vi) consider the unique needs of Medicare bene-

ficiaries who are dually eligible for Medicare and the Medicaid program under title XIX. ‘‘(C) N
O INCREASE IN TOTAL MEDICARE PROGRAM  
SPENDING .—Each proposal submitted under this section

shall be designed in such a manner that implementation of the recommendations contained in the proposal would not be expected to result, over the 10-year period starting with the implementation year, in any increase in the total amount of net Medicare program spending relative to the total amount of net Medicare program spending that would have occurred absent such implementation. 
‘‘(D) C
ONSULTATION WITH MEDPAC .—The Board shall

ONSULTATION WITH MEDPAC .—The Board shall 
submit a draft copy of each proposal to be submitted under this section to the Medicare Payment Advisory Commission established under section 1805 for its review. The Board 
Deadline. Submission. 
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124 STAT. 492 PUBLIC LAW 111–148—MAR. 23, 2010 
shall submit such draft copy by not later than September 
1 of the determination year. 
‘‘(E) R EVIEW AND COMMENT BY THE SECRETARY .—The

Board shall submit a draft copy of each proposal to be submitted to Congress under this section to the Secretary for the Secretary’s review and comment. The Board shall submit such draft copy by not later than September 1 of the determination year. Not later than March 1 of the submission year, the Secretary shall submit a report to Congress on the results of such review, unless the Secretary submits a proposal under paragraph (5)(A) in that year. 
‘‘(F) C

‘‘(F) C
ONSULTATIONS .—In carrying out its duties under 
this section, the Board shall engage in regular consultations with the Medicaid and CHIP Payment and Access Commis-sion under section 1900. ‘‘(3) T
RANSMISSION OF BOARD PROPOSAL TO PRESIDENT .— 
(ii) and subsection (f)(3)(B), the Board shall transmit a proposal under this section to the President on January 15 of each year (beginning with 2014). 
‘‘(ii) E

‘‘(ii) E
XCEPTION .—The Board shall not submit a 
proposal under clause (i) in a proposal year if the year is— 
‘‘(I) a year for which the Chief Actuary of 
the Centers for Medicare & Medicaid Services makes a determination in the determination year under paragraph (6)(A) that the growth rate described in clause (i) of such paragraph does not exceed the growth rate described in clause (ii) of such paragraph; 
‘‘(II) a year in which the Chief Actuary of

the Centers for Medicare & Medicaid Services makes a determination in the determination year that the projected percentage increase (if any) for the medical care expenditure category of the Con-sumer Price Index for All Urban Consumers (United States city average) for the implementa-tion year is less than the projected percentage increase (if any) in the Consumer Price Index for All Urban Consumers (all items; United States city average) for such implementation year; or

‘‘(III) for proposal year 2019 and subsequent 
proposal years, a year in which the Chief Actuary of the Centers for Medicare & Medicaid Services makes a determination in the determination year that the growth rate described in paragraph (8) exceeds the growth rate described in paragraph (6)(A)(i). ‘‘(iii) S
TART -UP PERIOD .—The Board may not 
submit a proposal under clause (i) prior to January 15, 2014. ‘‘(B) R
EQUIRED INFORMATION .—Each proposal sub-

mitted by the Board under subparagraph (A)(i) shall include— 
‘‘(i) the recommendations described in paragraph 
(2)(A)(i); Deadline. Reports. Submission. 
Deadlines. 
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124 STAT. 493 PUBLIC LAW 111–148—MAR. 23, 2010 
‘‘(ii) an explanation of each recommendation con-
tained in the proposal and the reasons for including such recommendation; 
‘‘(iii) an actuarial opinion by the Chief Actuary 
of the Centers for Medicare & Medicaid Services certi-fying that the proposal meets the requirements of sub-paragraphs (A)(i) and (C) of paragraph (2); 
‘‘(iv) a legislative proposal that implements the 
recommendations; and 
‘‘(v) other information determined appropriate by

the Board. 
‘‘(4) P
RESIDENTIAL SUBMISSION TO CONGRESS .—Upon 
receiving a proposal from the Board under paragraph (3)(A)(i) or the Secretary under paragraph (5), the President shall imme-diately submit such proposal to Congress. 
‘‘(5) C
ONTINGENT SECRETARIAL DEVELOPMENT OF PRO -
POSAL .—If, with respect to a proposal year, the Board is

required, to but fails, to submit a proposal to the President by the deadline applicable under paragraph (3)(A)(i), the Sec-retary shall develop a detailed and specific proposal that satis-fies the requirements of subparagraphs (A) and (C) (and, to the extent feasible, subparagraph (B)) of paragraph (2) and contains the information required paragraph (3)(B)). By not later than January 25 of the year, the Secretary shall transmit—

‘‘(A) such proposal to the President; and ‘‘(B) a copy of such proposal to the Medicare Payment 
Advisory Commission for its review. ‘‘(6) P
ER CAPITA GROWTH RATE PROJECTIONS BY CHIEF  
ACTUARY .— 
‘‘(A) I N GENERAL .—Subject to subsection (f)(3)(A), not 
later than April 30, 2013, and annually thereafter, the Chief Actuary of the Centers for Medicare & Medicaid Services shall determine in each such year whether— 
‘‘(i) the projected Medicare per capita growth rate

for the implementation year (as determined under subparagraph (B)); exceeds 
‘‘(ii) the projected Medicare per capita target 
growth rate for the implementation year (as deter-mined under subparagraph (C)). ‘‘(B) M
EDICARE PER CAPITA GROWTH RATE .— 
‘‘(i) I N GENERAL .—For purposes of this section, the

Medicare per capita growth rate for an implementation year shall be calculated as the projected 5-year average (ending with such year) of the growth in Medicare program spending per unduplicated enrollee. 
‘‘(ii) R
EQUIREMENT .—The projection under clause 
(i) shall— 
‘‘(I) to the extent that there is projected to

‘‘(I) to the extent that there is projected to 
be a negative update to the single conversion factor applicable to payments for physicians’ services under section 1848(d) furnished in the proposal year or the implementation year, assume that such update for such services is 0 percent rather than the negative percent that would otherwise apply; and Deadlines. 
Determination. Deadline. 
Transmission.

Transmission. 
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124 STAT. 494 PUBLIC LAW 111–148—MAR. 23, 2010 
‘‘(II) take into account any delivery system 
reforms or other payment changes that have been enacted or published in final rules but not yet implemented as of the making of such calculation. 
‘‘(C) M
EDICARE PER CAPITA TARGET GROWTH RATE .— 
For purposes of this section, the Medicare per capita target growth rate for an implementation year shall be calculated as the projected 5-year average (ending with such year) percentage increase in—

‘‘(i) with respect to a determination year that is 
prior to 2018, the average of the projected percentage increase (if any) in— 
‘‘(I) the Consumer Price Index for All Urban 
Consumers (all items; United States city average); and 
‘‘(II) the medical care expenditure category of 
the Consumer Price Index for All Urban Con-sumers (United States city average); and ‘‘(ii) with respect to a determination year that is

after 2017, the nominal gross domestic product per capita plus 1.0 percentage point. 
‘‘(7) S
AVINGS REQUIREMENT .— 
‘‘(A) I N GENERAL .—If, with respect to a determination

year, the Chief Actuary of the Centers for Medicare & Medicaid Services makes a determination under paragraph (6)(A) that the growth rate described in clause (i) of such paragraph exceeds the growth rate described in clause (ii) of such paragraph, the Chief Actuary shall establish an applicable savings target for the implementation year. 
‘‘(B) A
PPLICABLE SAVINGS TARGET .—For purposes of this

PPLICABLE SAVINGS TARGET .—For purposes of this 
section, the applicable savings target for an implementation year shall be an amount equal to the product of— 
‘‘(i) the total amount of projected Medicare program 
spending for the proposal year; and 
‘‘(ii) the applicable percent for the implementation 
year. ‘‘(C) A
PPLICABLE PERCENT .—For purposes of subpara-
graph (B), the applicable percent for an implementation year is the lesser of— 
‘‘(i) in the case of—

‘‘(i) in the case of— 
‘‘(I) implementation year 2015, 0.5 percent; ‘‘(II) implementation year 2016, 1.0 percent; ‘‘(III) implementation year 2017, 1.25 percent; 
and 
‘‘(IV) implementation year 2018 or any subse-
quent implementation year, 1.5 percent; and ‘‘(ii) the projected excess for the implementation 
year (expressed as a percent) determined under subparagraph (A). 
‘‘(8) P
ER CAPITA RATE OF GROWTH IN NATIONAL HEALTH  
EXPENDITURES .—In each determination year (beginning in

2018), the Chief Actuary of the Centers for Medicare & Med-icaid Services shall project the per capita rate of growth in national health expenditures for the implementation year. Such rate of growth for an implementation year shall be calculated as the projected 5-year average (ending with such year) percent-age increase in national health care expenditures. Effective date.

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124 STAT. 495 PUBLIC LAW 111–148—MAR. 23, 2010 
‘‘(d) C ONGRESSIONAL CONSIDERATION .— 
‘‘(1) I NTRODUCTION .— 
‘‘(A) I N GENERAL .—On the day on which a proposal

is submitted by the President to the House of Representa-tives and the Senate under subsection (c)(4), the legislative proposal (described in subsection (c)(3)(B)(iv)) contained in the proposal shall be introduced (by request) in the Senate by the majority leader of the Senate or by Members of the Senate designated by the majority leader of the Senate and shall be introduced (by request) in the House by the majority leader of the House or by Members of the House designated by the majority

Members of the House designated by the majority leader of the House.

‘‘(B) N
OT IN SESSION .—If either House is not in session 
on the day on which such legislative proposal is submitted, the legislative proposal shall be introduced in that House, as provided in subparagraph (A), on the first day thereafter on which that House is in session. 
‘‘(C) A
NY MEMBER .—If the legislative proposal is not

NY MEMBER .—If the legislative proposal is not 
introduced in either House within 5 days on which that House is in session after the day on which the legislative proposal is submitted, then any Member of that House may introduce the legislative proposal. 
‘‘(D) R
EFERRAL .—The legislation introduced under this

EFERRAL .—The legislation introduced under this 
paragraph shall be referred by the Presiding Officers of the respective Houses to the Committee on Finance in the Senate and to the Committee on Energy and Commerce and the Committee on Ways and Means in the House of Representatives. ‘‘(2) C
OMMITTEE CONSIDERATION OF PROPOSAL .— 
‘‘(A) R EPORTING BILL .—Not later than April 1 of any

proposal year in which a proposal is submitted by the President to Congress under this section, the Committee on Ways and Means and the Committee on Energy and Commerce of the House of Representatives and the Com-mittee on Finance of the Senate may report the bill referred to the Committee under paragraph (1)(D) with committee amendments related to the Medicare program. 
‘‘(B) C
ALCULATIONS .—In determining whether a com-

mittee amendment meets the requirement of subparagraph (A), the reductions in Medicare program spending during the 3-month period immediately preceding the implementa-tion year shall be counted to the extent that such reductions are a result of the implementation provisions in the com-mittee amendment for a change in the payment rate for an item or service that was effective during such period pursuant to such amendment. 
‘‘(C) C

‘‘(C) C
OMMITTEE JURISDICTION .—Notwithstanding rule 
XV of the Standing Rules of the Senate, a committee amendment described in subparagraph (A) may include matter not within the jurisdiction of the Committee on Finance if that matter is relevant to a proposal contained in the bill submitted under subsection (c)(3). 
‘‘(D) D
ISCHARGE .—If, with respect to the House

‘‘(D) D
ISCHARGE .—If, with respect to the House 
involved, the committee has not reported the bill by the date required by subparagraph (A), the committee shall be discharged from further consideration of the proposal. Deadline. Proposal. 
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124 STAT. 496 PUBLIC LAW 111–148—MAR. 23, 2010 
‘‘(3) L IMITATION ON CHANGES TO THE BOARD RECOMMENDA -
TIONS .— 
‘‘(A) I N GENERAL .—It shall not be in order in the Senate 
or the House of Representatives to consider any bill, resolu-tion, or amendment, pursuant to this subsection or con-ference report thereon, that fails to satisfy the requirements of subparagraphs (A)(i) and (C) of subsection (c)(2). 
‘‘(B) L
IMITATION ON CHANGES TO THE BOARD REC -

‘‘(B) L
OMMENDATIONS IN OTHER LEGISLATION .—It shall not be 
in order in the Senate or the House of Representatives to consider any bill, resolution, amendment, or conference report (other than pursuant to this section) that would repeal or otherwise change the recommendations of the Board if that change would fail to satisfy the requirements of subparagraphs (A)(i) and (C) of subsection (c)(2). 
‘‘(C) L
IMITATION ON CHANGES TO THIS SUBSECTION .—

IMITATION ON CHANGES TO THIS SUBSECTION .— 
It shall not be in order in the Senate or the House of Representatives to consider any bill, resolution, amend-ment, or conference report that would repeal or otherwise change this subsection. 
‘‘(D) W
AIVER .—This paragraph may be waived or sus-
pended in the Senate only by the affirmative vote of three- fifths of the Members, duly chosen and sworn. 
‘‘(E) A
PPEALS .—An affirmative vote of three-fifths of

PPEALS .—An affirmative vote of three-fifths of 
the Members of the Senate, duly chosen and sworn, shall be required in the Senate to sustain an appeal of the ruling of the Chair on a point of order raised under this paragraph. ‘‘(4) E
XPEDITED PROCEDURE .— 
‘‘(A) C ONSIDERATION .—A motion to proceed to the 
consideration of the bill in the Senate is not debatable. 
‘‘(B) A MENDMENT .— 
‘‘(i) T IME LIMITATION .—Debate in the Senate on

any amendment to a bill under this section shall be limited to 1 hour, to be equally divided between, and controlled by, the mover and the manager of the bill, and debate on any amendment to an amendment, debatable motion, or appeal shall be limited to 30 minutes, to be equally divided between, and controlled by, the mover and the manager of the bill, except that in the event the manager of the bill is in favor of any such amendment, motion, or appeal, the time in opposition thereto shall be

appeal, the time in opposition thereto shall be controlled by the minority leader or such leader’s designee.

‘‘(ii) G
ERMANE .—No amendment that is not ger-
mane to the provisions of such bill shall be received. 
‘‘(iii) A DDITIONAL TIME .—The leaders, or either of 
them, may, from the time under their control on the passage of the bill, allot additional time to any Senator during the consideration of any amendment, debatable motion, or appeal. 
‘‘(iv) A
MENDMENT NOT IN ORDER .—It shall not be

‘‘(iv) A
MENDMENT NOT IN ORDER .—It shall not be 
in order to consider an amendment that would cause the bill to result in a net reduction in total Medicare program spending in the implementation year that is less than the applicable savings target established 
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124 STAT. 497 PUBLIC LAW 111–148—MAR. 23, 2010 
under subsection (c)(7)(B) for such implementation 
year. 
‘‘(v) W AIVER AND APPEALS .—This paragraph may 
be waived or suspended in the Senate only by the affirmative vote of three-fifths of the Members, duly chosen and sworn. An affirmative vote of three-fifths of the Members of the Senate, duly chosen and sworn, shall be required in the Senate to sustain an appeal of the ruling of the Chair on a point of order raised under this section. ‘‘(C) C

ONSIDERATION BY THE OTHER HOUSE .— 
‘‘(i) I N GENERAL .—The expedited procedures pro-
vided in this subsection for the consideration of a bill introduced pursuant to paragraph (1) shall not apply to such a bill that is received by one House from the other House if such a bill was not introduced in the receiving House. 
‘‘(ii) B
EFORE PASSAGE .—If a bill that is introduced

EFORE PASSAGE .—If a bill that is introduced 
pursuant to paragraph (1) is received by one House from the other House, after introduction but before disposition of such a bill in the receiving House, then the following shall apply: 
‘‘(I) The receiving House shall consider the 
bill introduced in that House through all stages of consideration up to, but not including, passage. 
‘‘(II) The question on passage shall be put

‘‘(II) The question on passage shall be put 
on the bill of the other House as amended by the language of the receiving House. ‘‘(iii) A
FTER PASSAGE .—If a bill introduced pursuant

FTER PASSAGE .—If a bill introduced pursuant 
to paragraph (1) is received by one House from the other House, after such a bill is passed by the receiving House, then the vote on passage of the bill that origi-nates in the receiving House shall be considered to be the vote on passage of the bill received from the other House as amended by the language of the receiving House. 
‘‘(iv) D
ISPOSITION .—Upon disposition of a bill intro-

duced pursuant to paragraph (1) that is received by one House from the other House, it shall no longer be in order to consider the bill that originates in the receiving House. 
‘‘(v) L
IMITATION .—Clauses (ii), (iii), and (iv) shall 
apply only to a bill received by one House from the other House if the bill— 
‘‘(I) is related only to the program under this 
title; and 
‘‘(II) satisfies the requirements of subpara-

graphs (A)(i) and (C) of subsection (c)(2). 
‘‘(D) S
ENATE LIMITS ON DEBATE .— 
‘‘(i) I N GENERAL .—In the Senate, consideration of 
the bill and on all debatable motions and appeals in connection therewith shall not exceed a total of 30 hours, which shall be divided equally between the majority and minority leaders or their designees. 
‘‘(ii) M
OTION TO FURTHER LIMIT DEBATE .—A motion

OTION TO FURTHER LIMIT DEBATE .—A motion 
to further limit debate on the bill is in order and is not debatable. Applicability. Applicability. 
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124 STAT. 498 PUBLIC LAW 111–148—MAR. 23, 2010 
‘‘(iii) M OTION OR APPEAL .—Any debatable motion 
or appeal is debatable for not to exceed 1 hour, to be divided equally between those favoring and those opposing the motion or appeal. 
‘‘(iv) F
INAL DISPOSITION .—After 30 hours of consid-

eration, the Senate shall proceed, without any further debate on any question, to vote on the final disposition thereof to the exclusion of all amendments not then pending before the Senate at that time and to the exclusion of all motions, except a motion to table, or to reconsider and one quorum call on demand to estab-lish the presence of a quorum (and motions required to establish a quorum) immediately before the final vote begins. ‘‘(E) C

ONSIDERATION IN CONFERENCE .— 
‘‘(i) I N GENERAL .—Consideration in the Senate and 
the House of Representatives on the conference report or any messages between Houses shall be limited to 10 hours, equally divided and controlled by the majority and minority leaders of the Senate or their designees and the Speaker of the House of Representa-tives and the minority leader of the House of Rep-resentatives or their designees. 
‘‘(ii) T
IME LIMITATION .—Debate in the Senate on

any amendment under this subparagraph shall be lim-ited to 1 hour, to be equally divided between, and controlled by, the mover and the manager of the bill, and debate on any amendment to an amendment, debatable motion, or appeal shall be limited to 30 minutes, to be equally divided between, and controlled by, the mover and the manager of the bill, except that in the event the manager of the bill is in favor of any such amendment, motion, or appeal, the time in opposition thereto shall be

eration, the Senate shall proceed, without any further debate on any question, to vote on the final disposition thereof to the exclusion of all motions not then pending before the Senate at that time or necessary to resolve the differences between the Houses and to the exclu-sion of all other motions, except a motion to table, or to reconsider and one quorum call on demand to establish the presence of a quorum (and motions required to establish a quorum) immediately before the final vote

‘‘(iv) L
IMITATION .—Clauses (i) through (iii) shall 
only apply to a conference report, message or the amendments thereto if the conference report, message, or an amendment thereto— 
title; and 
‘‘(F) V
ETO.—If the President vetoes the bill debate on 
a veto message in the Senate under this subsection shall Applicability.

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124 STAT. 499 PUBLIC LAW 111–148—MAR. 23, 2010 
be 1 hour equally divided between the majority and 
minority leaders or their designees. ‘‘(5) R
ULES OF THE SENATE AND HOUSE OF REPRESENTA -
TIVES .—This subsection and subsection (f)(2) are enacted by 
Congress— 
‘‘(A) as an exercise of the rulemaking power of the

Senate and the House of Representatives, respectively, and is deemed to be part of the rules of each House, respec-tively, but applicable only with respect to the procedure to be followed in that House in the case of bill under this section, and it supersedes other rules only to the extent that it is inconsistent with such rules; and 
‘‘(B) 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. 
‘‘(e) I
MPLEMENTATION OF PROPOSAL .— 
‘‘(1) I N GENERAL .—Notwithstanding any other provision of

law, the Secretary shall, except as provided in paragraph (3), implement the recommendations contained in a proposal sub-mitted by the President to Congress pursuant to this section on August 15 of the year in which the proposal is so submitted. 
‘‘(2) A
‘‘(A) I N GENERAL .—A recommendation described in 
paragraph (1) shall apply as follows: 
‘‘(i) In the case of a recommendation that is a

change in the payment rate for an item or service under Medicare in which payment rates change on a fiscal year basis (or a cost reporting period basis that relates to a fiscal year), on a calendar year basis (or a cost reporting period basis that relates to a cal-endar year), or on a rate year basis (or a cost reporting period basis that relates to a rate year), such rec-ommendation shall apply to items and services fur-nished on the first day of the first fiscal year, calendar year, or rate

of the first fiscal year, calendar year, or rate year (as the case may be) that begins after such August 15.

‘‘(ii) In the case of a recommendation relating to 
payments to plans under parts C and D, such rec-ommendation shall apply to plan years beginning on the first day of the first calendar year that begins after such August 15. 
‘‘(iii) In the case of any other recommendation, 
such recommendation shall be addressed in the regular regulatory process timeframe and shall apply as soon as practicable. ‘‘(B) I
NTERIM FINAL RULEMAKING .—The Secretary may

NTERIM FINAL RULEMAKING .—The Secretary may 
use interim final rulemaking to implement any rec-ommendation described in paragraph (1). ‘‘(3) E
XCEPTION .—The Secretary shall not be required to 
implement the recommendations contained in a proposal sub-mitted in a proposal year by the President to Congress pursuant to this section if— 
‘‘(A) prior to August 15 of the proposal year, Federal

legislation is enacted that includes the following provision: ‘This Act supercedes the recommendations of the Board 
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124 STAT. 500 PUBLIC LAW 111–148—MAR. 23, 2010 
contained in the proposal submitted, in the year which 
includes the date of enactment of this Act, to Congress under section 1899A of the Social Security Act.’; and 
‘‘(B) in the case of implementation year 2020 and subse-
quent implementation years, a joint resolution described in subsection (f)(1) is enacted not later than August 15, 2017. ‘‘(4) N
O AFFECT ON AUTHORITY TO IMPLEMENT CERTAIN

O AFFECT ON AUTHORITY TO IMPLEMENT CERTAIN  
PROVISIONS .—Nothing in paragraph (3) shall be construed to 
affect the authority of the Secretary to implement any rec-ommendation contained in a proposal or advisory report under this section to the extent that the Secretary otherwise has the authority to implement such recommendation administra-tively. 
‘‘(5) L
IMITATION ON REVIEW .—There shall be no administra-

tive or judicial review under section 1869, section 1878, or otherwise of the implementation by the Secretary under this subsection of the recommendations contained in a proposal. ‘‘(f) J
OINT RESOLUTION REQUIRED TODISCONTINUE THE  
BOARD .— 
‘‘(1) I N GENERAL .—For purposes of subsection (e)(3)(B), a 
joint resolution described in this paragraph means only a joint resolution— 
‘‘(A) that is introduced in 2017 by not later than Feb-
ruary 1 of such year;

ruary 1 of such year; 
‘‘(B) which does not have a preamble; ‘‘(C) the title of which is as follows: ‘Joint resolution 
approving the discontinuation of the process for consider-ation and automatic implementation of the annual proposal of the Independent Medicare Advisory Board under section 1899A of the Social Security Act’; and 
‘‘(D) the matter after the resolving clause of which

is as follows: ‘That Congress approves the discontinuation of the process for consideration and automatic implementa-tion of the annual proposal of the Independent Medicare Advisory Board under section 1899A of the Social Security Act.’. ‘‘(2) P
ROCEDURE .— 
‘‘(A) R EFERRAL .—A joint resolution described in para-
graph (1) shall be referred to the Committee on Ways and Means and the Committee on Energy and Commerce of the House of Representatives and the Committee on Finance of the Senate.

‘‘(B) D
ISCHARGE .—In the Senate, if the committee to 
which is referred a joint resolution described in paragraph (1) has not reported such joint resolution (or an identical joint resolution) at the end of 20 days after the joint resolu-tion described in paragraph (1) is introduced, such com-mittee 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.

‘‘(C) C
ONSIDERATION .— 
‘‘(i) I N GENERAL .—In the Senate, when the com-
mittee to which a joint resolution is referred has reported, or when a committee is discharged (under subparagraph (C)) from further consideration of a joint Deadline. Petition. Definition. Deadline. 
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124 STAT. 501 PUBLIC LAW 111–148—MAR. 23, 2010 
resolution described in paragraph (1), 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 to be made, and all points of order against the joint resolution (and against consideration of the joint reso-lution) are waived, except for points of order under the Congressional Budget act of 1974 or under budget resolutions pursuant to that Act. The motion is not debatable. A motion to reconsider the vote by which the motion is

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.

ation of 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 the majority leader and the minority leader, or their designees. A motion fur-ther to 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. 
‘‘(iii) P

‘‘(iii) P
ASSAGE .—In the Senate, immediately fol-
lowing the conclusion of the debate on a joint resolution described in paragraph (1), and a single quorum call at the conclusion of the debate if requested in accord-ance with the rules of the Senate, the vote on passage of the joint resolution shall occur. 
‘‘(iv) A
PPEALS .—Appeals from the decisions of the

PPEALS .—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 paragraph (1) shall be decided without debate. ‘‘(D) O
THER HOUSE ACTS FIRST .—If, before the passage 
by 1 House of a joint resolution of that House described in paragraph (1), that House receives from the other House a joint resolution described in paragraph (1), then the following procedures shall apply:

‘‘(i) The joint resolution of the other House shall 
not be referred to a committee. 
‘‘(ii) With respect to a joint resolution described 
in paragraph (1) of the House receiving the joint resolu-
tion— 
‘‘(I) the procedure in that House shall be the 
same as if no joint resolution had been received from the other House; but 
‘‘(II) the vote on final passage shall be on 
the joint resolution of the other House. 
‘‘(E) E
XCLUDED DAYS .—For purposes of determining the

XCLUDED DAYS .—For purposes of determining the 
period specified in subparagraph (B), there shall be excluded any days either House of Congress is adjourned for more than 3 days during a session of Congress. Applicability. 
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124 STAT. 502 PUBLIC LAW 111–148—MAR. 23, 2010 
‘‘(F) M AJORITY REQUIRED FOR ADOPTION .—A joint reso-
lution considered under this subsection shall require an affirmative vote of three-fifths of the Members, duly chosen and sworn, for adoption. ‘‘(3) T
ERMINATION .—If a joint resolution described in para-
graph (1) is enacted not later than August 15, 2017— 
‘‘(A) the Chief Actuary of the Medicare & Medicaid 
Services shall not— 
‘‘(i) make any determinations under subsection

‘‘(i) make any determinations under subsection 
(c)(6) after May 1, 2017; or 
‘‘(ii) provide any opinion pursuant to subsection 
(c)(3)(B)(iii) after January 16, 2018; ‘‘(B) the Board shall not submit any proposals or 
advisory reports to Congress under this section after January 16, 2018; and 
‘‘(C) the Board and the consumer advisory council 
under subsection (k) shall terminate on August 16, 2018. 
‘‘(g) B
OARD MEMBERSHIP ; T ERMS OF OFFICE ; C HAIRPERSON ; 
REMOVAL .— 
‘‘(1) M EMBERSHIP .—

REMOVAL .— 
‘‘(1) M EMBERSHIP .— 
‘‘(A) I N GENERAL .—The Board shall be composed of— 
‘‘(i) 15 members appointed by the President, by 
and with the advice and consent of the Senate; and 
‘‘(ii) the Secretary, the Administrator of the Center 
for Medicare & Medicaid Services, and the Adminis-trator of the Health Resources and Services Adminis-tration, all of whom shall serve ex officio as nonvoting members of the Board. ‘‘(B) Q
UALIFICATIONS .— 
‘‘(i) I N GENERAL .—The appointed membership of

the Board shall include individuals with national rec-ognition for their expertise in health finance and economics, actuarial science, health facility manage-ment, health plans and integrated delivery systems, reimbursement of health facilities, allopathic and osteo-pathic physicians, and other providers of health serv-ices, and other related fields, who provide a mix of different professionals, broad geographic representa-tion, and a balance between urban and rural represent-atives. 
‘‘(ii) I

Board shall include (but not be limited to) physicians and other health professionals, experts in the area of pharmaco-economics or prescription drug benefit pro-grams, employers, third-party payers, individuals skilled in the conduct and interpretation of biomedical, health services, and health economics research and expertise in outcomes and effectiveness research and technology assessment. Such membership shall also include representatives of consumers and the elderly. 
‘‘(iii) M

‘‘(iii) M
AJORITY NONPROVIDERS .—Individuals who 
are directly involved in the provision or management of the delivery of items and services covered under this title shall not constitute a majority of the appointed membership of the Board. ‘‘(C) E
THICAL DISCLOSURE .—The President shall estab-
lish a system for public disclosure by appointed members President. Public information. President. 
Appointments. Deadlines.

Appointments. Deadlines. 
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124 STAT. 503 PUBLIC LAW 111–148—MAR. 23, 2010 
of the Board of financial and other potential conflicts of 
interest relating to such members. Appointed members of the Board shall be treated as officers in the executive branch for purposes of applying title I of the Ethics in Government Act of 1978 (Public Law 95–521). 
‘‘(D) C
ONFLICTS OF INTEREST .—No individual may serve 
as an appointed member if that individual engages in any other business, vocation, or employment. 
‘‘(E) C

‘‘(E) C
ONSULTATION WITH CONGRESS .—In selecting 
individuals for nominations for appointments to the Board, the President shall consult with— 
‘‘(i) the majority leader of the Senate concerning 
the appointment of 3 members; 
‘‘(ii) the Speaker of the House of Representatives 
concerning the appointment of 3 members; 
‘‘(iii) the minority leader of the Senate concerning 
the appointment of 3 members; and 
‘‘(iv) the minority leader of the House of Represent-

atives concerning the appointment of 3 members. 
‘‘(2) T
ERM OF OFFICE .—Each appointed member shall hold 
office for a term of 6 years except that— 
‘‘(A) a member may not serve more than 2 full consecu-
tive terms (but may be reappointed to 2 full consecutive terms after being appointed to fill a vacancy on the Board); 
‘‘(B) a member appointed to fill a vacancy occurring

prior to the expiration of the term for which that member’s predecessor was appointed shall be appointed for the remainder of such term; 
‘‘(C) a member may continue to serve after the expira-
tion of the member’s term until a successor has taken office; and 
‘‘(D) of the members first appointed under this section,

5 shall be appointed for a term of 1 year, 5 shall be appointed for a term of 3 years, and 5 shall be appointed for a term of 6 years, the term of each to be designated by the President at the time of nomination. ‘‘(3) C
HAIRPERSON .— 
‘‘(A) I N GENERAL .—The Chairperson shall be appointed 
by the President, by and with the advice and consent 
of the Senate, from among the members of the Board. 
‘‘(B) D UTIES .—The Chairperson shall be the principal

executive officer of the Board, and shall exercise all of the executive and administrative functions of the Board, including functions of the Board with respect to— 
‘‘(i) the appointment and supervision of personnel 
employed by the Board; 
‘‘(ii) the distribution of business among personnel 
appointed and supervised by the Chairperson and among administrative units of the Board; and 
‘‘(iii) the use and expenditure of funds. 
‘‘(C) G
OVERNANCE .—In carrying out any of the func-

tions under subparagraph (B), the Chairperson shall be governed by the general policies established by the Board and by the decisions, findings, and determinations the Board shall by law be authorized to make. Appointment. 
President. President. 
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124 STAT. 504 PUBLIC LAW 111–148—MAR. 23, 2010 
‘‘(D) R EQUESTS FOR APPROPRIATIONS .—Requests or esti-
mates for regular, supplemental, or deficiency appropria-tions on behalf of the Board may not be submitted by the Chairperson without the prior approval of a majority vote of the Board. ‘‘(4) R
EMOVAL .—Any appointed member may be removed 
by the President for neglect of duty or malfeasance in office, but for no other cause. ‘‘(h) V
ACANCIES ; Q UORUM ; SEAL; VICECHAIRPERSON ; VOTING

ONREPORTS .— 
‘‘(1) V ACANCIES .—No vacancy on the Board shall impair 
the right of the remaining members to exercise all the powers of the Board. 
‘‘(2) Q
UORUM .—A majority of the appointed members of 
the Board shall constitute a quorum for the transaction of business, but a lesser number of members may hold hearings. 
‘‘(3) S
EAL.—The Board shall have an official seal, of which 
judicial notice shall be taken. 
‘‘(4) V ICE CHAIRPERSON .—The Board shall annually elect

a Vice Chairperson to act in the absence or disability of the Chairperson or in case of a vacancy in the office of the Chair-person. 
‘‘(5) V
OTING ON PROPOSALS .—Any proposal of the Board 
must be approved by the majority of appointed members present. ‘‘(i) P
OWERS OF THE BOARD .— 
‘‘(1) H EARINGS .—The Board may hold such hearings, sit 
and act at such times and places, take such testimony, and receive such evidence as the Board considers advisable to carry out this section. 
‘‘(2) A

‘‘(2) A
UTHORITY TO INFORM RESEARCH PRIORITIES FOR DATA  
COLLECTION .—The Board may advise the Secretary on priorities 
for health services research, particularly as such priorities per-tain to necessary changes and issues regarding payment reforms under Medicare. 
‘‘(3) O
BTAINING OFFICIAL DATA .—The Board may secure

BTAINING OFFICIAL DATA .—The Board may secure 
directly from any department or agency of the United States information necessary to enable it to carry out this section. Upon request of the Chairperson, the head of that department or agency shall furnish that information to the Board on an agreed upon schedule. 
‘‘(4) P
OSTAL SERVICES .—The Board may use the United 
States mails in the same manner and under the same conditions as other departments and agencies of the Federal Government. 
‘‘(5) G

‘‘(5) G
IFTS.—The Board may accept, use, and dispose of 
gifts or donations of services or property. 
‘‘(6) O FFICES .—The Board shall maintain a principal office 
and such field offices as it determines necessary, and may meet and exercise any of its powers at any other place. ‘‘(j) P
ERSONNEL MATTERS .— 
‘‘(1) C OMPENSATION OF MEMBERS AND CHAIRPERSON .—Each

appointed member, other than the Chairperson, shall be com-pensated at a rate equal to the annual rate of basic pay pre-scribed for level III of the Executive Schedule under section 5315 of title 5, United States Code. The Chairperson shall be compensated at a rate equal to the daily equivalent of the annual rate of basic pay prescribed for level II of the Deadline.

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124 STAT. 505 PUBLIC LAW 111–148—MAR. 23, 2010 
Executive Schedule under section 5315 of title 5, United States 
Code. 
‘‘(2) T RAVEL EXPENSES .—The appointed members shall be 
allowed travel expenses, including per diem in lieu of subsist-ence, at rates authorized for employees of agencies under sub-chapter I of chapter 57 of title 5, United States Code, while away from their homes or regular places of business in the performance of services for the Board. 
‘‘(3) S
TAFF .—

‘‘(3) S
TAFF .— 
‘‘(A) I N GENERAL .—The Chairperson may, without 
regard to the civil service laws and regulations, appoint and terminate an executive director and such other addi-tional personnel as may be necessary to enable the Board to perform its duties. The employment of an executive director shall be subject to confirmation by the Board. 
‘‘(B) C
OMPENSATION .—The Chairperson may fix the

OMPENSATION .—The Chairperson may fix the 
compensation of the executive director and other personnel without regard to chapter 51 and subchapter III of chapter 53 of title 5, United States Code, relating to classification of positions and General Schedule pay rates, except that the rate of pay for the executive director and other per-sonnel may not exceed the rate payable for level V of the Executive Schedule under section 5316 of such title. ‘‘(4) D

ETAIL OF GOVERNMENT EMPLOYEES .—Any Federal 
Government employee may be detailed to the Board without reimbursement, and such detail shall be without interruption or loss of civil service status or privilege. 
‘‘(5) P
ROCUREMENT OF TEMPORARY AND INTERMITTENT SERV -
ICES.—The Chairperson may procure temporary and intermit-

tent services under section 3109(b) of title 5, United States Code, at rates for individuals which do not exceed the daily equivalent of the annual rate of basic pay prescribed for level V of the Executive Schedule under section 5316 of such title. ‘‘(k) C
ONSUMER ADVISORY COUNCIL .— 
‘‘(1) I N GENERAL .—There is established a consumer advisory 
council to advise the Board on the impact of payment policies under this title on consumers. 
‘‘(2) M
EMBERSHIP .—

‘‘(2) M
EMBERSHIP .— 
‘‘(A) N UMBER AND APPOINTMENT .—The consumer 
advisory council shall be composed of 10 consumer rep-resentatives appointed by the Comptroller General of the United States, 1 from among each of the 10 regions estab-lished by the Secretary as of the date of enactment of this section. 
‘‘(B) Q
UALIFICATIONS .—The membership of the council 
shall represent the interests of consumers and particular communities. ‘‘(3) D
UTIES .—The consumer advisory council shall, subject

to the call of the Board, meet not less frequently than 2 times each year in the District of Columbia. 
‘‘(4) O
PEN MEETINGS .—Meetings of the consumer advisory 
council shall be open to the public. 
‘‘(5) E LECTION OF OFFICERS .—Members of the consumer 
advisory council shall elect their own officers. 
‘‘(6) A PPLICATION OF FACA .—The Federal Advisory Com-

mittee Act (5 U.S.C. App.) shall apply to the consumer advisory council except that section 14 of such Act shall not apply. Deadlines. Establishment. 
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124 STAT. 506 PUBLIC LAW 111–148—MAR. 23, 2010 
‘‘(l) D EFINITIONS .—In this section: 
‘‘(1) B OARD ; CHAIRPERSON ; MEMBER .—The terms ‘Board’, 
‘Chairperson’, and ‘Member’ mean the Independent Medicare Advisory Board established under subsection (a) and the Chair-person and any Member thereof, respectively. 
‘‘(2) M
EDICARE .—The term ‘Medicare’ means the program 
established under this title, including parts A, B, C, and D. 
‘‘(3) M EDICARE BENEFICIARY .—The term ‘Medicare bene-

ficiary’ means an individual who is entitled to, or enrolled for, benefits under part A or enrolled for benefits under part B. 
‘‘(4) M
EDICARE PROGRAM SPENDING .—The term ‘Medicare 
program spending’ means program spending under parts A, B, and D net of premiums. ‘‘(m) F
UNDING .— 
‘‘(1) I N GENERAL .—There are appropriated to the Board 
to carry out its duties and functions— 
‘‘(A) for fiscal year 2012, $15,000,000; and ‘‘(B) for each subsequent fiscal year, the amount appro-

priated under this paragraph for the previous fiscal year increased by the annual percentage increase in the Con-sumer Price Index for All Urban Consumers (all items; United States city average) as of June of the previous fiscal year. ‘‘(2) F
ROM TRUST FUNDS .—Sixty percent of amounts appro-

priated under paragraph (1) shall be derived by transfer from the Federal Hospital Insurance Trust Fund under section 1817 and 40 percent of amounts appropriated under such paragraph shall be derived by transfer from the Federal Supplementary Medical Insurance Trust Fund under section 1841.’’. 
(2) L
OBBYING COOLING -OFF PERIOD FOR MEMBERS OF THE  
INDEPENDENT MEDICARE ADVISORY BOARD .—Section 207(c) of

title 18, United States Code, is amended by inserting at the end the following: 
‘‘(3) M
EMBERS OF THE INDEPENDENT MEDICARE ADVISORY  
BOARD .— 
‘‘(A) I N GENERAL .—Paragraph (1) shall apply to a 
member of the Independent Medicare Advisory Board under section 1899A. 
‘‘(B) A
GENCIES AND CONGRESS .—For purposes of para-

graph (1), the agency in which the individual described in subparagraph (A) served shall be considered to be the Independent Medicare Advisory Board, the Department of Health and Human Services, and the relevant committees of jurisdiction of Congress, including the Committee on Ways and Means and the Committee on Energy and Com-merce of the House of Representatives and the Committee on Finance of the Senate.’’. 
(b) GAO S

(b) GAO S
TUDY AND REPORT ON DETERMINATION AND  
IMPLEMENTATION OF PAYMENT AND COVERAGE POLICIES UNDER THE  
MEDICARE PROGRAM .— 
(1) I NITIAL STUDY AND REPORT .— 
States (in this section referred to as the ‘‘Comptroller Gen-eral’’) shall conduct a study on changes to payment policies, methodologies, and rates and coverage policies and meth-odologies under the Medicare program under title XVIII 42 USC 1395kkk–1. Applicability.

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124 STAT. 507 PUBLIC LAW 111–148—MAR. 23, 2010 
of the Social Security Act as a result of the recommenda-
tions contained in the proposals made by the Independent Medicare Advisory Board under section 1899A of such Act (as added by subsection (a)), including an analysis of the effect of such recommendations on— 
(i) Medicare beneficiary access to providers and 
items and services; 
(ii) the affordability of Medicare premiums and

(ii) the affordability of Medicare premiums and 
cost-sharing (including deductibles, coinsurance, and copayments); 
(iii) the potential impact of changes on other 
government or private-sector purchasers and payers of care; and 
(iv) quality of patient care, including patient 
experience, outcomes, and other measures of care. (B) R
EPORT .—Not later than July 1, 2015, the Comp-

troller General shall submit to Congress a report containing the results of the study conducted under subparagraph (A), together with recommendations for such legislation and administrative action as the Comptroller General determines appropriate. (2) S
UBSEQUENT STUDIES AND REPORTS .—The Comptroller

UBSEQUENT STUDIES AND REPORTS .—The Comptroller 
General shall periodically conduct such additional studies and submit reports to Congress on changes to Medicare payments policies, methodologies, and rates and coverage policies and methodologies as the Comptroller General determines appro-priate, in consultation with the Committee on Ways and Means and the Committee on Energy and Commerce of the House of Representatives and the Committee on Finance of the Senate. (c) C

ONFORMING AMENDMENTS .—Section 1805(b) of the Social 
Security Act (42 U.S.C. 1395b–6(b)) is amended— 
(1) by redesignating paragraphs (4) through (8) as para-
graphs (5) through (9), respectively; and 
(2) by inserting after paragraph (3) the following: ‘‘(4) R
EVIEW AND COMMENT ON THE INDEPENDENT MEDICARE  
ADVISORY BOARD OR SECRETARIAL PROPOSAL .—If the Inde-

pendent Medicare Advisory Board (as established under sub-section (a) of section 1899A) or the Secretary submits a proposal to the Commission under such section in a year, the Commis-sion shall review the proposal and, not later than March 1 of that year, submit to the Committee on Ways and Means and the Committee on Energy and Commerce of the House of Representatives and the Committee on Finance of the Senate written comments on such proposal. Such comments may include such recommendations as

Such comments may include such recommendations as the Commission deems appro-priate.’’.

Subtitle F—Health Care Quality 
Improvements 
SEC. 3501. HEALTH CARE DELIVERY SYSTEM RESEARCH; QUALITY 
IMPROVEMENT TECHNICAL ASSISTANCE. 
Part D of title IX of the Public Health Service Act, as amended 
by section 3013, is further amended by adding at the end the following: Deadline. 
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124 STAT. 508 PUBLIC LAW 111–148—MAR. 23, 2010 
‘‘Subpart II—Health Care Quality Improvement 
Programs 
‘‘SEC. 933. HEALTH CARE DELIVERY SYSTEM RESEARCH. 
‘‘(a) P URPOSE .—The purposes of this section are to— 
‘‘(1) enable the Director to identify, develop, evaluate,

disseminate, and provide training in innovative methodologies and strategies for quality improvement practices in the delivery of health care services that represent best practices (referred to as ‘best practices’) in health care quality, safety, and value; and 
‘‘(2) ensure that the Director is accountable for imple-
menting a model to pursue such research in a collaborative manner with other related Federal agencies. ‘‘(b) G
ENERAL FUNCTIONS OF THE CENTER .—The Center for

ENERAL FUNCTIONS OF THE CENTER .—The Center for 
Quality Improvement and Patient Safety of the Agency for Healthcare Research and Quality (referred to in this section as the ‘Center’), or any other relevant agency or department designated by the Director, shall— 
‘‘(1) carry out its functions using research from a variety

of disciplines, which may include epidemiology, health services, sociology, psychology, human factors engineering, biostatistics, health economics, clinical research, and health informatics; 
‘‘(2) conduct or support activities consistent with the pur-
poses described in subsection (a), and for— 
‘‘(A) best practices for quality improvement practices 
in the delivery of health care services; and 
‘‘(B) that include changes in processes of care and

the redesign of systems used by providers that will reliably result in intended health outcomes, improve patient safety, and reduce medical errors (such as skill development for health care providers in team-based health care delivery and rapid cycle process improvement) and facilitate adop-tion of improved workflow; ‘‘(3) identify health care providers, including health care 
systems, single institutions, and individual providers, that—

‘‘(A) deliver consistently high-quality, efficient health 
care services (as determined by the Secretary); and 
‘‘(B) employ best practices that are adaptable and scal-
able to diverse health care settings or effective in improving care across diverse settings; ‘‘(4) assess research, evidence, and knowledge about what 
strategies and methodologies are most effective in improving health care delivery; 
‘‘(5) find ways to translate such information rapidly and

effectively into practice, and document the sustainability of those improvements; 
‘‘(6) create strategies for quality improvement through the 
development of tools, methodologies, and interventions that can successfully reduce variations in the delivery of health care; 
‘‘(7) identify, measure, and improve organizational, human,

or other causative factors, including those related to the culture and system design of a health care organization, that contribute to the success and sustainability of specific quality improvement and patient safety strategies; 42 USC 299b–33. 
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124 STAT. 509 PUBLIC LAW 111–148—MAR. 23, 2010 
‘‘(8) provide for the development of best practices in the 
delivery of health care services that— 
‘‘(A) have a high likelihood of success, based on struc-
tured review of empirical evidence; 
‘‘(B) are specified with sufficient detail of the individual 
processes, steps, training, skills, and knowledge required for implementation and incorporation into workflow of health care practitioners in a variety of settings;

‘‘(C) are designed to be readily adapted by health care 
providers in a variety of settings; and 
‘‘(D) where applicable, assist health care providers in 
working with other health care providers across the con-tinuum of care and in engaging patients and their families in improving the care and patient health outcomes; ‘‘(9) provide for the funding of the activities of organizations

with recognized expertise and excellence in improving the delivery of health care services, including children’s health care, by involving multiple disciplines, managers of health care entities, broad development and training, patients, caregivers and families, and frontline health care workers, including activi-ties for the examination of strategies to share best quality improvement practices and to promote excellence in the delivery of health care services; and

‘‘(10) build capacity at the State and community level to 
lead quality and safety efforts through education, training, and mentoring programs to carry out the activities under para-graphs (1) through (9). ‘‘(c) R
ESEARCH FUNCTIONS OF CENTER .— 
‘‘(1) I N GENERAL .—The Center shall support, such as

through a contract or other mechanism, research on health care delivery system improvement and the development of tools to facilitate adoption of best practices that improve the quality, safety, and efficiency of health care delivery services. Such support may include establishing a Quality Improvement Net-work Research Program for the purpose of testing, scaling, and disseminating of interventions to improve quality and effi-ciency in health care. Recipients of funding under the Program may

care. Recipients of funding under the Program may include national, State, multi-State, or multi-site quality improvement networks.

‘‘(2) R
ESEARCH REQUIREMENTS .—The research conducted 
pursuant to paragraph (1) shall— 
‘‘(A) address the priorities identified by the Secretary 
in the national strategic plan established under section 399HH; 
‘‘(B) identify areas in which evidence is insufficient

to identify strategies and methodologies, taking into consid-eration areas of insufficient evidence identified by the entity with a contract under section 1890(a) of the Social Security Act in the report required under section 399JJ; 
‘‘(C) address concerns identified by health care institu-
tions and providers and communicated through the Center pursuant to subsection (d); 
‘‘(D) reduce preventable morbidity, mortality, and asso-

ciated costs of morbidity and mortality by building capacity for patient safety research; 
‘‘(E) support the discovery of processes for the reliable, 
safe, efficient, and responsive delivery of health care, taking 
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124 STAT. 510 PUBLIC LAW 111–148—MAR. 23, 2010 
into account discoveries from clinical research and 
comparative effectiveness research; 
‘‘(F) allow communication of research findings and 
translate evidence into practice recommendations that are adaptable to a variety of settings, and which, as soon as practicable after the establishment of the Center, shall include— 
‘‘(i) the implementation of a national application

of Intensive Care Unit improvement projects relating to the adult (including geriatric), pediatric, and neo-natal patient populations; 
‘‘(ii) practical methods for addressing health care 
associated infections, including Methicillin-Resistant Staphylococcus Aureus and Vancomycin-Resistant Entercoccus infections and other emerging infections; and 
‘‘(iii) practical methods for reducing preventable 
hospital admissions and readmissions; ‘‘(G) expand demonstration projects for improving the

quality of children’s health care and the use of health information technology, such as through Pediatric Quality Improvement Collaboratives and Learning Networks, con-sistent with provisions of section 1139A of the Social Secu-rity Act for assessing and improving quality, where applicable; 
‘‘(H) identify and mitigate hazards by— 
‘‘(i) analyzing events reported to patient safety 
reporting systems and patient safety organizations; and 
‘‘(ii) using the results of such analyses to develop

scientific methods of response to such events; ‘‘(I) include the conduct of systematic reviews of 
existing practices that improve the quality, safety, and efficiency of health care delivery, as well as new research on improving such practices; and 
‘‘(J) include the examination of how to measure and 
evaluate the progress of quality and patient safety activi-ties. 
‘‘(d) D
ISSEMINATION OF RESEARCH FINDINGS .— 
‘‘(1) P UBLIC AVAILABILITY .—The Director shall make the

research findings of the Center available to the public through multiple media and appropriate formats to reflect the varying needs of health care providers and consumers and diverse levels of health literacy. 
‘‘(2) L
INKAGE TO HEALTH INFORMATION TECHNOLOGY .—The 
Secretary shall ensure that research findings and results gen-

erated by the Center are shared with the Office of the National Coordinator of Health Information Technology and used to inform the activities of the health information technology exten-sion program under section 3012, as well as any relevant stand-ards, certification criteria, or implementation specifications. ‘‘(e) P
RIORITIZATION .—The Director shall identify and regularly

update a list of processes or systems on which to focus research and dissemination activities of the Center, taking into account— 
‘‘(1) the cost to Federal health programs; ‘‘(2) consumer assessment of health care experience; List. 
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124 STAT. 511 PUBLIC LAW 111–148—MAR. 23, 2010 
‘‘(3) provider assessment of such processes or systems and 
opportunities to minimize distress and injury to the health care workforce; 
‘‘(4) the potential impact of such processes or systems on 
health status and function of patients, including vulnerable populations including children; 
‘‘(5) the areas of insufficient evidence identified under sub-
section (c)(2)(B); and 
‘‘(6) the evolution of meaningful use of health information

technology, as defined in section 3000. ‘‘(f) C
OORDINATION .—The Center shall coordinate its activities 
with activities conducted by the Center for Medicare and Medicaid Innovation established under section 1115A of the Social Security Act. 
‘‘(g) F
UNDING .—There is authorized to be appropriated to carry 
out this section $20,000,000 for fiscal years 2010 through 2014. 
‘‘SEC. 934. QUALITY IMPROVEMENT TECHNICAL ASSISTANCE AND 
IMPLEMENTATION.

IMPLEMENTATION. 
‘‘(a) I NGENERAL .—The Director, through the Center for Quality 
Improvement and Patient Safety of the Agency for Healthcare Research and Quality (referred to in this section as the ‘Center’), shall award— 
‘‘(1) technical assistance grants or contracts to eligible enti-

ties to provide technical support to institutions that deliver health care and health care providers (including rural and urban providers of services and suppliers with limited infra-structure and financial resources to implement and support quality improvement activities, providers of services and sup-pliers with poor performance scores, and providers of services and suppliers for which there are disparities in care among subgroups of patients) so that such institutions and providers

patients) so that such institutions and providers understand, adapt, and implement the models and practices identified in the research conducted by the Center, including the Quality Improvement Networks Research Program; and

‘‘(2) implementation grants or contracts to eligible entities 
to implement the models and practices described under para-graph (1). 
‘‘(b) E
LIGIBLE ENTITIES .— 
‘‘(1) T ECHNICAL ASSISTANCE AWARD .—To be eligible to 
receive a technical assistance grant or contract under subsection (a)(1), an entity— 
‘‘(A) may be a health care provider, health care provider

association, professional society, health care worker organization, Indian health organization, quality improve-ment organization, patient safety organization, local quality improvement collaborative, the Joint Commission, aca-demic health center, university, physician-based research network, primary care extension program established under section 399W, a Federal Indian Health Service program or a health program operated by an Indian tribe (as defined in section 4 of the Indian Health Care

defined in section 4 of the Indian Health Care Improvement Act), or any other entity identified by the Secretary; and

‘‘(B) shall have demonstrated expertise in providing 
information and technical support and assistance to health care providers regarding quality improvement. Grants. 
Contracts. 42 USC 299b–34. 
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124 STAT. 512 PUBLIC LAW 111–148—MAR. 23, 2010 
‘‘(2) I MPLEMENTATION AWARD .—To be eligible to receive an 
implementation grant or contract under subsection (a)(2), an entity— 
‘‘(A) may be a hospital or other health care provider 
or consortium or providers, as determined by the Secretary; and 
information and technical support and assistance to health care providers regarding quality improvement. 
‘‘(c) A
PPLICATION .—

‘‘(c) A
‘‘(1) T ECHNICAL ASSISTANCE AWARD .—To receive a technical 
assistance grant or contract under subsection (a)(1), an eligible entity shall submit an application to the Secretary at such time, in such manner, and containing— 
‘‘(A) a plan for a sustainable business model that may 
include a system of— 
‘‘(i) charging fees to institutions and providers that 
receive technical support from the entity; and 
‘‘(ii) reducing or eliminating such fees for such

institutions and providers that serve low-income popu-lations; and ‘‘(B) such other information as the Director may 
require. ‘‘(2) I
MPLEMENTATION AWARD .—To receive a grant or con-
tract under subsection (a)(2), an eligible entity shall submit an application to the Secretary at such time, in such manner, and containing— 
‘‘(A) a plan for implementation of a model or practice 
identified in the research conducted by the Center including— 
‘‘(i) financial cost, staffing requirements, and

‘‘(i) financial cost, staffing requirements, and 
timeline for implementation; and 
‘‘(ii) pre- and projected post-implementation quality 
measure performance data in targeted improvement areas identified by the Secretary; and ‘‘(B) such other information as the Director may 
require. 
‘‘(d) M
ATCHING FUNDS .—The Director may not award a grant

‘‘(e) E
‘‘(1) I N GENERAL .—The Director shall evaluate the perform-
ance of each entity that receives a grant or contract under this section. The evaluation of an entity shall include a study of— 
‘‘(A) the success of such entity in achieving the 
implementation, by the health care institutions and pro-viders assisted by such entity, of the models and practices identified in the research conducted by the Center under section 933;

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124 STAT. 513 PUBLIC LAW 111–148—MAR. 23, 2010 
‘‘(B) the perception of the health care institutions and 
providers assisted by such entity regarding the value of the entity; and 
‘‘(C) where practicable, better patient health outcomes 
and lower cost resulting from the assistance provided by such entity. ‘‘(2) E
FFECT OF EVALUATION .—Based on the outcome of

FFECT OF EVALUATION .—Based on the outcome of 
the evaluation of the entity under paragraph (1), the Director shall determine whether to renew a grant or contract with such entity under this section. ‘‘(f) C
OORDINATION .—The entities that receive a grant or con-

tract under this section shall coordinate with health information technology regional extension centers under section 3012(c) and the primary care extension program established under section 399W regarding the dissemination of quality improvement, system delivery reform, and best practices information.’’. 
SEC. 3502. ESTABLISHING COMMUNITY HEALTH TEAMS TO SUPPORT 
THE PATIENT-CENTERED MEDICAL HOME. 

(referred to in this section as the ‘‘Secretary’’) shall establish a program to provide grants to or enter into contracts with eligible entities to establish community-based interdisciplinary, interprofes-sional teams (referred to in this section as ‘‘health teams’’) to support primary care practices, including obstetrics and gynecology practices, within the hospital service areas served by the eligible entities. Grants or contracts shall be used to—

(1) establish health teams to provide support services to 
primary care providers; and 
(2) provide capitated payments to primary care providers 
as determined by the Secretary. (b) E
LIGIBLE ENTITIES .—To be eligible to receive a grant or 
contract under subsection (a), an entity shall— 
(1)(A) be a State or State-designated entity; or (B) be an Indian tribe or tribal organization, as defined 
in section 4 of the Indian Health Care Improvement Act;

(2) submit a plan for achieving long-term financial sustain-
ability within 3 years; 
(3) submit a plan for incorporating prevention initiatives 
and patient education and care management resources into the delivery of health care that is integrated with community- based prevention and treatment resources, where available; 
(4) ensure that the health team established by the entity

includes an interdisciplinary, interprofessional team of health care providers, as determined by the Secretary; such team may include medical specialists, nurses, pharmacists, nutrition-ists, dieticians, social workers, behavioral and mental health providers (including substance use disorder prevention and treatment providers), doctors of chiropractic, licensed com-plementary and alternative medicine practitioners, and physi-cians’ assistants;

(5) agree to provide services to eligible individuals with 
chronic conditions, as described in section 1945 of the Social Security Act (as added by section 2703), in accordance with the payment methodology established under subsection (c) of such section; and Plans. Plans. 
Deadline. Grants. 
Contracts. 42 USC 256a–1. Determination.

Contracts. 42 USC 256a–1. Determination. 
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124 STAT. 514 PUBLIC LAW 111–148—MAR. 23, 2010 
(6) submit to the Secretary an application at such time, 
in such manner, and containing such information as the Sec-retary may require. (c) R
EQUIREMENTS FOR HEALTH TEAMS .—A health team estab-
lished pursuant to a grant or contract under subsection (a) shall— 
(1) establish contractual agreements with primary care pro-
viders to provide support services; 
(2) support patient-centered medical homes, defined as a 
mode of care that includes—

mode of care that includes— 
(A) personal physicians; (B) whole person orientation; (C) coordinated and integrated care; (D) safe and high-quality care through evidence- 
informed medicine, appropriate use of health information technology, and continuous quality improvements; 
(E) expanded access to care; and (F) payment that recognizes added value from addi-
tional components of patient-centered care; (3) collaborate with local primary care providers and

existing State and community based resources to coordinate disease prevention, chronic disease management, transitioning between health care providers and settings and case manage-ment for patients, including children, with priority given to those amenable to prevention and with chronic diseases or conditions identified by the Secretary; 
(4) in collaboration with local health care providers, develop

and implement interdisciplinary, interprofessional care plans that integrate clinical and community preventive and health promotion services for patients, including children, with a pri-ority given to those amenable to prevention and with chronic diseases or conditions identified by the Secretary; 
(5) incorporate health care providers, patients, caregivers, 
and authorized representatives in program design and over-sight; 
(6) provide support necessary for local primary care pro-
viders to—

viders to— 
(A) coordinate and provide access to high-quality health 
care services; 
(B) coordinate and provide access to preventive and 
health promotion services; 
(C) provide access to appropriate specialty care and 
inpatient services; 
(D) provide quality-driven, cost-effective, culturally 
appropriate, and patient- and family-centered health care; 
(E) provide access to pharmacist-delivered medication 
management services, including medication reconciliation;

(F) provide coordination of the appropriate use of com-
plementary and alternative (CAM) services to those who request such services; 
(G) promote effective strategies for treatment planning, 
monitoring health outcomes and resource use, sharing information, treatment decision support, and organizing care to avoid duplication of service and other medical management approaches intended to improve quality and value of health care services; 
(H) provide local access to the continuum of health

care services in the most appropriate setting, including Plans. 
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124 STAT. 515 PUBLIC LAW 111–148—MAR. 23, 2010 
access to individuals that implement the care plans of 
patients and coordinate care, such as integrative health care practitioners; 
(I) collect and report data that permits evaluation of 
the success of the collaborative effort on patient outcomes, including collection of data on patient experience of care, and identification of areas for improvement; and 
(J) establish a coordinated system of early identifica-

tion and referral for children at risk for developmental or behavioral problems such as through the use of infolines, health information technology, or other means as deter-mined by the Secretary; (7) provide 24-hour care management and support during 
transitions in care settings including— 
(A) a transitional care program that provides onsite

visits from the care coordinator, assists with the develop-ment of discharge plans and medication reconciliation upon admission to and discharge from the hospitals, nursing home, or other institution setting; 
(B) discharge planning and counseling support to pro-
viders, patients, caregivers, and authorized representatives; 
(C) assuring that post-discharge care plans include 
medication management, as appropriate; 
(D) referrals for mental and behavioral health services,

which may include the use of infolines; and 
(E) transitional health care needs from adolescence 
to adulthood; (8) serve as a liaison to community prevention and treat-
ment programs; 
(9) demonstrate a capacity to implement and maintain

health information technology that meets the requirements of certified EHR technology (as defined in section 3000 of the Public Health Service Act (42 U.S.C. 300jj)) to facilitate coordination among members of the applicable care team and affiliated primary care practices; and 
(10) where applicable, report to the Secretary information 
on quality measures used under section 399JJ of the Public Health Service Act. (d) R
EQUIREMENT FOR PRIMARY CARE PROVIDERS .—A provider

who contracts with a care team shall— 
(1) provide a care plan to the care team for each patient 
participant; 
(2) provide access to participant health records; and (3) meet regularly with the care team to ensure integration 
of care. (e) R
EPORTING TO SECRETARY .—An entity that receives a grant 
or contract under subsection (a) shall submit to the Secretary a report that describes and evaluates, as requested by the Secretary, the activities carried out by the entity under subsection (c).

(f) D
EFINITION OF PRIMARY CARE.—In this section, the term 
‘‘primary care’’ means the provision of integrated, accessible health care services by clinicians who are accountable for addressing a large majority of personal health care needs, developing a sustained partnership with patients, and practicing in the context of family and community. Records. Plans. Reports.

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124 STAT. 516 PUBLIC LAW 111–148—MAR. 23, 2010 
SEC. 3503. MEDICATION MANAGEMENT SERVICES IN TREATMENT OF 
CHRONIC DISEASE. 
Title IX of the Public Health Service Act (42 U.S.C. 299 et 
seq.), as amended by section 3501, is further amended by inserting after section 934 the following: 
‘‘SEC. 935. GRANTS OR CONTRACTS TO IMPLEMENT MEDICATION 
MANAGEMENT SERVICES IN TREATMENT OF CHRONIC DISEASES. 
‘‘(a) I NGENERAL .—The Secretary, acting through the Patient

Safety Research Center established in section 933 (referred to in this section as the ‘Center’), shall establish a program to provide grants or contracts to eligible entities to implement medication management (referred to in this section as ‘MTM’) services provided by licensed pharmacists, as a collaborative, multidisciplinary, inter- professional approach to the treatment of chronic diseases for tar-geted individuals, to improve the quality of care and reduce overall cost in the treatment of

care and reduce overall cost in the treatment of such diseases. The Secretary shall com-

mence the program under this section not later than May 1, 2010. 
‘‘(b) E
‘‘(1) provide a setting appropriate for MTM services, as 
recommended by the experts described in subsection (e); 
‘‘(2) submit to the Secretary a plan for achieving long- 
term financial sustainability; 
‘‘(3) where applicable, submit a plan for coordinating MTM

services through local community health teams established in section 3502 of the Patient Protection and Affordable Care Act or in collaboration with primary care extension programs established in section 399W; 
‘‘(4) submit a plan for meeting the requirements under 
‘‘(5) submit to the Secretary such other information as 
the Secretary may require. ‘‘(c) MTM S
ERVICES TO TARGETED INDIVIDUALS .—The MTM

ERVICES TO TARGETED INDIVIDUALS .—The MTM 
services provided with the assistance of a grant or contract awarded under subsection (a) shall, as allowed by State law including applicable collaborative pharmacy practice agreements, include— 
‘‘(1) performing or obtaining necessary assessments of the 
health and functional status of each patient receiving such MTM services; 
‘‘(2) formulating a medication treatment plan according

to therapeutic goals agreed upon by the prescriber and the patient or caregiver or authorized representative of the patient; 
‘‘(3) selecting, initiating, modifying, recommending changes 
to, or administering medication therapy; 
‘‘(4) monitoring, which may include access to, ordering, 
or performing laboratory assessments, and evaluating the response of the patient to therapy, including safety and effectiveness; 
‘‘(5) performing an initial comprehensive medication review

to identify, resolve, and prevent medication-related problems, including adverse drug events, quarterly targeted medication reviews for ongoing monitoring, and additional followup inter-ventions on a schedule developed collaboratively with the pre-scriber; Plans. Deadline. 42 USC 299b–35. 
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124 STAT. 517 PUBLIC LAW 111–148—MAR. 23, 2010 
‘‘(6) documenting the care delivered and communicating 
essential information about such care, including a summary of the medication review, and the recommendations of the pharmacist to other appropriate health care providers of the patient in a timely fashion; 
‘‘(7) providing education and training designed to enhance 
the understanding and appropriate use of the medications by the patient, caregiver, and other authorized representative;

‘‘(8) providing information, support services, and resources 
and strategies designed to enhance patient adherence with therapeutic regimens; 
‘‘(9) coordinating and integrating MTM services within the 
broader health care management services provided to the patient; and 
‘‘(10) such other patient care services allowed under phar-
macist scopes of practice in use in other Federal programs that have implemented MTM services. ‘‘(d) T
ARGETED INDIVIDUALS .—MTM services provided by

ARGETED INDIVIDUALS .—MTM services provided by 
licensed pharmacists under a grant or contract awarded under subsection (a) shall be offered to targeted individuals who— 
‘‘(1) take 4 or more prescribed medications (including over- 
the-counter medications and dietary supplements); 
‘‘(2) take any ‘high risk’ medications; ‘‘(3) have 2 or more chronic diseases, as identified by the 
Secretary; or 
‘‘(4) have undergone a transition of care, or other factors,

as determined by the Secretary, that are likely to create a high risk of medication-related problems. ‘‘(e) C
ONSULTATION WITHEXPERTS .—In designing and imple-

menting MTM services provided under grants or contracts awarded under subsection (a), the Secretary shall consult with Federal, State, private, public-private, and academic entities, pharmacy and pharmacist organizations, health care organizations, consumer advocates, chronic disease groups, and other stakeholders involved with the research, dissemination, and implementation of phar-macist-delivered MTM services, as the Secretary determines appro-priate. The Secretary, in collaboration with

The Secretary, in collaboration with this group, shall deter-mine whether it is possible to incorporate rapid cycle process improvement concepts in use in other Federal programs that have implemented MTM services.

‘‘(f) R
EPORTING TO THE SECRETARY .—An entity that receives 
a grant or contract under subsection (a) shall submit to the Sec-retary a report that describes and evaluates, as requested by the Secretary, the activities carried out under subsection (c), including quality measures endorsed by the entity with a contract under section 1890 of the Social Security Act, as determined by the Sec-
retary. 
‘‘(g) E
VALUATION AND REPORT .—The Secretary shall submit to

the relevant committees of Congress a report which shall— 
‘‘(1) assess the clinical effectiveness of pharmacist-provided 
services under the MTM services program, as compared to usual care, including an evaluation of whether enrollees main-tained better health with fewer hospitalizations and emergency room visits than similar patients not enrolled in the program; 
‘‘(2) assess changes in overall health care resource use 
by targeted individuals; Determination.

by targeted individuals; Determination. 
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124 STAT. 518 PUBLIC LAW 111–148—MAR. 23, 2010 
‘‘(3) assess patient and prescriber satisfaction with MTM 
services; 
‘‘(4) assess the impact of patient-cost sharing requirements 
on medication adherence and recommendations for modifica-tions; 
‘‘(5) identify and evaluate other factors that may impact

clinical and economic outcomes, including demographic characteristics, clinical characteristics, and health services use of the patient, as well as characteristics of the regimen, phar-macy benefit, and MTM services provided; and 
‘‘(6) evaluate the extent to which participating pharmacists

who maintain a dispensing role have a conflict of interest in the provision of MTM services, and if such conflict is found, provide recommendations on how such a conflict might be appropriately addressed. ‘‘(h) G
RANTS OR CONTRACTS TOFUND DEVELOPMENT OF  
PERFORMANCE MEASURES .—The Secretary may, through the quality

measure development program under section 931 of the Public Health Service Act, award grants or contracts to eligible entities for the purpose of funding the development of performance measures that assess the use and effectiveness of medication therapy manage-ment services.’’. 
SEC. 3504. DESIGN AND IMPLEMENTATION OF REGIONALIZED SYS-
TEMS FOR EMERGENCY CARE. 
(a) I NGENERAL .—Title XII of the Public Health Service Act 
(42 U.S.C. 300d et seq.) is amended— 
(1) in section 1203—

(1) in section 1203— 
(A) in the section heading, by inserting ‘‘ FOR TRAUMA  
SYSTEMS ’’ after ‘‘ GRANTS ’’; and 
(B) in subsection (a), by striking ‘‘Administrator of 
the Health Resources and Services Administration’’ and inserting ‘‘Assistant Secretary for Preparedness and Response’’; (2) by inserting after section 1203 the following: 
‘‘SEC. 1204. COMPETITIVE GRANTS FOR REGIONALIZED SYSTEMS FOR 
EMERGENCY CARE RESPONSE. 
‘‘(a) I NGENERAL .—The Secretary, acting through the Assistant

Secretary for Preparedness and Response, shall award not fewer than 4 multiyear contracts or competitive grants to eligible entities to support pilot projects that design, implement, and evaluate innovative models of regionalized, comprehensive, and accountable emergency care and trauma systems. 
‘‘(b) E
LIGIBLE ENTITY ; REGION .—In this section: 
‘‘(1) E LIGIBLE ENTITY .—The term ‘eligible entity’ means— 
‘‘(A) a State or a partnership of 1 or more States 
and 1 or more local governments; or

and 1 or more local governments; or 
‘‘(B) an Indian tribe (as defined in section 4 of the 
Indian Health Care Improvement Act) or a partnership of 1 or more Indian tribes. ‘‘(2) R
EGION .—The term ‘region’ means an area within a 
State, an area that lies within multiple States, or a similar area (such as a multicounty area), as determined by the Sec-retary. 
‘‘(3) E
MERGENCY SERVICES .—The term ‘emergency services’ 
includes acute, prehospital, and trauma care. Definitions. Contracts.

42 USC 300d–6. 42 USC 300d–5. 
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124 STAT. 519 PUBLIC LAW 111–148—MAR. 23, 2010 
‘‘(c) P ILOT PROJECTS .—The Secretary shall award a contract 
or grant under subsection (a) to an eligible entity that proposes a pilot project to design, implement, and evaluate an emergency medical and trauma system that— 
‘‘(1) coordinates with public health and safety services,

emergency medical services, medical facilities, trauma centers, and other entities in a region to develop an approach to emer-gency medical and trauma system access throughout the region, including 9–1–1 Public Safety Answering Points and emergency medical dispatch; 
‘‘(2) includes a mechanism, such as a regional medical

direction or transport communications system, that operates throughout the region to ensure that the patient is taken to the medically appropriate facility (whether an initial facility or a higher-level facility) in a timely fashion; 
‘‘(3) allows for the tracking of prehospital and hospital

resources, including inpatient bed capacity, emergency depart-ment capacity, trauma center capacity, on-call specialist cov-erage, ambulance diversion status, and the coordination of such tracking with regional communications and hospital destination decisions; and 
‘‘(4) includes a consistent region-wide prehospital, hospital, 
and interfacility data management system that— 
‘‘(A) submits data to the National EMS Information 
System, the National Trauma Data Bank, and others;

‘‘(B) reports data to appropriate Federal and State 
databanks and registries; and 
‘‘(C) contains information sufficient to evaluate key 
elements of prehospital care, hospital destination decisions, including initial hospital and interfacility decisions, and relevant health outcomes of hospital care. 
‘‘(d) A
‘‘(1) I N GENERAL .—An eligible entity that seeks a contract

or grant described in subsection (a) shall submit to the Sec-retary an application at such time and in such manner as the Secretary may require. 
‘‘(2) A
PPLICATION INFORMATION .—Each application shall 
include— 
‘‘(A) an assurance from the eligible entity that the 
proposed system— 
‘‘(i) has been coordinated with the applicable State 
Office of Emergency Medical Services (or equivalent State office); 
‘‘(ii) includes consistent indirect and direct medical

oversight of prehospital, hospital, and interfacility transport throughout the region; 
‘‘(iii) coordinates prehospital treatment and triage, 
hospital destination, and interfacility transport throughout the region; 
‘‘(iv) includes a categorization or designation 
system for special medical facilities throughout the region that is integrated with transport and destination protocols; 
‘‘(v) includes a regional medical direction, patient

tracking, and resource allocation system that supports day-to-day emergency care and surge capacity and is 
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124 STAT. 520 PUBLIC LAW 111–148—MAR. 23, 2010 
integrated with other components of the national and 
State emergency preparedness system; and 
‘‘(vi) addresses pediatric concerns related to 
integration, planning, preparedness, and coordination of emergency medical services for infants, children and adolescents; and ‘‘(B) such other information as the Secretary may 
require. 
‘‘(e) R
EQUIREMENT OF MATCHING FUNDS .— 
‘‘(1) I N GENERAL .—The Secretary may not make a grant

under this section unless the State (or consortia of States) involved agrees, with respect to the costs to be incurred by the State (or consortia) in carrying out the purpose for which such grant was made, to make available non-Federal contribu-tions (in cash or in kind under paragraph (2)) toward such costs in an amount equal to not less than $1 for each $3 of Federal funds provided in the grant. Such contributions may be made directly or through donations from public or private entities.

‘‘(2) N
ON-FEDERAL CONTRIBUTIONS .—Non-Federal contribu-
tions required in paragraph (1) may be in cash or in kind, fairly evaluated, including equipment or services (and excluding indirect or overhead costs). Amounts provided by the Federal Government, or services assisted or subsidized to any signifi-cant extent by the Federal Government, may not be included in determining the amount of such non-Federal contributions. ‘‘(f) P
RIORITY .—The Secretary shall give priority for the award

of the contracts or grants described in subsection (a) to any eligible entity that serves a population in a medically underserved area (as defined in section 330(b)(3)). 
‘‘(g) R
EPORT .—Not later than 90 days after the completion 
of a pilot project under subsection (a), the recipient of such contract or grant described in shall submit to the Secretary a report con-taining the results of an evaluation of the program, including an identification of—

‘‘(1) the impact of the regional, accountable emergency care 
and trauma system on patient health outcomes for various critical care categories, such as trauma, stroke, cardiac emer-gencies, neurological emergencies, and pediatric emergencies; 
‘‘(2) the system characteristics that contribute to the 
effectiveness and efficiency of the program (or lack thereof); 
‘‘(3) methods of assuring the long-term financial sustain-
ability of the emergency care and trauma system;

ability of the emergency care and trauma system; 
‘‘(4) the State and local legislation necessary to implement 
and to maintain the system; 
‘‘(5) the barriers to developing regionalized, accountable 
emergency care and trauma systems, as well as the methods to overcome such barriers; and 
‘‘(6) recommendations on the utilization of available funding 
for future regionalization efforts. ‘‘(h) D
ISSEMINATION OF FINDINGS .—The Secretary shall, as

appropriate, disseminate to the public and to the appropriate Committees of the Congress, the information contained in a report made under subsection (g).’’; and 
(3) in section 1232— 
(A) in subsection (a), by striking ‘‘appropriated’’ and 
all that follows through the period at the end and inserting 42 USC 300d–32. Public 
information. 
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124 STAT. 521 PUBLIC LAW 111–148—MAR. 23, 2010 
‘‘appropriated $24,000,000 for each of fiscal years 2010 
through 2014.’’; and 
(B) by inserting after subsection (c) the following: 
‘‘(d) A UTHORITY .—For the purpose of carrying out parts A

through C, beginning on the date of enactment of the Patient Protection and Affordable Care Act, the Secretary shall transfer authority in administering grants and related authorities under such parts from the Administrator of the Health Resources and Services Administration to the Assistant Secretary for Preparedness and Response.’’. 
(b) S
UPPORT FOR EMERGENCY MEDICINE RESEARCH .—Part H

UPPORT FOR EMERGENCY MEDICINE RESEARCH .—Part H 
of title IV of the Public Health Service Act (42 U.S.C. 289 et seq.) is amended by inserting after the section 498C the following: 
‘‘SEC. 498D. SUPPORT FOR EMERGENCY MEDICINE RESEARCH. 
‘‘(a) E MERGENCY MEDICAL RESEARCH .—The Secretary shall sup-

port Federal programs administered by the National Institutes of Health, the Agency for Healthcare Research and Quality, the Health Resources and Services Administration, the Centers for Disease Control and Prevention, and other agencies involved in improving the emergency care system to expand and accelerate research in emergency medical care systems and emergency medi-cine, including— 
‘‘(1) the basic science of emergency medicine; ‘‘(2) the model of service delivery and the components of

such models that contribute to enhanced patient health out-comes; 
‘‘(3) the translation of basic scientific research into 
improved practice; and 
‘‘(4) the development of timely and efficient delivery of 
health services. ‘‘(b) P
EDIATRIC EMERGENCY MEDICAL RESEARCH .—The Sec-

retary shall support Federal programs administered by the National Institutes of Health, the Agency for Healthcare Research and Quality, the Health Resources and Services Administration, the Centers for Disease Control and Prevention, and other agencies to coordinate and expand research in pediatric emergency medical care systems and pediatric emergency medicine, including— 
‘‘(1) an examination of the gaps and opportunities in pedi-

atric emergency care research and a strategy for the optimal organization and funding of such research; 
‘‘(2) the role of pediatric emergency services as an 
integrated component of the overall health system; 
‘‘(3) system-wide pediatric emergency care planning, 
preparedness, coordination, and funding; 
‘‘(4) pediatric training in professional education; and ‘‘(5) research in pediatric emergency care, specifically on

the efficacy, safety, and health outcomes of medications used for infants, children, and adolescents in emergency care settings in order to improve patient safety. ‘‘(c) I
MPACT RESEARCH .—The Secretary shall support research 
to determine the estimated economic impact of, and savings that result from, the implementation of coordinated emergency care sys-tems. 
‘‘(d) A
UTHORIZATION OF APPROPRIATIONS .—There are authorized

to be appropriated to carry out this section such sums as may be necessary for each of fiscal years 2010 through 2014.’’. 42 USC 289g–4. Effective date. 
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124 STAT. 522 PUBLIC LAW 111–148—MAR. 23, 2010 
SEC. 3505. TRAUMA CARE CENTERS AND SERVICE AVAILABILITY. 
(a) T RAUMA CARECENTERS .— 
(1) G RANTS FOR TRAUMA CARE CENTERS .—Section 1241 of 
the Public Health Service Act (42 U.S.C. 300d–41) is amended by striking subsections (a) and (b) and inserting the following: ‘‘(a) I
NGENERAL .—The Secretary shall establish 3 programs 
to award grants to qualified public, nonprofit Indian Health Service, Indian tribal, and urban Indian trauma centers—

‘‘(1) to assist in defraying substantial uncompensated care 
costs; 
‘‘(2) to further the core missions of such trauma centers, 
including by addressing costs associated with patient stabiliza-tion and transfer, trauma education and outreach, coordination with local and regional trauma systems, essential personnel and other fixed costs, and expenses associated with employee and non-employee physician services; and 
‘‘(3) to provide emergency relief to ensure the continued

and future availability of trauma services. ‘‘(b) M
INIMUM QUALIFICATIONS OF TRAUMA CENTERS .— 
‘‘(1) P ARTICIPATION IN TRAUMA CARE SYSTEM OPERATING  
UNDER CERTAIN PROFESSIONAL GUIDELINES .—Except as provided 
in paragraph (2), the Secretary may not award a grant to a trauma center under subsection (a) unless the trauma center is a participant in a trauma system that substantially complies with section 1213. 
‘‘(2) E
XEMPTION .—Paragraph (1) shall not apply to trauma

centers that are located in States with no existing trauma care system. 
‘‘(3) Q
UALIFICATION FOR SUBSTANTIAL UNCOMPENSATED  
CARE COSTS .—The Secretary shall award substantial uncompen-
sated care grants under subsection (a)(1) only to trauma centers meeting at least 1 of the criteria in 1 of the following 3 cat-egories: 
‘‘(A) C
ATEGORY A .—The criteria for category A are as 
follows: 
‘‘(i) At least 40 percent of the visits in the emer-

gency department of the hospital in which the trauma center is located were charity or self-pay patients. 
‘‘(ii) At least 50 percent of the visits in such emer-
gency department were Medicaid (under title XIX of the Social Security Act (42 U.S.C. 1396 et seq.)) and charity and self-pay patients combined. ‘‘(B) C
ATEGORY B .—The criteria for category B are as 
follows: 
‘‘(i) At least 35 percent of the visits in the emer-
gency department were charity or self-pay patients.

‘‘(ii) At least 50 percent of the visits in the emer-
gency department were Medicaid and charity and self- pay patients combined. ‘‘(C) C
ATEGORY C .—The criteria for category C are as 
follows: 
‘‘(i) At least 20 percent of the visits in the emer-
gency department were charity or self-pay patients. 
‘‘(ii) At least 30 percent of the visits in the emer-
gency department were Medicaid and charity and self- pay patients combined.

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124 STAT. 523 PUBLIC LAW 111–148—MAR. 23, 2010 
‘‘(4) T RAUMA CENTERS IN 1115 WAIVER STATES .—Notwith-
standing paragraph (3), the Secretary may award a substantial uncompensated care grant to a trauma center under subsection (a)(1) if the trauma center qualifies for funds under a Low Income Pool or Safety Net Care Pool established through a waiver approved under section 1115 of the Social Security Act (42 U.S.C. 1315). 
‘‘(5) D
ESIGNATION .—The Secretary may not award a grant

ESIGNATION .—The Secretary may not award a grant 
to a trauma center unless such trauma center is verified by the American College of Surgeons or designated by an equiva-lent State or local agency. ‘‘(c) A
DDITIONAL REQUIREMENTS .—The Secretary may not award 
a grant to a trauma center under subsection (a)(1) unless such trauma center— 
‘‘(1) submits to the Secretary a plan satisfactory to the

Secretary that demonstrates a continued commitment to serving trauma patients regardless of their ability to pay; and 
‘‘(2) has policies in place to assist patients who cannot 
pay for part or all of the care they receive, including a sliding fee scale, and to ensure fair billing and collection practices.’’. 
(2) C
ONSIDERATIONS IN MAKING GRANTS .—Section 1242 of

ONSIDERATIONS IN MAKING GRANTS .—Section 1242 of 
the Public Health Service Act (42 U.S.C. 300d–42) is amended by striking subsections (a) and (b) and inserting the following: ‘‘(a) S
UBSTANTIAL UNCOMPENSATED CAREAWARDS .— 
‘‘(1) I N GENERAL .—The Secretary shall establish an award 
basis for each eligible trauma center for grants under section 1241(a)(1) according to the percentage described in paragraph (2), subject to the requirements of section 1241(b)(3). 
‘‘(2) P

‘‘(2) P
ERCENTAGES .—The applicable percentages are as fol-
lows: 
‘‘(A) With respect to a category A trauma center, 100 
percent of the uncompensated care costs. 
‘‘(B) With respect to a category B trauma center, not 
more than 75 percent of the uncompensated care costs. 
‘‘(C) With respect to a category C trauma center, not 
more than 50 percent of the uncompensated care costs. 
‘‘(b) C OREMISSION AWARDS .— 
‘‘(1) I N GENERAL .—In awarding grants under section

1241(a)(2), the Secretary shall— 
‘‘(A) reserve 25 percent of the amount allocated for 
core mission awards for Level III and Level IV trauma centers; and 
‘‘(B) reserve 25 percent of the amount allocated for 
core mission awards for large urban Level I and II trauma centers— 
‘‘(i) that have at least 1 graduate medical education 
fellowship in trauma or trauma related specialties for which demand is exceeding supply; 
‘‘(ii) for which— 
‘‘(I) annual uncompensated care costs exceed

‘‘(I) annual uncompensated care costs exceed 
$10,000,000; or 
‘‘(II) at least 20 percent of emergency depart-
ment visits are charity or self-pay or Medicaid patients; and ‘‘(iii) that are not eligible for substantial 
uncompensated care awards under section 1241(a)(1). Plans. 
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124 STAT. 524 PUBLIC LAW 111–148—MAR. 23, 2010 
‘‘(c) E MERGENCY AWARDS .—In awarding grants under section 
1241(a)(3), the Secretary shall— 
‘‘(1) give preference to any application submitted by a 
trauma center that provides trauma care in a geographic area in which the availability of trauma care has significantly decreased or will significantly decrease if the center is forced to close or downgrade service or growth in demand for trauma services exceeds capacity; and

‘‘(2) reallocate any emergency awards funds not obligated 
due to insufficient, or a lack of qualified, applications to the significant uncompensated care award program.’’. 
(3) C
ERTAIN AGREEMENTS .—Section 1243 of the Public 
Health Service Act (42 U.S.C. 300d–43) is amended by striking subsections (a), (b), and (c) and inserting the following: ‘‘(a) M
AINTENANCE OF FINANCIAL SUPPORT .—The Secretary may

require a trauma center receiving a grant under section 1241(a) to maintain access to trauma services at comparable levels to the prior year during the grant period. 
‘‘(b) T
RAUMA CARE REGISTRY .—The Secretary may require the 
trauma center receiving a grant under section 1241(a) to provide data to a national and centralized registry of trauma cases, in accordance with guidelines developed by the American College of Surgeons, and as the Secretary may otherwise require.’’. 
(4) G

(4) G
ENERAL PROVISIONS .—Section 1244 of the Public 
Health Service Act (42 U.S.C. 300d–44) is amended by striking subsections (a), (b), and (c) and inserting the following: ‘‘(a) A
PPLICATION .—The Secretary may not award a grant to

a trauma center under section 1241(a) unless such center submits an application for the grant to the Secretary and the application is in such form, is made in such manner, and contains such agree-ments, assurances, and information as the Secretary determines to be necessary to carry out this part. 
‘‘(b) L
IMITATION ON DURATION OF SUPPORT .—The period during

which a trauma center receives payments under a grant under section 1241(a)(3) shall be for 3 fiscal years, except that the Sec-retary may waive such requirement for a center and authorize such center to receive such payments for 1 additional fiscal year. 
‘‘(c) L
IMITATION ON AMOUNT OF GRANT .—Notwithstanding sec-
tion 1242(a), a grant under section 1241 may not be made in an amount exceeding $2,000,000 for each fiscal year. 
‘‘(d) E
LIGIBILITY .—Except as provided in section

LIGIBILITY .—Except as provided in section 
1242(b)(1)(B)(iii), acquisition of, or eligibility for, a grant under section 1241(a) shall not preclude a trauma center from being eligible for other grants described in such section. 
‘‘(e) F
UNDING DISTRIBUTION .—Of the total amount appropriated

for a fiscal year under section 1245, 70 percent shall be used for substantial uncompensated care awards under section 1241(a)(1), 20 percent shall be used for core mission awards under section 1241(a)(2), and 10 percent shall be used for emergency awards under section 1241(a)(3). 
‘‘(f) M
INIMUM ALLOWANCE .—Notwithstanding subsection (e), if

the amount appropriated for a fiscal year under section 1245 is less than $25,000,000, all available funding for such fiscal year shall be used for substantial uncompensated care awards under section 1241(a)(1). 
‘‘(g) S
UBSTANTIAL UNCOMPENSATED CARE AWARD DISTRIBUTION  
AND PROPORTIONAL SHARE .—Notwithstanding section 1242(a), of Waiver authority.

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124 STAT. 525 PUBLIC LAW 111–148—MAR. 23, 2010 
the amount appropriated for substantial uncompensated care grants 
for a fiscal year, the Secretary shall— 
‘‘(1) make available— 
‘‘(A) 50 percent of such funds for category A trauma 
center grantees; 
‘‘(B) 35 percent of such funds for category B trauma 
center grantees; and 
‘‘(C) 15 percent of such funds for category C trauma 
center grantees; and ‘‘(2) provide available funds within each category in a

manner proportional to the award basis specified in section 1242(a)(2) to each eligible trauma center. ‘‘(h) R
EPORT .—Beginning 2 years after the date of enactment 
of the Patient Protection and Affordable Care Act, and every 2 years thereafter, the Secretary shall biennially report to Congress regarding the status of the grants made under section 1241 and on the overall financial stability of trauma centers.’’. 
(5) A
UTHORIZATION OF APPROPRIATIONS .—Section 1245 of

UTHORIZATION OF APPROPRIATIONS .—Section 1245 of 
the Public Health Service Act (42 U.S.C. 300d–45) is amended to read as follows: 
‘‘SEC. 1245. AUTHORIZATION OF APPROPRIATIONS. 
‘‘For the purpose of carrying out this part, there are authorized

to be appropriated $100,000,000 for fiscal year 2009, and such sums as may be necessary for each of fiscal years 2010 through 2015. Such authorization of appropriations is in addition to any other authorization of appropriations or amounts that are available for such purpose.’’. 
(6) D
EFINITION .—Part D of title XII of the Public Health 
Service Act (42 U.S.C. 300d–41 et seq.) is amended by adding at the end the following: 
‘‘SEC. 1246. DEFINITION.

‘‘SEC. 1246. DEFINITION. 
‘‘In this part, the term ‘uncompensated care costs’ means 
unreimbursed costs from serving self-pay, charity, or Medicaid patients, without regard to payment under section 1923 of the Social Security Act, all of which are attributable to emergency care and trauma care, including costs related to subsequent inpatient admissions to the hospital.’’. 
(b) T
RAUMA SERVICE AVAILABILITY .—Title XII of the Public

Health Service Act (42 U.S.C. 300d et seq.) is amended by adding at the end the following: 
‘‘PART H—TRAUMA SERVICE AVAILABILITY 
‘‘SEC. 1281. GRANTS TO STATES. 
‘‘(a) E STABLISHMENT .—To promote universal access to trauma 
care services provided by trauma centers and trauma-related physi-cian specialties, the Secretary shall provide funding to States to enable such States to award grants to eligible entities for the purposes described in this section. 
‘‘(b) A

‘‘(b) A
WARDING OF GRANTS BY STATES .—Each State may award 
grants to eligible entities within the State for the purposes described in subparagraph (d). 
‘‘(c) E
‘‘(1) I N GENERAL .—To be eligible to receive a grant under 
subsection (b) an entity shall— 
‘‘(A) be— 42 USC 300d–81. 42 USC 300d–46. 42 USC 300d–45. 
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124 STAT. 526 PUBLIC LAW 111–148—MAR. 23, 2010 
‘‘(i) a public or nonprofit trauma center or consor-
tium thereof that meets that requirements of para-graphs (1), (2), and (5) of section 1241(b); 
‘‘(ii) a safety net public or nonprofit trauma center 
that meets the requirements of paragraphs (1) through (5) of section 1241(b); or 
‘‘(iii) a hospital in an underserved area (as defined

by the State) that seeks to establish new trauma serv-ices; and ‘‘(B) submit to the State an application at such time, 
in such manner, and containing such information as the State may require. ‘‘(2) L
IMITATION .—A State shall use at least 40 percent 
of the amount available to the State under this part for a fiscal year to award grants to safety net trauma centers described in paragraph (1)(A)(ii). ‘‘(d) U
SE OF FUNDS .—The recipient of a grant under subsection

(b) shall carry out 1 or more of the following activities consistent with subsection (b): 
‘‘(1) Providing trauma centers with funding to support 
physician compensation in trauma-related physician specialties where shortages exist in the region involved, with priority provided to safety net trauma centers described in subsection (c)(1)(A)(ii). 
‘‘(2) Providing for individual safety net trauma center fiscal

stability and costs related to having service that is available 24 hours a day, 7 days a week, with priority provided to safety net trauma centers described in subsection (c)(1)(A)(ii) located in urban, border, and rural areas. 
‘‘(3) Reducing trauma center overcrowding at specific 
trauma centers related to throughput of trauma patients. 
‘‘(4) Establishing new trauma services in underserved areas 
as defined by the State. 
‘‘(5) Enhancing collaboration between trauma centers and

other hospitals and emergency medical services personnel related to trauma service availability. 
‘‘(6) Making capital improvements to enhance access and 
expedite trauma care, including providing helipads and associ-ated safety infrastructure. 
‘‘(7) Enhancing trauma surge capacity at specific trauma 
centers. 
‘‘(8) Ensuring expedient receipt of trauma patients trans-
ported by ground or air to the appropriate trauma center. 
‘‘(9) Enhancing interstate trauma center collaboration. 
‘‘(e) L

‘‘(e) L
‘‘(1) I N GENERAL .—A State may use not more than 20 
percent of the amount available to the State under this part for a fiscal year for administrative costs associated with awarding grants and related costs. 
‘‘(2) M
AINTENANCE OF EFFORT .—The Secretary may not pro-

vide funding to a State under this part unless the State agrees that such funds will be used to supplement and not supplant State funding otherwise available for the activities and costs described in this part. ‘‘(f) D
ISTRIBUTION OF FUNDS .—The following shall apply with 
respect to grants provided in this part: Applicability.

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124 STAT. 527 PUBLIC LAW 111–148—MAR. 23, 2010 
‘‘(1) L ESS THAN $10 ,000,000.—If the amount of appropriations 
for this part in a fiscal year is less than $10,000,000, the Secretary shall divide such funding evenly among only those States that have 1 or more trauma centers eligible for funding under section 1241(b)(3)(A). 
‘‘(2) L
ESS THAN $20 ,000,000.—If the amount of appropriations

in a fiscal year is less than $20,000,000, the Secretary shall divide such funding evenly among only those States that have 1 or more trauma centers eligible for funding under subpara-graphs (A) and (B) of section 1241(b)(3). 
‘‘(3) L
ESS THAN $30 ,000,000.—If the amount of appropriations

for this part in a fiscal year is less than $30,000,000, the Secretary shall divide such funding evenly among only those States that have 1 or more trauma centers eligible for funding under section 1241(b)(3). 
‘‘(4) $30,000,000 
OR MORE .—If the amount of appropriations 
for this part in a fiscal year is $30,000,000 or more, the Sec-
retary shall divide such funding evenly among all States. 
‘‘SEC. 1282. AUTHORIZATION OF APPROPRIATIONS.

‘‘SEC. 1282. AUTHORIZATION OF APPROPRIATIONS. 
‘‘For the purpose of carrying out this part, there is authorized 
to be appropriated $100,000,000 for each of fiscal years 2010 through 2015.’’. 
SEC. 3506. PROGRAM TO FACILITATE SHARED DECISIONMAKING. 
by section 3503, is further amended by adding at the end the following: 
‘‘SEC. 936. PROGRAM TO FACILITATE SHARED DECISIONMAKING.

‘‘(a) P URPOSE .—The purpose of this section is to facilitate 
collaborative processes between patients, caregivers or authorized representatives, and clinicians that engages the patient, caregiver or authorized representative in decisionmaking, provides patients, caregivers or authorized representatives with information about trade-offs among treatment options, and facilitates the incorporation of patient preferences and values into the medical plan. 
‘‘(b) D

‘‘(b) D
‘‘(1) P ATIENT DECISION AID .—The term ‘patient decision aid’ 
means an educational tool that helps patients, caregivers or authorized representatives understand and communicate their beliefs and preferences related to their treatment options, and to decide with their health care provider what treatments are best for them based on their treatment options, scientific evi-dence, circumstances, beliefs, and preferences. 
‘‘(2) P

sensitive care’ means medical care for which the clinical evi-dence does not clearly support one treatment option such that the appropriate course of treatment depends on the values of the patient or the preferences of the patient, caregivers or authorized representatives regarding the benefits, harms and scientific evidence for each treatment option, the use of such care should depend on the informed patient choice among clinically appropriate treatment options. ‘‘(c) E

STABLISHMENT OF INDEPENDENT STANDARDS FOR PATIENT  
DECISION AIDS FOR PREFERENCE SENSITIVE CARE.— 
‘‘(1) C ONTRACT WITH ENTITY TO ESTABLISH STANDARDS AND  
CERTIFY PATIENT DECISION AIDS .— 42 USC 299b–36. 42 USC 300d–82. 
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124 STAT. 528 PUBLIC LAW 111–148—MAR. 23, 2010 
‘‘(A) I N GENERAL .—For purposes of supporting con-

sensus-based standards for patient decision aids for pref-erence sensitive care and a certification process for patient decision aids for use in the Federal health programs and by other interested parties, the Secretary shall have in effect a contract with the entity with a contract under section 1890 of the Social Security Act. Such contract shall provide that the entity perform the duties described in paragraph (2). 
‘‘(B) T
IMING FOR FIRST CONTRACT .—As soon as prac-

ticable after the date of the enactment of this section, the Secretary shall enter into the first contract under subparagraph (A). 
‘‘(C) P
ERIOD OF CONTRACT .—A contract under subpara-
graph (A) shall be for a period of 18 months (except such contract may be renewed after a subsequent bidding process). ‘‘(2) D
UTIES .—The following duties are described in this 
‘‘(A) D EVELOP AND IDENTIFY STANDARDS FOR PATIENT

DECISION AIDS .—The entity shall synthesize evidence and 
convene a broad range of experts and key stakeholders to develop and identify consensus-based standards to evaluate patient decision aids for preference sensitive care. 
‘‘(B) E
NDORSE PATIENT DECISION AIDS .—The entity shall

NDORSE PATIENT DECISION AIDS .—The entity shall 
review patient decision aids and develop a certification process whether patient decision aids meet the standards developed and identified under subparagraph (A). The entity shall give priority to the review and certification of patient decision aids for preference sensitive care. 
‘‘(d) P
ROGRAM TODEVELOP , U PDATE AND PATIENT DECISION  
AIDSTOASSIST HEALTH CAREPROVIDERS AND PATIENTS .— 
‘‘(1) I N GENERAL .—The Secretary, acting through the

Director, and in coordination with heads of other relevant agen-cies, such as the Director of the Centers for Disease Control and Prevention and the Director of the National Institutes of Health, shall establish a program to award grants or con-tracts— 
‘‘(A) to develop, update, and produce patient decision

aids for preference sensitive care to assist health care providers in educating patients, caregivers, and authorized representatives concerning the relative safety, relative effectiveness (including possible health outcomes and impact on functional status), and relative cost of treatment or, where appropriate, palliative care options; 
‘‘(B) to test such materials to ensure such materials

are balanced and evidence based in aiding health care providers and patients, caregivers, and authorized rep-resentatives to make informed decisions about patient care and can be easily incorporated into a broad array of practice settings; and 
‘‘(C) to educate providers on the use of such materials, 
including through academic curricula. ‘‘(2) R
EQUIREMENTS FOR PATIENT DECISION AIDS .—Patient 
decision aids developed and produced pursuant to a grant or contract under paragraph (1)— Grants.

Contracts. 
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124 STAT. 529 PUBLIC LAW 111–148—MAR. 23, 2010 
‘‘(A) shall be designed to engage patients, caregivers, 
and authorized representatives in informed decisionmaking with health care providers; 
‘‘(B) shall present up-to-date clinical evidence about

the risks and benefits of treatment options in a form and manner that is age-appropriate and can be adapted for patients, caregivers, and authorized representatives from a variety of cultural and educational backgrounds to reflect the varying needs of consumers and diverse levels of health literacy; 
‘‘(C) shall, where appropriate, explain why there is 
a lack of evidence to support one treatment option over another; and 
‘‘(D) shall address health care decisions across the age

span, including those affecting vulnerable populations including children. ‘‘(3) D
ISTRIBUTION .—The Director shall ensure that patient 
decision aids produced with grants or contracts under this section are available to the public. 
‘‘(4) N
ONDUPLICATION OF EFFORTS .—The Director shall

ONDUPLICATION OF EFFORTS .—The Director shall 
ensure that the activities under this section of the Agency and other agencies, including the Centers for Disease Control and Prevention and the National Institutes of Health, are free of unnecessary duplication of effort. ‘‘(e) G
RANTS TO SUPPORT SHARED DECISIONMAKING  
IMPLEMENTATION .— 
‘‘(1) I N GENERAL .—The Secretary shall establish a program

to provide for the phased-in development, implementation, and evaluation of shared decisionmaking using patient decision aids to meet the objective of improving the understanding of patients of their medical treatment options. 
‘‘(2) S
HARED DECISIONMAKING RESOURCE CENTERS .— 
‘‘(A) I N GENERAL .—The Secretary shall provide grants

for the establishment and support of Shared Decision-making Resource Centers (referred to in this subsection as ‘Centers’) to provide technical assistance to providers and to develop and disseminate best practices and other information to support and accelerate adoption, implementation, and effective use of patient decision aids and shared decisionmaking by providers. 
‘‘(B) O
BJECTIVES .—The objective of a Center is to

BJECTIVES .—The objective of a Center is to 
enhance and promote the adoption of patient decision aids and shared decisionmaking through— 
‘‘(i) providing assistance to eligible providers with 
the implementation and effective use of, and training on, patient decision aids; and 
‘‘(ii) the dissemination of best practices and 
research on the implementation and effective use of patient decision aids. 
‘‘(3) S
HARED DECISIONMAKING PARTICIPATION GRANTS .—

HARED DECISIONMAKING PARTICIPATION GRANTS .— 
‘‘(A) I N GENERAL .—The Secretary shall provide grants 
to health care providers for the development and implementation of shared decisionmaking techniques and to assess the use of such techniques. 
‘‘(B) P
REFERENCE .—In order to facilitate the use of 
best practices, the Secretary shall provide a preference in making grants under this subsection to health care

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124 STAT. 530 PUBLIC LAW 111–148—MAR. 23, 2010 
providers who participate in training by Shared Decision-
making Resource Centers or comparable training. 
‘‘(C) L IMITATION .—Funds under this paragraph shall 
not be used to purchase or implement use of patient deci-sion aids other than those certified under the process identified in subsection (c). ‘‘(4) G
UIDANCE .—The Secretary may issue guidance to 
eligible grantees under this subsection on the use of patient decision aids. ‘‘(f) F

UNDING .—For purposes of carrying out this section there 
are authorized to be appropriated such sums as may be necessary for fiscal year 2010 and each subsequent fiscal year.’’. 
SEC. 3507. PRESENTATION OF PRESCRIPTION DRUG BENEFIT AND 
RISK INFORMATION. 

(referred to in this section as the ‘‘Secretary’’), acting through the Commissioner of Food and Drugs, shall determine whether the addition of quantitative summaries of the benefits and risks of prescription drugs in a standardized format (such as a table or drug facts box) to the promotional labeling or print advertising of such drugs would improve health care decisionmaking by clini-cians and patients and consumers. 
(b) R
EVIEW AND CONSULTATION .—In making the determination

under subsection (a), the Secretary shall review all available sci-entific evidence and research on decisionmaking and social and cognitive psychology and consult with drug manufacturers, clini-cians, patients and consumers, experts in health literacy, represent-atives of racial and ethnic minorities, and experts in women’s and pediatric health. 
(c) R
EPORT .—Not later than 1 year after the date of enactment 
of this Act, the Secretary shall submit to Congress a report that provides—

(1) the determination by the Secretary under subsection 
(a); and 
(2) the reasoning and analysis underlying that determina-
tion. (d) A
UTHORITY .—If the Secretary determines under subsection

(a) that the addition of quantitative summaries of the benefits and risks of prescription drugs in a standardized format (such as a table or drug facts box) to the promotional labeling or print advertising of such drugs would improve health care decisionmaking by clinicians and patients and consumers, then the Secretary, not later than 3 years after the date of submission of the report under subsection (c), shall promulgate proposed regulations as necessary to implement such format. 
(e) C

(e) C
LARIFICATION .—Nothing in this section shall be construed 
to restrict the existing authorities of the Secretary with respect to benefit and risk information. 
SEC. 3508. DEMONSTRATION PROGRAM TO INTEGRATE QUALITY 
IMPROVEMENT AND PATIENT SAFETY TRAINING INTO CLINICAL EDUCATION OF HEALTH PROFESSIONALS. 
(a) I NGENERAL .—The Secretary may award grants to eligible

entities or consortia under this section to carry out demonstration projects to develop and implement academic curricula that integrates quality improvement and patient safety in the clinical 42 USC 294j. Deadline. 
Regulations. Determination. 21 USC 352 note. 
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124 STAT. 531 PUBLIC LAW 111–148—MAR. 23, 2010 
education of health professionals. Such awards shall be made on 
a competitive basis and pursuant to peer review. 
(b) E LIGIBILITY .—To be eligible to receive a grant under sub-
section (a), an entity or consortium shall— 
(1) submit to the Secretary an application at such time, 
in such manner, and containing such information as the Sec-retary may require; 
(2) be or include—

(2) be or include— 
(A) a health professions school; (B) a school of public health; (C) a school of social work; (D) a school of nursing; (E) a school of pharmacy; (F) an institution with a graduate medical education 
program; or 
(G) a school of health care administration; 
(3) collaborate in the development of curricula described 
in subsection (a) with an organization that accredits such school or institution; 
(4) provide for the collection of data regarding the effective-

ness of the demonstration project; and 
(5) provide matching funds in accordance with subsection 
(c). (c) M
ATCHING FUNDS .— 
(1) I N GENERAL .—The Secretary may award a grant to 
an entity or consortium under this section only if the entity or consortium agrees to make available non-Federal contribu-tions toward the costs of the program to be funded under the grant in an amount that is not less than $1 for each $5 of Federal funds provided under the grant. 
(2) D

(2) D
ETERMINATION OF AMOUNT CONTRIBUTED .—Non-Fed-
eral contributions under paragraph (1) may be in cash or in- kind, fairly evaluated, including equipment or services. 
Amounts provided by the Federal Government, or services assisted or subsidized to any significant extent by the Federal Government, may not be included in determining the amount of such contributions. (d) E
VALUATION .—The Secretary shall take such action as may

be necessary to evaluate the projects funded under this section and publish, make publicly available, and disseminate the results of such evaluations on as wide a basis as is practicable. 
(e) R
EPORTS .—Not later than 2 years after the date of enact-

ment of this section, and annually thereafter, the Secretary shall submit to the Committee on Health, Education, Labor, and Pensions and the Committee on Finance of the Senate and the Committee on Energy and Commerce and the Committee on Ways and Means of the House of Representatives a report that— 
(1) describes the specific projects supported under this sec-
tion; and 
(2) contains recommendations for Congress based on the 
evaluation conducted under subsection (d).

evaluation conducted under subsection (d). 
SEC. 3509. IMPROVING WOMEN’S HEALTH. 
(a) H EALTH AND HUMAN SERVICES OFFICE ON WOMEN ’S 
HEALTH .— Publication. 
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124 STAT. 532 PUBLIC LAW 111–148—MAR. 23, 2010 
(1) E STABLISHMENT .—Part A of title II of the Public Health 
Service Act (42 U.S.C. 202 et seq.) is amended by adding at the end the following: 
‘‘SEC. 229. HEALTH AND HUMAN SERVICES OFFICE ON WOMEN’S 
HEALTH. 
‘‘(a) E STABLISHMENT OF OFFICE .—There is established within

the Office of the Secretary, an Office on Women’s Health (referred to in this section as the ‘Office’). The Office shall be headed by a Deputy Assistant Secretary for Women’s Health who may report to the Secretary. 
‘‘(b) D
UTIES .—The Secretary, acting through the Office, with 
respect to the health concerns of women, shall— 
‘‘(1) establish short-range and long-range goals and objec-

tives within the Department of Health and Human Services and, as relevant and appropriate, coordinate with other appro-priate offices on activities within the Department that relate to disease prevention, health promotion, service delivery, research, and public and health care professional education, for issues of particular concern to women throughout their lifespan; 
‘‘(2) provide expert advice and consultation to the Secretary

concerning scientific, legal, ethical, and policy issues relating to women’s health; 
‘‘(3) monitor the Department of Health and Human Serv-
ices’ offices, agencies, and regional activities regarding women’s health and identify needs regarding the coordination of activi-ties, including intramural and extramural multidisciplinary activities; 
‘‘(4) establish a Department of Health and Human Services

Coordinating Committee on Women’s Health, which shall be chaired by the Deputy Assistant Secretary for Women’s Health and composed of senior level representatives from each of the agencies and offices of the Department of Health and Human Services; 
‘‘(5) establish a National Women’s Health Information 
Center to— 
‘‘(A) facilitate the exchange of information regarding

matters relating to health information, health promotion, preventive health services, research advances, and edu-cation in the appropriate use of health care; 
‘‘(B) facilitate access to such information; ‘‘(C) assist in the analysis of issues and problems 
relating to the matters described in this paragraph; and 
‘‘(D) provide technical assistance with respect to the

exchange of information (including facilitating the develop-ment of materials for such technical assistance); ‘‘(6) coordinate efforts to promote women’s health programs 
and policies with the private sector; and 
‘‘(7) through publications and any other means appropriate, 
provide for the exchange of information between the Office and recipients of grants, contracts, and agreements under sub-section (c), and between the Office and health professionals and the general public. ‘‘(c) G

RANTS AND CONTRACTS REGARDING DUTIES .— Establishment. 42 USC 237a. 
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124 STAT. 533 PUBLIC LAW 111–148—MAR. 23, 2010 
‘‘(1) A UTHORITY .—In carrying out subsection (b), the Sec-
retary may make grants to, and enter into cooperative agree-ments, contracts, and interagency agreements with, public and private entities, agencies, and organizations. 
‘‘(2) E
VALUATION AND DISSEMINATION .—The Secretary shall

directly or through contracts with public and private entities, agencies, and organizations, provide for evaluations of projects carried out with financial assistance provided under paragraph (1) and for the dissemination of information developed as a result of such projects. ‘‘(d) R
EPORTS .—Not later than 1 year after the date of enact-

ment of this section, and every second year thereafter, the Secretary shall prepare and submit to the appropriate committees of Congress a report describing the activities carried out under this section during the period for which the report is being prepared. 
‘‘(e) A
UTHORIZATION OF APPROPRIATIONS .—For the purpose of 
carrying out this section, there are authorized to be appropriated such sums as may be necessary for each of the fiscal years 2010 through 2014.’’. 
(2) T

Office on Women’s Health (established under section 229 of the Public Health Service Act, as added by this section), all functions exercised by the Office on Women’s Health of the Public Health Service prior to the date of enactment of this section, including all personnel and compensation authority, all delegation and assignment authority, and all remaining appropriations. All orders, determinations, rules, regulations, permits, agreements, grants, contracts, certificates, licenses,

grants, contracts, certificates, licenses, registrations, privileges, and other administrative actions that—

(A) have been issued, made, granted, or allowed to 
become effective by the President, any Federal agency or official thereof, or by a court of competent jurisdiction, in the performance of functions transferred under this para-graph; and 
(B) are in effect at the time this section takes effect, 
or were final before the date of enactment of this section and are to become effective on or after such date,

shall continue in effect according to their terms until modified, terminated, superseded, set aside, or revoked in accordance with law by the President, the Secretary, or other authorized official, a court of competent jurisdiction, or by operation of law. (b) C
ENTERS FOR DISEASE CONTROL AND PREVENTION OFFICE  
OFWOMEN ’SHEALTH .—Part A of title III of the Public Health 
Service Act (42 U.S.C. 241 et seq.) is amended by adding at the end the following:

‘‘SEC. 310A. CENTERS FOR DISEASE CONTROL AND PREVENTION 
OFFICE OF WOMEN’S HEALTH. 
‘‘(a) E STABLISHMENT .—There is established within the Office 
of the Director of the Centers for Disease Control and Prevention, an office to be known as the Office of Women’s Health (referred to in this section as the ‘Office’). The Office shall be headed by a director who shall be appointed by the Director of such Centers. 
‘‘(b) P
URPOSE .—The Director of the Office shall— 42 USC 242s. 42 USC 237a 
note.

note. 
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124 STAT. 534 PUBLIC LAW 111–148—MAR. 23, 2010 
‘‘(1) report to the Director of the Centers for Disease Control 
and Prevention on the current level of the Centers’ activity regarding women’s health conditions across, where appropriate, age, biological, and sociocultural contexts, in all aspects of the Centers’ work, including prevention programs, public and professional education, services, and treatment; 
‘‘(2) establish short-range and long-range goals and objec-

tives within the Centers for women’s health and, as relevant and appropriate, coordinate with other appropriate offices on activities within the Centers that relate to prevention, research, education and training, service delivery, and policy develop-ment, for issues of particular concern to women; 
‘‘(3) identify projects in women’s health that should be 
conducted or supported by the Centers; 
‘‘(4) consult with health professionals, nongovernmental

organizations, consumer organizations, women’s health profes-sionals, and other individuals and groups, as appropriate, on the policy of the Centers with regard to women; and 
‘‘(5) serve as a member of the Department of Health and 
Human Services Coordinating Committee on Women’s Health (established under section 229(b)(4)). ‘‘(c) D
EFINITION .—As used in this section, the term ‘women’s

health conditions’, with respect to women of all age, ethnic, and racial groups, means diseases, disorders, and conditions— 
‘‘(1) unique to, significantly more serious for, or significantly 
more prevalent in women; and 
‘‘(2) for which the factors of medical risk or type of medical 
intervention are different for women, or for which there is reasonable evidence that indicates that such factors or types may be different for women. ‘‘(d) A
UTHORIZATION OF APPROPRIATIONS .—For the purpose of

(c) O
FFICE OF WOMEN ’SHEALTH RESEARCH .—Section 486(a) 
of the Public Health Service Act (42 U.S.C. 287d(a)) is amended by inserting ‘‘and who shall report directly to the Director’’ before the period at the end thereof. 
(d) S
UBSTANCE ABUSE AND MENTAL HEALTH SERVICES ADMINIS -
TRATION .—Section 501(f) of the Public Health Service Act (42 U.S.C.

290aa(f)) is amended— 
(1) in paragraph (1), by inserting ‘‘who shall report directly 
to the Administrator’’ before the period; 
(2) by redesignating paragraph (4) as paragraph (5); and (3) by inserting after paragraph (3), the following: ‘‘(4) O
FFICE .—Nothing in this subsection shall be construed 
to preclude the Secretary from establishing within the Sub-stance Abuse and Mental Health Administration an Office of Women’s Health.’’. (e) A
GENCY FOR HEALTHCARE RESEARCH AND QUALITY ACTIVI -

TIES REGARDING WOMEN ’SHEALTH .—Part C of title IX of the Public 
Health Service Act (42 U.S.C. 299c et seq.) is amended— 
(1) by redesignating sections 925 and 926 as sections 926 
and 927, respectively; and 
(2) by inserting after section 924 the following: 42 USC 299b–25, 
299b–26. 
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124 STAT. 535 PUBLIC LAW 111–148—MAR. 23, 2010 
‘‘SEC. 925. ACTIVITIES REGARDING WOMEN’S HEALTH. 
of the Director, an Office of Women’s Health and Gender-Based Research (referred to in this section as the ‘Office’). The Office shall be headed by a director who shall be appointed by the Director of Healthcare and Research Quality. 
‘‘(b) P
URPOSE .—The official designated under subsection (a) 
shall—

shall— 
‘‘(1) report to the Director on the current Agency level 
of activity regarding women’s health, across, where appropriate, age, biological, and sociocultural contexts, in all aspects of Agency work, including the development of evidence reports and clinical practice protocols and the conduct of research into patient outcomes, delivery of health care services, quality of care, and access to health care; 

tives within the Agency for research important to women’s health and, as relevant and appropriate, coordinate with other appropriate offices on activities within the Agency that relate to health services and medical effectiveness research, for issues of particular concern to women; 
conducted or supported by the Agency; 

organizations, consumer organizations, women’s health profes-sionals, and other individuals and groups, as appropriate, on Agency policy with regard to women; and 
Human Services Coordinating Committee on Women’s Health (established under section 229(b)(4)).’’. ‘‘(c) A

(f) H
EALTH RESOURCES AND SERVICES ADMINISTRATION OFFICE  
OFWOMEN ’SHEALTH .—Title VII of the Social Security Act (42 
U.S.C. 901 et seq.) is amended by adding at the end the following: 
‘‘SEC. 713. OFFICE OF WOMEN’S HEALTH. 
‘‘(a) E STABLISHMENT .—The Secretary shall establish within the

Office of the Administrator of the Health Resources and Services Administration, an office to be known as the Office of Women’s Health. The Office shall be headed by a director who shall be appointed by the Administrator. 
‘‘(b) P
URPOSE .—The Director of the Office shall— 
‘‘(1) report to the Administrator on the current Administra-
tion level of activity regarding women’s health across, where appropriate, age, biological, and sociocultural contexts;

tives within the Health Resources and Services Administration for women’s health and, as relevant and appropriate, coordinate with other appropriate offices on activities within the Adminis-tration that relate to health care provider training, health service delivery, research, and demonstration projects, for issues of particular concern to women; 
‘‘(3) identify projects in women’s health that should be

conducted or supported by the bureaus of the Administration; 42 USC 914. 42 USC 
299b–24a. 
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124 STAT. 536 PUBLIC LAW 111–148—MAR. 23, 2010 
‘‘(4) consult with health professionals, nongovernmental 
organizations, consumer organizations, women’s health profes-sionals, and other individuals and groups, as appropriate, on Administration policy with regard to women; and 
Human Services Coordinating Committee on Women’s Health (established under section 229(b)(4) of the Public Health Service Act). ‘‘(c) C

ONTINUED ADMINISTRATION OF EXISTING PROGRAMS .—The 
Director of the Office shall assume the authority for the develop-ment, implementation, administration, and evaluation of any projects carried out through the Health Resources and Services Administration relating to women’s health on the date of enactment of this section. 
‘‘(d) D
EFINITIONS .—For purposes of this section: 
‘‘(1) A DMINISTRATION .—The term ‘Administration’ means 
the Health Resources and Services Administration.

‘‘(2) A DMINISTRATOR .—The term ‘Administrator’ means the 
Administrator of the Health Resources and Services Adminis-tration. 
‘‘(3) O
FFICE .—The term ‘Office’ means the Office of Women’s 
Health established under this section in the Administration. ‘‘(e) A
(g) F

(g) F
OOD AND DRUG ADMINISTRATION OFFICE OF WOMEN ’S 
HEALTH .—Chapter X of the Federal Food, Drug, and Cosmetic Act 
(21 U.S.C. 391 et seq.) is amended by adding at the end the following: 
‘‘SEC. 1011. OFFICE OF WOMEN’S HEALTH. 
‘‘(a) E STABLISHMENT .—There is established within the Office

of the Commissioner, an office to be known as the Office of Women’s Health (referred to in this section as the ‘Office’). The Office shall be headed by a director who shall be appointed by the Commissioner of Food and Drugs. 
‘‘(b) P
‘‘(1) report to the Commissioner of Food and Drugs on

current Food and Drug Administration (referred to in this section as the ‘Administration’) levels of activity regarding women’s participation in clinical trials and the analysis of data by sex in the testing of drugs, medical devices, and biological products across, where appropriate, age, biological, and sociocultural contexts; 

tives within the Administration for issues of particular concern to women’s health within the jurisdiction of the Administration, including, where relevant and appropriate, adequate inclusion of women and analysis of data by sex in Administration proto-cols and policies; 
‘‘(3) provide information to women and health care pro-
viders on those areas in which differences between men and women exist; 
‘‘(4) consult with pharmaceutical, biologics, and device

manufacturers, health professionals with expertise in women’s 21 USC 399b. 
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124 STAT. 537 PUBLIC LAW 111–148—MAR. 23, 2010 
issues, consumer organizations, and women’s health profes-
sionals on Administration policy with regard to women; 
‘‘(5) make annual estimates of funds needed to monitor 
clinical trials and analysis of data by sex in accordance with needs that are identified; and 
‘‘(6) serve as a member of the Department of Health and

Human Services Coordinating Committee on Women’s Health (established under section 229(b)(4) of the Public Health Service Act). ‘‘(c) A
(h) N
ONEWREGULATORY AUTHORITY .—Nothing in this section

and the amendments made by this section may be construed as establishing regulatory authority or modifying any existing regu-latory authority. 
(i) L
IMITATION ON TERMINATION .—Notwithstanding any other

provision of law, a Federal office of women’s health (including the Office of Research on Women’s Health of the National Institutes of Health) or Federal appointive position with primary responsibility over women’s health issues (including the Associate Administrator for Women’s Services under the Substance Abuse and Mental Health Services Administration) that is in existence on the date of enactment of this section shall not be terminated, reorganized, or have any of it’s powers or duties

reorganized, or have any of it’s powers or duties transferred unless such termi-nation, reorganization, or transfer is approved by Congress through the adoption of a concurrent resolution of approval.

(j) R
ULE OF CONSTRUCTION .—Nothing in this section (or the 
amendments made by this section) shall be construed to limit the authority of the Secretary of Health and Human Services with respect to women’s health, or with respect to activities carried out through the Department of Health and Human Services on the date of enactment of this section. 
SEC. 3510. PATIENT NAVIGATOR PROGRAM. 
Section 340A of the Public Health Service Act (42 U.S.C. 256a) 
is amended—

(1) by striking subsection (d)(3) and inserting the following: ‘‘(3) L
IMITATIONS ON GRANT PERIOD .—In carrying out this 
section, the Secretary shall ensure that the total period of a grant does not exceed 4 years.’’; 
(2) in subsection (e), by adding at the end the following: ‘‘(3) M
INIMUM CORE PROFICIENCIES .—The Secretary shall

INIMUM CORE PROFICIENCIES .—The Secretary shall 
not award a grant to an entity under this section unless such entity provides assurances that patient navigators recruited, assigned, trained, or employed using grant funds meet min-imum core proficiencies, as defined by the entity that submits the application, that are tailored for the main focus or interven-tion of the navigator involved.’’; and 
(3) in subsection (m)— 
(A) in paragraph (1), by striking ‘‘and $3,500,000 for

fiscal year 2010.’’ and inserting ‘‘$3,500,000 for fiscal year 2010, and such sums as may be necessary for each of fiscal years 2011 through 2015.’’; and 
(B) in paragraph (2), by striking ‘‘2010’’ and inserting 
‘‘2015’’. 42 USC 237a note. 42 USC 237a 
note. 42 USC 237a 
note. 
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124 STAT. 538 PUBLIC LAW 111–148—MAR. 23, 2010 
SEC. 3511. AUTHORIZATION OF APPROPRIATIONS. 
Except where otherwise provided in this subtitle (or an amend-
ment made by this subtitle), there is authorized to be appropriated such sums as may be necessary to carry out this subtitle (and such amendments made by this subtitle). 
Subtitle G—Protecting and Improving 
Guaranteed Medicare Benefits 
SEC. 3601. PROTECTING AND IMPROVING GUARANTEED MEDICARE 
BENEFITS.

BENEFITS. 
(a) P ROTECTING GUARANTEED MEDICARE BENEFITS .—Nothing 
in the provisions of, or amendments made by, this Act shall result in a reduction of guaranteed benefits under title XVIII of the Social Security Act. 
(b) E
NSURING THAT MEDICARE SAVINGS BENEFIT THE MEDICARE  
PROGRAM AND MEDICARE BENEFICIARIES .—Savings generated for

the Medicare program under title XVIII of the Social Security Act under the provisions of, and amendments made by, this Act shall extend the solvency of the Medicare trust funds, reduce Medi-care premiums and other cost-sharing for beneficiaries, and improve or expand guaranteed Medicare benefits and protect access to Medi-care providers. 
SEC. 3602. NO CUTS IN GUARANTEED BENEFITS. 
Nothing in this Act shall result in the reduction or elimination

of any benefits guaranteed by law to participants in Medicare Advantage plans. 
TITLE IV—PREVENTION OF CHRONIC 
DISEASE AND IMPROVING PUBLIC HEALTH 
Subtitle A—Modernizing Disease 
Prevention and Public Health Systems 
SEC. 4001. NATIONAL PREVENTION, HEALTH PROMOTION AND PUBLIC 
HEALTH COUNCIL. 
(a) E STABLISHMENT .—The President shall establish, within the

Department of Health and Human Services, a council to be known as the ‘‘National Prevention, Health Promotion and Public Health Council’’ (referred to in this section as the ‘‘Council’’). 
(b) C
HAIRPERSON .—The President shall appoint the Surgeon 
General to serve as the chairperson of the Council. 
(c) C OMPOSITION .—The Council shall be composed of—

(1) the Secretary of Health and Human Services; (2) the Secretary of Agriculture; (3) the Secretary of Education; (4) the Chairman of the Federal Trade Commission; (5) the Secretary of Transportation; (6) the Secretary of Labor; (7) the Secretary of Homeland Security; President. Appointment. President. 42 USC 300u–10. 42 USC 
1395w–21 note. 42 USC 1395 
note.

note. 
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124 STAT. 539 PUBLIC LAW 111–148—MAR. 23, 2010 
(8) the Administrator of the Environmental Protection 
Agency; 
(9) the Director of the Office of National Drug Control 
Policy; 
(10) the Director of the Domestic Policy Council; (11) the Assistant Secretary for Indian Affairs; (12) the Chairman of the Corporation for National and 
Community Service; and 
(13) the head of any other Federal agency that the chair-
person determines is appropriate. (d) P
URPOSES AND DUTIES .—The Council shall—

URPOSES AND DUTIES .—The Council shall— 
(1) provide coordination and leadership at the Federal level, 
and among all Federal departments and agencies, with respect to prevention, wellness and health promotion practices, the public health system, and integrative health care in the United States; 
(2) after obtaining input from relevant stakeholders,

develop a national prevention, health promotion, public health, and integrative health care strategy that incorporates the most effective and achievable means of improving the health status of Americans and reducing the incidence of preventable illness and disability in the United States; 
(3) provide recommendations to the President and Congress

concerning the most pressing health issues confronting the United States and changes in Federal policy to achieve national wellness, health promotion, and public health goals, including the reduction of tobacco use, sedentary behavior, and poor nutrition; 
(4) consider and propose evidence-based models, policies, 
and innovative approaches for the promotion of transformative models of prevention, integrative health, and public health on individual and community levels across the United States;

(5) establish processes for continual public input, including 
input from State, regional, and local leadership communities and other relevant stakeholders, including Indian tribes and tribal organizations; 
(6) submit the reports required under subsection (g); and (7) carry out other activities determined appropriate by 
the President. (e) M
EETINGS .—The Council shall meet at the call of the Chair-
person. 
(f) A DVISORY GROUP .— 
(1) I N GENERAL .—The President shall establish an Advisory

Group to the Council to be known as the ‘‘Advisory Group on Prevention, Health Promotion, and Integrative and Public Health’’ (hereafter referred to in this section as the ‘‘Advisory 
Group’’). The Advisory Group shall be within the Department of Health and Human Services and report to the Surgeon General. 
(2) C
(A) I N GENERAL .—The Advisory Group shall be com-
posed of not more than 25 non-Federal members to be appointed by the President. 
(B) R

(B) R
EPRESENTATION .—In appointing members under 
subparagraph (A), the President shall ensure that the Advisory Group includes a diverse group of licensed health Establishment. President. 
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124 STAT. 540 PUBLIC LAW 111–148—MAR. 23, 2010 
professionals, including integrative health practitioners 
who have expertise in— 
(i) worksite health promotion; (ii) community services, including community 
health centers; 
(iii) preventive medicine; (iv) health coaching; (v) public health education; (vi) geriatrics; and (vii) rehabilitation medicine. 
(3) P
URPOSES AND DUTIES .—The Advisory Group shall

URPOSES AND DUTIES .—The Advisory Group shall 
develop policy and program recommendations and advise the Council on lifestyle-based chronic disease prevention and management, integrative health care practices, and health pro-motion. (g) N
ATIONAL PREVENTION AND HEALTH PROMOTION  
STRATEGY .—Not later than 1 year after the date of enactment

of this Act, the Chairperson, in consultation with the Council, shall develop and make public a national prevention, health pro-motion and public health strategy, and shall review and revise such strategy periodically. Such strategy shall— 
(1) set specific goals and objectives for improving the health 
of the United States through federally-supported prevention, health promotion, and public health programs, consistent with ongoing goal setting efforts conducted by specific agencies;

(2) establish specific and measurable actions and timelines 
to carry out the strategy, and determine accountability for meeting those timelines, within and across Federal departments and agencies; and 
(3) make recommendations to improve Federal efforts 
relating to prevention, health promotion, public health, and integrative health care practices to ensure Federal efforts are consistent with available standards and evidence. (h) R
EPORT .—Not later than July 1, 2010, and annually there-

after through January 1, 2015, the Council shall submit to the President and the relevant committees of Congress, a report that— 
(1) describes the activities and efforts on prevention, health 
promotion, and public health and activities to develop a national strategy conducted by the Council during the period for which the report is prepared; 
(2) describes the national progress in meeting specific

prevention, health promotion, and public health goals defined in the strategy and further describes corrective actions rec-ommended by the Council and taken by relevant agencies and organizations to meet these goals; 
(3) contains a list of national priorities on health promotion

and disease prevention to address lifestyle behavior modifica-tion (smoking cessation, proper nutrition, appropriate exercise, mental health, behavioral health, substance use disorder, and domestic violence screenings) and the prevention measures for the 5 leading disease killers in the United States; 
(4) contains specific science-based initiatives to achieve the

measurable goals of Healthy People 2010 regarding nutrition, exercise, and smoking cessation, and targeting the 5 leading disease killers in the United States; 
(5) contains specific plans for consolidating Federal health 
programs and Centers that exist to promote healthy behavior Deadline. Public information. 
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124 STAT. 541 PUBLIC LAW 111–148—MAR. 23, 2010 
and reduce disease risk (including eliminating programs and 
offices determined to be ineffective in meeting the priority goals of Healthy People 2010); 
(6) contains specific plans to ensure that all Federal health 
care programs are fully coordinated with science-based preven-tion recommendations by the Director of the Centers for Disease Control and Prevention; and 
(7) contains specific plans to ensure that all non-Depart-

ment of Health and Human Services prevention programs are based on the science-based guidelines developed by the Centers for Disease Control and Prevention under paragraph (4). (i) P
ERIODIC REVIEWS .—The Secretary and the Comptroller

General of the United States shall jointly conduct periodic reviews, not less than every 5 years, and evaluations of every Federal disease prevention and health promotion initiative, program, and agency. Such reviews shall be evaluated based on effectiveness in meeting metrics-based goals with an analysis posted on such agencies’ public Internet websites. 
SEC. 4002. PREVENTION AND PUBLIC HEALTH FUND. 
(a) P URPOSE .—It is the purpose of this section to establish

a Prevention and Public Health Fund (referred to in this section as the ‘‘Fund’’), to be administered through the Department of Health and Human Services, Office of the Secretary, to provide for expanded and sustained national investment in prevention and public health programs to improve health and help restrain the rate of growth in private and public sector health care costs. 
(b) F
UNDING .—There are hereby authorized to be appropriated,

and appropriated, to the Fund, out of any monies in the Treasury not otherwise appropriated— 
(1) for fiscal year 2010, $500,000,000; (2) for fiscal year 2011, $750,000,000; (3) for fiscal year 2012, $1,000,000,000; (4) for fiscal year 2013, $1,250,000,000; (5) for fiscal year 2014, $1,500,000,000; and (6) for fiscal year 2015, and each fiscal year thereafter, 
$2,000,000,000. (c) U
SE OF FUND.—The Secretary shall transfer amounts in

the Fund to accounts within the Department of Health and Human Services to increase funding, over the fiscal year 2008 level, for programs authorized by the Public Health Service Act, for preven-tion, wellness, and public health activities including prevention research and health screenings, such as the Community Trans-formation grant program, the Education and Outreach Campaign for Preventive Benefits, and immunization programs. 
(d) T
RANSFER AUTHORITY .—The Committee on Appropriations

of the Senate and the Committee on Appropriations of the House 
of Representatives may provide for the transfer of funds in the Fund to eligible activities under this section, subject to subsection (c). 
SEC. 4003. CLINICAL AND COMMUNITY PREVENTIVE SERVICES. 
(a) P REVENTIVE SERVICES TASK FORCE .—Section 915 of the 
Public Health Service Act (42 U.S.C. 299b–4) is amended by striking subsection (a) and inserting the following: 
‘‘(a) P
REVENTIVE SERVICES TASKFORCE .—

‘‘(a) P
REVENTIVE SERVICES TASKFORCE .— 
‘‘(1) E STABLISHMENT AND PURPOSE .—The Director shall con-
vene an independent Preventive Services Task Force (referred 42 USC 300u–11. Web posting. Deadlines. 
Evaluations. 
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124 STAT. 542 PUBLIC LAW 111–148—MAR. 23, 2010 
to in this subsection as the ‘Task Force’) to be composed of

individuals with appropriate expertise. Such Task Force shall review the scientific evidence related to the effectiveness, appro-priateness, and cost-effectiveness of clinical preventive services for the purpose of developing recommendations for the health care community, and updating previous clinical preventive rec-ommendations, to be published in the Guide to Clinical Preven-tive Services (referred to in this section as the ‘Guide’), for individuals and organizations delivering clinical

individuals and organizations delivering clinical services, including primary care professionals, health care systems, professional societies, employers, community organizations, non-profit organizations, Congress and other policy-makers, governmental public health agencies, health care quality organizations, and organizations developing national health objectives. Such recommendations shall consider clinical preventive best practice recommendations from the Agency for Healthcare Research and

from the Agency for Healthcare Research and Quality, the National Institutes of Health, the Centers for Disease Control and Prevention, the Institute of Medicine, specialty medical associations, patient groups, and scientific societies.

‘‘(2) D
UTIES .—The duties of the Task Force shall include— 
‘‘(A) the development of additional topic areas for new 
recommendations and interventions related to those topic areas, including those related to specific sub-populations and age groups; 
‘‘(B) at least once during every 5-year period, review 
interventions and update recommendations related to existing topic areas, including new or improved techniques to assess the health effects of interventions;

‘‘(C) improved integration with Federal Government 
health objectives and related target setting for health improvement; 
‘‘(D) the enhanced dissemination of recommendations; ‘‘(E) the provision of technical assistance to those 
health care professionals, agencies and organizations that request help in implementing the Guide recommendations; and 
‘‘(F) the submission of yearly reports to Congress and

related agencies identifying gaps in research, such as preventive services that receive an insufficient evidence statement, and recommending priority areas that deserve further examination, including areas related to populations and age groups not adequately addressed by current rec-ommendations. ‘‘(3) R
OLE OF AGENCY .—The Agency shall provide ongoing

OLE OF AGENCY .—The Agency shall provide ongoing 
administrative, research, and technical support for the oper-ations of the Task Force, including coordinating and supporting the dissemination of the recommendations of the Task Force, ensuring adequate staff resources, and assistance to those organizations requesting it for implementation of the Guide’s recommendations. 
‘‘(4) C
OORDINATION WITH COMMUNITY PREVENTIVE SERVICES  
TASK FORCE .—The Task Force shall take appropriate steps to

coordinate its work with the Community Preventive Services Task Force and the Advisory Committee on Immunization Prac-tices, including the examination of how each task force’s rec-ommendations interact at the nexus of clinic and community. 
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124 STAT. 543 PUBLIC LAW 111–148—MAR. 23, 2010 
‘‘(5) O PERATION .—Operation. In carrying out the duties 
under paragraph (2), the Task Force is not subject to the provisions of Appendix 2 of title 5, United States Code. 
‘‘(6) I
NDEPENDENCE .—All members of the Task Force con-
vened under this subsection, and any recommendations made by such members, shall be independent and, to the extent practicable, not subject to political pressure. 
‘‘(7) A
UTHORIZATION OF APPROPRIATIONS .—There are

UTHORIZATION OF APPROPRIATIONS .—There are 
authorized to be appropriated such sums as may be necessary for each fiscal year to carry out the activities of the Task Force.’’. (b) C
OMMUNITY PREVENTIVE SERVICES TASKFORCE .— 
(1) I N GENERAL .—Part P of title III of the Public Health 
Service Act, as amended by paragraph (2), is amended by adding at the end the following: 
‘‘SEC. 399U. COMMUNITY PREVENTIVE SERVICES TASK FORCE. 
‘‘(a) E STABLISHMENT AND PURPOSE .—The Director of the Cen-

ters for Disease Control and Prevention shall convene an inde-pendent Community Preventive Services Task Force (referred to in this subsection as the ‘Task Force’) to be composed of individuals with appropriate expertise. Such Task Force shall review the sci-entific evidence related to the effectiveness, appropriateness, and cost-effectiveness of community preventive interventions for the purpose of developing recommendations, to be published in the Guide to Community Preventive Services

in the Guide to Community Preventive Services (referred to in this section as the ‘Guide’), for individuals and organizations delivering popu-lation-based services, including primary care professionals, health care systems, professional societies, employers, community organizations, non-profit organizations, schools, governmental public health agencies, Indian tribes, tribal organizations and urban Indian organizations, medical groups, Congress and other policy- makers. Community preventive

and other policy- makers. Community preventive services include any policies, pro-grams, processes or activities designed to affect or otherwise affecting health at the population level.

‘‘(b) D
‘‘(1) the development of additional topic areas for new rec-
ommendations and interventions related to those topic areas, 
including those related to specific populations and age groups, as well as the social, economic and physical environments that can have broad effects on the health and disease of populations and health disparities among sub-populations and age groups; 
‘‘(2) at least once during every 5-year period, review inter-

ventions and update recommendations related to existing topic areas, including new or improved techniques to assess the health effects of interventions, including health impact assess-ment and population health modeling; 
‘‘(3) improved integration with Federal Government health 
objectives and related target setting for health improvement; 
‘‘(4) the enhanced dissemination of recommendations; ‘‘(5) the provision of technical assistance to those health

care professionals, agencies, and organizations that request help in implementing the Guide recommendations; and 
‘‘(6) providing yearly reports to Congress and related agen-
cies identifying gaps in research and recommending priority areas that deserve further examination, including areas related Review. 
Recommenda- tions. Publication. 42 USC 280g–10.

Recommenda- tions. Publication. 42 USC 280g–10. 
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124 STAT. 544 PUBLIC LAW 111–148—MAR. 23, 2010 
to populations and age groups not adequately addressed by 
current recommendations. ‘‘(c) R
OLE OF AGENCY .—The Director shall provide ongoing

administrative, research, and technical support for the operations of the Task Force, including coordinating and supporting the dissemination of the recommendations of the Task Force, ensuring adequate staff resources, and assistance to those organizations requesting it for implementation of Guide recommendations. 
‘‘(d) C
OORDINATION WITHPREVENTIVE SERVICES TASKFORCE .—

OORDINATION WITHPREVENTIVE SERVICES TASKFORCE .— 
The Task Force shall take appropriate steps to coordinate its work with the U.S. Preventive Services Task Force and the Advisory Committee on Immunization Practices, including the examination of how each task force’s recommendations interact at the nexus of clinic and community. 
‘‘(e) O
PERATION .—In carrying out the duties under subsection

(b), the Task Force shall not be subject to the provisions of Appendix 2 of title 5, United States Code. 
‘‘(f) A
to be appropriated such sums as may be necessary for each fiscal year to carry out the activities of the Task Force.’’. 
(2) T
(A) Section 399R of the Public Health Service Act 
(as added by section 2 of the ALS Registry Act (Public Law 110–373; 122 Stat. 4047)) is redesignated as section 399S.

(B) Section 399R of such Act (as added by section 
3 of the Prenatally and Postnatally Diagnosed Conditions Awareness Act (Public Law 110–374; 122 Stat. 4051)) is redesignated as section 399T. 
SEC. 4004. EDUCATION AND OUTREACH CAMPAIGN REGARDING 
PREVENTIVE BENEFITS. 

(referred to in this section as the ‘‘Secretary’’) shall provide for the planning and implementation of a national public–private part-nership for a prevention and health promotion outreach and edu-cation campaign to raise public awareness of health improvement across the life span. Such campaign shall include the dissemination 
of information that— 
(1) describes the importance of utilizing preventive services 
to promote wellness, reduce health disparities, and mitigate chronic disease;

(2) promotes the use of preventive services recommended 
by the United States Preventive Services Task Force and the Community Preventive Services Task Force; 
(3) encourages healthy behaviors linked to the prevention 
of chronic diseases; 
(4) explains the preventive services covered under health 
plans offered through a Gateway; 
(5) describes additional preventive care supported by the

Centers for Disease Control and Prevention, the Health Resources and Services Administration, the Substance Abuse and Mental Health Services Administration, the Advisory Com-mittee on Immunization Practices, and other appropriate agen-cies; and 
(6) includes general health promotion information. 42 USC 300u–12. 42 USC 280g–8. 42 USC 280g–7.

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124 STAT. 545 PUBLIC LAW 111–148—MAR. 23, 2010 
(b) C ONSULTATION .—In coordinating the campaign under sub-
section (a), the Secretary shall consult with the Institute of Medicine to provide ongoing advice on evidence-based scientific information for policy, program development, and evaluation. 
(c) M
EDIA CAMPAIGN .— 
(1) I N GENERAL .—Not later than 1 year after the date

of enactment of this Act, the Secretary, acting through the Director of the Centers for Disease Control and Prevention, shall establish and implement a national science-based media campaign on health promotion and disease prevention. 
(2) R
EQUIREMENT OF CAMPAIGN .—The campaign imple-
mented under paragraph (1)— 
(A) shall be designed to address proper nutrition, reg-

ular exercise, smoking cessation, obesity reduction, the 5 leading disease killers in the United States, and secondary prevention through disease screening promotion; 
(B) shall be carried out through competitively bid con-
tracts awarded to entities providing for the professional production and design of such campaign; 
(C) may include the use of television, radio, Internet,

and other commercial marketing venues and may be tar-geted to specific age groups based on peer-reviewed social research; 
(D) shall not be duplicative of any other Federal efforts 
relating to health promotion and disease prevention; and 
(E) may include the use of humor and nationally recog-
nized positive role models. (3) E
VALUATION .—The Secretary shall ensure that the cam-

paign implemented under paragraph (1) is subject to an inde-pendent evaluation every 2 years and shall report every 2 years to Congress on the effectiveness of such campaigns towards meeting science-based metrics. (d) W
EBSITE .—The Secretary, in consultation with private-

sector experts, shall maintain or enter into a contract to maintain an Internet website to provide science-based information on guide-lines for nutrition, regular exercise, obesity reduction, smoking ces-sation, and specific chronic disease prevention. Such website shall be designed to provide information to health care providers and consumers. 
(e) D
ISSEMINATION OF INFORMATION THROUGH PROVIDERS .—

The Secretary, acting through the Centers for Disease Control and Prevention, shall develop and implement a plan for the dissemina-tion of health promotion and disease prevention information con-sistent with national priorities, to health care providers who partici-pate in Federal programs, including programs administered by the Indian Health Service, the Department of Veterans Affairs, the Department of Defense, and the Health Resources and Services Administration, and Medicare and Medicaid.

(f) P
ERSONALIZED PREVENTION PLANS .— 
(1) C ONTRACT .—The Secretary, acting through the Director 
of the Centers for Disease Control and Prevention, shall enter into a contract with a qualified entity for the development and operation of a Federal Internet website personalized prevention plan tool. 
(2) U
SE.—The website developed under paragraph (1) shall

be designed to be used as a source of the most up-to-date scientific evidence relating to disease prevention for use by Web site. Plan. Deadlines. 
Reports. Deadline. 
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124 STAT. 546 PUBLIC LAW 111–148—MAR. 23, 2010 
individuals. Such website shall contain a component that 
enables an individual to determine their disease risk (based on personal health and family history, BMI, and other relevant information) relating to the 5 leading diseases in the United States, and obtain personalized suggestions for preventing such diseases. (g) I
NTERNET PORTAL .—The Secretary shall establish an Inter-

net portal for accessing risk-assessment tools developed and main-tained by private and academic entities. 
(h) P
RIORITY FUNDING .—Funding for the activities authorized 
under this section shall take priority over funding provided through the Centers for Disease Control and Prevention for grants to States and other entities for similar purposes and goals as provided for in this section. Not to exceed $500,000,000 shall be expended on the campaigns and activities required under this section.

(i) P
UBLIC AWARENESS OF PREVENTIVE AND OBESITY -RELATED  
SERVICES .— 
(1) I NFORMATION TO STATES .—The Secretary of Health and 
Human Services shall provide guidance and relevant informa-tion to States and health care providers regarding preventive and obesity-related services that are available to Medicaid enrollees, including obesity screening and counseling for chil-dren and adults. 
(2) I
NFORMATION TO ENROLLEES .—Each State shall design

a public awareness campaign to educate Medicaid enrollees regarding availability and coverage of such services, with the goal of reducing incidences of obesity. 
(3) R
EPORT .—Not later than January 1, 2011, and every

3 years thereafter through January 1, 2017, the Secretary of Health and Human Services shall report to Congress on the status and effectiveness of efforts under paragraphs (1) and (2), including summaries of the States’ efforts to increase awareness of coverage of obesity-related services. (j) A
Subtitle B—Increasing Access to Clinical 
Preventive Services

Preventive Services 
SEC. 4101. SCHOOL-BASED HEALTH CENTERS. 
(a) G RANTS FOR THE ESTABLISHMENT OF SCHOOL -BASED HEALTH  
CENTERS .— 
(1) P ROGRAM .—The Secretary of Health and Human Serv-
ices (in this subsection referred to as the ‘‘Secretary’’) shall establish a program to award grants to eligible entities to support the operation of school-based health centers. 
(2) E
LIGIBILITY .—To be eligible for a grant under this sub-
section, an entity shall—

section, an entity shall— 
(A) be a school-based health center or a sponsoring 
facility of a school-based health center; and 
(B) submit an application at such time, in such manner, 
and containing such information as the Secretary may require, including at a minimum an assurance that funds awarded under the grant shall not be used to provide 42 USC 280h–4.

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124 STAT. 547 PUBLIC LAW 111–148—MAR. 23, 2010 
any service that is not authorized or allowed by Federal, 
State, or local law. (3) P
REFERENCE .—In awarding grants under this section,

the Secretary shall give preference to awarding grants for school-based health centers that serve a large population of children eligible for medical assistance under the State Med-icaid plan under title XIX of the Social Security Act or under a waiver of such plan or children eligible for child health assistance under the State child health plan under title XXI of that Act (42 U.S.C. 1397aa et seq.). 
(4) L
IMITATION ON USE OF FUNDS .—An eligible entity shall

use funds provided under a grant awarded under this sub-section only for expenditures for facilities (including the acquisi-tion or improvement of land, or the acquisition, construction, expansion, replacement, or other improvement of any building or other facility), equipment, or similar expenditures, as speci-fied by the Secretary. No funds provided under a grant awarded under this section shall be used for expenditures for personnel or to provide health services. 
(5) A

(5) A
PPROPRIATIONS .—Out of any funds in the Treasury 
not otherwise appropriated, there is appropriated for each of fiscal years 2010 through 2013, $50,000,000 for the purpose of carrying out this subsection. Funds appropriated under this paragraph shall remain available until expended. 
(6) D
EFINITIONS .—In this subsection, the terms ‘‘school-

based health center’’ and ‘‘sponsoring facility’’ have the meanings given those terms in section 2110(c)(9) of the Social Security Act (42 U.S.C. 1397jj(c)(9)). (b) G
RANTS FOR THE OPERATION OF SCHOOL -BASED HEALTH  
CENTERS .—Part Q of title III of the Public Health Service Act 
(42 U.S.C. 280h et seq.) is amended by adding at the end the following: 
‘‘SEC. 399Z–1. SCHOOL-BASED HEALTH CENTERS. 
‘‘(a) D EFINITIONS ; ESTABLISHMENT OF CRITERIA .—In this section:

‘‘(1) C OMPREHENSIVE PRIMARY HEALTH SERVICES .—The term 
‘comprehensive primary health services’ means the core services offered by school-based health centers, which shall include the following: 
‘‘(A) P
HYSICAL .—Comprehensive health assessments, 
diagnosis, and treatment of minor, acute, and chronic med-ical conditions, and referrals to, and follow-up for, specialty care and oral health services. 
‘‘(B) M
ENTAL HEALTH .—Mental health and substance

ENTAL HEALTH .—Mental health and substance 
use disorder assessments, crisis intervention, counseling, treatment, and referral to a continuum of services including emergency psychiatric care, community support programs, inpatient care, and outpatient programs. ‘‘(2) M
EDICALLY UNDERSERVED CHILDREN AND ADOLES -
CENTS .— 
‘‘(A) I N GENERAL .—The term ‘medically underserved

children and adolescents’ means a population of children and adolescents who are residents of an area designated as a medically underserved area or a health professional shortage area by the Secretary. 
‘‘(B) C
RITERIA .—The Secretary shall prescribe criteria 
for determining the specific shortages of personal health 42 USC 280h–5. 
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124 STAT. 548 PUBLIC LAW 111–148—MAR. 23, 2010 
services for medically underserved children and adolescents 
under subparagraph (A) that shall— 
‘‘(i) take into account any comments received by 
the Secretary from the chief executive officer of a State and local officials in a State; and 
‘‘(ii) include factors indicative of the health status

of such children and adolescents of an area, including the ability of the residents of such area to pay for health services, the accessibility of such services, the availability of health professionals to such children and adolescents, and other factors as determined appropriate by the Secretary. 
‘‘(3) S
CHOOL -BASED HEALTH CENTER .—The term ‘school- 
based health center’ means a health clinic that— 
‘‘(A) meets the definition of a school-based health center

under section 2110(c)(9)(A) of the Social Security Act and is administered by a sponsoring facility (as defined in sec-tion 2110(c)(9)(B) of the Social Security Act); 
‘‘(B) provides, at a minimum, comprehensive primary

health services during school hours to children and adoles-cents by health professionals in accordance with established standards, community practice, reporting laws, and other State laws, including parental consent and notification laws that are not inconsistent with Federal law; and 
‘‘(C) does not perform abortion services. 
‘‘(b) A
UTHORITY TOAWARD GRANTS .—The Secretary shall award

grants for the costs of the operation of school-based health centers (referred to in this section as ‘SBHCs’) that meet the requirements of this section. 
‘‘(c) A
PPLICATIONS .—To be eligible to receive a grant under 
this section, an entity shall— 
‘‘(1) be an SBHC (as defined in subsection (a)(3)); and ‘‘(2) submit to the Secretary an application at such time, 
in such manner, and containing— 
‘‘(A) evidence that the applicant meets all criteria nec-
essary to be designated an SBHC;

essary to be designated an SBHC; 
‘‘(B) evidence of local need for the services to be pro-
vided by the SBHC; 
‘‘(C) an assurance that— 
‘‘(i) SBHC services will be provided to those chil-
dren and adolescents for whom parental or guardian consent has been obtained in cooperation with Federal, State, and local laws governing health care service provision to children and adolescents; 
‘‘(ii) the SBHC has made and will continue to

‘‘(ii) the SBHC has made and will continue to 
make every reasonable effort to establish and maintain collaborative relationships with other health care pro-viders in the catchment area of the SBHC; 
‘‘(iii) the SBHC will provide on-site access during 
the academic day when school is in session and 24- hour coverage through an on-call system and through its backup health providers to ensure access to services on a year-round basis when the school or the SBHC is closed;

‘‘(iv) the SBHC will be integrated into the school 
environment and will coordinate health services with school personnel, such as administrators, teachers, 
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124 STAT. 549 PUBLIC LAW 111–148—MAR. 23, 2010 
nurses, counselors, and support personnel, as well as 
with other community providers co-located at the school; 
‘‘(v) the SBHC sponsoring facility assumes all 
responsibility for the SBHC administration, operations, and oversight; and 
‘‘(vi) the SBHC will comply with Federal, State,

‘‘(vi) the SBHC will comply with Federal, State, 
and local laws concerning patient privacy and student records, including regulations promulgated under the Health Insurance Portability and Accountability Act of 1996 and section 444 of the General Education Provi-sions Act; and ‘‘(D) such other information as the Secretary may 
require. 
‘‘(d) P
REFERENCES AND CONSIDERATION .—In reviewing applica-
tions: 
‘‘(1) The Secretary may give preference to applicants who

demonstrate an ability to serve the following: 
‘‘(A) Communities that have evidenced barriers to pri-
mary health care and mental health and substance use disorder prevention services for children and adolescents. 
‘‘(B) Communities with high per capita numbers of 
children and adolescents who are uninsured, underinsured, or enrolled in public health insurance programs. 
‘‘(C) Populations of children and adolescents that have

historically demonstrated difficulty in accessing health and mental health and substance use disorder prevention serv-ices. ‘‘(2) The Secretary may give consideration to whether an 
applicant has received a grant under subsection (a) of section 4101 of the Patient Protection and Affordable Care Act. ‘‘(e) W
AIVER OF REQUIREMENTS .—The Secretary may— 
‘‘(1) under appropriate circumstances, waive the application

of all or part of the requirements of this subsection with respect to an SBHC for not to exceed 2 years; and 
‘‘(2) upon a showing of good cause, waive the requirement 
that the SBHC provide all required comprehensive primary health services for a designated period of time to be determined by the Secretary. ‘‘(f) U
SE OF FUNDS .— 
‘‘(1) F UNDS .—Funds awarded under a grant under this 
section— 
‘‘(A) may be used for— 
‘‘(i) acquiring and leasing equipment (including the

costs of amortizing the principle of, and paying interest on, loans for such equipment); 
‘‘(ii) providing training related to the provision of 
required comprehensive primary health services and additional health services; 
‘‘(iii) the management and operation of health 
center programs; 
‘‘(iv) the payment of salaries for physicians, nurses, 
and other personnel of the SBHC; and ‘‘(B) may not be used to provide abortions. 
‘‘(2) C
ONSTRUCTION .—The Secretary may award grants

ONSTRUCTION .—The Secretary may award grants 
which may be used to pay the costs associated with expanding and modernizing existing buildings for use as an SBHC, 
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124 STAT. 550 PUBLIC LAW 111–148—MAR. 23, 2010 
including the purchase of trailers or manufactured buildings 
to install on the school property. 
‘‘(3) L IMITATIONS .— 
‘‘(A) I N GENERAL .—Any provider of services that is 
determined by a State to be in violation of a State law described in subsection (a)(3)(B) with respect to activities carried out at a SBHC shall not be eligible to receive additional funding under this section. 
‘‘(B) N
O OVERLAPPING GRANT PERIOD .—No entity that

O OVERLAPPING GRANT PERIOD .—No entity that 
has received funding under section 330 for a grant period shall be eligible for a grant under this section for with respect to the same grant period. 
‘‘(g) M
ATCHING REQUIREMENT .— 
‘‘(1) I N GENERAL .—Each eligible entity that receives a grant 
under this section shall provide, from non-Federal sources, an amount equal to 20 percent of the amount of the grant (which may be provided in cash or in-kind) to carry out the

activities supported by the grant. 
‘‘(2) W
AIVER .—The Secretary may waive all or part of the 
matching requirement described in paragraph (1) for any fiscal year for the SBHC if the Secretary determines that applying the matching requirement to the SBHC would result in serious hardship or an inability to carry out the purposes of this section. ‘‘(h) S
UPPLEMENT , NOTSUPPLANT .—Grant funds provided under 
this section shall be used to supplement, not supplant, other Federal or State funds.

‘‘(i) E
VALUATION .—The Secretary shall develop and implement 
a plan for evaluating SBHCs and monitoring quality performance under the awards made under this section. 
‘‘(j) A
GEAPPROPRIATE SERVICES .—An eligible entity receiving 
funds under this section shall only provide age appropriate services through a SBHC funded under this section to an individual. 
‘‘(k) P
ARENTAL CONSENT .—An eligible entity receiving funds

under this section shall not provide services through a SBHC funded under this section to an individual without the consent of the parent or guardian of such individual if such individual is consid-ered a minor under applicable State law. 
‘‘(l) A
UTHORIZATION OF APPROPRIATIONS .—For purposes of car-
rying out this section, there are authorized to be appropriated such sums as may be necessary for each of the fiscal years 2010 through 2014.’’. 
SEC. 4102. ORAL HEALTHCARE PREVENTION ACTIVITIES.

(a) I NGENERAL .—Title III of the Public Health Service Act 
(42 U.S.C. 241 et seq.), as amended by section 3025, is amended by adding at the end the following: 
‘‘PART T—ORAL HEALTHCARE PREVENTION 
ACTIVITIES 
‘‘SEC. 399LL. ORAL HEALTHCARE PREVENTION EDUCATION CAMPAIGN. 
‘‘(a) E STABLISHMENT .—The Secretary, acting through the

Director of the Centers for Disease Control and Prevention and in consultation with professional oral health organizations, shall, subject to the availability of appropriations, establish a 5-year national, public education campaign (referred to in this section 42 USC 280k. 
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124 STAT. 551 PUBLIC LAW 111–148—MAR. 23, 2010 
as the ‘campaign’) that is focused on oral healthcare prevention 
and education, including prevention of oral disease such as early childhood and other caries, periodontal disease, and oral cancer. 
‘‘(b) R
EQUIREMENTS .—In establishing the campaign, the Sec-
retary shall— 
‘‘(1) ensure that activities are targeted towards specific

populations such as children, pregnant women, parents, the elderly, individuals with disabilities, and ethnic and racial minority populations, including Indians, Alaska Natives and Native Hawaiians (as defined in section 4(c) of the Indian Health Care Improvement Act) in a culturally and linguistically appropriate manner; and 
‘‘(2) utilize science-based strategies to convey oral health

prevention messages that include, but are not limited to, community water fluoridation and dental sealants. ‘‘(c) P
LANNING AND IMPLEMENTATION .—Not later than 2 years 
after the date of enactment of this section, the Secretary shall begin implementing the 5-year campaign. During the 2-year period referred to in the previous sentence, the Secretary shall conduct planning activities with respect to the campaign. 
‘‘SEC. 399LL–1. RESEARCH-BASED DENTAL CARIES DISEASE MANAGE-
MENT.

MENT. 
‘‘(a) I NGENERAL .—The Secretary, acting through the Director 
of the Centers for Disease Control and Prevention, shall award demonstration grants to eligible entities to demonstrate the effectiveness of research-based dental caries disease management activities. 
‘‘(b) E
LIGIBILITY .—To be eligible for a grant under this section, 
an entity shall— 
‘‘(1) be a community-based provider of dental services (as

defined by the Secretary), including a Federally-qualified health center, a clinic of a hospital owned or operated by a State (or by an instrumentality or a unit of government within a State), a State or local department of health, a dental program of the Indian Health Service, an Indian tribe or tribal organiza-tion, or an urban Indian organization (as such terms are defined in section 4 of the Indian Health Care Improvement Act), a health system provider, a private provider of dental

system provider, a private provider of dental services, medical, dental, public health, nursing, nutrition educational institutions, or national organizations involved in improving children’s oral health; and

‘‘(2) submit to the Secretary an application at such time, 
in such manner, and containing such information as the Sec-retary may require. ‘‘(c) U
SE OF FUNDS .—A grantee shall use amounts received 
under a grant under this section to demonstrate the effectiveness 
of research-based dental caries disease management activities. 
‘‘(d) U SE OF INFORMATION .—The Secretary shall utilize informa-

tion generated from grantees under this section in planning and implementing the public education campaign under section 399LL. 
‘‘SEC. 399LL–2. AUTHORIZATION OF APPROPRIATIONS. 
‘‘There is authorized to be appropriated to carry out this part, 
such sums as may be necessary.’’. 
(b) S CHOOL -BASED SEALANT PROGRAMS .—Section 317M(c)(1) of

the Public Health Service Act (42 U.S.C. 247b–14(c)(1)) is amended by striking ‘‘may award grants to States and Indian tribes’’ and 42 USC 280k–2. Submission. Grants. 
42 USC 280k–1. Deadline. 
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124 STAT. 552 PUBLIC LAW 111–148—MAR. 23, 2010 
inserting ‘‘shall award a grant to each of the 50 States and terri-
tories and to Indians, Indian tribes, tribal organizations and urban Indian organizations (as such terms are defined in section 4 of the Indian Health Care Improvement Act)’’. 
(c) O
RALHEALTH INFRASTRUCTURE .—Section 317M of the Public 
Health Service Act (42 U.S.C. 247b–14) is amended— 
(1) by redesignating subsections (d) and (e) as subsections 
(e) and (f), respectively; and

(e) and (f), respectively; and 
(2) by inserting after subsection (c), the following: 
‘‘(d) O RALHEALTH INFRASTRUCTURE .— 
‘‘(1) C OOPERATIVE AGREEMENTS .—The Secretary, acting

through the Director of the Centers for Disease Control and Prevention, shall enter into cooperative agreements with State, territorial, and Indian tribes or tribal organizations (as those terms are defined in section 4 of the Indian Health Care Improvement Act) to establish oral health leadership and pro-gram guidance, oral health data collection and interpretation, (including determinants of poor oral health among vulnerable populations), a multi-dimensional delivery system for oral health,

delivery system for oral health, and to implement science-based programs (including dental sealants and community water fluoridation) to improve oral health.

‘‘(2) A
UTHORIZATION OF APPROPRIATIONS .—There is author-
ized to be appropriated such sums as necessary to carry out this subsection for fiscal years 2010 through 2014.’’. (d) U
PDATING NATIONAL ORAL HEALTHCARE SURVEILLANCE  
ACTIVITIES .— 
(1) PRAMS.— 
(A) I N GENERAL .—The Secretary of Health and Human

Services (referred to in this subsection as the ‘‘Secretary’’) shall carry out activities to update and improve the Preg-nancy Risk Assessment Monitoring System (referred to in this section as ‘‘PRAMS’’) as it relates to oral healthcare. 
(B) S
TATE REPORTS AND MANDATORY MEASUREMENTS .— 
(i) I N GENERAL .—Not later than 5 years after the

date of enactment of this Act, and every 5 years there-after, a State shall submit to the Secretary a report concerning activities conducted within the State under PRAMS. 
(ii) M
EASUREMENTS .—The oral healthcare 
measurements developed by the Secretary for use under PRAMS shall be mandatory with respect to States for purposes of the State reports under clause (i). (C) F
UNDING .—There is authorized to be appropriated 
to carry out this paragraph, such sums as may be nec-essary. (2) N

ATIONAL HEALTH AND NUTRITION EXAMINATION  
SURVEY .—The Secretary shall develop oral healthcare compo-

nents that shall include tooth-level surveillance for inclusion in the National Health and Nutrition Examination Survey. Such components shall be updated by the Secretary at least every 6 years. For purposes of this paragraph, the term ‘‘tooth- level surveillance’’ means a clinical examination where an examiner looks at each dental surface, on each tooth in the mouth and as expanded by the Division of Oral Health of the Centers for Disease Control and Prevention.

Definition. Deadline. 42 USC 280k–3. 
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124 STAT. 553 PUBLIC LAW 111–148—MAR. 23, 2010 
(3) M EDICAL EXPENDITURES PANEL SURVEY .—The Secretary 
shall ensure that the Medical Expenditures Panel Survey by the Agency for Healthcare Research and Quality includes the verification of dental utilization, expenditure, and coverage findings through conduct of a look-back analysis. 
(4) N
ATIONAL ORAL HEALTH SURVEILLANCE SYSTEM .— 
(A) A PPROPRIATIONS .—There is authorized to be appro-

priated, such sums as may be necessary for each of fiscal years 2010 through 2014 to increase the participation of States in the National Oral Health Surveillance System from 16 States to all 50 States, territories, and District of Columbia. 
(B) R
the National Oral Health Surveillance System include the measurement of early childhood caries. 
SEC. 4103. MEDICARE COVERAGE OF ANNUAL WELLNESS VISIT PRO-
VIDING A PERSONALIZED PREVENTION PLAN.

VIDING A PERSONALIZED PREVENTION PLAN. 
(a) C OVERAGE OF PERSONALIZED PREVENTION PLAN SERVICES .— 
(1) I N GENERAL .—Section 1861(s)(2) of the Social Security 
Act (42 U.S.C. 1395x(s)(2)) is amended— 
(A) in subparagraph (DD), by striking ‘‘and’’ at the 
end; 
(B) in subparagraph (EE), by adding ‘‘and’’ at the end; 
and 
graph: ‘‘(FF) personalized prevention plan services (as defined in 
subsection (hhh));’’. 
(2) C

(2) C
ONFORMING AMENDMENTS .—Clauses (i) and (ii) of sec-
tion 1861(s)(2)(K) of the Social Security Act (42 U.S.C. 1395x(s)(2)(K)) are each amended by striking ‘‘subsection (ww)(1)’’ and inserting ‘‘subsections (ww)(1) and (hhh)’’. (b) P
ERSONALIZED PREVENTION PLAN SERVICES DEFINED .—Sec-
tion 1861 of the Social Security Act (42 U.S.C. 1395x) is amended by adding at the end the following new subsection: 
‘‘Annual Wellness Visit

‘‘Annual Wellness Visit 
‘‘(hhh)(1) The term ‘personalized prevention plan services’ 
means the creation of a plan for an individual— 
‘‘(A) that includes a health risk assessment (that meets 
the guidelines established by the Secretary under paragraph (4)(A)) of the individual that is completed prior to or as part of the same visit with a health professional described in para-graph (3); and 
‘‘(B) that— 
‘‘(i) takes into account the results of the health risk 
assessment; and

assessment; and 
‘‘(ii) may contain the elements described in paragraph 
(2). 
‘‘(2) Subject to paragraph (4)(H), the elements described in 
this paragraph are the following: 
‘‘(A) The establishment of, or an update to, the individual’s 
medical and family history. 
‘‘(B) A list of current providers and suppliers that are 
regularly involved in providing medical care to the individual (including a list of all prescribed medications).

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124 STAT. 554 PUBLIC LAW 111–148—MAR. 23, 2010 
‘‘(C) A measurement of height, weight, body mass index 
(or waist circumference, if appropriate), blood pressure, and other routine measurements. 
‘‘(D) Detection of any cognitive impairment. ‘‘(E) The establishment of, or an update to, the following: 
‘‘(i) A screening schedule for the next 5 to 10 years,

as appropriate, based on recommendations of the United States Preventive Services Task Force and the Advisory Committee on Immunization Practices, and the individual’s health status, screening history, and age-appropriate preventive services covered under this title. 
‘‘(ii) A list of risk factors and conditions for which

primary, secondary, or tertiary prevention interventions are recommended or are underway, including any mental health conditions or any such risk factors or conditions that have been identified through an initial preventive physical examination (as described under subsection (ww)(1)), and a list of treatment options and their associ-ated risks and benefits. ‘‘(F) The furnishing of personalized health advice and a

referral, as appropriate, to health education or preventive coun-seling services or programs aimed at reducing identified risk factors and improving self-management, or community-based lifestyle interventions to reduce health risks and promote self- management and wellness, including weight loss, physical activity, smoking cessation, fall prevention, and nutrition. 
‘‘(G) Any other element determined appropriate by the 
Secretary. ‘‘(3) A health professional described in this paragraph is—

‘‘(A) a physician; ‘‘(B) a practitioner described in clause (i) of section 
1842(b)(18)(C); or 
‘‘(C) a medical professional (including a health educator, 
registered dietitian, or nutrition professional) or a team of medical professionals, as determined appropriate by the Sec-retary, under the supervision of a physician. ‘‘(4)(A) For purposes of paragraph (1)(A), the Secretary, not

later than 1 year after the date of enactment of this subsection, shall establish publicly available guidelines for health risk assess-ments. Such guidelines shall be developed in consultation with relevant groups and entities and shall provide that a health risk assessment— 
‘‘(i) identify chronic diseases, injury risks, modifiable risk 
factors, and urgent health needs of the individual; and 
‘‘(ii) may be furnished— 
‘‘(I) through an interactive telephonic or web-based

program that meets the standards established under subparagraph (B); 
‘‘(II) during an encounter with a health care profes-
sional; 
‘‘(III) through community-based prevention programs; 
or 
‘‘(IV) through any other means the Secretary deter-
mines appropriate to maximize accessibility and ease of use by beneficiaries, while ensuring the privacy of such beneficiaries. 
Deadline. 
Public information. Guidelines.

Deadline. 
Public information. Guidelines. 
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124 STAT. 555 PUBLIC LAW 111–148—MAR. 23, 2010 
‘‘(B) Not later than 1 year after the date of enactment of

this subsection, the Secretary shall establish standards for inter-active telephonic or web-based programs used to furnish health risk assessments under subparagraph (A)(ii)(I). The Secretary may utilize any health risk assessment developed under section 4004(f) of the Patient Protection and Affordable Care Act as part of the requirement to develop a personalized prevention plan to comply with this subparagraph. 
‘‘(C)(i) Not later than 18 months after the date of enactment

of this subsection, the Secretary shall develop and make available to the public a health risk assessment model. Such model shall meet the guidelines under subparagraph (A) and may be used to meet the requirement under paragraph (1)(A). 
‘‘(ii) Any health risk assessment that meets the guidelines 
under subparagraph (A) and is approved by the Secretary may be used to meet the requirement under paragraph (1)(A). 
‘‘(D) The Secretary may coordinate with community-based enti-

ties (including State Health Insurance Programs, Area Agencies on Aging, Aging and Disability Resource Centers, and the Adminis-tration on Aging) to— 
‘‘(i) ensure that health risk assessments are accessible to 
beneficiaries; and 
‘‘(ii) provide appropriate support for the completion of 
health risk assessments by beneficiaries. ‘‘(E) The Secretary shall establish procedures to make bene-

ficiaries and providers aware of the requirement that a beneficiary complete a health risk assessment prior to or at the same time as receiving personalized prevention plan services. 
‘‘(F) To the extent practicable, the Secretary shall encourage

the use of, integration with, and coordination of health information technology (including use of technology that is compatible with electronic medical records and personal health records) and may experiment with the use of personalized technology to aid in the development of self-management skills and management of and adherence to provider recommendations in order to improve the health status of beneficiaries. 
‘‘(G)(i) A beneficiary shall only be eligible to receive an initial

preventive physical examination (as defined under subsection (ww)(1)) at any time during the 12-month period after the date that the beneficiary’s coverage begins under part B and shall be eligible to receive personalized prevention plan services under this subsection provided that the beneficiary has not received such serv-ices within the preceding 12-month period. 
‘‘(ii) The Secretary shall establish procedures to make bene-

ficiaries aware of the option to select an initial preventive physical examination or personalized prevention plan services during the 
period of 12 months after the date that a beneficiary’s coverage begins under part B, which shall include information regarding any relevant differences between such services. 
‘‘(H) The Secretary shall issue guidance that— 
‘‘(i) identifies elements under paragraph (2) that are

required to be provided to a beneficiary as part of their first visit for personalized prevention plan services; and 
‘‘(ii) establishes a yearly schedule for appropriate provision 
of such elements thereafter.’’. (c) P
AYMENT AND ELIMINATION OF COST-SHARING .— Guidance. Procedures. Procedures. Deadline. 
Public information. Assessment model. Deadline. 
Standards. Communications and tele- communications. Web site.

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124 STAT. 556 PUBLIC LAW 111–148—MAR. 23, 2010 
(1) P AYMENT AND ELIMINATION OF COINSURANCE .—Section 
1833(a)(1) of the Social Security Act (42 U.S.C. 1395l(a)(1)) is amended— 
(A) in subparagraph (N), by inserting ‘‘other than 
personalized prevention plan services (as defined in section 1861(hhh)(1))’’ after ‘‘(as defined in section 1848(j)(3))’’; 
(B) by striking ‘‘and’’ before ‘‘(W)’’; and (C) by inserting before the semicolon at the end the

following: ‘‘, and (X) with respect to personalized prevention plan services (as defined in section 1861(hhh)(1)), the amount paid shall be 100 percent of the lesser of the actual charge for the services or the amount determined under the payment basis determined under section 1848’’. (2) P
AYMENT UNDER PHYSICIAN FEE SCHEDULE .—Section

AYMENT UNDER PHYSICIAN FEE SCHEDULE .—Section 
1848(j)(3) of the Social Security Act (42 U.S.C. 1395w–4(j)(3)) is amended by inserting ‘‘(2)(FF) (including administration of the health risk assessment) ,’’ after ‘‘(2)(EE),’’. 
(3) E
LIMINATION OF COINSURANCE IN OUTPATIENT HOSPITAL  
SETTINGS .— 
(A) E XCLUSION FROM OPD FEE SCHEDULE .—Section

(A) E XCLUSION FROM OPD FEE SCHEDULE .—Section 
1833(t)(1)(B)(iv) of the Social Security Act (42 U.S.C. 1395l(t)(1)(B)(iv)) is amended by striking ‘‘and diagnostic mammography’’ and inserting ‘‘, diagnostic mammography, or personalized prevention plan services (as defined in sec-tion 1861(hhh)(1))’’. 
(B) C
ONFORMING AMENDMENTS .—Section 1833(a)(2) of 
the Social Security Act (42 U.S.C. 1395l(a)(2)) is amended— 
(i) in subparagraph (F), by striking ‘‘and’’ at the 
end;

end; 
(ii) in subparagraph (G)(ii), by striking the comma 
at the end and inserting ‘‘; and’’; and 
(iii) by inserting after subparagraph (G)(ii) the fol-
lowing new subparagraph: ‘‘(H) with respect to personalized prevention plan serv-
ices (as defined in section 1861(hhh)(1)) furnished by an outpatient department of a hospital, the amount deter-mined under paragraph (1)(X),’’. (4) W
AIVER OF APPLICATION OF DEDUCTIBLE .—The first sen-

tence of section 1833(b) of the Social Security Act (42 U.S.C. 1395l(b)) is amended— 
(A) by striking ‘‘and’’ before ‘‘(9)’’; and (B) by inserting before the period the following: ‘‘, 
and (10) such deductible shall not apply with respect to personalized prevention plan services (as defined in section 1861(hhh)(1))’’. 
(d) F
REQUENCY LIMITATION .—Section 1862(a) of the Social Secu-
rity Act (42 U.S.C. 1395y(a)) is amended— 
(1) in paragraph (1)—

(A) in subparagraph (N), by striking ‘‘and’’ at the end; (B) in subparagraph (O), by striking the semicolon 
at the end and inserting ‘‘, and’’; and 
graph: ‘‘(P) in the case of personalized prevention plan services 
(as defined in section 1861(hhh)(1)), which are performed more frequently than is covered under such section;’’; and

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124 STAT. 557 PUBLIC LAW 111–148—MAR. 23, 2010 
(2) in paragraph (7), by striking ‘‘or (K)’’ and inserting 
‘‘(K), or (P)’’. (e) E
shall apply to services furnished on or after January 1, 2011. 
SEC. 4104. REMOVAL OF BARRIERS TO PREVENTIVE SERVICES IN 
MEDICARE. 
(a) D EFINITION OF PREVENTIVE SERVICES .—Section 1861(ddd) 
of the Social Security Act (42 U.S.C. 1395x(ddd)) is amended— 
(1) in the heading, by inserting ‘‘; Preventive Services’’

after ‘‘Services’’; 
(2) in paragraph (1), by striking ‘‘not otherwise described 
in this title’’ and inserting ‘‘not described in subparagraph (A) or (C) of paragraph (3)’’; and 
‘‘(3) The term ‘preventive services’ means the following: 
‘‘(A) The screening and preventive services described in 
subsection (ww)(2) (other than the service described in subpara-graph (M) of such subsection).

‘‘(B) An initial preventive physical examination (as defined 
in subsection (ww)). 
‘‘(C) Personalized prevention plan services (as defined in 
subsection (hhh)(1)).’’. (b) C
OINSURANCE .— 
(1) G ENERAL APPLICATION .— 
(A) I N GENERAL .—Section 1833(a)(1) of the Social Secu-
rity Act (42 U.S.C. 1395l(a)(1)), as amended by section 4103(c)(1), is amended— 
(i) in subparagraph (T), by inserting ‘‘(or 100 per-

cent if such services are recommended with a grade of A or B by the United States Preventive Services Task Force for any indication or population and are appropriate for the individual)’’ after ‘‘80 percent’’; 
(ii) in subparagraph (W)— 
(I) in clause (i), by inserting ‘‘(if such subpara-
graph were applied, by substituting ‘100 percent’ for ‘80 percent’)’’ after ‘‘subparagraph (D)’’; and 
(II) in clause (ii), by striking ‘‘80 percent’’ and

inserting ‘‘100 percent’’; (iii) by striking ‘‘and’’ before ‘‘(X)’’; and (iv) by inserting before the semicolon at the end

the following: ‘‘, and (Y) with respect to preventive services described in subparagraphs (A) and (B) of section 1861(ddd)(3) that are appropriate for the indi-vidual and, in the case of such services described in subparagraph (A), are recommended with a grade of A or B by the United States Preventive Services Task Force for any indication or population, the amount paid shall be 100 percent of the lesser of the actual charge for the services or the amount determined under the fee schedule that

the amount determined under the fee schedule that applies to such services under this part’’.

(2) E
1833(t)(1)(B)(iv) of the Social Security Act (42 U.S.C. 42 USC 1395 l 
note. 
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124 STAT. 558 PUBLIC LAW 111–148—MAR. 23, 2010 
1395l(t)(1)(B)(iv)), as amended by section 4103(c)(3)(A), is 
amended— 
(i) by striking ‘‘or’’ before ‘‘personalized prevention 
plan services’’; and 
(ii) by inserting before the period the following:

‘‘, or preventive services described in subparagraphs (A) and (B) of section 1861(ddd)(3) that are appropriate for the individual and, in the case of such services described in subparagraph (A), are recommended with a grade of A or B by the United States Preventive Services Task Force for any indication or population’’. (B) C
the Social Security Act (42 U.S.C. 1395l(a)(2)), as amended by section 4103(c)(3)(B), is amended—

(i) in subparagraph (G)(ii), by striking ‘‘and’’ after 
the semicolon at the end; 
(ii) in subparagraph (H), by striking the comma 
(iii) by inserting after subparagraph (H) the fol-
lowing new subparagraph: ‘‘(I) with respect to preventive services described in

subparagraphs (A) and (B) of section 1861(ddd)(3) that are appropriate for the individual and are furnished by an outpatient department of a hospital and, in the case of such services described in subparagraph (A), are rec-ommended with a grade of A or B by the United States Preventive Services Task Force for any indication or popu-lation, the amount determined under paragraph (1)(W) or (1)(Y),’’. 
(c) W
AIVER OF APPLICATION OF DEDUCTIBLE FOR PREVENTIVE

SERVICES AND COLORECTAL CANCER SCREENING TESTS .—Section 
1833(b) of the Social Security Act (42 U.S.C. 1395l(b)), as amended by section 4103(c)(4), is amended— 
(1) in paragraph (1), by striking ‘‘items and services

described in section 1861(s)(10)(A)’’ and inserting ‘‘preventive services described in subparagraph (A) of section 1861(ddd)(3) that are recommended with a grade of A or B by the United States Preventive Services Task Force for any indication or population and are appropriate for the individual.’’; and 
(2) by adding at the end the following new sentence: ‘‘Para-

graph (1) of the first sentence of this subsection shall apply with respect to a colorectal cancer screening test regardless of the code that is billed for the establishment of a diagnosis as a result of the test, or for the removal of tissue or other matter or other procedure that is furnished in connection with, as a result of, and in the same clinical encounter as the screening test.’’. (d) E

SEC. 4105. EVIDENCE-BASED COVERAGE OF PREVENTIVE SERVICES 
IN MEDICARE. 
(a) A UTHORITY TOMODIFY OR ELIMINATE COVERAGE OF CERTAIN  
PREVENTIVE SERVICES .—Section 1834 of the Social Security Act 
(42 U.S.C. 1395m) is amended by adding at the end the following new subsection: 42 USC 1395 l 
note.

note. 
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124 STAT. 559 PUBLIC LAW 111–148—MAR. 23, 2010 
‘‘(n) A UTHORITY TOMODIFY OR ELIMINATE COVERAGE OF CER-
TAIN PREVENTIVE SERVICES .—Notwithstanding any other provision 
of this title, effective beginning on January 1, 2010, if the Secretary determines appropriate, the Secretary may— 
‘‘(1) modify— 
‘‘(A) the coverage of any preventive service described

in subparagraph (A) of section 1861(ddd)(3) to the extent that such modification is consistent with the recommenda-tions of the United States Preventive Services Task Force; and 
‘‘(B) the services included in the initial preventive phys-
ical examination described in subparagraph (B) of such section; and ‘‘(2) provide that no payment shall be made under this

title for a preventive service described in subparagraph (A) of such section that has not received a grade of A, B, C, or I by such Task Force.’’. (b) C
ONSTRUCTION .—Nothing in the amendment made by para-
graph (1) shall be construed to affect the coverage of diagnostic or treatment services under title XVIII of the Social Security Act. 
SEC. 4106. IMPROVING ACCESS TO PREVENTIVE SERVICES FOR 
ELIGIBLE ADULTS IN MEDICAID. 
(a) C LARIFICATION OF INCLUSION OF SERVICES .—Section

1905(a)(13) of the Social Security Act (42 U.S.C. 1396d(a)(13)) is amended to read as follows: 
‘‘(13) other diagnostic, screening, preventive, and rehabilita-
tive services, including— 
‘‘(A) any clinical preventive services that are assigned 
a grade of A or B by the United States Preventive Services Task Force; 
‘‘(B) with respect to an adult individual, approved vac-

cines recommended by the Advisory Committee on Immunization Practices (an advisory committee established by the Secretary, acting through the Director of the Centers for Disease Control and Prevention) and their administra-tion; and 
‘‘(C) any medical or remedial services (provided in a

facility, a home, or other setting) recommended by a physi-cian or other licensed practitioner of the healing arts within the scope of their practice under State law, for the max-imum reduction of physical or mental disability and res-toration of an individual to the best possible functional level;’’. 
(b) I
NCREASED FMAP.—Section 1905(b) of the Social Security 
Act (42 U.S.C. 1396d(b)), as amended by sections 2001(a)(3)(A) and 2004(c)(1), is amended in the first sentence—

(1) by striking ‘‘, and (4)’’ and inserting ‘‘, (4)’’; and (2) by inserting before the period the following: ‘‘, and

(5) in the case of a State that provides medical assistance for services and vaccines described in subparagraphs (A) and (B) of subsection (a)(13), and prohibits cost-sharing for such services and vaccines, the Federal medical assistance percent-age, as determined under this subsection and subsection (y) (without regard to paragraph (1)(C) of such subsection), shall be increased by 1 percentage point with respect to medical 42 USC 1395m 
note. Effective date.

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124 STAT. 560 PUBLIC LAW 111–148—MAR. 23, 2010 
assistance for such services and vaccines and for items and 
services described in subsection (a)(4)(D)’’. (c) E
FFECTIVE DATE.—The amendments made under this section 
shall take effect on January 1, 2013. 
SEC. 4107. COVERAGE OF COMPREHENSIVE TOBACCO CESSATION 
SERVICES FOR PREGNANT WOMEN IN MEDICAID. 
(a) R EQUIRING COVERAGE OF COUNSELING AND  
PHARMACOTHERAPY FOR CESSATION OF TOBACCO USE BY PREGNANT

WOMEN .—Section 1905 of the Social Security Act (42 U.S.C. 1396d), 
as amended by sections 2001(a)(3)(B) and 2303, is further amended— 
(1) in subsection (a)(4)— 
(A) by striking ‘‘and’’ before ‘‘(C)’’; and (B) by inserting before the semicolon at the end the 
following new subparagraph: ‘‘; and (D) counseling and pharmacotherapy for cessation of tobacco use by pregnant women (as defined in subsection (bb))’’; and (2) by adding at the end the following:

‘‘(bb)(1) For purposes of this title, the term ‘counseling and 
pharmacotherapy for cessation of tobacco use by pregnant women’ means diagnostic, therapy, and counseling services and pharmacotherapy (including the coverage of prescription and non-prescription tobacco cessation agents approved by the Food and Drug Administration) for cessation of tobacco use by pregnant women who use tobacco products or who are being treated for tobacco use that is furnished—

‘‘(A) by or under the supervision of a physician; or ‘‘(B) by any other health care professional who— 
‘‘(i) is legally authorized to furnish such services under 
State law (or the State regulatory mechanism provided by State law) of the State in which the services are fur-nished; and 
‘‘(ii) is authorized to receive payment for other services 
under this title or is designated by the Secretary for this 
purpose. 
‘‘(2) Subject to paragraph (3), such term is limited to—

‘‘(A) services recommended with respect to pregnant women 
in ‘Treating Tobacco Use and Dependence: 2008 Update: A Clinical Practice Guideline’, published by the Public Health Service in May 2008, or any subsequent modification of such Guideline; and 
‘‘(B) such other services that the Secretary recognizes to 
be effective for cessation of tobacco use by pregnant women. ‘‘(3) Such term shall not include coverage for drugs or biologicals 
that are not otherwise covered under this title.’’.

(b) E
XCEPTION FROM OPTIONAL RESTRICTION UNDER MEDICAID  
PRESCRIPTION DRUG COVERAGE .—Section 1927(d)(2)(F) of the Social

Security Act (42 U.S.C. 1396r–8(d)(2)(F)), as redesignated by section 2502(a), is amended by inserting before the period at the end the following: ‘‘, except, in the case of pregnant women when rec-ommended in accordance with the Guideline referred to in section 1905(bb)(2)(A), agents approved by the Food and Drug Administra-tion under the over-the-counter monograph process for purposes of promoting, and when used to promote, tobacco cessation’’. Definition. 42 USC 1396d 
note.

note. 
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124 STAT. 561 PUBLIC LAW 111–148—MAR. 23, 2010 
(c) R EMOVAL OF COST-SHARING FOR COUNSELING AND  
PHARMACOTHERAPY FOR CESSATION OF TOBACCO USE BY PREGNANT  
WOMEN .— 
(1) G ENERAL COST -SHARING LIMITATIONS .—Section 1916 of

the Social Security Act (42 U.S.C. 1396o) is amended in each of subsections (a)(2)(B) and (b)(2)(B) by inserting ‘‘, and coun-seling and pharmacotherapy for cessation of tobacco use by pregnant women (as defined in section 1905(bb)) and covered outpatient drugs (as defined in subsection (k)(2) of section 1927 and including nonprescription drugs described in sub-section (d)(2) of such section) that are prescribed for purposes of promoting, and when used to promote, tobacco cessation by pregnant

used to promote, tobacco cessation by pregnant women in accordance with the Guideline referred to in section 1905(bb)(2)(A)’’ after ‘‘complicate the pregnancy’’.

(2) A
PPLICATION TO ALTERNATIVE COST -SHARING .—Section 
1916A(b)(3)(B)(iii) of such Act (42 U.S.C. 1396o–1(b)(3)(B)(iii)) is amended by inserting ‘‘, and counseling and pharmacotherapy for cessation of tobacco use by pregnant women (as defined in section 1905(bb))’’ after ‘‘complicate the pregnancy’’. (d) E
shall take effect on October 1, 2010. 
SEC. 4108. INCENTIVES FOR PREVENTION OF CHRONIC DISEASES IN 
MEDICAID. 
(a) I NITIATIVES .—

MEDICAID. 
(a) I NITIATIVES .— 
(1) E STABLISHMENT .— 
(A) I N GENERAL .—The Secretary shall award grants 
to States to carry out initiatives to provide incentives to Medicaid beneficiaries who— 
(i) successfully participate in a program described 
in paragraph (3); and 
(ii) upon completion of such participation, dem-
onstrate changes in health risk and outcomes, including the adoption and maintenance of healthy behaviors by meeting specific targets (as described in subsection (c)(2)). (B) P

URPOSE .—The purpose of the initiatives under 
this section is to test approaches that may encourage behavior modification and determine scalable solutions. (2) D
URATION .— 
(A) I NITIATION OF PROGRAM ; RESOURCES .—The Sec-

retary shall awards grants to States beginning on January 1, 2011, or beginning on the date on which the Secretary develops program criteria, whichever is earlier. The Sec-retary shall develop program criteria for initiatives under this section using relevant evidence-based research and resources, including the Guide to Community Preventive Services, the Guide to Clinical Preventive Services, and the National Registry of Evidence-Based Programs and Practices. 
(B) D

(B) D
URATION OF PROGRAM .—A State awarded a grant 
to carry out initiatives under this section shall carry out such initiatives within the 5-year period beginning on January 1, 2011, or beginning on the date on which the Secretary develops program criteria, whichever is earlier. Initiatives under this section shall be carried out by a State for a period of not less than 3 years. Deadline. Criteria. Effective date. Grants. 
42 USC 1396a note. 42 USC 1396d 
note.

note. 
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124 STAT. 562 PUBLIC LAW 111–148—MAR. 23, 2010 
(3) P ROGRAM DESCRIBED .— 
(A) I N GENERAL .—A program described in this para-
graph is a comprehensive, evidence-based, widely available, and easily accessible program, proposed by the State and approved by the Secretary, that is designed and uniquely suited to address the needs of Medicaid beneficiaries and has demonstrated success in helping individuals achieve one or more of the following:

(i) Ceasing use of tobacco products. (ii) Controlling or reducing their weight. (iii) Lowering their cholesterol. (iv) Lowering their blood pressure. (v) Avoiding the onset of diabetes or, in the case 
of a diabetic, improving the management of that condi-tion. (B) C
O-MORBIDITIES .—A program under this section 
may also address co-morbidities (including depression) that are related to any of the conditions described in subpara-graph (A). 
(C) W
AIVER AUTHORITY .—The Secretary may waive the

AIVER AUTHORITY .—The Secretary may waive the 
requirements of section 1902(a)(1) (relating to statewideness) of the Social Security Act for a State awarded a grant to conduct an initiative under this section and shall ensure that a State makes any program described in subparagraph (A) available and accessible to Medicaid beneficiaries. 
(D) F
LEXIBILITY IN IMPLEMENTATION .—A State may

(D) F
LEXIBILITY IN IMPLEMENTATION .—A State may 
enter into arrangements with providers participating in Medicaid, community-based organizations, faith-based organizations, public-private partnerships, Indian tribes, or similar entities or organizations to carry out programs described in subparagraph (A). (4) A
PPLICATION .—Following the development of program

criteria by the Secretary, a State may submit an application, in such manner and containing such information as the Sec-retary may require, that shall include a proposal for programs described in paragraph (3)(A) and a plan to make Medicaid beneficiaries and providers participating in Medicaid who reside in the State aware and informed about such programs. (b) E
DUCATION AND OUTREACH CAMPAIGN .— 
(1) S TATE AWARENESS .—The Secretary shall conduct an

outreach and education campaign to make States aware of the grants under this section. 
(2) P
ROVIDER AND BENEFICIARY EDUCATION .—A State 
awarded a grant to conduct an initiative under this section shall conduct an outreach and education campaign to make 
Medicaid beneficiaries and providers participating in Medicaid who reside in the State aware of the programs described in subsection (a)(3) that are to be carried out by the State under the grant. (c) I

MPACT .—A State awarded a grant to conduct an initiative 
under this section shall develop and implement a system to— 
(1) track Medicaid beneficiary participation in the program 
and validate changes in health risk and outcomes with clinical data, including the adoption and maintenance of health behav-iors by such beneficiaries; 
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124 STAT. 563 PUBLIC LAW 111–148—MAR. 23, 2010 
(2) to the extent practicable, establish standards and health 
status targets for Medicaid beneficiaries participating in the program and measure the degree to which such standards and targets are met; 
(3) evaluate the effectiveness of the program and provide 
the Secretary with such evaluations; 
(4) report to the Secretary on processes that have been 
developed and lessons learned from the program; and

(5) report on preventive services as part of reporting on 
quality measures for Medicaid managed care programs. (d) E
(1) I NDEPENDENT ASSESSMENT .—The Secretary shall enter 
into a contract with an independent entity or organization to conduct an evaluation and assessment of the initiatives carried out by States under this section, for the purpose of determining— 
(A) the effect of such initiatives on the use of health

care services by Medicaid beneficiaries participating in the program; 
(B) the extent to which special populations (including 
adults with disabilities, adults with chronic illnesses, and children with special health care needs) are able to partici-pate in the program; 
(C) the level of satisfaction of Medicaid beneficiaries 
with respect to the accessibility and quality of health care services provided through the program; and 
(D) the administrative costs incurred by State agencies

that are responsible for administration of the program. (2) S
TATE REPORTING .—A State awarded a grant to carry 
out initiatives under this section shall submit reports to the Secretary, on a semi-annual basis, regarding the programs that are supported by the grant funds. Such report shall include information, as specified by the Secretary, regarding— 
(A) the specific uses of the grant funds; (B) an assessment of program implementation and les-
sons learned from the programs;

sons learned from the programs; 
(C) an assessment of quality improvements and clinical 
outcomes under such programs; and 
(D) estimates of cost savings resulting from such pro-
grams. (3) I
NITIAL REPORT .—Not later than January 1, 2014, the

Secretary shall submit to Congress an initial report on such initiatives based on information provided by States through reports required under paragraph (2). The initial report shall include an interim evaluation of the effectiveness of the initia-tives carried out with grants awarded under this section and a recommendation regarding whether funding for expanding or extending the initiatives should be extended beyond January 1, 2016. 
(4) F
INAL REPORT .—Not later than July 1, 2016, the Sec-

retary shall submit to Congress a final report on the program that includes the results of the independent assessment required under paragraph (1), together with recommendations for such legislation and administrative action as the Secretary determines appropriate. Contracts. Reports. Reports. 
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124 STAT. 564 PUBLIC LAW 111–148—MAR. 23, 2010 
(e) N OEFFECT ON ELIGIBILITY FOR , ORAMOUNT OF , M EDICAID  
OROTHER BENEFITS .—Any incentives provided to a Medicaid bene-
ficiary participating in a program described in subsection (a)(3) shall not be taken into account for purposes of determining the beneficiary’s eligibility for, or amount of, benefits under the Med-icaid program or any program funded in whole or in part with Federal funds. 
(f) F

(f) F
UNDING .—Out of any funds in the Treasury not otherwise 
appropriated, there are appropriated for the 5-year period beginning on January 1, 2011, $100,000,000 to the Secretary to carry out this section. Amounts appropriated under this subsection shall remain available until expended. 
(g) D
(1) M EDICAID BENEFICIARY .—The term ‘‘Medicaid bene-

ficiary’’ means an individual who is eligible for medical assist-ance under a State plan or waiver under title XIX of the Social Security Act (42 U.S.C. 1396 et seq.) and is enrolled in such plan or waiver. 
(2) S
Subtitle C—Creating Healthier 
Communities 
SEC. 4201. COMMUNITY TRANSFORMATION GRANTS.

SEC. 4201. COMMUNITY TRANSFORMATION GRANTS. 

(referred to in this section as the ‘‘Secretary’’), acting through the Director of the Centers for Disease Control and Prevention (referred to in this section as the ‘‘Director’’), shall award competitive grants to State and local governmental agencies and community-based organizations for the implementation, evaluation, and dissemination of evidence-based community preventive health activities in order to reduce chronic disease rates, prevent the development of sec-ondary conditions, address

the development of sec-ondary conditions, address health disparities, and develop a stronger evidence-base of effective prevention programming.

(b) E
LIGIBILITY .—To be eligible to receive a grant under sub-
section (a), an entity shall— 
(1) be— 
(A) a State governmental agency; (B) a local governmental agency; (C) a national network of community-based organiza-
tions; 
(D) a State or local non-profit organization; or (E) an Indian tribe; and 
(2) submit to the Director an application at such time,

in such a manner, and containing such information as the Director may require, including a description of the program to be carried out under the grant; and 
(3) demonstrate a history or capacity, if funded, to develop 
relationships necessary to engage key stakeholders from mul-tiple sectors within and beyond health care and across a community, such as healthy futures corps and health care providers. (c) U
SE OF FUNDS .— 42 USC 300u–13.

SE OF FUNDS .— 42 USC 300u–13. 
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124 STAT. 565 PUBLIC LAW 111–148—MAR. 23, 2010 
(1) I N GENERAL .—An eligible entity shall use amounts 
received under a grant under this section to carry out programs described in this subsection. 
(2) C
OMMUNITY TRANSFORMATION PLAN .— 
(A) I N GENERAL .—An eligible entity that receives a

grant under this section shall submit to the Director (for approval) a detailed plan that includes the policy, environ-mental, programmatic, and as appropriate infrastructure changes needed to promote healthy living and reduce disparities. 
(B) A
CTIVITIES .—Activities within the plan may focus 
on (but not be limited to)— 
(i) creating healthier school environments,

(i) creating healthier school environments, 
including increasing healthy food options, physical activity opportunities, promotion of healthy lifestyle, emotional wellness, and prevention curricula, and activities to prevent chronic diseases; 
(ii) creating the infrastructure to support active 
living and access to nutritious foods in a safe environ-ment; 
(iii) developing and promoting programs targeting

a variety of age levels to increase access to nutrition, physical activity and smoking cessation, improve social and emotional wellness, enhance safety in a commu-nity, or address any other chronic disease priority area identified by the grantee; 
(iv) assessing and implementing worksite wellness 
programming and incentives; 
(v) working to highlight healthy options at res-
taurants and other food venues; 
(vi) prioritizing strategies to reduce racial and

ethnic disparities, including social, economic, and geographic determinants of health; and 
(vii) addressing special populations needs, 
including all age groups and individuals with disabil-ities, and individuals in both urban and rural areas. 
(3) C
OMMUNITY -BASED PREVENTION HEALTH ACTIVITIES .— 
(A) I N GENERAL .—An eligible entity shall use amounts

received under a grant under this section to implement a variety of programs, policies, and infrastructure improve-ments to promote healthier lifestyles. 
(B) A
CTIVITIES .—An eligible entity shall implement 
activities detailed in the community transformation plan under paragraph (2). 
(C) I
N-KIND SUPPORT .—An eligible entity may provide 
in-kind resources such as staff, equipment, or office space in carrying out activities under this section. (4) E
VALUATION .—

(A) I N GENERAL .—An eligible entity shall use amounts 
provided under a grant under this section to conduct activi-ties to measure changes in the prevalence of chronic disease risk factors among community members participating in preventive health activities 
(B) T
YPES OF MEASURES .—In carrying out subpara-
graph (A), the eligible entity shall, with respect to residents in the community, measure— 
(i) changes in weight;

(i) changes in weight; 
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124 STAT. 566 PUBLIC LAW 111–148—MAR. 23, 2010 
(ii) changes in proper nutrition; 
(iii) changes in physical activity; (iv) changes in tobacco use prevalence; (v) changes in emotional well-being and overall 
mental health; 
(vi) other factors using community-specific data 
from the Behavioral Risk Factor Surveillance Survey; and 
(vii) other factors as determined by the Secretary. 
(C) R
EPORTING .—An eligible entity shall annually

EPORTING .—An eligible entity shall annually 
submit to the Director a report containing an evaluation of activities carried out under the grant. (5) D
ISSEMINATION .—A grantee under this section shall— 
(A) meet at least annually in regional or national 
meetings to discuss challenges, best practices, and lessons learned with respect to activities carried out under the grant; and 
(B) develop models for the replication of successful

programs and activities and the mentoring of other eligible entities. 
(d) T
RAINING .— 
(1) I N GENERAL .—The Director shall develop a program 
to provide training for eligible entities on effective strategies for the prevention and control of chronic disease and the link between physical, emotional, and social well-being. 
(2) C
OMMUNITY TRANSFORMATION PLAN .—The Director shall 
provide appropriate feedback and technical assistance to grantees to establish community transformation plans

(3) E
VALUATION .—The Director shall provide a literature 
review and framework for the evaluation of programs conducted as part of the grant program under this section, in addition to working with academic institutions or other entities with expertise in outcome evaluation. (e) P
ROHIBITION .—A grantee shall not use funds provided under 
a grant under this section to create video games or to carry out any other activities that may lead to higher rates of obesity or inactivity. 
(f) A

(f) A
to be appropriated to carry out this section, such sums as may be necessary for each fiscal years 2010 through 2014. 
SEC. 4202. HEALTHY AGING, LIVING WELL; EVALUATION OF COMMU-
NITY-BASED PREVENTION AND WELLNESS PROGRAMS FOR MEDICARE BENEFICIARIES. 
(a) H EALTHY AGING , LIVING WELL.— 

Services (referred to in this section as the ‘‘Secretary’’), acting through the Director of the Centers for Disease Control and Prevention, shall award grants to State or local health depart-ments and Indian tribes to carry out 5-year pilot programs to provide public health community interventions, screenings, and where necessary, clinical referrals for individuals who are between 55 and 64 years of age. 
(2) E
LIGIBILITY .—To be eligible to receive a grant under

(A) be— 
(i) a State health department; 42 USC 300u–14. 
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124 STAT. 567 PUBLIC LAW 111–148—MAR. 23, 2010 
(ii) a local health department; or 
(iii) an Indian tribe; 
(B) submit to the Secretary an application at such 
time, in such manner, and containing such information as the Secretary may require including a description of the program to be carried out under the grant; 
(C) design a strategy for improving the health of the 
55-to-64 year-old population through community-based public health interventions; and

(D) demonstrate the capacity, if funded, to develop 
the relationships necessary with relevant health agencies, health care providers, community-based organizations, and insurers to carry out the activities described in paragraph (3), such relationships to include the identification of a community-based clinical partner, such as a community health center or rural health clinic. (3) U
(A) I N GENERAL .—A State or local health department

shall use amounts received under a grant under this sub-section to carry out a program to provide the services described in this paragraph to individuals who are between 55 and 64 years of age. 
(B) P
UBLIC HEALTH INTERVENTIONS .— 
(i) I N GENERAL .—In developing and implementing 
such activities, a grantee shall collaborate with the Centers for Disease Control and Prevention and the Administration on Aging, and relevant local agencies and organizations. 
(ii) T

(ii) T
YPES OF INTERVENTION ACTIVITIES .—Interven-
tion activities conducted under this subparagraph may include efforts to improve nutrition, increase physical activity, reduce tobacco use and substance abuse, improve mental health, and promote healthy lifestyles among the target population. (C) C
OMMUNITY PREVENTIVE SCREENINGS .— 
(i) I N GENERAL .—In addition to community-wide

(i) I N GENERAL .—In addition to community-wide 
public health interventions, a State or local health department shall use amounts received under a grant under this subsection to conduct ongoing health screening to identify risk factors for cardiovascular disease, cancer, stroke, and diabetes among individuals in both urban and rural areas who are between 55 and 64 years of age. 
(ii) T
YPES OF SCREENING ACTIVITIES .—Screening 
activities conducted under this subparagraph may include—

(I) mental health/behavioral health and sub-
stance use disorders; 
(II) physical activity, smoking, and nutrition; 
and 
(III) any other measures deemed appropriate 
by the Secretary. (iii) M
ONITORING .—Grantees under this section 
shall maintain records of screening results under this subparagraph to establish the baseline data for moni-toring the targeted population Records.

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124 STAT. 568 PUBLIC LAW 111–148—MAR. 23, 2010 
(D) C LINICAL REFERRAL /TREATMENT FOR CHRONIC DIS -
EASES .— 
(i) I N GENERAL .—A State or local health depart-
ment shall use amounts received under a grant under this subsection to ensure that individuals between 55 and 64 years of age who are found to have chronic disease risk factors through the screening activities described in subparagraph (C)(ii), receive clinical referral/treatment for follow-up services to reduce such risk. 
(ii) M

(ii) M
ECHANISM .— 
(I) I DENTIFICATION AND DETERMINATION OF  
STATUS .—With respect to each individual with risk 
factors for or having heart disease, stroke, diabetes, or any other condition for which such individual was screened under subparagraph (C), a grantee under this section shall determine whether or not such individual is covered under any public or private health insurance program. 
(II) I
NSURED INDIVIDUALS .—An individual

(II) I
NSURED INDIVIDUALS .—An individual 
determined to be covered under a health insurance program under subclause (I) shall be referred by the grantee to the existing providers under such program or, if such individual does not have a current provider, to a provider who is in-network with respect to the program involved. 
(III) U
NINSURED INDIVIDUALS .—With respect

(III) U
NINSURED INDIVIDUALS .—With respect 
to an individual determined to be uninsured under subclause (I), the grantee’s community-based clin-ical partner described in paragraph (4)(D) shall assist the individual in determining eligibility for available public coverage options and identify other appropriate community health care resources and assistance programs. (iii) P
UBLIC HEALTH INTERVENTION PROGRAM .—A

UBLIC HEALTH INTERVENTION PROGRAM .—A 
State or local health department shall use amounts received under a grant under this subsection to enter into contracts with community health centers or rural health clinics and mental health and substance use disorder service providers to assist in the referral/treat-ment of at risk patients to community resources for clinical follow-up and help determine eligibility for other public programs. (E) G
RANTEE EVALUATION .—An eligible entity shall use

RANTEE EVALUATION .—An eligible entity shall use 
amounts provided under a grant under this subsection to conduct activities to measure changes in the prevalence of chronic disease risk factors among participants. (4) P
ILOT PROGRAM EVALUATION .—The Secretary shall con-

duct an annual evaluation of the effectiveness of the pilot program under this subsection. In determining such effective-ness, the Secretary shall consider changes in the prevalence of uncontrolled chronic disease risk factors among new Medicare enrollees (or individuals nearing enrollment, including those who are 63 and 64 years of age) who reside in States or localities receiving grants under this section as compared with national and historical data for those States and localities for the

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124 STAT. 569 PUBLIC LAW 111–148—MAR. 23, 2010 
(5) A UTHORIZATION OF APPROPRIATIONS .—There are author-
ized to be appropriated to carry out this subsection, such sums as may be necessary for each of fiscal years 2010 through 2014. (b) E
VALUATION AND PLAN FOR COMMUNITY -BASED PREVENTION  
AND WELLNESS PROGRAMS FOR MEDICARE BENEFICIARIES .— 
(1) I N GENERAL .—The Secretary shall conduct an evaluation

of community-based prevention and wellness programs and develop a plan for promoting healthy lifestyles and chronic disease self-management for Medicare beneficiaries. 
(2) M
EDICARE EVALUATION OF PREVENTION AND WELLNESS  
(A) I N GENERAL .—The Secretary shall evaluate commu-

nity prevention and wellness programs including those that are sponsored by the Administration on Aging, are evi-dence-based, and have demonstrated potential to help Medicare beneficiaries (particularly beneficiaries that have attained 65 years of age) reduce their risk of disease, disability, and injury by making healthy lifestyle choices, including exercise, diet, and self-management of chronic diseases. 
(B) E
VALUATION .—The evaluation under subparagraph

VALUATION .—The evaluation under subparagraph 
(A) shall consist of the following: 
(i) E VIDENCE REVIEW .—The Secretary shall review 
available evidence, literature, best practices, and resources that are relevant to programs that promote healthy lifestyles and reduce risk factors for the Medi-care population. The Secretary may determine the scope of the evidence review and such issues to be considered, which shall include, at a minimum—

(I) physical activity, nutrition, and obesity; (II) falls; (III) chronic disease self-management; and (IV) mental health. 
(ii) I
NDEPENDENT EVALUATION OF EVIDENCE -BASED  
COMMUNITY PREVENTION AND WELLNESS PROGRAMS .—

COMMUNITY PREVENTION AND WELLNESS PROGRAMS .— 
The Administrator of the Centers for Medicare & Med-icaid Services, in consultation with the Assistant Sec-retary for Aging, shall, to the extent feasible and prac-ticable, conduct an evaluation of existing community prevention and wellness programs that are sponsored by the Administration on Aging to assess the extent to which Medicare beneficiaries who participate in such programs— 
(I) reduce their health risks, improve their

(I) reduce their health risks, improve their 
health outcomes, and adopt and maintain healthy behaviors; 
(II) improve their ability to manage their 
chronic conditions; and 
(III) reduce their utilization of health services 
and associated costs under the Medicare program for conditions that are amenable to improvement under such programs. 
(3) R
EPORT .—Not later than September 30, 2013, the Sec-
retary shall submit to Congress a report that includes—

(A) recommendations for such legislation and adminis-
trative action as the Secretary determines appropriate to 
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124 STAT. 570 PUBLIC LAW 111–148—MAR. 23, 2010 
promote healthy lifestyles and chronic disease self-manage-
ment for Medicare beneficiaries; 
(B) any relevant findings relating to the evidence 
review under paragraph (2)(B)(i); and 
(C) the results of the evaluation under paragraph 
(2)(B)(ii). (4) F
UNDING .—For purposes of carrying out this subsection,

the Secretary shall provide for the transfer, from the Federal Hospital Insurance Trust Fund under section 1817 of the Social Security Act (42 U.S.C. 1395i) and the Federal Supplemental Medical Insurance Trust Fund under section 1841 of such Act (42 U.S.C. 1395t), in such proportion as the Secretary deter-mines appropriate, of $50,000,000 to the Centers for Medicare & Medicaid Services Program Management Account. Amounts transferred under the preceding sentence shall remain available until

(5) A
Code shall not apply to the this subsection. 
(6) M EDICARE BENEFICIARY .—In this subsection, the term 
‘‘Medicare beneficiary’’ means an individual who is entitled to benefits under part A of title XVIII of the Social Security Act and enrolled under part B of such title. 
SEC. 4203. REMOVING BARRIERS AND IMPROVING ACCESS TO 
WELLNESS FOR INDIVIDUALS WITH DISABILITIES. 
Title V of the Rehabilitation Act of 1973 (29 U.S.C. 791 et

seq.) is amended by adding at the end of the following: 
‘‘SEC. 510. ESTABLISHMENT OF STANDARDS FOR ACCESSIBLE MED-
ICAL DIAGNOSTIC EQUIPMENT. 
‘‘(a) S TANDARDS .—Not later than 24 months after the date

of enactment of the Affordable Health Choices Act, the Architectural and Transportation Barriers Compliance Board shall, in consulta-tion with the Commissioner of the Food and Drug Administration, promulgate regulatory standards in accordance with the Adminis-trative Procedure Act (2 U.S.C. 551 et seq.) setting forth the min-imum technical criteria for medical diagnostic equipment used in (or in conjunction with) physician’s offices, clinics, emergency rooms, hospitals, and other medical

emergency rooms, hospitals, and other medical settings. The standards shall ensure that such equipment is accessible to, and usable by, individuals with accessibility needs, and shall allow independent entry to, use of, and exit from the equipment by such individuals to the maximum extent possible.

‘‘(b) M
EDICAL DIAGNOSTIC EQUIPMENT COVERED .—The stand-
ards issued under subsection (a) for medical diagnostic equipment shall apply to equipment that includes examination tables, examina-tion chairs (including chairs used for eye examinations or proce-dures, and dental examinations or procedures), weight scales, mammography equipment, x-ray machines, and other radiological equipment commonly used for diagnostic purposes by health profes-sionals. 
‘‘(c) R

‘‘(c) R
EVIEW AND AMENDMENT .—The Architectural and 
Transportation Barriers Compliance Board, in consultation with the Commissioner of the Food and Drug Administration, shall periodically review and, as appropriate, amend the standards in accordance with the Administrative Procedure Act (2 U.S.C. 551 et seq.).’’. Deadline. 29 USC 794f. Definition.

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124 STAT. 571 PUBLIC LAW 111–148—MAR. 23, 2010 
SEC. 4204. IMMUNIZATIONS. 
(a) S TATE AUTHORITY TOPURCHASE RECOMMENDED VACCINES  
FOR ADULTS .—Section 317 of the Public Health Service Act (42 
U.S.C. 247b) is amended by adding at the end the following: 
‘‘(l) A UTHORITY TO PURCHASE RECOMMENDED VACCINES FOR  
ADULTS .— 
‘‘(1) I N GENERAL .—The Secretary may negotiate and enter

into contracts with manufacturers of vaccines for the purchase and delivery of vaccines for adults as provided for under sub-section (e). 
‘‘(2) S
TATE PURCHASE .—A State may obtain additional 
quantities of such adult vaccines (subject to amounts specified to the Secretary by the State in advance of negotiations) through the purchase of vaccines from manufacturers at the applicable price negotiated by the Secretary under this sub-section.’’. (b) D

EMONSTRATION PROGRAM TO IMPROVE IMMUNIZATION COV-
ERAGE .—Section 317 of the Public Health Service Act (42 U.S.C. 
247b), as amended by subsection (a), is further amended by adding 
at the end the following: 
‘‘(m) D EMONSTRATION PROGRAM TOIMPROVE IMMUNIZATION  
COVERAGE .— 

Director of the Centers for Disease Control and Prevention, shall establish a demonstration program to award grants to States to improve the provision of recommended immunizations for children, adolescents, and adults through the use of evi-dence-based, population-based interventions for high-risk popu-lations. 
‘‘(2) S
TATE PLAN .—To be eligible for a grant under para-

graph (1), a State shall submit to the Secretary an application at such time, in such manner, and containing such information as the Secretary may require, including a State plan that describes the interventions to be implemented under the grant and how such interventions match with local needs and capabilities, as determined through consultation with local authorities. 
‘‘(3) U
SE OF FUNDS .—Funds received under a grant under

SE OF FUNDS .—Funds received under a grant under 
this subsection shall be used to implement interventions that are recommended by the Task Force on Community Preventive Services (as established by the Secretary, acting through the Director of the Centers for Disease Control and Prevention) or other evidence-based interventions, including— 
‘‘(A) providing immunization reminders or recalls for 
target populations of clients, patients, and consumers;

‘‘(B) educating targeted populations and health care 
providers concerning immunizations in combination with one or more other interventions; 
‘‘(C) reducing out-of-pocket costs for families for vac-
cines and their administration; 
‘‘(D) carrying out immunization-promoting strategies

for participants or clients of public programs, including assessments of immunization status, referrals to health care providers, education, provision of on-site immuniza-tions, or incentives for immunization; Grants. 
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124 STAT. 572 PUBLIC LAW 111–148—MAR. 23, 2010 
‘‘(E) providing for home visits that promote immuniza-
tion through education, assessments of need, referrals, provision of immunizations, or other services; 
‘‘(F) providing reminders or recalls for immunization 
providers; 
‘‘(G) conducting assessments of, and providing feedback 
to, immunization providers; 
‘‘(H) any combination of one or more interventions 
described in this paragraph; or 
‘‘(I) immunization information systems to allow all

States to have electronic databases for immunization records. ‘‘(4) C
ONSIDERATION .—In awarding grants under this sub-
section, the Secretary shall consider any reviews or rec-ommendations of the Task Force on Community Preventive Services. 
‘‘(5) E
VALUATION .—Not later than 3 years after the date

on which a State receives a grant under this subsection, the State shall submit to the Secretary an evaluation of progress made toward improving immunization coverage rates among high-risk populations within the State. 
‘‘(6) R
EPORT TO CONGRESS .—Not later than 4 years after

EPORT TO CONGRESS .—Not later than 4 years after 
the date of enactment of the Affordable Health Choices Act, the Secretary shall submit to Congress a report concerning the effectiveness of the demonstration program established under this subsection together with recommendations on whether to continue and expand such program. 
‘‘(7) A

ized to be appropriated to carry out this subsection, such sums as may be necessary for each of fiscal years 2010 through 2014.’’. (c) R
EAUTHORIZATION OF IMMUNIZATION PROGRAM .—Section 
317(j) of the Public Health Service Act (42 U.S.C. 247b(j)) is amended— 
(1) in paragraph (1), by striking ‘‘for each of the fiscal 
years 1998 through 2005’’; and 
(2) in paragraph (2), by striking ‘‘after October 1, 1997,’’. 
(d) R

(d) R
ULE OF CONSTRUCTION REGARDING ACCESS TO IMMUNIZA -
TIONS .—Nothing in this section (including the amendments made 
by this section), or any other provision of this Act (including any amendments made by this Act) shall be construed to decrease children’s access to immunizations. 
(e) GAO S
TUDY AND REPORT ON MEDICARE BENEFICIARY ACCESS  
TOVACCINES .— 
(1) S TUDY .—The Comptroller General of the United States

(in this section referred to as the ‘‘Comptroller General’’) shall conduct a study on the ability of Medicare beneficiaries who were 65 years of age or older to access routinely recommended vaccines covered under the prescription drug program under part D of title XVIII of the Social Security Act over the period since the establishment of such program. Such study shall include the following: 
(A) An analysis and determination of— 
(i) the number of Medicare beneficiaries who were

65 years of age or older and were eligible for a routinely recommended vaccination that was covered under part D; 42 USC 247b note. Deadline. 
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124 STAT. 573 PUBLIC LAW 111–148—MAR. 23, 2010 
(ii) the number of such beneficiaries who actually 
received a routinely recommended vaccination that was covered under part D; and 
(iii) any barriers to access by such beneficiaries 
to routinely recommended vaccinations that were cov-ered under part D. (B) A summary of the findings and recommendations

by government agencies, departments, and advisory bodies (as well as relevant professional organizations) on the impact of coverage under part D of routinely recommended adult immunizations for access to such immunizations by Medicare beneficiaries. (2) R
EPORT .—Not later than June 1, 2011, the Comptroller

General shall submit to the appropriate committees of jurisdic-tion of the House of Representatives and the Senate a report containing the results of the study conducted under paragraph (1), together with recommendations for such legislation and administrative action as the Comptroller General determines appropriate. 
(3) F
UNDING .—Out of any funds in the Treasury not other-
wise appropriated, there are appropriated $1,000,000 for fiscal year 2010 to carry out this subsection.

SEC. 4205. NUTRITION LABELING OF STANDARD MENU ITEMS AT 
CHAIN RESTAURANTS. 
(a) T ECHNICAL AMENDMENTS .—Section 403(q)(5)(A) of the Fed-
eral Food, Drug, and Cosmetic Act (21 U.S.C. 343(q)(5)(A)) is amended— 
(1) in subitem (i), by inserting at the beginning ‘‘except 
as provided in clause (H)(ii)(III),’’; and 
(2) in subitem (ii), by inserting at the beginning ‘‘except 
as provided in clause (H)(ii)(III),’’. (b) L
ABELING REQUIREMENTS .—Section 403(q)(5) of the Federal

Food, Drug, and Cosmetic Act (21 U.S.C. 343(q)(5)) is amended by adding at the end the following: 
‘‘(H) R
ESTAURANTS , R ETAIL FOOD ESTABLISHMENTS , AND 
VENDING MACHINES .— 
‘‘(i) G ENERAL REQUIREMENTS FOR RESTAURANTS AND SIMILAR  
RETAIL FOOD ESTABLISHMENTS .—Except for food described in

subclause (vii), in the case of food that is a standard menu item that is offered for sale in a restaurant or similar retail food establishment that is part of a chain with 20 or more locations doing business under the same name (regardless of the type of ownership of the locations) and offering for sale substantially the same menu items, the restaurant or similar retail food establishment shall disclose the information described in subclauses (ii) and (iii). 
‘‘(ii) I

‘‘(ii) I
NFORMATION REQUIRED TO BE DISCLOSED BY RES -
TAURANTS AND RETAIL FOOD ESTABLISHMENTS .—Except as pro-
vided in subclause (vii), the restaurant or similar retail food establishment shall disclose in a clear and conspicuous manner— 
‘‘(I)(aa) in a nutrient content disclosure statement adja-
cent to the name of the standard menu item, so as to be clearly associated with the standard menu item, on the menu listing the item for sale, the number of calories

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124 STAT. 574 PUBLIC LAW 111–148—MAR. 23, 2010 
contained in the standard menu item, as usually prepared 
and offered for sale; and 
‘‘(bb) a succinct statement concerning suggested daily 
caloric intake, as specified by the Secretary by regulation and posted prominently on the menu and designed to enable the public to understand, in the context of a total daily diet, the significance of the caloric information that is provided on the menu; 
‘‘(II)(aa) in a nutrient content disclosure statement

adjacent to the name of the standard menu item, so as to be clearly associated with the standard menu item, on the menu board, including a drive-through menu board, the number of calories contained in the standard menu item, as usually prepared and offered for sale; and 
‘‘(bb) a succinct statement concerning suggested daily

caloric intake, as specified by the Secretary by regulation and posted prominently on the menu board, designed to enable the public to understand, in the context of a total daily diet, the significance of the nutrition information that is provided on the menu board; ‘‘(III) in a written form, available on the premises of the 
restaurant or similar retail establishment and to the consumer upon request, the nutrition information required under clauses (C) and (D) of subparagraph (1); and

‘‘(IV) on the menu or menu board, a prominent, clear, 
and conspicuous statement regarding the availability of the information described in item (III). 
‘‘(iii) S
ELF-SERVICE FOOD AND FOOD ON DISPLAY .—Except

ELF-SERVICE FOOD AND FOOD ON DISPLAY .—Except 
as provided in subclause (vii), in the case of food sold at a salad bar, buffet line, cafeteria line, or similar self-service facility, and for self-service beverages or food that is on display and that is visible to customers, a restaurant or similar retail food establishment shall place adjacent to each food offered a sign that lists calories per displayed food item or per serving. 
‘‘(iv) R
EASONABLE BASIS .—For the purposes of this clause,

a restaurant or similar retail food establishment shall have a reasonable basis for its nutrient content disclosures, including nutrient databases, cookbooks, laboratory analyses, and other reasonable means, as described in section 101.10 of title 21, Code of Federal Regulations (or any successor regulation) or in a related guidance of the Food and Drug Administration. 
‘‘(v) M
ENU VARIABILITY AND COMBINATION MEALS .—The Sec-

retary shall establish by regulation standards for determining and disclosing the nutrient content for standard menu items that come in different flavors, varieties, or combinations, but which are listed as a single menu item, such as soft drinks, ice cream, pizza, doughnuts, or children’s combination meals, through means determined by the Secretary, including ranges, averages, or other methods. 
‘‘(vi) A

‘‘(vi) A
DDITIONAL INFORMATION .—If the Secretary deter-
mines that a nutrient, other than a nutrient required under subclause (ii)(III), should be disclosed for the purpose of pro-viding information to assist consumers in maintaining healthy dietary practices, the Secretary may require, by regulation, disclosure of such nutrient in the written form required under subclause (ii)(III). 
‘‘(vii) N
ONAPPLICABILITY TO CERTAIN FOOD .—

‘‘(vii) N
ONAPPLICABILITY TO CERTAIN FOOD .— 
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124 STAT. 575 PUBLIC LAW 111–148—MAR. 23, 2010 
‘‘(I) I N GENERAL .—Subclauses (i) through (vi) do not 
apply to— 
‘‘(aa) items that are not listed on a menu or menu 
board (such as condiments and other items placed on the table or counter for general use); 
‘‘(bb) daily specials, temporary menu items 
appearing on the menu for less than 60 days per cal-endar year, or custom orders; or 
‘‘(cc) such other food that is part of a customary

market test appearing on the menu for less than 90 days, under terms and conditions established by the Secretary. ‘‘(II) W
RITTEN FORMS .—Subparagraph (5)(C) shall apply 
to any regulations promulgated under subclauses (ii)(III) and (vi). ‘‘(viii) V
ENDING MACHINES .— 
‘‘(I) I N GENERAL .—In the case of an article of food 
sold from a vending machine that— 
‘‘(aa) does not permit a prospective purchaser to

examine the Nutrition Facts Panel before purchasing the article or does not otherwise provide visible nutri-tion information at the point of purchase; and 
‘‘(bb) is operated by a person who is engaged in 
the business of owning or operating 20 or more vending machines,

the vending machine operator shall provide a sign in close proximity to each article of food or the selection button that includes a clear and conspicuous statement disclosing the number of calories contained in the article. ‘‘(ix) V
OLUNTARY PROVISION OF NUTRITION INFORMATION .— 
‘‘(I) I N GENERAL .—An authorized official of any res-

taurant or similar retail food establishment or vending machine operator not subject to the requirements of this clause may elect to be subject to the requirements of such clause, by registering biannually the name and address of such restaurant or similar retail food establishment or vending machine operator with the Secretary, as specified by the Secretary by regulation. 
‘‘(II) R
EGISTRATION .—Within 120 days of enactment of

EGISTRATION .—Within 120 days of enactment of 
this clause, the Secretary shall publish a notice in the Federal Register specifying the terms and conditions for implementation of item (I), pending promulgation of regula-tions. 
‘‘(III) R
ULE OF CONSTRUCTION .—Nothing in this sub-
clause shall be construed to authorize the Secretary to require an application, review, or licensing process for any entity to register with the Secretary, as described in such item. ‘‘(x) R
EGULATIONS .—

EGULATIONS .— 
‘‘(I) P ROPOSED REGULATION .—Not later than 1 year 
after the date of enactment of this clause, the Secretary shall promulgate proposed regulations to carry out this clause. 
‘‘(II) C
ONTENTS .—In promulgating regulations, the Sec-
‘‘(aa) consider standardization of recipes and 
methods of preparation, reasonable variation in serving Deadline. Deadline. 
Notice. Federal Register, publication. Applicability.

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124 STAT. 576 PUBLIC LAW 111–148—MAR. 23, 2010 
size and formulation of menu items, space on menus 
and menu boards, inadvertent human error, training of food service workers, variations in ingredients, and other factors, as the Secretary determines; and 
‘‘(bb) specify the format and manner of the nutrient 
content disclosure requirements under this subclause. ‘‘(III) R
EPORTING .—The Secretary shall submit to the

EPORTING .—The Secretary shall submit to the 
Committee on Health, Education, Labor, and Pensions of the Senate and the Committee on Energy and Commerce of the House of Representatives a quarterly report that describes the Secretary’s progress toward promulgating final regulations under this subparagraph. ‘‘(xi) D
EFINITION .—In this clause, the term ‘menu’ or ‘menu

board’ means the primary writing of the restaurant or other similar retail food establishment from which a consumer makes an order selection.’’ (c) N
ATIONAL UNIFORMITY .—Section 403A(a)(4) of the Federal

Food, Drug, and Cosmetic Act (21 U.S.C. 343–1(a)(4)) is amended by striking ‘‘except a requirement for nutrition labeling of food which is exempt under subclause (i) or (ii) of section 403(q)(5)(A)’’ and inserting ‘‘except that this paragraph does not apply to food that is offered for sale in a restaurant or similar retail food establishment that is not part of a chain with 20 or more locations doing business under the same name (regardless of the type of ownership of the locations) and

of the type of ownership of the locations) and offering for sale substantially the same menu items unless such restaurant or similar retail food establishment complies with the voluntary provision of nutrition information requirements under section 403(q)(5)(H)(ix)’’.

(d) R
ULE OF CONSTRUCTION .—Nothing in the amendments made 
by this section shall be construed— 
(1) to preempt any provision of State or local law, unless 
such provision establishes or continues into effect nutrient con-tent disclosures of the type required under section 403(q)(5)(H) of the Federal Food, Drug, and Cosmetic Act (as added by subsection (b)) and is expressly preempted under subsection (a)(4) of such section; 
(2) to apply to any State or local requirement respecting

a statement in the labeling of food that provides for a warning concerning the safety of the food or component of the food; or 
(3) except as provided in section 403(q)(5)(H)(ix) of the 
Federal Food, Drug, and Cosmetic Act (as added by subsection (b)), to apply to any restaurant or similar retail food establish-ment other than a restaurant or similar retail food establish-ment described in section 403(q)(5)(H)(i) of such Act. 
SEC. 4206. DEMONSTRATION PROJECT CONCERNING INDIVIDUALIZED

WELLNESS PLAN. 
Section 330 of the Public Health Service Act (42 U.S.C. 245b) 
‘‘(s) D EMONSTRATION PROGRAM FOR INDIVIDUALIZED WELLNESS  
PLANS .— 
program to test the impact of providing at-risk populations who utilize community health centers funded under this section an individualized wellness plan that is designed to reduce risk 21 USC 343 note.

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124 STAT. 577 PUBLIC LAW 111–148—MAR. 23, 2010 
factors for preventable conditions as identified by a comprehen-
sive risk-factor assessment. 
‘‘(2) A GREEMENTS .—The Secretary shall enter into agree-
ments with not more than 10 community health centers funded under this section to conduct activities under the pilot program under paragraph (1). 
‘‘(3) W
ELLNESS PLANS .— 
‘‘(A) I N GENERAL .—An individualized wellness plan pre-

pared under the pilot program under this subsection may include one or more of the following as appropriate to the individual’s identified risk factors: 
‘‘(i) Nutritional counseling. ‘‘(ii) A physical activity plan. ‘‘(iii) Alcohol and smoking cessation counseling and 
services. 
‘‘(iv) Stress management. ‘‘(v) Dietary supplements that have health claims 
approved by the Secretary. 
‘‘(vi) Compliance assistance provided by a commu-
nity health center employee. ‘‘(B) R

ISK FACTORS .—Wellness plan risk factors shall 
include— 
‘‘(i) weight; ‘‘(ii) tobacco and alcohol use; ‘‘(iii) exercise rates; ‘‘(iv) nutritional status; and ‘‘(v) blood pressure. 
‘‘(C) C
OMPARISONS .—Individualized wellness plans 
shall make comparisons between the individual involved and a control group of individuals with respect to the risk factors described in subparagraph (B). ‘‘(4) A

ized to be appropriated to carry out this subsection, such sums 
as may be necessary.’’. 
SEC. 4207. REASONABLE BREAK TIME FOR NURSING MOTHERS. 
Section 7 of the Fair Labor Standards Act of 1938 (29 U.S.C. 
207) is amended by adding at the end the following: 
‘‘(r)(1) An employer shall provide— 
‘‘(A) a reasonable break time for an employee to express

breast milk for her nursing child for 1 year after the child’s birth each time such employee has need to express the milk; and 
‘‘(B) a place, other than a bathroom, that is shielded from 
view and free from intrusion from coworkers and the public, which may be used by an employee to express breast milk. ‘‘(2) An employer shall not be required to compensate an 
employee receiving reasonable break time under paragraph (1) for any work time spent for such purpose.

‘‘(3) An employer that employs less than 50 employees shall 
not be subject to the requirements of this subsection, if such require-ments would impose an undue hardship by causing the employer significant difficulty or expense when considered in relation to the size, financial resources, nature, or structure of the employer’s business. 
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124 STAT. 578 PUBLIC LAW 111–148—MAR. 23, 2010 
‘‘(4) Nothing in this subsection shall preempt a State law that 
provides greater protections to employees than the protections pro-vided for under this subsection.’’. 
Subtitle D—Support for Prevention and 
Public Health Innovation 
SEC. 4301. RESEARCH ON OPTIMIZING THE DELIVERY OF PUBLIC 
HEALTH SERVICES. 

(referred to in this section as the ‘‘Secretary’’), acting through the Director of the Centers for Disease Control and Prevention, shall provide funding for research in the area of public health services and systems. 
(b) R
EQUIREMENTS OF RESEARCH .—Research supported under 
this section shall include— 
(1) examining evidence-based practices relating to preven-

tion, with a particular focus on high priority areas as identified by the Secretary in the National Prevention Strategy or Healthy People 2020, and including comparing community-based public health interventions in terms of effectiveness and cost; 
(2) analyzing the translation of interventions from academic 
settings to real world settings; and 
(3) identifying effective strategies for organizing, financing,

or delivering public health services in real world community settings, including comparing State and local health depart-ment structures and systems in terms of effectiveness and cost. (c) E
XISTING PARTNERSHIPS .—Research supported under this

section shall be coordinated with the Community Preventive Serv-ices Task Force and carried out by building on existing partnerships within the Federal Government while also considering initiatives at the State and local levels and in the private sector. 
(d) A
NNUAL REPORT .—The Secretary shall, on an annual basis, 
submit to Congress a report concerning the activities and findings with respect to research supported under this section.

SEC. 4302. UNDERSTANDING HEALTH DISPARITIES: DATA COLLECTION 
AND ANALYSIS. 
(a) U NIFORM CATEGORIES AND COLLECTION REQUIREMENTS .— 
The Public Health Service Act (42 U.S.C. 201 et seq.) is amended by adding at the end the following: 
‘‘TITLE XXXI—DATA COLLECTION, 
ANALYSIS, AND QUALITY 
‘‘SEC. 3101. DATA COLLECTION, ANALYSIS, AND QUALITY. 
‘‘(a) D ATACOLLECTION .— 
‘‘(1) I N GENERAL .—The Secretary shall ensure that, by not

later than 2 years after the date of enactment of this title, any federally conducted or supported health care or public health program, activity or survey (including Current Popu-lation Surveys and American Community Surveys conducted Deadline. 42 USC 300kk. 42 USC 300u–15. 
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124 STAT. 579 PUBLIC LAW 111–148—MAR. 23, 2010 
by the Bureau of Labor Statistics and the Bureau of the Census) 
collects and reports, to the extent practicable— 
‘‘(A) data on race, ethnicity, sex, primary language, 
and disability status for applicants, recipients, or partici-pants; 
‘‘(B) data at the smallest geographic level such as 
State, local, or institutional levels if such data can be aggregated; 
‘‘(C) sufficient data to generate statistically reliable

estimates by racial, ethnic, sex, primary language, and disability status subgroups for applicants, recipients or participants using, if needed, statistical oversamples of these subpopulations; and 
‘‘(D) any other demographic data as deemed appro-
priate by the Secretary regarding health disparities. ‘‘(2) C
OLLECTION STANDARDS .—In collecting data described 
in paragraph (1), the Secretary or designee shall— 
‘‘(A) use Office of Management and Budget standards,

at a minimum, for race and ethnicity measures; 
‘‘(B) develop standards for the measurement of sex, 
primary language, and disability status; 
‘‘(C) develop standards for the collection of data 
described in paragraph (1) that, at a minimum— 
‘‘(i) collects self-reported data by the applicant, 
recipient, or participant; and 
‘‘(ii) collects data from a parent or legal guardian

if the applicant, recipient, or participant is a minor or legally incapacitated; ‘‘(D) survey health care providers and establish other 
procedures in order to assess access to care and treatment for individuals with disabilities and to identify— 
‘‘(i) locations where individuals with disabilities 
access primary, acute (including intensive), and long- term care; 
‘‘(ii) the number of providers with accessible facili-

ties and equipment to meet the needs of the individuals with disabilities, including medical diagnostic equip-ment that meets the minimum technical criteria set forth in section 510 of the Rehabilitation Act of 1973; and 
‘‘(iii) the number of employees of health care pro-
viders trained in disability awareness and patient care of individuals with disabilities; and ‘‘(E) require that any reporting requirement imposed

for purposes of measuring quality under any ongoing or federally conducted or supported health care or public health program, activity, or survey includes requirements for the collection of data on individuals receiving health care items or services under such programs activities by race, ethnicity, sex, primary language, and disability status. ‘‘(3) D
ATA MANAGEMENT .—In collecting data described in

ATA MANAGEMENT .—In collecting data described in 
paragraph (1), the Secretary, acting through the National Coordinator for Health Information Technology shall— 
‘‘(A) develop national standards for the management 
of data collected; and 
‘‘(B) develop interoperability and security systems for 
data management. Standards. 
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124 STAT. 580 PUBLIC LAW 111–148—MAR. 23, 2010 
‘‘(b) D ATAANALYSIS .— 
‘‘(1) I N GENERAL .—For each federally conducted or sup-
ported health care or public health program or activity, the Secretary shall analyze data collected under paragraph (a) to detect and monitor trends in health disparities (as defined for purposes of section 485E) at the Federal and State levels. ‘‘(c) D
ATAREPORTING AND DISSEMINATION .— 
‘‘(1) I N GENERAL .—The Secretary shall make the analyses

described in (b) available to— 
‘‘(A) the Office of Minority Health; ‘‘(B) the National Center on Minority Health and 
Health Disparities; 
‘‘(C) the Agency for Healthcare Research and Quality; ‘‘(D) the Centers for Disease Control and Prevention; ‘‘(E) the Centers for Medicare & Medicaid Services; ‘‘(F) the Indian Health Service and epidemiology cen-
ters funded under the Indian Health Care Improvement Act;

‘‘(G) the Office of Rural health; ‘‘(H) other agencies within the Department of Health 
‘‘(I) other entities as determined appropriate by the 
Secretary. ‘‘(2) R
EPORTING OF DATA .—The Secretary shall report data 
and analyses described in (a) and (b) through— 
‘‘(A) public postings on the Internet websites of the 
Department of Health and Human Services; and 
‘‘(B) any other reporting or dissemination mechanisms 
determined appropriate by the Secretary. ‘‘(3) A

VAILABILITY OF DATA .—The Secretary may make data 
described in (a) and (b) available for additional research, anal-yses, and dissemination to other Federal agencies, non-govern-mental entities, and the public, in accordance with any Federal agency’s data user agreements. ‘‘(d) L
IMITATIONS ON USE OF DATA.—Nothing in this section

shall be construed to permit the use of information collected under this section in a manner that would adversely affect any individual. 
‘‘(e) P
ROTECTION AND SHARING OF DATA.— 
‘‘(1) P RIVACY AND OTHER SAFEGUARDS .—The Secretary shall 
ensure (through the promulgation of regulations or otherwise) that— 
‘‘(A) all data collected pursuant to subsection (a) is 
protected— 
‘‘(i) under privacy protections that are at least

as broad as those that the Secretary applies to other health data under the regulations promulgated under section 264(c) of the Health Insurance Portability and Accountability Act of 1996 (Public Law 104–191; 110 Stat. 2033); and 
‘‘(ii) from all inappropriate internal use by any

entity that collects, stores, or receives the data, including use of such data in determinations of eligi-bility (or continued eligibility) in health plans, and from other inappropriate uses, as defined by the Sec-retary; and Public 
information. Web sites. 
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124 STAT. 581 PUBLIC LAW 111–148—MAR. 23, 2010 
‘‘(B) all appropriate information security safeguards 
are used in the collection, analysis, and sharing of data collected pursuant to subsection (a). ‘‘(2) D
ATA SHARING .—The Secretary shall establish proce-

dures for sharing data collected pursuant to subsection (a), measures relating to such data, and analyses of such data, with other relevant Federal and State agencies including the agencies, centers, and entities within the Department of Health and Human Services specified in subsection (c)(1).. ‘‘(f) D
ATA ON RURAL UNDERSERVED POPULATIONS .—The Sec-

retary shall ensure that any data collected in accordance with this section regarding racial and ethnic minority groups are also collected regarding underserved rural and frontier populations. 
‘‘(g) A
carrying out this section, there are authorized to be appropriated such sums as may be necessary for each of fiscal years 2010 through 2014. 
‘‘(h) R

‘‘(h) R
EQUIREMENT FOR IMPLEMENTATION .—Notwithstanding 
any other provision of this section, data may not be collected under this section unless funds are directly appropriated for such purpose in an appropriations Act. 
‘‘(i) C
ONSULTATION .—The Secretary shall consult with the

Director of the Office of Personnel Management, the Secretary of Defense, the Secretary of Veterans Affairs, the Director of the Bureau of the Census, the Commissioner of Social Security, and the head of other appropriate Federal agencies in carrying out this section.’’. 
(b) A
DDRESSING HEALTH CARE DISPARITIES IN MEDICAID AND  
CHIP.— 
(1) S TANDARDIZED COLLECTION REQUIREMENTS INCLUDED IN  
STATE PLANS .— 
(A) M EDICAID .—Section 1902(a) of the Social Security

Act (42 U.S.C. 1396a(a)), as amended by section 2001(d), is amended— 
(i) in paragraph 4), by striking ‘‘and’’ at the end; (ii) in paragraph (75), by striking the period at 
(iii) by inserting after paragraph (75) the following 
new paragraph: 
‘‘(76) provide that any data collected under the State plan 
meets the requirements of section 3101 of the Public Health Service Act.’’. 
(B) CHIP.—Section 2108(e) of the Social Security Act

(42 U.S.C. 1397hh(e)) is amended by adding at the end the following new paragraph: ‘‘(7) Data collected and reported in accordance with section 
3101 of the Public Health Service Act, with respect to individ-uals enrolled in the State child health plan (and, in the case of enrollees under 19 years of age, their parents or legal guard-ians), including data regarding the primary language of such individuals, parents, and legal guardians.’’. 
(2) E
XTENDING MEDICARE REQUIREMENT TO ADDRESS

(2) E
XTENDING MEDICARE REQUIREMENT TO ADDRESS  
HEALTH DISPARITIES DATA COLLECTION TO MEDICAID AND CHIP .— 
Title XIX of the Social Security Act (42 U.S.C. 1396 et seq.), as amended by section 2703 is amended by adding at the end the following new section: Procedures. 
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124 STAT. 582 PUBLIC LAW 111–148—MAR. 23, 2010 
‘‘SEC. 1946. ADDRESSING HEALTH CARE DISPARITIES. 
‘‘(a) E VALUATING DATA COLLECTION APPROACHES .—The Sec-

retary shall evaluate approaches for the collection of data under this title and title XXI, to be performed in conjunction with existing quality reporting requirements and programs under this title and title XXI, that allow for the ongoing, accurate, and timely collection and evaluation of data on disparities in health care services and performance on the basis of race, ethnicity, sex, primary language, and disability status. In conducting such evaluation, the Secretary shall consider the

such evaluation, the Secretary shall consider the following objectives:

‘‘(1) Protecting patient privacy. ‘‘(2) Minimizing the administrative burdens of data collec-
tion and reporting on States, providers, and health plans participating under this title or title XXI. 
‘‘(3) Improving program data under this title and title 
XXI on race, ethnicity, sex, primary language, and disability status. ‘‘(b) R
EPORTS TO CONGRESS .— 
‘‘(1) R EPORT ON EVALUATION .—Not later than 18 months

after the date of the enactment of this section, the Secretary shall submit to Congress a report on the evaluation conducted under subsection (a). Such report shall, taking into consider-ation the results of such evaluation— 
‘‘(A) identify approaches (including defining methodolo-
gies) for identifying and collecting and evaluating data on health care disparities on the basis of race, ethnicity, sex, primary language, and disability status for the pro-grams under this title and title XXI; and

‘‘(B) include recommendations on the most effective 
strategies and approaches to reporting HEDIS quality measures as required under section 1852(e)(3) and other nationally recognized quality performance measures, as appropriate, on such bases. ‘‘(2) R
EPORTS ON DATA ANALYSES .—Not later than 4 years

EPORTS ON DATA ANALYSES .—Not later than 4 years 
after the date of the enactment of this section, and 4 years thereafter, the Secretary shall submit to Congress a report that includes recommendations for improving the identification of health care disparities for beneficiaries under this title and under title XXI based on analyses of the data collected under subsection (c). ‘‘(c) I
MPLEMENTING EFFECTIVE APPROACHES .—Not later than

24 months after the date of the enactment of this section, the Secretary shall implement the approaches identified in the report submitted under subsection (b)(1) for the ongoing, accurate, and timely collection and evaluation of data on health care disparities on the basis of race, ethnicity, sex, primary language, and disability status.’’. 
SEC. 4303. CDC AND EMPLOYER-BASED WELLNESS PROGRAMS. 
Title III of the Public Health Service Act (42 U.S.C. 241 et

seq.), by section 4102, is further amended by adding at the end the following: Deadline. 42 USC 1396w–5. 
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124 STAT. 583 PUBLIC LAW 111–148—MAR. 23, 2010 
‘‘PART U—EMPLOYER-BASED WELLNESS 
PROGRAM 
‘‘SEC. 399MM. TECHNICAL ASSISTANCE FOR EMPLOYER-BASED 
WELLNESS PROGRAMS. 
‘‘In order to expand the utilization of evidence-based prevention 
and health promotion approaches in the workplace, the Director shall— 
‘‘(1) provide employers (including small, medium, and large

employers, as determined by the Director) with technical assist-ance, consultation, tools, and other resources in evaluating such employers’ employer-based wellness programs, including— 
‘‘(A) measuring the participation and methods to 
increase participation of employees in such programs; 
‘‘(B) developing standardized measures that assess

policy, environmental and systems changes necessary to have a positive health impact on employees’ health behav-iors, health outcomes, and health care expenditures; and 
‘‘(C) evaluating such programs as they relate to 
changes in the health status of employees, the absenteeism of employees, the productivity of employees, the rate of workplace injury, and the medical costs incurred by employees; and ‘‘(2) build evaluation capacity among workplace staff by

training employers on how to evaluate employer-based wellness programs by ensuring evaluation resources, technical assist-ance, and consultation are available to workplace staff as needed through such mechanisms as web portals, call centers, or other means. 
‘‘SEC. 399MM–1. NATIONAL WORKSITE HEALTH POLICIES AND PRO-
GRAMS STUDY. 
‘‘(a) I NGENERAL .—In order to assess, analyze, and monitor

over time data about workplace policies and programs, and to develop instruments to assess and evaluate comprehensive work-place chronic disease prevention and health promotion programs, policies and practices, not later than 2 years after the date of enactment of this part, and at regular intervals (to be determined by the Director) thereafter, the Director shall conduct a national worksite health policies and programs survey to assess employer- based health policies and programs. 
‘‘(b) R

‘‘(b) R
EPORT .—Upon the completion of each study under sub-
section (a), the Director shall submit to Congress a report that includes the recommendations of the Director for the implementa-tion of effective employer-based health policies and programs. 
‘‘SEC. 399MM–2. PRIORITIZATION OF EVALUATION BY SECRETARY. 
‘‘The Secretary shall evaluate, in accordance with this part,

all programs funded through the Centers for Disease Control and Prevention before conducting such an evaluation of privately funded programs unless an entity with a privately funded wellness program requests such an evaluation. 
‘‘SEC. 399MM–3. PROHIBITION OF FEDERAL WORKPLACE WELLNESS 
REQUIREMENTS. 
‘‘Notwithstanding any other provision of this part, any rec-
ommendations, data, or assessments carried out under this part 42 USC 280 l–3. 42 USC 280 l–2. Deadline.

Determination. 42 USC 280 l–1. 42 USC 280 l. 
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124 STAT. 584 PUBLIC LAW 111–148—MAR. 23, 2010 
shall not be used to mandate requirements for workplace wellness 
programs.’’. 
SEC. 4304. EPIDEMIOLOGY-LABORATORY CAPACITY GRANTS. 
Title XXVIII of the Public Health Service Act (42 U.S.C. 300hh 
‘‘Subtitle C—Strengthening Public Health 
Surveillance Systems 
‘‘SEC. 2821. EPIDEMIOLOGY-LABORATORY CAPACITY GRANTS. 
‘‘(a) I NGENERAL .—Subject to the availability of appropriations,

the Secretary, acting through the Director of the Centers for Disease Control and Prevention, shall establish an Epidemiology and Lab-oratory Capacity Grant Program to award grants to State health departments as well as local health departments and tribal jurisdic-tions that meet such criteria as the Director determines appropriate. Academic centers that assist State and eligible local and tribal health departments may also be eligible for funding under this section as the Director determines

under this section as the Director determines appropriate. Grants shall be awarded under this section to assist public health agencies in improving surveillance for, and response to, infectious diseases and other conditions of public health importance by—

‘‘(1) strengthening epidemiologic capacity to identify and 
monitor the occurrence of infectious diseases and other condi-tions of public health importance; 
‘‘(2) enhancing laboratory practice as well as systems to 
report test orders and results electronically; 
‘‘(3) improving information systems including developing

and maintaining an information exchange using national guide-lines and complying with capacities and functions determined by an advisory council established and appointed by the Director; and 
‘‘(4) developing and implementing prevention and control 
strategies. ‘‘(b) A
to be appropriated to carry out this section $190,000,000 for each of fiscal years 2010 through 2013, of which— 
‘‘(1) not less than $95,000,000 shall be made available

each such fiscal year for activities under paragraphs (1) and (4) of subsection (a); 
‘‘(2) not less than $60,000,000 shall be made available 
each such fiscal year for activities under subsection (a)(3); and 
‘‘(3) not less than $32,000,000 shall be made available 
each such fiscal year for activities under subsection (a)(2).’’. 
SEC. 4305. ADVANCING RESEARCH AND TREATMENT FOR PAIN CARE 
MANAGEMENT. 
(a) I NSTITUTE OF MEDICINE CONFERENCE ON PAIN.—

(a) I NSTITUTE OF MEDICINE CONFERENCE ON PAIN.— 
(1) C ONVENING .—Not later than 1 year after funds are 
appropriated to carry out this subsection, the Secretary of Health and Human Services shall seek to enter into an agree-ment with the Institute of Medicine of the National Academies to convene a Conference on Pain (in this subsection referred to as ‘‘the Conference’’). Deadline. Contracts. 42 USC 
300hh–31.

300hh–31. 
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124 STAT. 585 PUBLIC LAW 111–148—MAR. 23, 2010 
(2) P URPOSES .—The purposes of the Conference shall be 
to— 
(A) increase the recognition of pain as a significant 
public health problem in the United States; 
(B) evaluate the adequacy of assessment, diagnosis,

treatment, and management of acute and chronic pain in the general population, and in identified racial, ethnic, gender, age, and other demographic groups that may be disproportionately affected by inadequacies in the assess-ment, diagnosis, treatment, and management of pain; 
(C) identify barriers to appropriate pain care; (D) establish an agenda for action in both the public

and private sectors that will reduce such barriers and significantly improve the state of pain care research, edu-cation, and clinical care in the United States. (3) O
THER APPROPRIATE ENTITY .—If the Institute of Medi-
cine declines to enter into an agreement under paragraph (1), the Secretary of Health and Human Services may enter into such agreement with another appropriate entity. 
(4) R
EPORT .—A report summarizing the Conference’s

EPORT .—A report summarizing the Conference’s 
findings and recommendations shall be submitted to the Con-gress not later than June 30, 2011. 
(5) A
UTHORIZATION OF APPROPRIATIONS .—For the purpose 
of carrying out this subsection, there is authorized to be appro-priated such sums as may be necessary for each of fiscal years 2010 and 2011. (b) P
AIN RESEARCH AT NATIONAL INSTITUTES OF HEALTH .—

AIN RESEARCH AT NATIONAL INSTITUTES OF HEALTH .— 
Part B of title IV of the Public Health Service Act (42 U.S.C. 284 et seq.) is amended by adding at the end the following: 
‘‘SEC. 409J. PAIN RESEARCH. 
‘‘(a) R ESEARCH INITIATIVES .— 
‘‘(1) I N GENERAL .—The Director of NIH is encouraged to 
continue and expand, through the Pain Consortium, an aggres-sive program of basic and clinical research on the causes of and potential treatments for pain. 
‘‘(2) A

‘‘(2) A
NNUAL RECOMMENDATIONS .—Not less than annually, 
the Pain Consortium, in consultation with the Division of Pro-gram Coordination, Planning, and Strategic Initiatives, shall develop and submit to the Director of NIH recommendations on appropriate pain research initiatives that could be under-taken with funds reserved under section 402A(c)(1) for the Common Fund or otherwise available for such initiatives. 
‘‘(3) D
EFINITION .—In this subsection, the term ‘Pain Consor-

tium’ means the Pain Consortium of the National Institutes of Health or a similar trans-National Institutes of Health coordinating entity designated by the Secretary for purposes of this subsection. ‘‘(b) I
NTERAGENCY PAIN RESEARCH COORDINATING COM-
MITTEE .— 
‘‘(1) E STABLISHMENT .—The Secretary shall establish not

later than 1 year after the date of the enactment of this section and as necessary maintain a committee, to be known as the Interagency Pain Research Coordinating Committee (in this section referred to as the ‘Committee’), to coordinate all efforts within the Department of Health and Human Services and other Federal agencies that relate to pain research. Deadline. 42 USC 284q.

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124 STAT. 586 PUBLIC LAW 111–148—MAR. 23, 2010 
‘‘(2) M EMBERSHIP .— 
‘‘(A) I N GENERAL .—The Committee shall be composed 
of the following voting members: 
‘‘(i) Not more than 7 voting Federal representatives 
appoint by the Secretary from agencies that conduct pain care research and treatment. 
‘‘(ii) 12 additional voting members appointed under 
subparagraph (B). ‘‘(B) A
DDITIONAL MEMBERS .—The Committee shall 
include additional voting members appointed by the Sec-retary as follows:

‘‘(i) 6 non-Federal members shall be appointed from 
among scientists, physicians, and other health profes-sionals. 
‘‘(ii) 6 members shall be appointed from members 
of the general public, who are representatives of leading research, advocacy, and service organizations for individuals with pain-related conditions. ‘‘(C) N
ONVOTING MEMBERS .—The Committee shall 
include such nonvoting members as the Secretary deter-mines to be appropriate. ‘‘(3) C

HAIRPERSON .—The voting members of the Committee 
shall select a chairperson from among such members. The selection of a chairperson shall be subject to the approval of the Director of NIH. 
‘‘(4) M
EETINGS .—The Committee shall meet at the call of 
the chairperson of the Committee or upon the request of the Director of NIH, but in no case less often than once each year. 
‘‘(5) D
UTIES .—The Committee shall— 
‘‘(A) develop a summary of advances in pain care

‘‘(A) develop a summary of advances in pain care 
research supported or conducted by the Federal agencies relevant to the diagnosis, prevention, and treatment of pain and diseases and disorders associated with pain; 
‘‘(B) identify critical gaps in basic and clinical research 
on the symptoms and causes of pain; 
‘‘(C) make recommendations to ensure that the activi-
ties of the National Institutes of Health and other Federal agencies are free of unnecessary duplication of effort;

‘‘(D) make recommendations on how best to dissemi-
nate information on pain care; and 
‘‘(E) make recommendations on how to expand partner-
ships between public entities and private entities to expand collaborative, cross-cutting research. ‘‘(6) R
EVIEW .—The Secretary shall review the necessity of 
the Committee at least once every 2 years.’’. (c) P
AINCARE EDUCATION AND TRAINING .—Part D of title VII

of the Public Health Service Act (42 U.S.C. 294 et seq.) is amended by adding at the end the following new section: 
‘‘SEC. 759. PROGRAM FOR EDUCATION AND TRAINING IN PAIN CARE. 
‘‘(a) I NGENERAL .—The Secretary may make awards of grants, 
cooperative agreements, and contracts to health professions schools, hospices, and other public and private entities for the development and implementation of programs to provide education and training to health care professionals in pain care. 42 USC 294i.

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124 STAT. 587 PUBLIC LAW 111–148—MAR. 23, 2010 
‘‘(b) C ERTAIN TOPICS .—An award may be made under subsection 
(a) only if the applicant for the award agrees that the program carried out with the award will include information and education on— 
‘‘(1) recognized means for assessing, diagnosing, treating, 
and managing pain and related signs and symptoms, including the medically appropriate use of controlled substances; 
‘‘(2) applicable laws, regulations, rules, and policies on con-

trolled substances, including the degree to which misconcep-tions and concerns regarding such laws, regulations, rules, and policies, or the enforcement thereof, may create barriers to patient access to appropriate and effective pain care; 
‘‘(3) interdisciplinary approaches to the delivery of pain 
care, including delivery through specialized centers providing comprehensive pain care treatment expertise; 
‘‘(4) cultural, linguistic, literacy, geographic, and other bar-

riers to care in underserved populations; and 
‘‘(5) recent findings, developments, and improvements in 
the provision of pain care. ‘‘(c) E
VALUATION OF PROGRAMS .—The Secretary shall (directly 
or through grants or contracts) provide for the evaluation of pro-grams implemented under subsection (a) in order to determine the effect of such programs on knowledge and practice of pain care. 
‘‘(d) P
AIN CARE DEFINED .—For purposes of this section the

term ‘pain care’ means the assessment, diagnosis, treatment, or management of acute or chronic pain regardless of causation or body location. 
‘‘(e) A
UTHORIZATION OF APPROPRIATIONS .—There is authorized 
to be appropriated to carry out this section, such sums as may be necessary for each of the fiscal years 2010 through 2012. 
Amounts appropriated under this subsection shall remain available until expended.’’. 
SEC. 4306. FUNDING FOR CHILDHOOD OBESITY DEMONSTRATION 
PROJECT.

PROJECT. 
Section 1139A(e)(8) of the Social Security Act (42 U.S.C. 1320b– 
9a(e)(8)) is amended to read as follows: 
‘‘(8) A PPROPRIATION .—Out of any funds in the Treasury 
not otherwise appropriated, there is appropriated to carry out this subsection, $25,000,000 for the period of fiscal years 2010 through 2014.’’. 
SEC. 4401. SENSE OF THE SENATE CONCERNING CBO SCORING. 
(a) F INDING .—The Senate finds that the costs of prevention

programs are difficult to estimate due in part because prevention initiatives are hard to measure and results may occur outside the 5 and 10 year budget windows. 
(b) S
ENSE OF CONGRESS .—It is the sense of the Senate that 
Congress should work with the Congressional Budget Office to develop better methodologies for scoring progress to be made in prevention and wellness programs. Grants. 
Contracts.

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124 STAT. 588 PUBLIC LAW 111–148—MAR. 23, 2010 
SEC. 4402. EFFECTIVENESS OF FEDERAL HEALTH AND WELLNESS INI-
TIATIVES. 
To determine whether existing Federal health and wellness 
initiatives are effective in achieving their stated goals, the Secretary of Health and Human Services shall— 
(1) conduct an evaluation of such programs as they relate

to changes in health status of the American public and specifi-cally on the health status of the Federal workforce, including absenteeism of employees, the productivity of employees, the rate of workplace injury, and the medical costs incurred by employees, and health conditions, including workplace fitness, healthy food and beverages, and incentives in the Federal Employee Health Benefits Program; and 
(2) submit to Congress a report concerning such evaluation,

which shall include conclusions concerning the reasons that such existing programs have proven successful or not successful and what factors contributed to such conclusions. 
SEC. 5001. PURPOSE. 
The purpose of this title is to improve access to and the delivery 
of health care services for all individuals, particularly low income, underserved, uninsured, minority, health disparity, and rural popu-lations by—

(1) gathering and assessing comprehensive data in order 
for the health care workforce to meet the health care needs of individuals, including research on the supply, demand, dis-tribution, diversity, and skills needs of the health care workforce; 
(2) increasing the supply of a qualified health care 
workforce to improve access to and the delivery of health care services for all individuals; 
(3) enhancing health care workforce education and training

to improve access to and the delivery of health care services for all individuals; and 
(4) providing support to the existing health care workforce 
to improve access to and the delivery of health care services for all individuals. 
SEC. 5002. DEFINITIONS. 
(a) T HISTITLE.—In this title: 
(1) A LLIED HEALTH PROFESSIONAL .—The term ‘‘allied health 
professional’’ means an allied health professional as defined in section 799B(5) of the Public Heath Service Act (42 U.S.C. 295p(5)) who—

(A) has graduated and received an allied health profes-
sions degree or certificate from an institution of higher education; and 
(B) is employed with a Federal, State, local or tribal 
public health agency, or in a setting where patients might require health care services, including acute care facilities, ambulatory care facilities, personal residences, and other 42 USC 294q note. 42 USC 294q 
note. Reports. Evaluation.

note. Reports. Evaluation. 
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124 STAT. 589 PUBLIC LAW 111–148—MAR. 23, 2010 
settings located in health professional shortage areas, medi-
cally underserved areas, or medically underserved popu-lations, as recognized by the Secretary of Health and Human Services. (2) H
EALTH CARE CAREER PATHWAY .—The term ‘‘healthcare 
career pathway’’ means a rigorous, engaging, and high quality set of courses and services that— 
(A) includes an articulated sequence of academic and 
career courses, including 21st century skills;

career courses, including 21st century skills; 
(B) is aligned with the needs of healthcare industries 
in a region or State; 
(C) prepares students for entry into the full range 
of postsecondary education options, including registered apprenticeships, and careers; 
(D) provides academic and career counseling in stu-
dent-to-counselor ratios that allow students to make informed decisions about academic and career options; 
(E) meets State academic standards, State require-

ments for secondary school graduation and is aligned with requirements for entry into postsecondary education, and applicable industry standards; and 
(F) leads to 2 or more credentials, including— 
(i) a secondary school diploma; and (ii) a postsecondary degree, an apprenticeship or 
other occupational certification, a certificate, or a license. 
(3) I
NSTITUTION OF HIGHER EDUCATION .—The term ‘‘institu-

tion of higher education’’ has the meaning given the term in sections 101 and 102 of the Higher Education Act of 1965 (20 U.S.C. 1001 and 1002). 
(4) L
OW INCOME INDIVIDUAL , STATE WORKFORCE INVEST -
MENT BOARD , AND LOCAL WORKFORCE INVESTMENT BOARD .— 
(A) L OW-INCOME INDIVIDUAL .—The term ‘‘low-income 
individual’’ has the meaning given that term in section 101 of the Workforce investment Act of 1998 (29 U.S.C. 2801). 
(B) S
TATE WORKFORCE INVESTMENT BOARD ; LOCAL

(B) S
TATE WORKFORCE INVESTMENT BOARD ; LOCAL  
WORKFORCE INVESTMENT BOARD .—The terms ‘‘State 
workforce investment board’’ and ‘‘local workforce invest-ment board’’, refer to a State workforce investment board established under section 111 of the Workforce Investment Act of 1998 (29 U.S.C. 2821) and a local workforce invest-ment board established under section 117 of such Act (29 U.S.C. 2832), respectively. (5) P
OSTSECONDARY EDUCATION .—The term ‘‘postsecondary 
education’’ means—

education’’ means— 
(A) a 4-year program of instruction, or not less than 
a 1-year program of instruction that is acceptable for credit toward an associate or a baccalaureate degree, offered by an institution of higher education; or 
(B) a certificate or registered apprenticeship program 
at the postsecondary level offered by an institution of higher education or a non-profit educational institution. (6) R
EGISTERED APPRENTICESHIP PROGRAM .—The term ‘‘reg-

istered apprenticeship program’’ means an industry skills training program at the postsecondary level that combines tech-nical and theoretical training through structure on the job 
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124 STAT. 590 PUBLIC LAW 111–148—MAR. 23, 2010 
learning with related instruction (in a classroom or through 
distance learning) while an individual is employed, working under the direction of qualified personnel or a mentor, and earning incremental wage increases aligned to enhance job proficiency, resulting in the acquisition of a nationally recog-nized and portable certificate, under a plan approved by the Office of Apprenticeship or a State agency recognized by the Department of Labor. (b) T

ITLE VII OF THE PUBLIC HEALTH SERVICE ACT.—Section 
799B of the Public Health Service Act (42 U.S.C. 295p) is amended— 
(1) by striking paragraph (3) and inserting the following: ‘‘(3) P
HYSICIAN ASSISTANT EDUCATION PROGRAM .—The term 
‘physician assistant education program’ means an educational program in a public or private institution in a State that— 
‘‘(A) has as its objective the education of individuals

who, upon completion of their studies in the program, be qualified to provide primary care medical services with the supervision of a physician; and 
‘‘(B) is accredited by the Accreditation Review Commis-
sion on Education for the Physician Assistant.’’; and (2) by adding at the end the following: ‘‘(12) A
REA HEALTH EDUCATION CENTER .—The term ‘area

health education center’ means a public or nonprofit private organization that has a cooperative agreement or contract in effect with an entity that has received an award under sub-section (a)(1) or (a)(2) of section 751, satisfies the requirements in section 751(d)(1), and has as one of its principal functions the operation of an area health education center. Appropriate organizations may include hospitals, health organizations with accredited primary care training programs, accredited

primary care training programs, accredited physician assistant educational programs associated with a college or university, and universities or colleges not operating a school of medicine or osteopathic medicine.

term ‘area health education center program’ means cooperative program consisting of an entity that has received an award under subsection (a)(1) or (a)(2) of section 751 for the purpose of planning, developing, operating, and evaluating an area health education center program and one or more area health education centers, which carries out the required activities described in section 751(c), satisfies the program requirements in such section, has as one of its principal functions identifying

has as one of its principal functions identifying and implementing strategies and activities that address health care workforce needs in its service area, in coordination with the local workforce investment boards.

‘‘(14) C
LINICAL SOCIAL WORKER .—The term ‘clinical social 
worker’ has the meaning given the term in section 1861(hh)(1) of the Social Security Act (42 U.S.C. 1395x(hh)(1)). 
‘‘(15) C
ULTURAL COMPETENCY .—The term ‘cultural com-
petency’ shall be defined by the Secretary in a manner con-sistent with section 1707(d)(3). 
‘‘(16) D
IRECT CARE WORKER .—The term ‘direct care worker’

has the meaning given that term in the 2010 Standard Occupa-tional Classifications of the Department of Labor for Home Health Aides [31–1011], Psychiatric Aides [31–1013], Nursing Assistants [31–1014], and Personal Care Aides [39–9021]. 
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124 STAT. 591 PUBLIC LAW 111–148—MAR. 23, 2010 
‘‘(17) F EDERALLY QUALIFIED HEALTH CENTER .—The term 
‘Federally qualified health center’ has the meaning given that term in section 1861(aa) of the Social Security Act (42 U.S.C. 1395x(aa)). 
‘‘(18) F
RONTIER HEALTH PROFESSIONAL SHORTAGE AREA .— 
The term ‘frontier health professional shortage area’ means an area— 
‘‘(A) with a population density less than 6 persons 
per square mile within the service area; and

per square mile within the service area; and 
‘‘(B) with respect to which the distance or time for 
the population to access care is excessive. ‘‘(19) G
RADUATE PSYCHOLOGY .—The term ‘graduate psy-
chology’ means an accredited program in professional psy-chology. 
‘‘(20) H
EALTH DISPARITY POPULATION .—The term ‘health 
disparity population’ has the meaning given such term in sec-tion 903(d)(1). 
‘‘(21) H
EALTH LITERACY .—The term ‘health literacy’ means

the degree to which an individual has the capacity to obtain, communicate, process, and understand health information and services in order to make appropriate health decisions. 
‘‘(22) M
ENTAL HEALTH SERVICE PROFESSIONAL .—The term

ENTAL HEALTH SERVICE PROFESSIONAL .—The term 
‘mental health service professional’ means an individual with a graduate or postgraduate degree from an accredited institu-tion of higher education in psychiatry, psychology, school psy-chology, behavioral pediatrics, psychiatric nursing, social work, school social work, substance abuse disorder prevention and treatment, marriage and family counseling, school counseling, or professional counseling. 
‘‘(23) O

‘‘(23) O
NE-STOP DELIVERY SYSTEM CENTER .—The term ‘one- 
stop delivery system’ means a one-stop delivery system described in section 134(c) of the Workforce Investment Act of 1998 (29 U.S.C. 2864(c)). 
‘‘(24) P
ARAPROFESSIONAL CHILD AND ADOLESCENT MENTAL  
HEALTH WORKER .—The term ‘paraprofessional child and adoles-

cent mental health worker’ means an individual who is not a mental or behavioral health service professional, but who works at the first stage of contact with children and families who are seeking mental or behavioral health services, including substance abuse prevention and treatment services. 
‘‘(25) R
ACIAL AND ETHNIC MINORITY GROUP ; RACIAL AND  
ETHNIC MINORITY POPULATION .—The terms ‘racial and ethnic

minority group’ and ‘racial and ethnic minority population’ have the meaning given the term ‘racial and ethnic minority group’ in section 1707. 
‘‘(26) R
URAL HEALTH CLINIC .—The term ‘rural health clinic’ 
has the meaning given that term in section 1861(aa) of the Social Security Act (42 U.S.C. 1395x(aa)).’’. (c) T
ITLE VIII OF THE PUBLIC HEALTH SERVICE ACT.—Section 
801 of the Public Health Service Act (42 U.S.C. 296) is amended— 
(1) in paragraph (2)—

(A) by striking ‘‘means a’’ and inserting ‘‘means an 
accredited (as defined in paragraph 6)’’; and 
(B) by striking the period as inserting the following: 
‘‘where graduates are— 
‘‘(A) authorized to sit for the National Council Licen-
sure EXamination-Registered Nurse (NCLEX–RN); or 
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124 STAT. 592 PUBLIC LAW 111–148—MAR. 23, 2010 
‘‘(B) licensed registered nurses who will receive a grad-
uate or equivalent degree or training to become an advanced education nurse as defined by section 811(b).’’; and (2) by adding at the end the following: ‘‘(16) A
CCELERATED NURSING DEGREE PROGRAM .—The term

CCELERATED NURSING DEGREE PROGRAM .—The term 
‘accelerated nursing degree program’ means a program of edu-cation in professional nursing offered by an accredited school of nursing in which an individual holding a bachelors degree in another discipline receives a BSN or MSN degree in an accelerated time frame as determined by the accredited school of nursing. 
‘‘(17) B
RIDGE OR DEGREE COMPLETION PROGRAM .—The term

RIDGE OR DEGREE COMPLETION PROGRAM .—The term 
‘bridge or degree completion program’ means a program of education in professional nursing offered by an accredited school of nursing, as defined in paragraph (2), that leads to a bacca-laureate degree in nursing. Such programs may include, Reg-istered Nurse (RN) to Bachelor’s of Science of Nursing (BSN) programs, RN to MSN (Master of Science of Nursing) programs, or BSN to Doctoral programs.’’. 
Subtitle B—Innovations in the Health Care

Subtitle B—Innovations in the Health Care 
Workforce 
SEC. 5101. NATIONAL HEALTH CARE WORKFORCE COMMISSION. 
(a) P URPOSE .—It is the purpose of this section to establish 
a National Health Care Workforce Commission that— 
(1) serves as a national resource for Congress, the Presi-
dent, States, and localities; 
(2) communicates and coordinates with the Departments

of Health and Human Services, Labor, Veterans Affairs, Home-land Security, and Education on related activities administered by one or more of such Departments; 
(3) develops and commissions evaluations of education and 
training activities to determine whether the demand for health care workers is being met; 
(4) identifies barriers to improved coordination at the Fed-
eral, State, and local levels and recommend ways to address such barriers; and

(5) encourages innovations to address population needs, 
constant changes in technology, and other environmental fac-tors. (b) E
STABLISHMENT .—There is hereby established the National 
Health Care Workforce Commission (in this section referred to as the ‘‘Commission’’). 
(c) M
(1) N UMBER AND APPOINTMENT .—The Commission shall be 
composed of 15 members to be appointed by the Comptroller General, without regard to section 5 of the Federal Advisory 
Committee Act (5 U.S.C. App.).

Committee Act (5 U.S.C. App.). 
(2) Q
(A) I N GENERAL .—The membership of the Commission 
shall include individuals— 
(i) with national recognition for their expertise 
in health care labor market analysis, including health care workforce analysis; health care finance and 42 USC 294q. 
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124 STAT. 593 PUBLIC LAW 111–148—MAR. 23, 2010 
economics; health care facility management; health 
care plans and integrated delivery systems; health care workforce education and training; health care philan-thropy; providers of health care services; and other related fields; and 
(ii) who will provide a combination of professional 
perspectives, broad geographic representation, and a balance between urban, suburban, rural, and frontier representatives. (B) I
NCLUSION .—

NCLUSION .— 
(i) I N GENERAL .—The membership of the Commis-
sion shall include no less than one representative of— 
(I) the health care workforce and health 
professionals; 
(II) employers; (III) third-party payers; (IV) individuals skilled in the conduct and 
interpretation of health care services and health economics research; 
(V) representatives of consumers; (VI) labor unions; (VII) State or local workforce investment 
boards; and 
(VIII) educational institutions (which may

(VIII) educational institutions (which may 
include elementary and secondary institutions, institutions of higher education, including 2 and 4 year institutions, or registered apprenticeship programs). (ii) A
DDITIONAL MEMBERS .—The remaining mem-
bership may include additional representatives from clause (i) and other individuals as determined appro-priate by the Comptroller General of the United States. (C) M
AJORITY NON -PROVIDERS .—Individuals who are

AJORITY NON -PROVIDERS .—Individuals who are 
directly involved in health professions education or practice shall not constitute a majority of the membership of the Commission. 
(D) E
THICAL DISCLOSURE .—The Comptroller General

THICAL DISCLOSURE .—The Comptroller General 
shall establish a system for public disclosure by members of the Commission of financial and other potential conflicts of interest relating to such members. Members of the Commission shall be treated as employees of Congress for purposes of applying title I of the Ethics in Government Act of 1978. Members of the Commission shall not be treated as special government employees under title 18, United States Code. (3) T
ERMS .—

ERMS .— 
(A) I N GENERAL .—The terms of members of the 
Commission shall be for 3 years except that the Comptroller General shall designate staggered terms for the members first appointed. 
(B) V
ACANCIES .—Any member appointed to fill a

(B) V
ACANCIES .—Any member appointed to fill a 
vacancy occurring before the expiration of the term for which the member’s predecessor was appointed shall be appointed only for the remainder of that term. A member may serve after the expiration of that member’s term until a successor has taken office. A vacancy in the Commission Public 
information.

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124 STAT. 594 PUBLIC LAW 111–148—MAR. 23, 2010 
shall be filled in the manner in which the original appoint-
ment was made. 
(C) I NITIAL APPOINTMENTS .—The Comptroller General 
shall make initial appointments of members to the Commis-sion not later than September 30, 2010. (4) C
OMPENSATION .—While serving on the business of the

Commission (including travel time), a member of the Commis-sion shall be entitled to compensation at the per diem equiva-lent of the rate provided for level IV of the Executive Schedule under section 5315 of tile 5, United States Code, and while so serving away from home and the member’s regular place of business, a member may be allowed travel expenses, as authorized by the Chairman of the Commission. Physicians serving as personnel of the Commission may be provided a physician comparability

may be provided a physician comparability allowance by the Commission in the same manner as Government physicians may be provided such an allowance by an agency under section 5948 of title 5, United States Code, and for such purpose subsection (i) of such section shall apply to the Commission in the same manner as it applies to the Tennessee Valley Authority. For purposes of pay (other than pay of members of the Commission) and employment benefits, rights, and privileges, all personnel of the

rights, and privileges, all personnel of the Commission shall be treated as if they were employees of the United States Senate. Personnel of the Commission shall not be treated as employees of the Government Accountability Office for any purpose.

(5) C
HAIRMAN , VICE CHAIRMAN .—The Comptroller General 
shall designate a member of the Commission, at the time of appointment of the member, as Chairman and a member as Vice Chairman for that term of appointment, except that in the case of vacancy of the chairmanship or vice chairmanship, the Comptroller General may designate another member for the remainder of that member’s term. 
(6) M
EETINGS .—The Commission shall meet at the call

EETINGS .—The Commission shall meet at the call 
of the chairman, but no less frequently than on a quarterly basis. (d) D
UTIES .— 
(1) R ECOGNITION , DISSEMINATION , AND COMMUNICATION .— 
The Commission shall— 
(A) recognize efforts of Federal, State, and local part-
nerships to develop and offer health care career pathways of proven effectiveness; 
(B) disseminate information on promising retention 
practices for health care professionals; and

practices for health care professionals; and 
(C) communicate information on important policies and 
practices that affect the recruitment, education and 
training, and retention of the health care workforce. (2) R
EVIEW OF HEALTH CARE WORKFORCE AND ANNUAL  
REPORTS .—In order to develop a fiscally sustainable integrated

workforce that supports a high-quality, readily accessible health care delivery system that meets the needs of patients and populations, the Commission, in consultation with relevant Fed-eral, State, and local agencies, shall— 
(A) review current and projected health care workforce 
supply and demand, including the topics described in para-graph (3); Designation. Applicability. Deadline.

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124 STAT. 595 PUBLIC LAW 111–148—MAR. 23, 2010 
(B) make recommendations to Congress and the 
Administration concerning national health care workforce priorities, goals, and policies; 
(C) by not later than October 1 of each year (beginning 
with 2011), submit a report to Congress and the Adminis-tration containing the results of such reviews and rec-ommendations concerning related policies; and 
(D) by not later than April 1 of each year (beginning

with 2011), submit a report to Congress and the Adminis-tration containing a review of, and recommendations on, at a minimum one high priority area as described in para-graph (4). (3) S
PECIFIC TOPICS TO BE REVIEWED .—The topics described 
in this paragraph include— 
(A) current health care workforce supply and distribu-
tion, including demographics, skill sets, and demands, with projected demands during the subsequent 10 and 25 year periods; 
(B) health care workforce education and training

(B) health care workforce education and training 
capacity, including the number of students who have com-pleted education and training, including registered apprenticeships; the number of qualified faculty; the edu-cation and training infrastructure; and the education and training demands, with projected demands during the sub-sequent 10 and 25 year periods; 
(C) the education loan and grant programs in titles

VII and VIII of the Public Health Service Act (42 U.S.C. 292 et seq. and 296 et seq.), with recommendations on whether such programs should become part of the Higher Education Act of 1965 (20 U.S.C. 1001 et seq); 
(D) the implications of new and existing Federal poli-

cies which affect the health care workforce, including Medi-care and Medicaid graduate medical education policies, titles VII and VIII of the Public Health Service Act (42 U.S.C. 292 et seq. and 296 et seq.), the National Health Service Corps (with recommendations for aligning such programs with national health workforce priorities and goals), and other health care workforce programs, including those supported through the Workforce Investment Act of 1998 (29 U.S.C. 2801 et seq.), the Carl D.

Act of 1998 (29 U.S.C. 2801 et seq.), the Carl D. Perkins Career and Technical Education Act of 2006 (20 U.S.C. 2301 et seq.), the Higher Education Act of 1965 (20 U.S.C. 1001 et seq.), and any other Federal health care workforce programs;

(E) the health care workforce needs of special popu-
lations, such as minorities, rural populations, medically 
underserved populations, gender specific needs, individuals with disabilities, and geriatric and pediatric populations with recommendations for new and existing Federal policies to meet the needs of these special populations; and 
(F) recommendations creating or revising national loan

repayment programs and scholarship programs to require low-income, minority medical students to serve in their home communities, if designated as medical underserved community. (4) H
IGH PRIORITY AREAS .— 
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124 STAT. 596 PUBLIC LAW 111–148—MAR. 23, 2010 
(A) I N GENERAL .—The initial high priority topics 
described in this paragraph include each of the following: 
(i) Integrated health care workforce planning that 
identifies health care professional skills needed and maximizes the skill sets of health care professionals across disciplines. 
(ii) An analysis of the nature, scopes of practice, 
and demands for health care workers in the enhanced information technology and management workplace.

(iii) An analysis of how to align Medicare and 
Medicaid graduate medical education policies with national workforce goals. 
(iv) The education and training capacity, projected 
demands, and integration with the health care delivery system of each of the following: 
(I) Nursing workforce capacity at all levels. (II) Oral health care workforce capacity at all 
levels. 
(III) Mental and behavioral health care 
workforce capacity at all levels. 
(IV) Allied health and public health care

(IV) Allied health and public health care 
(V) Emergency medical service workforce 
capacity, including the retention and recruitment of the volunteer workforce, at all levels. 
(VI) The geographic distribution of health care 
providers as compared to the identified health care workforce needs of States and regions. 
(B) F
UTURE DETERMINATIONS .—The Commission may

(B) F
UTURE DETERMINATIONS .—The Commission may 
require that additional topics be included under subpara-graph (A). The appropriate committees of Congress may recommend to the Commission the inclusion of other topics for health care workforce development areas that require special attention. (5) G
RANT PROGRAM .—The Commission shall— 
(A) review implementation progress reports on, and

report to Congress about, the State Health Care Workforce Development Grant program established in section 5102; 
(B) in collaboration with the Department of Labor and 
in coordination with the Department of Education and other relevant Federal agencies, make recommendations to the fiscal and administrative agent under section 5102(b) for grant recipients under section 5102; 
(C) assess the implementation of the grants under 
such section; and 
(D) collect performance and report information,

(D) collect performance and report information, 
including identified models and best practices, on grants from the fiscal and administrative agent under such section and distribute this information to Congress, relevant Fed-eral agencies, and to the public. (6) S
TUDY .—The Commission shall study effective mecha-
nisms for financing education and training for careers in health care, including public health and allied health. 
(7) R
ECOMMENDATIONS .—The Commission shall submit rec-

ommendations to Congress, the Department of Labor, and the Department of Health and Human Services about improving Review. 
Reports. 
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124 STAT. 597 PUBLIC LAW 111–148—MAR. 23, 2010 
safety, health, and worker protections in the workplace for 
the health care workforce. 
(8) A SSESSMENT .—The Commission shall assess and receive 
reports from the National Center for Health Care Workforce Analysis established under section 761(b) of the Public Service Health Act (as amended by section 5103). (e) C
ONSULTATION WITHFEDERAL , STATE , AND LOCAL AGENCIES , 
CONGRESS , AND OTHER ORGANIZATIONS .—

CONGRESS , AND OTHER ORGANIZATIONS .— 
(1) I N GENERAL .—The Commission shall consult with Fed-

eral agencies (including the Departments of Health and Human Services, Labor, Education, Commerce, Agriculture, Defense, and Veterans Affairs and the Environmental Protection Agency), Congress, the Medicare Payment Advisory Commis-sion, the Medicaid and CHIP Payment and Access Commission, and, to the extent practicable, with State and local agencies, Indian tribes, voluntary health care organizations, professional societies, and other relevant public-private health care partner-ships. 
(2) O

(2) O
BTAINING OFFICIAL DATA .—The Commission, consistent 
with established privacy rules, may secure directly from any department or agency of the Executive Branch information necessary to enable the Commission to carry out this section. 
(3) D
ETAIL OF FEDERAL GOVERNMENT EMPLOYEES .—An 
employee of the Federal Government may be detailed to the Commission without reimbursement. The detail of such an employee shall be without interruption or loss of civil service status. (f) D

IRECTOR AND STAFF ; EXPERTS AND CONSULTANTS .—Subject 
to such review as the Comptroller General of the United States determines to be necessary to ensure the efficient administration of the Commission, the Commission may— 
(1) employ and fix the compensation of an executive director

that shall not exceed the rate of basic pay payable for level V of the Executive Schedule and such other personnel as may be necessary to carry out its duties (without regard to the provisions of title 5, United States Code, governing appoint-ments in the competitive service); 
(2) seek such assistance and support as may be required 
in the performance of its duties from appropriate Federal departments and agencies; 
(3) enter into contracts or make other arrangements, as

may be necessary for the conduct of the work of the Commission (without regard to section 3709 of the Revised Statutes (41 U.S.C. 5)); 
(4) make advance, progress, and other payments which 
relate to the work of the Commission; 
(5) provide transportation and subsistence for persons 
serving without compensation; and 
(6) prescribe such rules and regulations as the Commission 
determines to be necessary with respect to the internal organization and operation of the Commission. (g) P
OWERS .—

OWERS .— 
(1) D ATA COLLECTION .—In order to carry out its functions 
under this section, the Commission shall— 
(A) utilize existing information, both published and 
unpublished, where possible, collected and assessed either by its own staff or under other arrangements made in 
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124 STAT. 598 PUBLIC LAW 111–148—MAR. 23, 2010 
accordance with this section, including coordination with 
the Bureau of Labor Statistics; 
(B) carry out, or award grants or contracts for the 
carrying out of, original research and development, where existing information is inadequate, and 
(C) adopt procedures allowing interested parties to 
submit information for the Commission’s use in making reports and recommendations. (2) A
CCESS OF THE GOVERNMENT ACCOUNTABILITY OFFICE

CCESS OF THE GOVERNMENT ACCOUNTABILITY OFFICE  
TO INFORMATION .—The Comptroller General of the United 
States shall have unrestricted access to all deliberations, records, and data of the Commission, immediately upon request. 
(3) P
ERIODIC AUDIT .—The Commission shall be subject to 
periodic audit by an independent public accountant under con-tract to the Commission. (h) A
UTHORIZATION OF APPROPRIATIONS .— 
(1) R EQUEST FOR APPROPRIATIONS .—The Commission shall

submit requests for appropriations in the same manner as the Comptroller General of the United States submits requests for appropriations. Amounts so appropriated for the Commis-sion shall be separate from amounts appropriated for the Comp-troller General. 
(2) A
UTHORIZATION .—There are authorized to be appro-
priated such sums as may be necessary to carry out this section. 
(3) G IFTS AND SERVICES .—The Commission may not accept

gifts, bequeaths, or donations of property, but may accept and use donations of services for purposes of carrying out this section. (i) D
(1) H EALTH CARE WORKFORCE .—The term ‘‘health care

workforce’’ includes all health care providers with direct patient care and support responsibilities, such as physicians, nurses, nurse practitioners, primary care providers, preventive medi-cine physicians, optometrists, ophthalmologists, physician assistants, pharmacists, dentists, dental hygienists, and other oral healthcare professionals, allied health professionals, doc-tors of chiropractic, community health workers, health care paraprofessionals, direct care workers, psychologists and

direct care workers, psychologists and other behavioral and mental health professionals (including sub-stance abuse prevention and treatment providers), social workers, physical and occupational therapists, certified nurse midwives, podiatrists, the EMS workforce (including profes-sional and volunteer ambulance personnel and firefighters who perform emergency medical services), licensed complementary and alternative medicine providers, integrative health practi-tioners, public health

integrative health practi-tioners, public health professionals, and any other health

professional that the Comptroller General of the United States determines appropriate. 
(2) H
EALTH PROFESSIONALS .—The term ‘‘health profes-
sionals’’ includes— 
(A) dentists, dental hygienists, primary care providers,

specialty physicians, nurses, nurse practitioners, physician assistants, psychologists and other behavioral and mental health professionals (including substance abuse prevention and treatment providers), social workers, physical and occupational therapists, public health professionals, clinical 
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124 STAT. 599 PUBLIC LAW 111–148—MAR. 23, 2010 
pharmacists, allied health professionals, doctors of chiro-
practic, community health workers, school nurses, certified nurse midwives, podiatrists, licensed complementary and alternative medicine providers, the EMS workforce (including professional and volunteer ambulance personnel and firefighters who perform emergency medical services), and integrative health practitioners;

(B) national representatives of health professionals; (C) representatives of schools of medicine, osteopathy, 
nursing, dentistry, optometry, pharmacy, chiropractic, allied health, educational programs for public health profes-sionals, behavioral and mental health professionals (as so defined), social workers, pharmacists, physical and occupa-tional therapists, oral health care industry dentistry and dental hygiene, and physician assistants;

(D) representatives of public and private teaching hos-
pitals, and ambulatory health facilities, including Federal medical facilities; and 
(E) any other health professional the Comptroller Gen-
eral of the United States determines appropriate. 
SEC. 5102. STATE HEALTH CARE WORKFORCE DEVELOPMENT GRANTS. 
(a) E STABLISHMENT .—There is established a competitive health

care workforce development grant program (referred to in this sec-tion as the ‘‘program’’) for the purpose of enabling State partner-ships to complete comprehensive planning and to carry out activities leading to coherent and comprehensive health care workforce development strategies at the State and local levels. 
(b) F
ISCAL AND ADMINISTRATIVE AGENT .—The Health Resources

and Services Administration of the Department of Health and Human Services (referred to in this section as the ‘‘Administration’’) shall be the fiscal and administrative agent for the grants awarded under this section. The Administration is authorized to carry out the program, in consultation with the National Health Care Workforce Commission (referred to in this section as the ‘‘Commis-sion’’), which shall review reports on the development, implementa-tion, and evaluation activities of the

implementa-tion, and evaluation activities of the grant program, including—

(1) administering the grants; 
(2) providing technical assistance to grantees; and (3) reporting performance information to the Commission. 
(c) P
(1) A MOUNT AND DURATION .—A planning grant shall be 
awarded under this subsection for a period of not more than one year and the maximum award may not be more than $150,000. 
(2) E
LIGIBILITY .—To be eligible to receive a planning grant,

an entity shall be an eligible partnership. An eligible partner-ship shall be a State workforce investment board, if it includes or modifies the members to include at least one representative from each of the following: health care employer, labor organiza-tion, a public 2-year institution of higher education, a public 4-year institution of higher education, the recognized State federation of labor, the State public secondary education agency, the State P–16 or P–20 Council if such a council

the State P–16 or P–20 Council if such a council exists, and a philanthropic organization that is actively engaged in pro-viding learning, mentoring, and work opportunities to recruit, Review. 42 USC 294r.

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124 STAT. 600 PUBLIC LAW 111–148—MAR. 23, 2010 
educate, and train individuals for, and retain individuals in, 
careers in health care and related industries. 
(3) F ISCAL AND ADMINISTRATIVE AGENT .—The Governor of 
the State receiving a planning grant has the authority to appoint a fiscal and an administrative agency for the partner-ship. 
(4) A
PPLICATION .—Each State partnership desiring a plan-

ning grant shall submit an application to the Administrator of the Administration at such time and in such manner, and accompanied by such information as the Administrator may reasonable require. Each application submitted for a planning grant shall describe the members of the State partnership, the activities for which assistance is sought, the proposed performance benchmarks to be used to measure progress under the planning grant, a budget for use of the funds to complete the required

for use of the funds to complete the required activities described in paragraph (5), and such additional assurance and information as the Administrator determines to be essential to ensure compliance with the grant program requirements.

(5) R
EQUIRED ACTIVITIES .—A State partnership receiving 
a planning grant shall carry out the following: 
(A) Analyze State labor market information in order 
to create health care career pathways for students and adults, including dislocated workers. 
(B) Identify current and projected high demand State 
or regional health care sectors for purposes of planning career pathways. 
(C) Identify existing Federal, State, and private

resources to recruit, educate or train, and retain a skilled health care workforce and strengthen partnerships. 
(D) Describe the academic and health care industry 
skill standards for high school graduation, for entry into postsecondary education, and for various credentials and licensure. 
(E) Describe State secondary and postsecondary edu-
cation and training policies, models, or practices for the health care sector, including career information and guid-ance counseling.

(F) Identify Federal or State policies or rules to devel-
oping a coherent and comprehensive health care workforce development strategy and barriers and a plan to resolve these barriers. 
(G) Participate in the Administration’s evaluation and 
reporting activities. (6) P
ERFORMANCE AND EVALUATION .—Before the State part-
nership receives a planning grant, such partnership and the

Administrator of the Administration shall jointly determine the performance benchmarks that will be established for the purposes of the planning grant. 
(7) M
ATCH .—Each State partnership receiving a planning

grant shall provide an amount, in cash or in kind, that is not less that 15 percent of the amount of the grant, to carry out the activities supported by the grant. The matching require-ment may be provided from funds available under other Fed-eral, State, local or private sources to carry out the activities. 
(8) R
EPORT .— 
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124 STAT. 601 PUBLIC LAW 111–148—MAR. 23, 2010 
(A) R EPORT TO ADMINISTRATION .—Not later than 1 year 
after a State partnership receives a planning grant, the partnership shall submit a report to the Administration on the State’s performance of the activities under the grant, including the use of funds, including matching funds, to carry out required activities, and a description of the progress of the State workforce investment board in meeting the performance benchmarks. 
(B) R

(B) R
EPORT TO CONGRESS .—The Administration shall 
submit a report to Congress analyzing the planning activi-ties, performance, and fund utilization of each State grant recipient, including an identification of promising practices and a profile of the activities of each State grant recipient. 
(d) I
MPLEMENTATION GRANTS .— 
(1) I N GENERAL .—The Administration shall— 
(A) competitively award implementation grants to

(A) competitively award implementation grants to 
State partnerships to enable such partnerships to imple-ment activities that will result in a coherent and com-prehensive plan for health workforce development that will address current and projected workforce demands within the State; and 
(B) inform the Commission and Congress about the 
awards made. (2) D
URATION .—An implementation grant shall be awarded

for a period of no more than 2 years, except in those cases where the Administration determines that the grantee is high performing and the activities supported by the grant warrant up to 1 additional year of funding. 
(3) E
LIGIBILITY .—To be eligible for an implementation 
grant, a State partnership shall have— 
(A) received a planning grant under subsection (c) and 
completed all requirements of such grant; or 
(B) completed a satisfactory application, including a

plan to coordinate with required partners and complete the required activities during the 2 year period of the implementation grant. (4) F
ISCAL AND ADMINISTRATIVE AGENT .—A State partner-
ship receiving an implementation grant shall appoint a fiscal and an administration agent for the implementation of such grant. 
(5) A
PPLICATION .—Each eligible State partnership desiring

an implementation grant shall submit an application to the Administration at such time, in such manner, and accompanied by such information as the Administration may reasonably require. Each application submitted shall include— 
(A) a description of the members of the State partner-
ship; 
(B) a description of how the State partnership com-
pleted the required activities under the planning grant, if applicable; 
(C) a description of the activities for which implementa-

tion grant funds are sought, including grants to regions by the State partnership to advance coherent and com-prehensive regional health care workforce planning activi-ties; 
(D) a description of how the State partnership will 
coordinate with required partners and complete the 
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124 STAT. 602 PUBLIC LAW 111–148—MAR. 23, 2010 
required partnership activities during the duration of an 
implementation grant; 
(E) a budget proposal of the cost of the activities sup-
ported by the implementation grant and a timeline for the provision of matching funds required; 
(F) proposed performance benchmarks to be used to 
assess and evaluate the progress of the partnership activi-ties; 
(G) a description of how the State partnership will

collect data to report progress in grant activities; and 
(H) such additional assurances as the Administration 
determines to be essential to ensure compliance with grant requirements. (6) R
EQUIRED ACTIVITIES .— 
(A) I N GENERAL .—A State partnership that receives

an implementation grant may reserve not less than 60 percent of the grant funds to make grants to be competi-tively awarded by the State partnership, consistent with State procurement rules, to encourage regional partner-ships to address health care workforce development needs and to promote innovative health care workforce career pathway activities, including career counseling, learning, and employment. 
(B) E
LIGIBLE PARTNERSHIP DUTIES .—An eligible State

LIGIBLE PARTNERSHIP DUTIES .—An eligible State 
partnership receiving an implementation grant shall— 
(i) identify and convene regional leadership to dis-

cuss opportunities to engage in statewide health care workforce development planning, including the poten-tial use of competitive grants to improve the develop-ment, distribution, and diversity of the regional health care workforce; the alignment of curricula for health care careers; and the access to quality career informa-tion and guidance and education and training opportunities; 
(ii) in consultation with key stakeholders and

regional leaders, take appropriate steps to reduce Fed-eral, State, or local barriers to a comprehensive and coherent strategy, including changes in State or local policies to foster coherent and comprehensive health care workforce development activities, including health care career pathways at the regional and State levels, career planning information, retraining for dislocated workers, and as appropriate, requests for Federal pro-gram or administrative waivers;

(iii) develop, disseminate, and review with key 
stakeholders a preliminary statewide strategy that addresses short- and long-term health care workforce development supply versus demand; 
(iv) convene State partnership members on a reg-
ular basis, and at least on a semiannual basis; 
(v) assist leaders at the regional level to form 
partnerships, including technical assistance and capacity building activities;

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124 STAT. 603 PUBLIC LAW 111–148—MAR. 23, 2010 
(vi) collect and assess data on and report on the 
performance benchmarks selected by the State partner-ship and the Administration for implementation activi-ties carried out by regional and State partnerships; and 
(vii) participate in the Administration’s evaluation 
and reporting activities. 
(7) P

nership receives an implementation grant, it and the Adminis-trator shall jointly determine the performance benchmarks that shall be established for the purposes of the implementation grant. 
(8) M
ATCH .—Each State partnership receiving an

(8) M
ATCH .—Each State partnership receiving an 
implementation grant shall provide an amount, in cash or in kind that is not less than 25 percent of the amount of the grant, to carry out the activities supported by the grant. The matching funds may be provided from funds available from other Federal, State, local, or private sources to carry out such activities. 
(9) R
EPORTS .— 
(A) R EPORT TO ADMINISTRATION .—For each year of the

implementation grant, the State partnership receiving the implementation grant shall submit a report to the Adminis-tration on the performance of the State of the grant activi-ties, including a description of the use of the funds, including matched funds, to complete activities, and a description of the performance of the State partnership in meeting the performance benchmarks. 
(B) R
EPORT TO CONGRESS .—The Administration shall

submit a report to Congress analyzing implementation activities, performance, and fund utilization of the State grantees, including an identification of promising practices and a profile of the activities of each State grantee. 
(e) A
UTHORIZATION FOR APPROPRIATIONS .— 
(1) P LANNING GRANTS .—There are authorized to be appro-

priated to award planning grants under subsection (c) $8,000,000 for fiscal year 2010, and such sums as may be necessary for each subsequent fiscal year. 
(2) I
MPLEMENTATION GRANTS .—There are authorized to be 
appropriated to award implementation grants under subsection (d), $150,000,000 for fiscal year 2010, and such sums as may be necessary for each subsequent fiscal year. 
SEC. 5103. HEALTH CARE WORKFORCE ASSESSMENT. 
(a) I NGENERAL .—Section 761 of the Public Health Service

Act (42 U.S.C. 294m) is amended— 
(1) by redesignating subsection (c) as subsection (e); (2) by striking subsection (b) and inserting the following: 
‘‘(b) N
ATIONAL CENTER FOR HEALTH CARE WORKFORCE ANAL-
YSIS.— 
‘‘(1) E STABLISHMENT .—The Secretary shall establish the 
National Center for Health Workforce Analysis (referred to in this section as the ‘National Center’). 
‘‘(2) P
URPOSES .—The National Center, in coordination to

the extent practicable with the National Health Care Workforce 42 USC 294n. 
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124 STAT. 604 PUBLIC LAW 111–148—MAR. 23, 2010 
Commission (established in section 5101 of the Patient Protec-
tion and Affordable Care Act), and relevant regional and State centers and agencies, shall— 
‘‘(A) provide for the development of information 
describing and analyzing the health care workforce and workforce related issues; 
‘‘(B) carry out the activities under section 792(a); ‘‘(C) annually evaluate programs under this title; ‘‘(D) develop and publish performance measures and

benchmarks for programs under this title; and 
‘‘(E) establish, maintain, and publicize a national Inter-
net registry of each grant awarded under this title and a database to collect data from longitudinal evaluations (as described in subsection (d)(2)) on performance measures (as developed under sections 749(d)(3), 757(d)(3), and 762(a)(3)). ‘‘(3) C
OLLABORATION AND DATA SHARING .— 
‘‘(A) I N GENERAL .—The National Center shall collabo-

rate with Federal agencies and relevant professional and educational organizations or societies for the purpose of linking data regarding grants awarded under this title. 
‘‘(B) C
ONTRACTS FOR HEALTH WORKFORCE ANALYSIS .— 
For the purpose of carrying out the activities described in subparagraph (A), the National Center may enter into contracts with relevant professional and educational organizations or societies. 
‘‘(c) S
TATE AND REGIONAL CENTERS FOR HEALTH WORKFORCE  
ANALYSIS .—

ANALYSIS .— 
‘‘(1) I N GENERAL .—The Secretary shall award grants to, 
or enter into contracts with, eligible entities for purposes of— 
‘‘(A) collecting, analyzing, and reporting data regarding 
programs under this title to the National Center and to the public; and 
‘‘(B) providing technical assistance to local and regional 
entities on the collection, analysis, and reporting of data. ‘‘(2) E
tract under this subsection, an entity shall—

‘‘(A) be a State, a State workforce investment board, 
a public health or health professions school, an academic 
health center, or an appropriate public or private nonprofit entity; and 
‘‘(B) submit to the Secretary an application at such 
time, in such manner, and containing such information as the Secretary may require. 
‘‘(d) I
NCREASE IN GRANTS FOR LONGITUDINAL EVALUATIONS .— 
‘‘(1) I N GENERAL .—The Secretary shall increase the amount

awarded to an eligible entity under this title for a longitudinal evaluation of individuals who have received education, training, or financial assistance from programs under this title. 
‘‘(2) C
APABILITY .—A longitudinal evaluation shall be 
capable of— 
‘‘(A) studying practice patterns; and ‘‘(B) collecting and reporting data on performance 
measures developed under sections 749(d)(3), 757(d)(3), and 762(a)(3). Grants. 
Contracts. Internet registry.

Contracts. Internet registry. 
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124 STAT. 605 PUBLIC LAW 111–148—MAR. 23, 2010 
‘‘(3) G UIDELINES .—A longitudinal evaluation shall comply 
with guidelines issued under sections 749(d)(4), 757(d)(4), and 762(a)(4). 
‘‘(4) E
LIGIBLE ENTITIES .—To be eligible to obtain an increase 
under this section, an entity shall be a recipient of a grant or contract under this title.’’; and 
(3) in subsection (e), as so redesignated— 
(A) by striking paragraph (1) and inserting the fol-
lowing: ‘‘(1) I
N GENERAL .—

N GENERAL .— 
‘‘(A) N ATIONAL CENTER .—To carry out subsection (b), 
there are authorized to be appropriated $7,500,000 for each of fiscal years 2010 through 2014. 
‘‘(B) S
TATE AND REGIONAL CENTERS .—To carry out sub-
section (c), there are authorized to be appropriated $4,500,000 for each of fiscal years 2010 through 2014. 
‘‘(C) G
RANTS FOR LONGITUDINAL EVALUATIONS .—To

‘‘(C) G
RANTS FOR LONGITUDINAL EVALUATIONS .—To 
carry out subsection (d), there are authorized to be appro-priated such sums as may be necessary for fiscal years 2010 through 2014.’’; and (4) in paragraph (2), by striking ‘‘subsection (a)’’ and 
inserting ‘‘paragraph (1)’’. (b) T
RANSFERS .—Not later than 180 days after the date of

enactment of this Act, the responsibilities and resources of the National Center for Health Workforce Analysis, as in effect on the date before the date of enactment of this Act, shall be trans-ferred to the National Center for Health Care Workforce Analysis established under section 761 of the Public Health Service Act, as amended by subsection (a). 
(c) U
SE OF LONGITUDINAL EVALUATIONS .—Section 791(a)(1) of 
the Public Health Service Act (42 U.S.C. 295j(a)(1)) is amended—

(1) in subparagraph (A), by striking ‘‘or’’ at the end; (2) in subparagraph (B), by striking the period and 
‘‘(C) utilizes a longitudinal evaluation (as described 
in section 761(d)(2)) and reports data from such system to the national workforce database (as established under section 761(b)(2)(E)).’’. 
(d) P
ERFORMANCE MEASURES ; GUIDELINES FOR LONGITUDINAL  
EVALUATIONS .— 
(1) A DVISORY COMMITTEE ON TRAINING IN PRIMARY CARE

MEDICINE AND DENTISTRY .—Section 748(d) of the Public Health 
Service Act is amended— 
(A) in paragraph (1), by striking ‘‘and’’ at the end; (B) in paragraph (2), by striking the period and 
inserting a semicolon; and 
‘‘(3) develop, publish, and implement performance measures 
for programs under this part; 
‘‘(4) develop and publish guidelines for longitudinal evalua-
tions (as described in section 761(d)(2)) for programs under this part; and

‘‘(5) recommend appropriation levels for programs under 
this part.’’. 42 USC 293 l. Deadline. 
42 USC 294n note. Appropriation 
authorization. 
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124 STAT. 606 PUBLIC LAW 111–148—MAR. 23, 2010 
(2) A DVISORY COMMITTEE ON INTERDISCIPLINARY , COMMU -
NITY-BASED LINKAGES .—Section 756(d) of the Public Health 
for programs under this part;

tions (as described in section 761(d)(2)) for programs under this part; and 
this part.’’. 
(3) A
DVISORY COUNCIL ON GRADUATE MEDICAL EDUCATION .— 
Section 762(a) of the Public Health Service Act (42 U.S.C. 294o(a)) is amended— 
(A) in paragraph (1), by striking ‘‘and’’ at the end; (B) in paragraph (2), by striking the period and

for programs under this title, except for programs under part C or D; 
tions (as described in section 761(d)(2)) for programs under this title, except for programs under part C or D; and 
this title, except for programs under part C or D.’’.

Subtitle C—Increasing the Supply of the 
Health Care Workforce 
SEC. 5201. FEDERALLY SUPPORTED STUDENT LOAN FUNDS. 
(a) M EDICAL SCHOOLS AND PRIMARY HEALTH CARE.—Section 
723 of the Public Health Service Act (42 U.S.C. 292s) is amended— 
(A) in paragraph (1), by striking subparagraph (B) 
‘‘(B) to practice in such care for 10 years (including

residency training in primary health care) or through the date on which the loan is repaid in full, whichever occurs first.’’; and 
(B) by striking paragraph (3) and inserting the fol-
lowing: ‘‘(3) N
ONCOMPLIANCE BY STUDENT .—Each agreement 
entered into with a student pursuant to paragraph (1) shall provide that, if the student fails to comply with such agreement, the loan involved will begin to accrue interest at a rate of

2 percent per year greater than the rate at which the student would pay if compliant in such year.’’; and 
‘‘(d) S
ENSE OF CONGRESS .—It is the sense of Congress that 
funds repaid under the loan program under this section should not be transferred to the Treasury of the United States or otherwise used for any other purpose other than to carry out this section.’’. 42 USC 294f.

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124 STAT. 607 PUBLIC LAW 111–148—MAR. 23, 2010 
(b) S TUDENT LOAN GUIDELINES .—The Secretary of Health and

Human Services shall not require parental financial information for an independent student to determine financial need under sec-tion 723 of the Public Health Service Act (42 U.S.C. 292s) and the determination of need for such information shall be at the discretion of applicable school loan officer. The Secretary shall amend guidelines issued by the Health Resources and Services Administration in accordance with the preceding sentence. 
SEC. 5202. NURSING STUDENT LOAN PROGRAM.

SEC. 5202. NURSING STUDENT LOAN PROGRAM. 
(a) L OAN AGREEMENTS .—Section 836(a) of the Public Health 
Service Act (42 U.S.C. 297b(a)) is amended— 
(1) by striking ‘‘$2,500’’ and inserting ‘‘$3,300’’; (2) by striking ‘‘$4,000’’ and inserting ‘‘$5,200’’; and (3) by striking ‘‘$13,000’’ and all that follows through the

period and inserting ‘‘$17,000 in the case of any student during fiscal years 2010 and 2011. After fiscal year 2011, such amounts shall be adjusted to provide for a cost-of-attendance increase for the yearly loan rate and the aggregate of the loans.’’. (b) L
OAN PROVISIONS .—Section 836(b) of the Public Health 
Service Act (42 U.S.C. 297b(b)) is amended— 
(1) in paragraph (1)(C), by striking ‘‘1986’’ and inserting 
‘‘2000’’; and 
(2) in paragraph (3), by striking ‘‘the date of enactment

of the Nurse Training Amendments of 1979’’ and inserting ‘‘September 29, 1995’’. 
SEC. 5203. HEALTH CARE WORKFORCE LOAN REPAYMENT PROGRAMS. 
Part E of title VII of the Public Health Service Act (42 U.S.C. 
294n et seq.) is amended by adding at the end the following: 
‘‘Subpart 3—Recruitment and Retention Programs 
‘‘SEC. 775. INVESTMENT IN TOMORROW’S PEDIATRIC HEALTH CARE 
WORKFORCE. 
‘‘(a) E STABLISHMENT .—The Secretary shall establish and carry

out a pediatric specialty loan repayment program under which the eligible individual agrees to be employed full-time for a specified period (which shall not be less than 2 years) in providing pediatric medical subspecialty, pediatric surgical specialty, or child and adolescent mental and behavioral health care, including substance abuse prevention and treatment services. 
‘‘(b) P
ROGRAM ADMINISTRATION .—Through the program estab-

lished under this section, the Secretary shall enter into contracts with qualified health professionals under which— 
‘‘(1) such qualified health professionals will agree to provide 
pediatric medical subspecialty, pediatric surgical specialty, or child and adolescent mental and behavioral health care in an area with a shortage of the specified pediatric subspecialty that has a sufficient pediatric population to support such pedi-atric subspecialty, as determined by the Secretary; and

‘‘(2) the Secretary agrees to make payments on the principal 
and interest of undergraduate, graduate, or graduate medical education loans of professionals described in paragraph (1) of not more than $35,000 a year for each year of agreed upon service under such paragraph for a period of not more than 3 years during the qualified health professional’s— Contracts. 42 USC 295f. 42 USC 292s 
note.

note. 
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124 STAT. 608 PUBLIC LAW 111–148—MAR. 23, 2010 
‘‘(A) participation in an accredited pediatric medical 
subspecialty, pediatric surgical specialty, or child and adolescent mental health subspecialty residency or fellow-ship; or 
‘‘(B) employment as a pediatric medical subspecialist, 
pediatric surgical specialist, or child and adolescent mental health professional serving an area or population described in such paragraph. 
‘‘(c) I
NGENERAL .— 
‘‘(1) E LIGIBLE INDIVIDUALS .—

‘‘(1) E LIGIBLE INDIVIDUALS .— 
‘‘(A) P EDIATRIC MEDICAL SPECIALISTS AND PEDIATRIC  
SURGICAL SPECIALISTS .—For purposes of contracts with 
respect to pediatric medical specialists and pediatric sur-gical specialists, the term ‘qualified health professional’ means a licensed physician who— 
‘‘(i) is entering or receiving training in an accred-
ited pediatric medical subspecialty or pediatric surgical specialty residency or fellowship; or

‘‘(ii) has completed (but not prior to the end of 
the calendar year in which this section is enacted) the training described in subparagraph (B). ‘‘(B) C
HILD AND ADOLESCENT MENTAL AND BEHAVIORAL  
HEALTH .—For purposes of contracts with respect to child 
and adolescent mental and behavioral health care, the term ‘qualified health professional’ means a health care professional who— 
‘‘(i) has received specialized training or clinical

experience in child and adolescent mental health in psychiatry, psychology, school psychology, behavioral pediatrics, psychiatric nursing, social work, school social work, substance abuse disorder prevention and treatment, marriage and family therapy, school coun-seling, or professional counseling; 
‘‘(ii) has a license or certification in a State to

practice allopathic medicine, osteopathic medicine, psy-chology, school psychology, psychiatric nursing, social work, school social work, marriage and family therapy, school counseling, or professional counseling; or 
‘‘(iii) is a mental health service professional who 
completed (but not before the end of the calendar year in which this section is enacted) specialized training or clinical experience in child and adolescent mental health described in clause (i). 
‘‘(2) A

‘‘(2) A
DDITIONAL ELIGIBILITY REQUIREMENTS .—The Sec-
retary may not enter into a contract under this subsection with an eligible individual unless— 
‘‘(A) the individual agrees to work in, or for a provider 
serving, a health professional shortage area or medically underserved area, or to serve a medically underserved population; 
‘‘(B) the individual is a United States citizen or a 
permanent legal United States resident; and 
‘‘(C) if the individual is enrolled in a graduate program,

the program is accredited, and the individual has an accept-able level of academic standing (as determined by the Sec-retary). Definitions. 
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124 STAT. 609 PUBLIC LAW 111–148—MAR. 23, 2010 
‘‘(d) P RIORITY .—In entering into contracts under this subsection, 
the Secretary shall give priority to applicants who— 
‘‘(1) are or will be working in a school or other pre-kinder-
garten, elementary, or secondary education setting; 
‘‘(2) have familiarity with evidence-based methods and cul-
tural and linguistic competence health care services; and 
‘‘(3) demonstrate financial need.

‘‘(3) demonstrate financial need. 
‘‘(e) A UTHORIZATION OF APPROPRIATIONS .—There is authorized 
to be appropriated $30,000,000 for each of fiscal years 2010 through 2014 to carry out subsection (c)(1)(A) and $20,000,000 for each of fiscal years 2010 through 2013 to carry out subsection (c)(1)(B).’’. 
SEC. 5204. PUBLIC HEALTH WORKFORCE RECRUITMENT AND RETEN-
TION PROGRAMS. 
Part E of title VII of the Public Health Service Act (42 U.S.C.

294n et seq.), as amended by section 5203, is further amended by adding at the end the following: 
‘‘SEC. 776. PUBLIC HEALTH WORKFORCE LOAN REPAYMENT PROGRAM. 
‘‘(a) E STABLISHMENT .—The Secretary shall establish the Public 
Health Workforce Loan Repayment Program (referred to in this section as the ‘Program’) to assure an adequate supply of public health professionals to eliminate critical public health workforce shortages in Federal, State, local, and tribal public health agencies. 
‘‘(b) E

‘‘(b) E
LIGIBILITY .—To be eligible to participate in the Program, 
an individual shall— 
‘‘(1)(A) be accepted for enrollment, or be enrolled, as a

student in an accredited academic educational institution in a State or territory in the final year of a course of study or program leading to a public health or health professions degree or certificate; and have accepted employment with a Federal, State, local, or tribal public health agency, or a related training fellowship, as recognized by the Secretary, to com-mence upon graduation; 
‘‘(B)(i) have graduated, during the preceding 10-year period,

from an accredited educational institution in a State or territory and received a public health or health professions degree or certificate; and 
‘‘(ii) be employed by, or have accepted employment with, 
a Federal, State, local, or tribal public health agency or a related training fellowship, as recognized by the Secretary; 
‘‘(2) be a United States citizen; and ‘‘(3)(A) submit an application to the Secretary to participate 
in the Program;

in the Program; 
‘‘(B) execute a written contract as required in subsection 
(c); and 
‘‘(4) not have received, for the same service, a reduction 
of loan obligations under section 455(m), 428J, 428K, 428L, or 460 of the Higher Education Act of 1965. 
‘‘(c) C
ONTRACT .—The written contract (referred to in this section 
as the ‘written contract’) between the Secretary and an individual shall contain— 
‘‘(1) an agreement on the part of the Secretary that the

Secretary will repay on behalf of the individual loans incurred by the individual in the pursuit of the relevant degree or certificate in accordance with the terms of the contract; 
‘‘(2) an agreement on the part of the individual that the 
individual will serve in the full-time employment of a Federal, 42 USC 295f–1. 
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124 STAT. 610 PUBLIC LAW 111–148—MAR. 23, 2010 
State, local, or tribal public health agency or a related fellow-
ship program in a position related to the course of study or program for which the contract was awarded for a period of time (referred to in this section as the ‘period of obligated service’) equal to the greater of— 
‘‘(A) 3 years; or ‘‘(B) such longer period of time as determined appro-

priate by the Secretary and the individual; ‘‘(3) an agreement, as appropriate, on the part of the indi-
vidual to relocate to a priority service area (as determined by the Secretary) in exchange for an additional loan repayment incentive amount to be determined by the Secretary; 
‘‘(4) a provision that any financial obligation of the United

States arising out of a contract entered into under this section and any obligation of the individual that is conditioned thereon, is contingent on funds being appropriated for loan repayments under this section; 
‘‘(5) a statement of the damages to which the United States 
is entitled, under this section for the individual’s breach of the contract; and 
‘‘(6) such other statements of the rights and liabilities 
of the Secretary and of the individual, not inconsistent with this section. ‘‘(d) P

AYMENTS .— 
‘‘(1) I N GENERAL .—A loan repayment provided for an indi-
vidual under a written contract under the Program shall consist of payment, in accordance with paragraph (2), on behalf of the individual of the principal, interest, and related expenses on government and commercial loans received by the individual regarding the undergraduate or graduate education of the indi-vidual (or both), which loans were made for tuition expenses incurred by the individual. 
‘‘(2) P

‘‘(2) P
AYMENTS FOR YEARS SERVED .—For each year of obli-
gated service that an individual contracts to serve under sub-section (c) the Secretary may pay up to $35,000 on behalf of the individual for loans described in paragraph (1). With respect to participants under the Program whose total eligible loans are less than $105,000, the Secretary shall pay an amount that does not exceed 
1⁄3of the eligible loan balance for each 
year of obligated service of the individual.

year of obligated service of the individual. 
‘‘(3) T AX LIABILITY .—For the purpose of providing 
reimbursements for tax liability resulting from payments under paragraph (2) on behalf of an individual, the Secretary shall, in addition to such payments, make payments to the individual in an amount not to exceed 39 percent of the total amount of loan repayments made for the taxable year involved. 
‘‘(e) P
OSTPONING OBLIGATED SERVICE .—With respect to an indi-

vidual receiving a degree or certificate from a health professions or other related school, the date of the initiation of the period of obligated service may be postponed as approved by the Secretary. 
‘‘(f) B
REACH OF CONTRACT .—An individual who fails to comply 
with the contract entered into under subsection (c) shall be subject to the same financial penalties as provided for under section 338E for breaches of loan repayment contracts under section 338B. 
‘‘(g) A

‘‘(g) A
to be appropriated to carry out this section $195,000,000 for fiscal Penalty. 
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124 STAT. 611 PUBLIC LAW 111–148—MAR. 23, 2010 
year 2010, and such sums as may be necessary for each of fiscal 
years 2011 through 2015.’’. 
SEC. 5205. ALLIED HEALTH WORKFORCE RECRUITMENT AND RETEN-
(a) P URPOSE .—The purpose of this section is to assure an ade-

quate supply of allied health professionals to eliminate critical allied health workforce shortages in Federal, State, local, and tribal public health agencies or in settings where patients might require health care services, including acute care facilities, ambulatory care facilities, personal residences and other settings, as recognized by the Secretary of Health and Human Services by authorizing an Allied Health Loan Forgiveness Program. 
(b) A

(b) A
LLIED HEALTH WORKFORCE RECRUITMENT AND RETENTION  
PROGRAM .—Section 428K of the Higher Education Act of 1965 (20 
U.S.C. 1078–11) is amended— 
(1) in subsection (b), by adding at the end the following: ‘‘(18) A
LLIED HEALTH PROFESSIONALS .—The individual is 
employed full-time as an allied health professional— 
‘‘(A) in a Federal, State, local, or tribal public health 
agency; or 
‘‘(B) in a setting where patients might require health

care services, including acute care facilities, ambulatory care facilities, personal residences and other settings located in health professional shortage areas, medically underserved areas, or medically underserved populations, as recognized by the Secretary of Health and Human Serv-ices.’’; and (2) in subsection (g)— 
(A) by redesignating paragraphs (1) through (9) as 
paragraphs (2) through (10), respectively; and 
(B) by inserting before paragraph (2) (as redesignated

by subparagraph (A)) the following: ‘‘(1) A
LLIED HEALTH PROFESSIONAL .—The term ‘allied health 
professional’ means an allied health professional as defined in section 799B(5) of the Public Heath Service Act (42 U.S.C. 295p(5)) who— 
‘‘(A) has graduated and received an allied health profes-
‘‘(B) is employed with a Federal, State, local or tribal

public health agency, or in a setting where patients might require health care services, including acute care facilities, ambulatory care facilities, personal residences and other settings located in health professional shortage areas, medi-cally underserved areas, or medically underserved popu-lations, as recognized by the Secretary of Health and Human Services.’’. 
SEC. 5206. GRANTS FOR STATE AND LOCAL PROGRAMS. 
(a) I NGENERAL .—Section 765(d) of the Public Health Service

Act (42 U.S.C. 295(d)) is amended— 
(1) in paragraph (7), by striking ‘‘; or’’ and inserting a 
semicolon; 
(2) by redesignating paragraph (8) as paragraph (9); and (3) by inserting after paragraph (7) the following: ‘‘(8) public health workforce loan repayment programs; or’’. Definition. 20 USC 1078–11 
note. 
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124 STAT. 612 PUBLIC LAW 111–148—MAR. 23, 2010 
(b) T RAINING FOR MID-CAREER PUBLIC HEALTH PROFES -
SIONALS .—Part E of title VII of the Public Health Service Act 
(42 U.S.C. 294n et seq.), as amended by section 5204, is further amended by adding at the end the following: 
‘‘SEC. 777. TRAINING FOR MID-CAREER PUBLIC AND ALLIED HEALTH 
PROFESSIONALS. 
‘‘(a) I NGENERAL .—The Secretary may make grants to, or enter

into contracts with, any eligible entity to award scholarships to eligible individuals to enroll in degree or professional training pro-grams for the purpose of enabling mid-career professionals in the public health and allied health workforce to receive additional training in the field of public health and allied health. 
‘‘(b) E
‘‘(1) E LIGIBLE ENTITY .—The term ‘eligible entity’ indicates

an accredited educational institution that offers a course of study, certificate program, or professional training program in public or allied health or a related discipline, as determined by the Secretary 
‘‘(2) E
LIGIBLE INDIVIDUALS .—The term ‘eligible individuals’ 
includes those individuals employed in public and allied health positions at the Federal, State, tribal, or local level who are interested in retaining or upgrading their education. ‘‘(c) A

to be appropriated to carry out this section, $60,000,000 for fiscal year 2010 and such sums as may be necessary for each of fiscal years 2011 through 2015. Fifty percent of appropriated funds shall be allotted to public health mid-career professionals and 50 percent shall be allotted to allied health mid-career professionals.’’. 
SEC. 5207. FUNDING FOR NATIONAL HEALTH SERVICE CORPS.

Section 338H(a) of the Public Health Service Act (42 U.S.C. 
254q(a)) is amended to read as follows: 
‘‘(a) A UTHORIZATION OF APPROPRIATIONS .—For the purpose of 
carrying out this section, there is authorized to be appropriated, out of any funds in the Treasury not otherwise appropriated, the following:

‘‘(1) For fiscal year 2010, $320,461,632. ‘‘(2) For fiscal year 2011, $414,095,394. ‘‘(3) For fiscal year 2012, $535,087,442. ‘‘(4) For fiscal year 2013, $691,431,432. ‘‘(5) For fiscal year 2014, $893,456,433. ‘‘(6) For fiscal year 2015, $1,154,510,336. ‘‘(7) For fiscal year 2016, and each subsequent fiscal year, 
the amount appropriated for the preceding fiscal year adjusted by the product of— 
‘‘(A) one plus the average percentage increase in the

costs of health professions education during the prior fiscal year; and 
‘‘(B) one plus the average percentage change in the 
number of individuals residing in health professions short-age areas designated under section 333 during the prior fiscal year, relative to the number of individuals residing in such areas during the previous fiscal year.’’. 
SEC. 5208. NURSE-MANAGED HEALTH CLINICS. 
(a) P URPOSE .—The purpose of this section is to fund the develop-

ment and operation of nurse-managed health clinics. 42 USC 254c–1a note. Definitions. 42 USC 295f–2. 
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124 STAT. 613 PUBLIC LAW 111–148—MAR. 23, 2010 
(b) G RANTS .—Subpart 1 of part D of title III of the Public 
Health Service Act (42 U.S.C. 254b et seq.) is amended by inserting after section 330A the following: 
‘‘SEC. 330A–1. GRANTS TO NURSE–MANAGED HEALTH CLINICS. 
‘‘(a) D EFINITIONS .— 
‘‘(1) C OMPREHENSIVE PRIMARY HEALTH CARE SERVICES .— 
In this section, the term ‘comprehensive primary health care services’ means the primary health services described in section 330(b)(1). 
‘‘(2) N

‘‘(2) N
URSE -MANAGED HEALTH CLINIC .—The term ‘nurse- 
managed health clinic’ means a nurse-practice arrangement, managed by advanced practice nurses, that provides primary care or wellness services to underserved or vulnerable popu-lations and that is associated with a school, college, university or department of nursing, federally qualified health center, or independent nonprofit health or social services agency. ‘‘(b) A
UTHORITY TO AWARD GRANTS .—The Secretary shall award

grants for the cost of the operation of nurse-managed health clinics that meet the requirements of this section. 
‘‘(c) A
‘‘(1) be an NMHC; and ‘‘(2) submit to the Secretary an application at such time, 
‘‘(A) assurances that nurses are the major providers

of services at the NMHC and that at least 1 advanced practice nurse holds an executive management position within the organizational structure of the NMHC; 
‘‘(B) an assurance that the NMHC will continue pro-
viding comprehensive primary health care services or wellness services without regard to income or insurance status of the patient for the duration of the grant period; and 
‘‘(C) an assurance that, not later than 90 days of

receiving a grant under this section, the NMHC will estab-lish a community advisory committee, for which a majority of the members shall be individuals who are served by the NMHC. 
‘‘(d) G
RANT AMOUNT .—The amount of any grant made under 
this section for any fiscal year shall be determined by the Secretary, taking into account— 
‘‘(1) the financial need of the NMHC, considering State, 
local, and other operational funding provided to the NMHC; and

‘‘(2) other factors, as the Secretary determines appropriate. 
‘‘(e) A
UTHORIZATION OF APPROPRIATIONS .—For the purposes of 
carrying out this section, there are authorized to be appropriated $50,000,000 for the fiscal year 2010 and such sums as may be necessary for each of the fiscal years 2011 through 2014.’’. 
SEC. 5209. ELIMINATION OF CAP ON COMMISSIONED CORPS. 
Section 202 of the Department of Health and Human Services

Appropriations Act, 1993 (Public Law 102–394) is amended by striking ‘‘not to exceed 2,800’’. 42 USC 238f 
note. Determination. 42 USC 254c–1a. 
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124 STAT. 614 PUBLIC LAW 111–148—MAR. 23, 2010 
SEC. 5210. ESTABLISHING A READY RESERVE CORPS. 
Section 203 of the Public Health Service Act (42 U.S.C. 204) 
is amended to read as follows: 
‘‘SEC. 203. COMMISSIONED CORPS AND READY RESERVE CORPS. 
‘‘(1) I N GENERAL .—There shall be in the Service a commis-
sioned Regular Corps and a Ready Reserve Corps for service in time of national emergency. 
‘‘(2) R
EQUIREMENT .—All commissioned officers shall be citi-

zens of the United States and shall be appointed without regard to the civil-service laws and compensated without regard to the Classification Act of 1923, as amended. 
‘‘(3) A
PPOINTMENT .—Commissioned officers of the Ready 
Reserve Corps shall be appointed by the President and commis-sioned officers of the Regular Corps shall be appointed by the President with the advice and consent of the Senate. 
‘‘(4) A
CTIVE DUTY .—Commissioned officers of the Ready

CTIVE DUTY .—Commissioned officers of the Ready 
Reserve Corps shall at all times be subject to call to active duty by the Surgeon General, including active duty for the purpose of training. 
‘‘(5) W
ARRANT OFFICERS .—Warrant officers may be

ARRANT OFFICERS .—Warrant officers may be 
appointed to the Service for the purpose of providing support to the health and delivery systems maintained by the Service and any warrant officer appointed to the Service shall be consid-ered for purposes of this Act and title 37, United States Code, to be a commissioned officer within the Commissioned Corps of the Service. ‘‘(b) A
SSIMILATING RESERVE CORP OFFICERS INTO THE REGULAR

CORPS .—Effective on the date of enactment of the Patient Protection 
and Affordable Care Act, all individuals classified as officers in the Reserve Corps under this section (as such section existed on the day before the date of enactment of such Act) and serving on active duty shall be deemed to be commissioned officers of the Regular Corps. 
‘‘(c) P
URPOSE AND USE OF READY RESEARCH .— 
‘‘(1) P URPOSE .—The purpose of the Ready Reserve Corps

is to fulfill the need to have additional Commissioned Corps personnel available on short notice (similar to the uniformed service’s reserve program) to assist regular Commissioned Corps personnel to meet both routine public health and emer-gency response missions. 
‘‘(2) U
SES.—The Ready Reserve Corps shall— 
‘‘(A) participate in routine training to meet the general 
and specific needs of the Commissioned Corps; 
‘‘(B) be available and ready for involuntary calls to

active duty during national emergencies and public health crises, similar to the uniformed service reserve personnel; 
‘‘(C) be available for backfilling critical positions left 
vacant during deployment of active duty Commissioned Corps members, as well as for deployment to respond to public health emergencies, both foreign and domestic; and 
‘‘(D) be available for service assignment in isolated,

hardship, and medically underserved communities (as defined in section 799B) to improve access to health serv-ices. Effective date. President. 
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124 STAT. 615 PUBLIC LAW 111–148—MAR. 23, 2010 
‘‘(d) F UNDING .—For the purpose of carrying out the duties and 
responsibilities of the Commissioned Corps under this section, there are authorized to be appropriated $5,000,000 for each of fiscal years 2010 through 2014 for recruitment and training and $12,500,000 for each of fiscal years 2010 through 2014 for the Ready Reserve Corps.’’. 
Subtitle D—Enhancing Health Care 
Workforce Education and Training

Workforce Education and Training 
SEC. 5301. TRAINING IN FAMILY MEDICINE, GENERAL INTERNAL MEDI-
CINE, GENERAL PEDIATRICS, AND PHYSICIAN ASSISTANTSHIP. 
Part C of title VII (42 U.S.C. 293k et seq.) is amended by 
striking section 747 and inserting the following: 
‘‘SEC. 747. PRIMARY CARE TRAINING AND ENHANCEMENT. 
‘‘(a) S UPPORT AND DEVELOPMENT OF PRIMARY CARE TRAINING  
‘‘(1) I N GENERAL .—The Secretary may make grants to, or

enter into contracts with, an accredited public or nonprofit private hospital, school of medicine or osteopathic medicine, academically affiliated physician assistant training program, 
or a public or private nonprofit entity which the Secretary has determined is capable of carrying out such grant or con-tract— 
‘‘(A) to plan, develop, operate, or participate in an

accredited professional training program, including an accredited residency or internship program in the field of family medicine, general internal medicine, or general pediatrics for medical students, interns, residents, or prac-ticing physicians as defined by the Secretary; 
‘‘(B) to provide need-based financial assistance in the

form of traineeships and fellowships to medical students, interns, residents, practicing physicians, or other medical personnel, who are participants in any such program, and who plan to specialize or work in the practice of the fields defined in subparagraph (A); 
‘‘(C) to plan, develop, and operate a program for the 
training of physicians who plan to teach in family medicine, general internal medicine, or general pediatrics training programs;

‘‘(D) to plan, develop, and operate a program for the 
training of physicians teaching in community-based set-tings; 
‘‘(E) to provide financial assistance in the form of 
traineeships and fellowships to physicians who are partici-pants in any such programs and who plan to teach or conduct research in a family medicine, general internal medicine, or general pediatrics training program; 
‘‘(F) to plan, develop, and operate a physician assistant

education program, and for the training of individuals who will teach in programs to provide such training; 
‘‘(G) to plan, develop, and operate a demonstration 
program that provides training in new competencies, as recommended by the Advisory Committee on Training in 42 USC 293k. 
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124 STAT. 616 PUBLIC LAW 111–148—MAR. 23, 2010 
Primary Care Medicine and Dentistry and the National 
Health Care Workforce Commission established in section 5101 of the Patient Protection and Affordable Care Act, which may include— 
‘‘(i) providing training to primary care physicians 
relevant to providing care through patient-centered medical homes (as defined by the Secretary for pur-poses of this section); 
‘‘(ii) developing tools and curricula relevant to

patient-centered medical homes; and 
‘‘(iii) providing continuing education to primary 
care physicians relevant to patient-centered medical homes; and ‘‘(H) to plan, develop, and operate joint degree pro-
grams to provide interdisciplinary and interprofessional graduate training in public health and other health profes-sions to provide training in environmental health, infec-tious disease control, disease prevention and health pro-motion, epidemiological studies and injury control. ‘‘(2) D

URATION OF AWARDS .—The period during which pay-
ments are made to an entity from an award of a grant or contract under this subsection shall be 5 years. ‘‘(b) C
APACITY BUILDING IN PRIMARY CARE.— 
‘‘(1) I N GENERAL .—The Secretary may make grants to or 
enter into contracts with accredited schools of medicine or osteopathic medicine to establish, maintain, or improve— 
‘‘(A) academic units or programs that improve clinical 
teaching and research in fields defined in subsection (a)(1)(A); or

‘‘(B) programs that integrate academic administrative 
units in fields defined in subsection (a)(1)(A) to enhance interdisciplinary recruitment, training, and faculty develop-ment. ‘‘(2) P
REFERENCE IN MAKING AWARDS UNDER THIS SUB -
SECTION .—In making awards of grants and contracts under 
paragraph (1), the Secretary shall give preference to any quali-fied applicant for such an award that agrees to expend the award for the purpose of— 
‘‘(A) establishing academic units or programs in fields

defined in subsection (a)(1)(A); or 
‘‘(B) substantially expanding such units or programs. 
‘‘(3) P
RIORITIES IN MAKING AWARDS .—In awarding grants 
or contracts under paragraph (1), the Secretary shall give pri-ority to qualified applicants that— 
‘‘(A) proposes a collaborative project between academic 
administrative units of primary care; 
‘‘(B) proposes innovative approaches to clinical teaching

using models of primary care, such as the patient centered medical home, team management of chronic disease, and interprofessional integrated models of health care that incorporate transitions in health care settings and integra-tion physical and mental health provision; 
‘‘(C) have a record of training the greatest percentage 
of providers, or that have demonstrated significant improvements in the percentage of providers trained, who enter and remain in primary care practice;

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124 STAT. 617 PUBLIC LAW 111–148—MAR. 23, 2010 
‘‘(D) have a record of training individuals who are 
from underrepresented minority groups or from a rural or disadvantaged background; 
‘‘(E) provide training in the care of vulnerable popu-
lations such as children, older adults, homeless individuals, victims of abuse or trauma, individuals with mental health or substance-related disorders, individuals with HIV/AIDS, and individuals with disabilities;

‘‘(F) establish formal relationships and submit joint 
applications with federally qualified health centers, rural health clinics, area health education centers, or clinics located in underserved areas or that serve underserved populations; 
‘‘(G) teach trainees the skills to provide interprofes-
sional, integrated care through collaboration among health professionals; 
‘‘(H) provide training in enhanced communication with

patients, evidence-based practice, chronic disease manage-ment, preventive care, health information technology, or other competencies as recommended by the Advisory Com-mittee on Training in Primary Care Medicine and Dentistry and the National Health Care Workforce Commission established in section 5101 of the Patient Protection and Affordable Care Act; or 
‘‘(I) provide training in cultural competency and health 
literacy. 
‘‘(4) D

ments are made to an entity from an award of a grant or contract under this subsection shall be 5 years. ‘‘(c) A
‘‘(1) I N GENERAL .—For purposes of carrying out this section 
(other than subsection (b)(1)(B)), there are authorized to be appropriated $125,000,000 for fiscal year 2010, and such sums as may be necessary for each of fiscal years 2011 through 2014. 
‘‘(2) T

‘‘(2) T
RAINING PROGRAMS .—Fifteen percent of the amount 
appropriated pursuant to paragraph (1) in each such fiscal year shall be allocated to the physician assistant training pro-grams described in subsection (a)(1)(F), which prepare students for practice in primary care. 
‘‘(3) I
NTEGRATING ACADEMIC ADMINISTRATIVE UNITS .—For 
purposes of carrying out subsection (b)(1)(B), there are author-ized to be appropriated $750,000 for each of fiscal years 2010 through 2014.’’.

SEC. 5302. TRAINING OPPORTUNITIES FOR DIRECT CARE WORKERS. 
Part C of title VII of the Public Health Service Act (42 U.S.C. 
293k et seq.) is amended by inserting after section 747, as amended by section 5301, the following: 
‘‘SEC. 747A. TRAINING OPPORTUNITIES FOR DIRECT CARE WORKERS. 
‘‘(a) I NGENERAL .—The Secretary shall award grants to eligible

entities to enable such entities to provide new training opportunities for direct care workers who are employed in long-term care settings such as nursing homes (as defined in section 1908(e)(1) of the Social Security Act (42 U.S.C. 1396g(e)(1)), assisted living facilities Grants. 42 USC 293k–1. 
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124 STAT. 618 PUBLIC LAW 111–148—MAR. 23, 2010 
and skilled nursing facilities, intermediate care facilities for individ-
uals with mental retardation, home and community based settings, and any other setting the Secretary determines to be appropriate. 
‘‘(b) E
LIGIBILITY .—To be eligible to receive a grant under this 
‘‘(1) be an institution of higher education (as defined in 
section 102 of the Higher Education Act of 1965 (20 U.S.C. 1002)) that—

‘‘(A) is accredited by a nationally recognized accrediting 
agency or association listed under section 101(c) of the Higher Education Act of 1965 (20 U.S.C. 1001(c)); and 
‘‘(B) has established a public-private educational part-
nership with a nursing home or skilled nursing facility, agency or entity providing home and community based services to individuals with disabilities, or other long-term care provider; and ‘‘(2) submit to the Secretary an application at such time,

SE OF FUNDS .—An eligible entity shall use amounts 
awarded under a grant under this section to provide assistance to eligible individuals to offset the cost of tuition and required fees for enrollment in academic programs provided by such entity. 
‘‘(d) E
‘‘(1) E LIGIBILITY .—To be eligible for assistance under this

section, an individual shall be enrolled in courses provided by a grantee under this subsection and maintain satisfactory academic progress in such courses. 
‘‘(2) C
ONDITION OF ASSISTANCE .—As a condition of receiving

assistance under this section, an individual shall agree that, following completion of the assistance period, the individual will work in the field of geriatrics, disability services, long term services and supports, or chronic care management for a minimum of 2 years under guidelines set by the Secretary. ‘‘(e) A
to be appropriated to carry out this section, $10,000,000 for the period of fiscal years 2011 through 2013.’’.

SEC. 5303. TRAINING IN GENERAL, PEDIATRIC, AND PUBLIC HEALTH 
DENTISTRY. 
Part C of Title VII of the Public Health Service Act (42 U.S.C. 
293k et seq.) is amended by— 
(1) redesignating section 748, as amended by section 5103 
of this Act, as section 749; and 
(2) inserting after section 747A, as added by section 5302, 
‘‘SEC. 748. TRAINING IN GENERAL, PEDIATRIC, AND PUBLIC HEALTH 
‘‘(a) S UPPORT AND DEVELOPMENT OF DENTAL TRAINING PRO-
GRAMS .—

GRAMS .— 
‘‘(1) I N GENERAL .—The Secretary may make grants to, or 
enter into contracts with, a school of dentistry, public or non-profit private hospital, or a public or private nonprofit entity which the Secretary has determined is capable of carrying out such grant or contract— 
‘‘(A) to plan, develop, and operate, or participate in, 
an approved professional training program in the field 42 USC 293k–2. 42 USC 293 l.

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124 STAT. 619 PUBLIC LAW 111–148—MAR. 23, 2010 
of general dentistry, pediatric dentistry, or public health 
dentistry for dental students, residents, practicing dentists, dental hygienists, or other approved primary care dental trainees, that emphasizes training for general, pediatric, or public health dentistry; 
‘‘(B) to provide financial assistance to dental students,

residents, practicing dentists, and dental hygiene students who are in need thereof, who are participants in any such program, and who plan to work in the practice of general, pediatric, public heath dentistry, or dental hygiene; 
training of oral health care providers who plan to teach in general, pediatric, public health dentistry, or dental hygiene; 
‘‘(D) to provide financial assistance in the form of

traineeships and fellowships to dentists who plan to teach or are teaching in general, pediatric, or public health den-tistry; 
‘‘(E) to meet the costs of projects to establish, maintain, 
or improve dental faculty development programs in primary care (which may be departments, divisions or other units); 
‘‘(F) to meet the costs of projects to establish, maintain, 
or improve predoctoral and postdoctoral training in primary care programs; 
‘‘(G) to create a loan repayment program for faculty

in dental programs; and 
‘‘(H) to provide technical assistance to pediatric 
training programs in developing and implementing instruc-tion regarding the oral health status, dental care needs, and risk-based clinical disease management of all pediatric populations with an emphasis on underserved children. ‘‘(2) F
ACULTY LOAN REPAYMENT .— 
‘‘(A) I N GENERAL .—A grant or contract under subsection

(a)(1)(G) may be awarded to a program of general, pediatric, or public health dentistry described in such subsection to plan, develop, and operate a loan repayment program under which— 
‘‘(i) individuals agree to serve full-time as faculty 
members; and 
‘‘(ii) the program of general, pediatric or public 
health dentistry agrees to pay the principal and interest on the outstanding student loans of the individuals. ‘‘(B) M
ANNER OF PAYMENTS .—With respect to the pay-

ments described in subparagraph (A)(ii), upon completion by an individual of each of the first, second, third, fourth, and fifth years of service, the program shall pay an amount equal to 10, 15, 20, 25, and 30 percent, respectively, of the individual’s student loan balance as calculated based on principal and interest owed at the initiation of the agreement. 
‘‘(b) E
LIGIBLE ENTITY .—For purposes of this subsection, entities

eligible for such grants or contracts in general, pediatric, or public health dentistry shall include entities that have programs in dental or dental hygiene schools, or approved residency or advanced edu-cation programs in the practice of general, pediatric, or public health dentistry. Eligible entities may partner with schools of public

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124 STAT. 620 PUBLIC LAW 111–148—MAR. 23, 2010 
health to permit the education of dental students, residents, and 
dental hygiene students for a master’s year in public health at a school of public health. 
‘‘(c) P
RIORITIES IN MAKING AWARDS .—With respect to training 
provided for under this section, the Secretary shall give priority in awarding grants or contracts to the following: 
‘‘(1) Qualified applicants that propose collaborative projects

between departments of primary care medicine and depart-ments of general, pediatric, or public health dentistry. 
‘‘(2) Qualified applicants that have a record of training 
the greatest percentage of providers, or that have demonstrated significant improvements in the percentage of providers, who enter and remain in general, pediatric, or public health den-tistry. 
‘‘(3) Qualified applicants that have a record of training

individuals who are from a rural or disadvantaged background, or from underrepresented minorities. 
‘‘(4) Qualified applicants that establish formal relationships 
with Federally qualified health centers, rural health centers, or accredited teaching facilities and that conduct training of students, residents, fellows, or faculty at the center or facility. 
‘‘(5) Qualified applicants that conduct teaching programs

targeting vulnerable populations such as older adults, homeless individuals, victims of abuse or trauma, individuals with mental health or substance-related disorders, individuals with disabil-ities, and individuals with HIV/AIDS, and in the risk-based clinical disease management of all populations. 
‘‘(6) Qualified applicants that include educational activities 
in cultural competency and health literacy. 
‘‘(7) Qualified applicants that have a high rate for placing

graduates in practice settings that serve underserved areas or health disparity populations, or who achieve a significant increase in the rate of placing graduates in such settings. 
‘‘(8) Qualified applicants that intend to establish a special

populations oral health care education center or training pro-gram for the didactic and clinical education of dentists, dental health professionals, and dental hygienists who plan to teach oral health care for people with developmental disabilities, cognitive impairment, complex medical problems, significant physical limitations, and vulnerable elderly. ‘‘(d) A
PPLICATION .—An eligible entity desiring a grant under

this section shall submit to the Secretary an application at such time, in such manner, and containing such information as the Secretary may require. 
‘‘(e) D
URATION OF AWARD .—The period during which payments 
are made to an entity from an award of a grant or contract under subsection (a) shall be 5 years. The provision of such payments shall be subject to annual approval by the Secretary and subject to the availability of appropriations for the fiscal year involved to make the payments.

‘‘(f) A
UTHORIZATIONS OF APPROPRIATIONS .—For the purpose of 
carrying out subsections (a) and (b), there is authorized to be appropriated $30,000,000 for fiscal year 2010 and such sums as may be necessary for each of fiscal years 2011 through 2015. 
‘‘(g) C
ARRYOVER FUNDS .—An entity that receives an award 
under this section may carry over funds from 1 fiscal year to another without obtaining approval from the Secretary. In no case

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124 STAT. 621 PUBLIC LAW 111–148—MAR. 23, 2010 
may any funds be carried over pursuant to the preceding sentence 
for more than 3 years.’’. 
SEC. 5304. ALTERNATIVE DENTAL HEALTH CARE PROVIDERS DEM-
Subpart X of part D of title III of the Public Health Service 
Act (42 U.S.C. 256f et seq.) is amended by adding at the end the following: 
‘‘SEC. 340G–1. DEMONSTRATION PROGRAM. 
‘‘(1) A UTHORIZATION .—The Secretary is authorized to award

grants to 15 eligible entities to enable such entities to establish a demonstration program to establish training programs to train, or to employ, alternative dental health care providers in order to increase access to dental health care services in rural and other underserved communities. 
‘‘(2) D
EFINITION .—The term ‘alternative dental health care

providers’ includes community dental health coordinators, advance practice dental hygienists, independent dental hygien-ists, supervised dental hygienists, primary care physicians, dental therapists, dental health aides, and any other health professional that the Secretary determines appropriate. ‘‘(b) T
IMEFRAME .—The demonstration projects funded under this

section shall begin not later than 2 years after the date of enactment of this section, and shall conclude not later than 7 years after such date of enactment. 
‘‘(c) E
LIGIBLE ENTITIES .—To be eligible to receive a grant under 
subsection (a), an entity shall— 
‘‘(1) be— 
‘‘(A) an institution of higher education, including a 
community college; 
‘‘(B) a public-private partnership; ‘‘(C) a federally qualified health center; ‘‘(D) an Indian Health Service facility or a tribe or

tribal organization (as such terms are defined in section 4 of the Indian Self-Determination and Education Assist-ance Act); 
‘‘(E) a State or county public health clinic, a health 
facility operated by an Indian tribe or tribal organization, or urban Indian organization providing dental services; or 
‘‘(F) a public hospital or health system; 
‘‘(2) be within a program accredited by the Commission 
on Dental Accreditation or within a dental education program in an accredited institution; and

‘‘(3) shall submit an application to the Secretary at such 
‘‘(d) A
DMINISTRATIVE PROVISIONS .— 
‘‘(1) A MOUNT OF GRANT .—Each grant under this section 
shall be in an amount that is not less than $4,000,000 for the 5-year period during which the demonstration project being conducted. 
‘‘(2) D
ISBURSEMENT OF FUNDS .— 
‘‘(A) P RELIMINARY DISBURSEMENTS .—Beginning 1 year

after the enactment of this section, the Secretary may disperse to any entity receiving a grant under this section Effective date. Grants. 42 USC 256g–1. 
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124 STAT. 622 PUBLIC LAW 111–148—MAR. 23, 2010 
not more than 20 percent of the total funding awarded 
to such entity under such grant, for the purpose of enabling the entity to plan the demonstration project to be conducted under such grant. 
‘‘(B) S
UBSEQUENT DISBURSEMENTS .—The remaining 
amount of grant funds not dispersed under subparagraph (A) shall be dispersed such that not less than 15 percent of such remaining amount is dispersed each subsequent year. 
‘‘(e) C

‘‘(e) C
OMPLIANCE WITH STATE REQUIREMENTS .—Each entity 
receiving a grant under this section shall certify that it is in compliance with all applicable State licensing requirements. 
‘‘(f) E
VALUATION .—The Secretary shall contract with the 
Director of the Institute of Medicine to conduct a study of the demonstration programs conducted under this section that shall provide analysis, based upon quantitative and qualitative data, regarding access to dental health care in the United States.

‘‘(g) C
LARIFICATION REGARDING DENTAL HEALTH AIDE PRO-
GRAM .—Nothing in this section shall prohibit a dental health aide 
training program approved by the Indian Health Service from being eligible for a grant under this section. 
‘‘(h) A
to be appropriated such sums as may be necessary to carry out this section.’’. 
SEC. 5305. GERIATRIC EDUCATION AND TRAINING; CAREER AWARDS; 
COMPREHENSIVE GERIATRIC EDUCATION.

COMPREHENSIVE GERIATRIC EDUCATION. 
(a) W ORKFORCE DEVELOPMENT ; CAREER AWARDS .—Section 753 
of the Public Health Service Act (42 U.S.C. 294c) is amended by adding at the end the following: 
‘‘(d) G
ERIATRIC WORKFORCE DEVELOPMENT .— 
‘‘(1) I N GENERAL .—The Secretary shall award grants or 
contracts under this subsection to entities that operate a geri-atric education center pursuant to subsection (a)(1). 
‘‘(2) A
PPLICATION .—To be eligible for an award under para-

graph (1), an entity described in such paragraph shall submit to the Secretary an application at such time, in such manner, and containing such information as the Secretary may require. 
‘‘(3) U
SE OF FUNDS .—Amounts awarded under a grant or 
contract under paragraph (1) shall be used to— 
‘‘(A) carry out the fellowship program described in 
‘‘(B) carry out 1 of the 2 activities described in para-
graph (5). ‘‘(4) F
ELLOWSHIP PROGRAM .—

ELLOWSHIP PROGRAM .— 
‘‘(A) I N GENERAL .—Pursuant to paragraph (3), a geri-

atric education center that receives an award under this subsection shall use such funds to offer short-term intensive courses (referred to in this subsection as a ‘fellowship’) that focus on geriatrics, chronic care management, and long-term care that provide supplemental training for fac-ulty members in medical schools and other health profes-sions schools with programs in psychology, pharmacy, nursing, social work, dentistry, public health, allied health, or other health disciplines, as

allied health, or other health disciplines, as approved by the Secretary. Such a fellowship shall be open to current faculty, and Grants.

Contracts. Contracts. 
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124 STAT. 623 PUBLIC LAW 111–148—MAR. 23, 2010 
appropriately credentialed volunteer faculty and practi-
tioners, who do not have formal training in geriatrics, to upgrade their knowledge and clinical skills for the care of older adults and adults with functional limitations and to enhance their interdisciplinary teaching skills. 
‘‘(B) L
OCATION .—A fellowship shall be offered either

OCATION .—A fellowship shall be offered either 
at the geriatric education center that is sponsoring the course, in collaboration with other geriatric education cen-ters, or at medical schools, schools of dentistry, schools of nursing, schools of pharmacy, schools of social work, graduate programs in psychology, or allied health and other health professions schools approved by the Secretary with which the geriatric education centers are affiliated. 
‘‘(C) CME

‘‘(C) CME 
CREDIT .—Participation in a fellowship under 
this paragraph shall be accepted with respect to complying with continuing health profession education requirements. As a condition of such acceptance, the recipient shall agree to subsequently provide a minimum of 18 hours of vol-untary instructional support through a geriatric education center that is providing clinical training to students or trainees in long-term care settings. ‘‘(5) A
DDITIONAL REQUIRED ACTIVITIES DESCRIBED .—Pursu-

ant to paragraph (3), a geriatric education center that receives an award under this subsection shall use such funds to carry out 1 of the following 2 activities. 
‘‘(A) F
AMILY CAREGIVER AND DIRECT CARE PROVIDER  
TRAINING .—A geriatric education center that receives an

award under this subsection shall offer at least 2 courses each year, at no charge or nominal cost, to family caregivers and direct care providers that are designed to provide practical training for supporting frail elders and individuals with disabilities. The Secretary shall require such Centers to work with appropriate community partners to develop training program content and to publicize the availability of training courses in their service areas. All family care-giver and direct care

areas. All family care-giver and direct care provider training programs shall include instruction on the management of psychological and behavioral aspects of dementia, communication tech-niques for working with individuals who have dementia, and the appropriate, safe, and effective use of medications for older adults.

‘‘(B) I
NCORPORATION OF BEST PRACTICES .—A geriatric 
education center that receives an award under this sub-section shall develop and include material on depression and other mental disorders common among older adults, medication safety issues for older adults, and management of the psychological and behavioral aspects of dementia and communication techniques with individuals who have dementia in all training courses, where appropriate. ‘‘(6) T

ARGETS .—A geriatric education center that receives 
an award under this subsection shall meet targets approved by the Secretary for providing geriatric training to a certain number of faculty or practitioners during the term of the award, as well as other parameters established by the Secretary. 
‘‘(7) A
MOUNT OF AWARD .—An award under this subsection 
shall be in an amount of $150,000. Not more than 24 geriatric education centers may receive an award under this subsection. Requirements.

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124 STAT. 624 PUBLIC LAW 111–148—MAR. 23, 2010 
‘‘(8) M AINTENANCE OF EFFORT .—A geriatric education center 
that receives an award under this subsection shall provide assurances to the Secretary that funds provided to the geriatric education center under this subsection will be used only to supplement, not to supplant, the amount of Federal, State, and local funds otherwise expended by the geriatric education center. 
‘‘(9) A
UTHORIZATION OF APPROPRIATIONS .—In addition to

UTHORIZATION OF APPROPRIATIONS .—In addition to 
any other funding available to carry out this section, there is authorized to be appropriated to carry out this subsection, $10,800,000 for the period of fiscal year 2011 through 2014. ‘‘(e) G
ERIATRIC CAREER INCENTIVE AWARDS .— 
‘‘(1) I N GENERAL .—The Secretary shall award grants or

contracts under this section to individuals described in para-graph (2) to foster greater interest among a variety of health professionals in entering the field of geriatrics, long-term care, and chronic care management. 
‘‘(2) E
LIGIBLE INDIVIDUALS .—To be eligible to received an 
award under paragraph (1), an individual shall— 
‘‘(A) be an advanced practice nurse, a clinical social

worker, a pharmacist, or student of psychology who is pursuing a doctorate or other advanced degree in geriatrics or related fields in an accredited health professions school; and 
time, in such manner, and containing such information as the Secretary may require. ‘‘(3) C
ONDITION OF AWARD .—As a condition of receiving

ONDITION OF AWARD .—As a condition of receiving 
an award under this subsection, an individual shall agree that, following completion of the award period, the individual will teach or practice in the field of geriatrics, long-term care, or chronic care management for a minimum of 5 years under guidelines set by the Secretary. 
‘‘(4) A

ized to be appropriated to carry out this subsection, $10,000,000 for the period of fiscal years 2011 through 2013.’’. (b) E
XPANSION OF ELIGIBILITY FOR GERIATRIC ACADEMIC CAREER  
AWARDS ; PAYMENT TO INSTITUTION .—Section 753(c) of the Public 
Health Service Act 294(c)) is amended— 
(1) by redesignating paragraphs (4) and (5) as paragraphs 
(5) and (6), respectively; 
(2) by striking paragraph (2) through paragraph (3) and

inserting the following: 
‘‘(2) E LIGIBLE INDIVIDUALS .—To be eligible to receive an 
Award under paragraph (1), an individual shall— 
‘‘(A) be board certified or board eligible in internal 
medicine, family practice, psychiatry, or licensed dentistry, or have completed any required training in a discipline and employed in an accredited health professions school that is approved by the Secretary; 
‘‘(B) have completed an approved fellowship program

in geriatrics or have completed specialty training in geri-atrics as required by the discipline and any addition geri-atrics training as required by the Secretary; and 
‘‘(C) have a junior (non-tenured) faculty appointment 
at an accredited (as determined by the Secretary) school of medicine, osteopathic medicine, nursing, social work, 42 USC 294c. Grants. 

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124 STAT. 625 PUBLIC LAW 111–148—MAR. 23, 2010 
psychology, dentistry, pharmacy, or other allied health dis-
ciplines in an accredited health professions school that is approved by the Secretary. ‘‘(3) L
IMITATIONS .—No Award under paragraph (1) may 
be made to an eligible individual unless the individual— 
‘‘(A) has submitted to the Secretary an application,

at such time, in such manner, and containing such informa-tion as the Secretary may require, and the Secretary has approved such application; 
‘‘(B) provides, in such form and manner as the Sec-
retary may require, assurances that the individual will meet the service requirement described in paragraph (6); and 
‘‘(C) provides, in such form and manner as the Sec-

retary may require, assurances that the individual has a full-time faculty appointment in a health professions institution and documented commitment from such institu-tion to spend 75 percent of the total time of such individual on teaching and developing skills in interdisciplinary edu-cation in geriatrics. ‘‘(4) M
AINTENANCE OF EFFORT .—An eligible individual that

receives an Award under paragraph (1) shall provide assurances to the Secretary that funds provided to the eligible individual under this subsection will be used only to supplement, not to supplant, the amount of Federal, State, and local funds otherwise expended by the eligible individual.’’; and 
(3) in paragraph (5), as so designated— 
(i) by inserting ‘‘for individuals who are physicians’’ 
after ‘‘this section’’; and

after ‘‘this section’’; and 
(ii) by inserting after the period at the end the 
following: ‘‘The Secretary shall determine the amount of an Award under this section for individuals who are not physicians.’’; and (B) by adding at the end the following: ‘‘(C) P
AYMENT TO INSTITUTION .—The Secretary shall 
make payments to institutions which include schools of medicine, osteopathic medicine, nursing, social work, psy-chology, dentistry, and pharmacy, or other allied health

discipline in an accredited health professions school that is approved by the Secretary.’’. 
(c) C
OMPREHENSIVE GERIATRIC EDUCATION .—Section 855 of the 
Public Health Service Act (42 U.S.C. 298) is amended— 
(A) in paragraph (3), by striking ‘‘or’’ at the end; (B) in paragraph (4), by striking the period and 
‘‘(5) establish traineeships for individuals who are pre-

paring for advanced education nursing degrees in geriatric nursing, long-term care, gero-psychiatric nursing or other nursing areas that specialize in the care of the elderly popu-lation.’’; and 
(2) in subsection (e), by striking ‘‘2003 through 2007’’ and 
inserting ‘‘2010 through 2014’’. Determination. 
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124 STAT. 626 PUBLIC LAW 111–148—MAR. 23, 2010 
SEC. 5306. MENTAL AND BEHAVIORAL HEALTH EDUCATION AND 
TRAINING GRANTS. 
(a) I NGENERAL .—Part D of title VII (42 U.S.C. 294 et seq.) 
is amended by— 
(1) striking section 757; (2) redesignating section 756 (as amended by section 5103) 
as section 757; and 
(3) inserting after section 755 the following: 
‘‘SEC. 756. MENTAL AND BEHAVIORAL HEALTH EDUCATION AND 
‘‘(a) G RANTS AUTHORIZED .—The Secretary may award grants

to eligible institutions of higher education to support the recruit-ment of students for, and education and clinical experience of the students in— 
‘‘(1) baccalaureate, master’s, and doctoral degree programs 
of social work, as well as the development of faculty in social work; 
‘‘(2) accredited master’s, doctoral, internship, and post-doc-

toral residency programs of psychology for the development and implementation of interdisciplinary training of psychology graduate students for providing behavioral and mental health services, including substance abuse prevention and treatment services; 
‘‘(3) accredited institutions of higher education or accredited

professional training programs that are establishing or expanding internships or other field placement programs in child and adolescent mental health in psychiatry, psychology, school psychology, behavioral pediatrics, psychiatric nursing, social work, school social work, substance abuse prevention and treatment, marriage and family therapy, school counseling, or professional counseling; and 
‘‘(4) State-licensed mental health nonprofit and for-profit

organizations to enable such organizations to pay for programs for preservice or in-service training of paraprofessional child and adolescent mental health workers. ‘‘(b) E
LIGIBILITY REQUIREMENTS .—To be eligible for a grant 
under this section, an institution shall demonstrate— 
‘‘(1) participation in the institutions’ programs of individ-

uals and groups from different racial, ethnic, cultural, geographic, religious, linguistic, and class backgrounds, and different genders and sexual orientations; 
‘‘(2) knowledge and understanding of the concerns of the 
individuals and groups described in subsection (a); 
‘‘(3) any internship or other field placement program 
assisted under the grant will prioritize cultural and linguistic competency; 
‘‘(4) the institution will provide to the Secretary such data,

assurances, and information as the Secretary may require; and 
‘‘(5) with respect to any violation of the agreement between 
the Secretary and the institution, the institution will pay such liquidated damages as prescribed by the Secretary by regula-tion. ‘‘(c) I
NSTITUTIONAL REQUIREMENT .—For grants authorized 
under subsection (a)(1), at least 4 of the grant recipients shall 42 USC 294e–1. 42 USC 294f. 42 USC 294g.

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124 STAT. 627 PUBLIC LAW 111–148—MAR. 23, 2010 
be historically black colleges or universities or other minority- 
serving institutions. 
‘‘(d) P RIORITY .— 
‘‘(1) In selecting the grant recipients in social work under 
subsection (a)(1), the Secretary shall give priority to applicants that— 
‘‘(A) are accredited by the Council on Social Work 
Education; 
‘‘(B) have a graduation rate of not less than 80 percent 
for social work students; and

for social work students; and 
‘‘(C) exhibit an ability to recruit social workers from 
and place social workers in areas with a high need and high demand population. ‘‘(2) In selecting the grant recipients in graduate psychology

under subsection (a)(2), the Secretary shall give priority to institutions in which training focuses on the needs of vulnerable groups such as older adults and children, individuals with mental health or substance-related disorders, victims of abuse or trauma and of combat stress disorders such as posttraumatic stress disorder and traumatic brain injuries, homeless individ-uals, chronically ill persons, and their families. 
‘‘(3) In selecting the grant recipients in training programs

in child and adolescent mental health under subsections (a)(3) and (a)(4), the Secretary shall give priority to applicants that— 
‘‘(A) have demonstrated the ability to collect data on 
the number of students trained in child and adolescent mental health and the populations served by such students after graduation or completion of preservice or in-service training; 
‘‘(B) have demonstrated familiarity with evidence-based

methods in child and adolescent mental health services, including substance abuse prevention and treatment serv-ices; 
‘‘(C) have programs designed to increase the number 
of professionals and paraprofessionals serving high-priority populations and to applicants who come from high-priority communities and plan to serve medically underserved popu-lations, in health professional shortage areas, or in medi-cally underserved areas; 
‘‘(D) offer curriculum taught collaboratively with a

family on the consumer and family lived experience or the importance of family-professional or family-paraprofes-sional partnerships; and 
‘‘(E) provide services through a community mental 
health program described in section 1913(b)(1). 
‘‘(e) A
UTHORIZATION OF APPROPRIATION .—For the fiscal years 
2010 through 2013, there is authorized to be appropriated to carry out this section— 
‘‘(1) $8,000,000 for training in social work in subsection 
(a)(1);

(a)(1); 
‘‘(2) $12,000,000 for training in graduate psychology in 
subsection (a)(2), of which not less than $10,000,000 shall be allocated for doctoral, postdoctoral, and internship level training; 
‘‘(3) $10,000,000 for training in professional child and 
adolescent mental health in subsection (a)(3); and 
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124 STAT. 628 PUBLIC LAW 111–148—MAR. 23, 2010 
‘‘(4) $5,000,000 for training in paraprofessional child and 
adolescent work in subsection (a)(4).’’. (b) C
ONFORMING AMENDMENTS .—Section 757(b)(2) of the Public 
Health Service Act, as redesignated by subsection (a), is amended by striking ‘‘sections 751(a)(1)(A), 751(a)(1)(B), 753(b), 754(3)(A), and 755(b)’’ and inserting ‘‘sections 751(b)(1)(A), 753(b), and 755(b)’’. 
SEC. 5307. CULTURAL COMPETENCY, PREVENTION, AND PUBLIC

HEALTH AND INDIVIDUALS WITH DISABILITIES TRAINING. 
(a) T ITLE VII.—Section 741 of the Public Health Service Act 
(42 U.S.C. 293e) is amended— 
(A) by striking the subsection heading and inserting 
‘‘CULTURAL COMPETENCY , P REVENTION , AND PUBLIC  
HEALTH AND INDIVIDUALS WITHDISABILITY GRANTS ’’; and 
(B) in paragraph (1), by striking ‘‘for the purpose of’’

and all that follows through the period at the end and inserting ‘‘for the development, evaluation, and dissemina-tion of research, demonstration projects, and model cur-ricula for cultural competency, prevention, public health proficiency, reducing health disparities, and aptitude for working with individuals with disabilities training for use in health professions schools and continuing education pro-grams, and for other purposes determined as appropriate by the Secretary.’’; and (2) by

as appropriate by the Secretary.’’; and (2) by striking subsection (b) and inserting the following:

retary shall collaborate with health professional societies, licensing and accreditation entities, health professions schools, and experts in minority health and cultural competency, prevention, and public health and disability groups, community-based organizations, and other organizations as determined appropriate by the Secretary. The Secretary shall coordinate with curricula and research and demonstration projects developed under section 807. 
‘‘(c) D
ISSEMINATION .—

‘‘(c) D
ISSEMINATION .— 
‘‘(1) I N GENERAL .—Model curricula developed under this 
section shall be disseminated through the Internet Clearing-house under section 270 and such other means as determined appropriate by the Secretary. 
‘‘(2) E
VALUATION .—The Secretary shall evaluate the adop-

tion and the implementation of cultural competency, prevention, and public health, and working with individuals with a dis-ability training curricula, and the facilitate inclusion of these competency measures in quality measurement systems as appropriate. ‘‘(d) A
to be appropriated to carry out this section such sums as may be necessary for each of fiscal years 2010 through 2015.’’. 
(b) T

(b) T
ITLE VIII.—Section 807 of the Public Health Service Act 
(42 U.S.C. 296e–1) is amended— 
(B) by striking ‘‘for the purpose of’’ and all that follows 
through ‘‘health care.’’ and inserting ‘‘for the development, 42 USC 294f.

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124 STAT. 629 PUBLIC LAW 111–148—MAR. 23, 2010 
evaluation, and dissemination of research, demonstration

projects, and model curricula for cultural competency, prevention, public health proficiency, reducing health disparities, and aptitude for working with individuals with disabilities training for use in health professions schools and continuing education programs, and for other purposes determined as appropriate by the Secretary.’’; and (2) by redesignating subsection (b) as subsection (d); (3) by inserting after subsection (a) the following: 
‘‘(b) C

‘‘(b) C
OLLABORATION .—In carrying out subsection (a), the Sec-
retary shall collaborate with the entities described in section 741(b). The Secretary shall coordinate with curricula and research and demonstration projects developed under such section 741. 
‘‘(c) D
ISSEMINATION .—Model curricula developed under this sec-
tion shall be disseminated and evaluated in the same manner as model curricula developed under section 741, as described in subsection (c) of such section.’’; and

(4) in subsection (d), as so redesignated— 
(A) by striking ‘‘subsection (a)’’ and inserting ‘‘this sec-
tion’’; and 
(B) by striking ‘‘2001 through 2004’’ and inserting 
‘‘2010 through 2015’’. 
SEC. 5308. ADVANCED NURSING EDUCATION GRANTS. 
Section 811 of the Public Health Service Act (42 U.S.C. 296j) 
(1) in subsection (c)— 
(A) in the subsection heading, by striking ‘‘ AND NURSE  
MIDWIFERY PROGRAMS ’’; and 
(B) by striking ‘‘and nurse midwifery’’; 
(2) in subsection (f)—

(2) in subsection (f)— 
(A) by striking paragraph (2); and (B) by redesignating paragraph (3) as paragraph (2); 
and (3) by redesignating subsections (d), (e), and (f) as sub-
sections (e), (f), and (g), respectively; and 
(4) by inserting after subsection (c), the following: 
‘‘(d) A
UTHORIZED NURSE -MIDWIFERY PROGRAMS .—Midwifery 
programs that are eligible for support under this section are edu-cational programs that— 
‘‘(1) have as their objective the education of midwives; 
and

and 
‘‘(2) are accredited by the American College of Nurse-Mid-
wives Accreditation Commission for Midwifery Education.’’. 
SEC. 5309. NURSE EDUCATION, PRACTICE, AND RETENTION GRANTS. 
(a) I NGENERAL .—Section 831 of the Public Health Service 
Act (42 U.S.C. 296p) is amended— 
(1) in the section heading, by striking ‘‘ RETENTION ’’ and 
inserting ‘‘ QUALITY ’’; 
(2) in subsection (a)—

(2) in subsection (a)— 
(A) in paragraph (1), by adding ‘‘or’’ after the semicolon; (B) by striking paragraph (2); and (C) by redesignating paragraph (3) as paragraph (2); 
(3) in subsection (b)(3), by striking ‘‘managed care, quality 
improvement’’ and inserting ‘‘coordinated care’’; 
(4) in subsection (g), by inserting ‘‘, as defined in section 
801(2),’’ after ‘‘school of nursing’’; and

801(2),’’ after ‘‘school of nursing’’; and 
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124 STAT. 630 PUBLIC LAW 111–148—MAR. 23, 2010 
(5) in subsection (h), by striking ‘‘2003 through 2007’’ and 
inserting ‘‘2010 through 2014’’. (b) N
URSE RETENTION GRANTS .—Title VIII of the Public Health 
Service Act is amended by inserting after section 831 (42 U.S.C. 296b) the following: 
‘‘SEC. 831A. NURSE RETENTION GRANTS. 
‘‘(a) R ETENTION PRIORITY AREAS .—The Secretary may award

grants to, and enter into contracts with, eligible entities to enhance the nursing workforce by initiating and maintaining nurse retention programs pursuant to subsection (b) or (c). 
‘‘(b) G
RANTS FOR CAREER LADDER PROGRAM .—The Secretary 
may award grants to, and enter into contracts with, eligible entities for programs— 
‘‘(1) to promote career advancement for individuals

including licensed practical nurses, licensed vocational nurses, certified nurse assistants, home health aides, diploma degree or associate degree nurses, to become baccalaureate prepared registered nurses or advanced education nurses in order to meet the needs of the registered nurse workforce; 
‘‘(2) developing and implementing internships and resi-

dency programs in collaboration with an accredited school of nursing, as defined by section 801(2), to encourage mentoring and the development of specialties; or 
‘‘(3) to assist individuals in obtaining education and 
training required to enter the nursing profession and advance within such profession. ‘‘(c) E
NHANCING PATIENT CAREDELIVERY SYSTEMS .— 
‘‘(1) G RANTS .—The Secretary may award grants to eligible

entities to improve the retention of nurses and enhance patient care that is directly related to nursing activities by enhancing collaboration and communication among nurses and other health care professionals, and by promoting nurse involvement in the organizational and clinical decision-making processes of a health care facility. 
‘‘(2) P
RIORITY .—In making awards of grants under this

RIORITY .—In making awards of grants under this 
subsection, the Secretary shall give preference to applicants that have not previously received an award under this sub-
section (or section 831(c) as such section existed on the day before the date of enactment of this section). 
‘‘(3) C
ONTINUATION OF AN AWARD .—The Secretary shall

ONTINUATION OF AN AWARD .—The Secretary shall 
make continuation of any award under this subsection beyond the second year of such award contingent on the recipient of such award having demonstrated to the Secretary measur-able and substantive improvement in nurse retention or patient care. ‘‘(d) O
THER PRIORITY AREAS .—The Secretary may award grants

to, or enter into contracts with, eligible entities to address other areas that are of high priority to nurse retention, as determined by the Secretary. 
‘‘(e) R
EPORT .—The Secretary shall submit to the Congress before

the end of each fiscal year a report on the grants awarded and the contracts entered into under this section. Each such report shall identify the overall number of such grants and contracts and provide an explanation of why each such grant or contract will meet the priority need of the nursing workforce. 42 USC 296p–1. 
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124 STAT. 631 PUBLIC LAW 111–148—MAR. 23, 2010 
‘‘(f) E LIGIBLE ENTITY .—For purposes of this section, the term 
‘eligible entity’ includes an accredited school of nursing, as defined by section 801(2), a health care facility, or a partnership of such a school and facility. 
‘‘(g) A
to be appropriated to carry out this section such sums as may be necessary for each of fiscal years 2010 through 2012.’’.

SEC. 5310. LOAN REPAYMENT AND SCHOLARSHIP PROGRAM. 
(a) L OAN REPAYMENTS AND SCHOLARSHIPS .—Section 846(a)(3) 
of the Public Health Service Act (42 U.S.C. 297n(a)(3)) is amended by inserting before the semicolon the following: ‘‘, or in a accredited school of nursing, as defined by section 801(2), as nurse faculty’’. 
(b) T
ECHNICAL AND CONFORMING AMENDMENTS .—Title VIII (42 
U.S.C. 296 et seq.) is amended— 
(1) by redesignating section 810 (relating to prohibition

against discrimination by schools on the basis of sex) as section 809 and moving such section so that it follows section 808; 
(2) in sections 835, 836, 838, 840, and 842, by striking 
the term ‘‘this subpart’’ each place it appears and inserting ‘‘this part’’; 
(3) in section 836(h), by striking the last sentence; (4) in section 836, by redesignating subsection (l) as sub-
section (k); 
(5) in section 839, by striking ‘‘839’’ and all that follows 
through ‘‘(a)’’ and inserting ‘‘839. (a)’’;

through ‘‘(a)’’ and inserting ‘‘839. (a)’’; 
(6) in section 835(b), by striking ‘‘841’’ each place it appears 
and inserting ‘‘871’’; 
(7) by redesignating section 841 as section 871, moving 
part F to the end of the title, and redesignating such part as part I; 
(8) in part G— 
(A) by redesignating section 845 as section 851; and (B) by redesignating part G as part F; 
(9) in part H— 
(A) by redesignating sections 851 and 852 as sections 
861 and 862, respectively; and

861 and 862, respectively; and 
(B) by redesignating part H as part G; and 
(10) in part I— 
(A) by redesignating section 855, as amended by section 
5305, as section 865; and 
(B) by redesignating part I as part H. 
SEC. 5311. NURSE FACULTY LOAN PROGRAM. 
(a) I NGENERAL .—Section 846A of the Public Health Service 
Act (42 U.S.C. 297n–1) is amended— 
(A) in the subsection heading, by striking ‘‘E STABLISH -
MENT ’’ and inserting ‘‘S CHOOL OF NURSING STUDENT LOAN

FUND’’; and 
(B) by inserting ‘‘accredited’’ after ‘‘agreement with 
any’’; (2) in subsection (c)— 
(A) in paragraph (2), by striking ‘‘$30,000’’ and all 
that follows through the semicolon and inserting ‘‘$35,500, during fiscal years 2010 and 2011 fiscal years (after fiscal year 2011, such amounts shall be adjusted to provide for 42 USC 298. 42 USC 297w, 
297x. 42 USC 297t. 42 USC 298d. 42 USC 297a. 42 USC 297e. 42 USC 297b. 42 USC 297a, 
297b, 297d, 297g, 297i. 42 USC 296g.

297b, 297d, 297g, 297i. 42 USC 296g. 
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124 STAT. 632 PUBLIC LAW 111–148—MAR. 23, 2010 
a cost-of-attendance increase for the yearly loan rate and 
the aggregate loan;’’; and 
(B) in paragraph (3)(A), by inserting ‘‘an accredited’’ 
after ‘‘faculty member in’’; (3) in subsection (e), by striking ‘‘a school’’ and inserting 
‘‘an accredited school’’; and 
(4) in subsection (f), by striking ‘‘2003 through 2007’’ and 
inserting ‘‘2010 through 2014’’. (b) E
LIGIBLE INDIVIDUAL STUDENT LOAN REPAYMENT .—Title

VIII of the Public Health Service Act is amended by inserting after section 846A (42 U.S.C. 297n–1) the following: 
‘‘SEC. 847. ELIGIBLE INDIVIDUAL STUDENT LOAN REPAYMENT. 
‘‘(a) I NGENERAL .—The Secretary, acting through the Adminis-
trator of the Health Resources and Services Administration, may enter into an agreement with eligible individuals for the repayment of education loans, in accordance with this section, to increase the number of qualified nursing faculty. 
‘‘(b) A

‘‘(b) A
GREEMENTS .—Each agreement entered into under this 
subsection shall require that the eligible individual shall serve as a full-time member of the faculty of an accredited school of nursing, for a total period, in the aggregate, of at least 4 years during the 6-year period beginning on the later of— 
‘‘(1) the date on which the individual receives a master’s 
or doctorate nursing degree from an accredited school of nursing; or

‘‘(2) the date on which the individual enters into an agree-
ment under this subsection. ‘‘(c) A
GREEMENT PROVISIONS .—Agreements entered into pursu-
ant to subsection (b) shall be entered into on such terms and conditions as the Secretary may determine, except that— 
‘‘(1) not more than 10 months after the date on which

the 6-year period described under subsection (b) begins, but in no case before the individual starts as a full-time member of the faculty of an accredited school of nursing the Secretary shall begin making payments, for and on behalf of that indi-vidual, on the outstanding principal of, and interest on, any loan of that individual obtained to pay for such degree; 
‘‘(2) for an individual who has completed a master’s in 
nursing or equivalent degree in nursing—

nursing or equivalent degree in nursing— 
‘‘(A) payments may not exceed $10,000 per calendar 
year; and 
‘‘(B) total payments may not exceed $40,000 during 
the 2010 and 2011 fiscal years (after fiscal year 2011, such amounts shall be adjusted to provide for a cost-of- attendance increase for the yearly loan rate and the aggre-gate loan); and ‘‘(3) for an individual who has completed a doctorate or 
equivalent degree in nursing— 
‘‘(A) payments may not exceed $20,000 per calendar 
year; and

year; and 
‘‘(B) total payments may not exceed $80,000 during 
the 2010 and 2011 fiscal years (adjusted for subsequent fiscal years as provided for in the same manner as in paragraph (2)(B)). 
‘‘(d) B
REACH OF AGREEMENT .— Deadline. 42 USC 297o. 
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124 STAT. 633 PUBLIC LAW 111–148—MAR. 23, 2010 
‘‘(1) I N GENERAL .—In the case of any agreement made 
under subsection (b), the individual is liable to the Federal Government for the total amount paid by the Secretary under such agreement, and for interest on such amount at the max-imum legal prevailing rate, if the individual fails to meet the agreement terms required under such subsection. 
‘‘(2) W
AIVER OR SUSPENSION OF LIABILITY .—In the case

AIVER OR SUSPENSION OF LIABILITY .—In the case 
of an individual making an agreement for purposes of para-graph (1), the Secretary shall provide for the waiver or suspen-sion of liability under such paragraph if compliance by the individual with the agreement involved is impossible or would involve extreme hardship to the individual or if enforcement of the agreement with respect to the individual would be uncon-scionable. 
‘‘(3) D
ATE CERTAIN FOR RECOVERY .—Subject to paragraph

ATE CERTAIN FOR RECOVERY .—Subject to paragraph 
(2), any amount that the Federal Government is entitled to recover under paragraph (1) shall be paid to the United States not later than the expiration of the 3-year period beginning on the date the United States becomes so entitled. 
‘‘(4) A
VAILABILITY .—Amounts recovered under paragraph 
(1) shall be available to the Secretary for making loan repay-ments under this section and shall remain available for such purpose until expended. ‘‘(e) E

LIGIBLE INDIVIDUAL DEFINED .—For purposes of this sec-
tion, the term ‘eligible individual’ means an individual who— 
‘‘(1) is a United States citizen, national, or lawful perma-
nent resident; 
‘‘(2) holds an unencumbered license as a registered nurse; 
and 
‘‘(3) has either already completed a master’s or doctorate 
nursing program at an accredited school of nursing or is cur-rently enrolled on a full-time or part-time basis in such a program. ‘‘(f) P

RIORITY .—For the purposes of this section and section 
846A, funding priority will be awarded to School of Nursing Student Loans that support doctoral nursing students or Individual Student Loan Repayment that support doctoral nursing students. 
‘‘(g) A
to be appropriated to carry out this section such sums as may be necessary for each of fiscal years 2010 through 2014.’’. 
SEC. 5312. AUTHORIZATION OF APPROPRIATIONS FOR PARTS B

THROUGH D OF TITLE VIII. 
Section 871 of the Public Health Service Act, as redesignated 
and moved by section 5310, is amended to read as follows: 
‘‘SEC. 871. AUTHORIZATION OF APPROPRIATIONS. 
‘‘For the purpose of carrying out parts B, C, and D (subject 
to section 851(g)), there are authorized to be appropriated $338,000,000 for fiscal year 2010, and such sums as may be nec-essary for each of the fiscal years 2011 through 2016.’’. 
SEC. 5313. GRANTS TO PROMOTE THE COMMUNITY HEALTH

(a) I NGENERAL .—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: 42 USC 298d. 
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124 STAT. 634 PUBLIC LAW 111–148—MAR. 23, 2010 
‘‘SEC. 399V. GRANTS TO PROMOTE POSITIVE HEALTH BEHAVIORS AND 
OUTCOMES. 
‘‘(a) G RANTS AUTHORIZED .—The Director of the Centers for Dis-
ease Control and Prevention, in collaboration with the Secretary, shall award grants to eligible entities to promote positive health behaviors and outcomes for populations in medically underserved communities through the use of community health workers. 
‘‘(b) U

‘‘(b) U
SE OF FUNDS .—Grants awarded under subsection (a) shall 
be used to support community health workers— 
‘‘(1) to educate, guide, and provide outreach in a community 
setting regarding health problems prevalent in medically under-served communities, particularly racial and ethnic minority populations; 
‘‘(2) to educate and provide guidance regarding effective 
strategies to promote positive health behaviors and discourage risky health behaviors;

‘‘(3) to educate and provide outreach regarding enrollment 
in health insurance including the Children’s Health Insurance Program under title XXI of the Social Security Act, Medicare under title XVIII of such Act and Medicaid under title XIX of such Act; 
‘‘(4) to identify, educate, refer, and enroll underserved popu-

lations to appropriate healthcare agencies and community- based programs and organizations in order to increase access to quality healthcare services and to eliminate duplicative care; or 
‘‘(5) to educate, guide, and provide home visitation services 
regarding maternal health and prenatal care. ‘‘(c) A
PPLICATION .—Each eligible entity that desires to receive

a grant under subsection (a) shall submit an application to the Secretary, at such time, in such manner, and accompanied by such information as the Secretary may require. 
‘‘(d) P
RIORITY .—In awarding grants under subsection (a), the 
Secretary shall give priority to applicants that— 
‘‘(1) propose to target geographic areas— 
‘‘(A) with a high percentage of residents who are 
eligible for health insurance but are uninsured or under-insured;

‘‘(B) with a high percentage of residents who suffer 
from chronic diseases; or 
‘‘(C) with a high infant mortality rate; 
‘‘(2) have experience in providing health or health-related 
social services to individuals who are underserved with respect to such services; and 
‘‘(3) have documented community activity and experience 
with community health workers. ‘‘(e) C
OLLABORATION WITH ACADEMIC INSTITUTIONS AND THE  
ONE-STOP DELIVERY SYSTEM .—The Secretary shall encourage

community health worker programs receiving funds under this sec-tion to collaborate with academic institutions and one-stop delivery systems under section 134(c) of the Workforce Investment Act of 1998. Nothing in this section shall be construed to require such collaboration. 
‘‘(f) E
VIDENCE -BASED INTERVENTIONS .—The Secretary shall 
encourage community health worker programs receiving funding under this section to implement a process or an outcome-based 42 USC 280g–11.

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124 STAT. 635 PUBLIC LAW 111–148—MAR. 23, 2010 
payment system that rewards community health workers for con-
necting underserved populations with the most appropriate services at the most appropriate time. Nothing in this section shall be construed to require such a payment. 
‘‘(g) Q
UALITY ASSURANCE AND COSTEFFECTIVENESS .—The Sec-

retary shall establish guidelines for assuring the quality of the training and supervision of community health workers under the programs funded under this section and for assuring the cost- effectiveness of such programs. 
‘‘(h) M
ONITORING .—The Secretary shall monitor community

health worker programs identified in approved applications under this section and shall determine whether such programs are in compliance with the guidelines established under subsection (g). 
‘‘(i) T
ECHNICAL ASSISTANCE .—The Secretary may provide tech-
nical assistance to community health worker programs identified in approved applications under this section with respect to planning, developing, and operating programs under the grant. 
‘‘(j) A

‘‘(j) A
to be appropriated, such sums as may be necessary to carry out this section for each of fiscal years 2010 through 2014. 
‘‘(k) D
‘‘(1) C OMMUNITY HEALTH WORKER .—The term ‘community 
health worker’, as defined by the Department of Labor as Standard Occupational Classification [21–1094] means an indi-vidual who promotes health or nutrition within the community in which the individual resides—

‘‘(A) by serving as a liaison between communities and 
healthcare agencies; 
‘‘(B) by providing guidance and social assistance to 
community residents; 
‘‘(C) by enhancing community residents’ ability to effec-
tively communicate with healthcare providers; 
‘‘(D) by providing culturally and linguistically appro-
priate health or nutrition education; 
‘‘(E) by advocating for individual and community 
health; 
‘‘(F) by providing referral and follow-up services or

otherwise coordinating care; and 
‘‘(G) by proactively identifying and enrolling eligible 
individuals in Federal, State, local, private or nonprofit health and human services programs. ‘‘(2) C
OMMUNITY SETTING .—The term ‘community setting’ 
means a home or a community organization located in the neighborhood in which a participant in the program under this section resides. 
‘‘(3) E
LIGIBLE ENTITY .—The term ‘eligible entity’ means a

public or nonprofit private entity (including a State or public subdivision of a State, a public health department, a free health clinic, a hospital, or a Federally-qualified health center (as defined in section 1861(aa) of the Social Security Act)), or a consortium of any such entities. 
‘‘(4) M
EDICALLY UNDERSERVED COMMUNITY .—The term 
‘medically underserved community’ means a community identi-fied by a State— 
‘‘(A) that has a substantial number of individuals who

are members of a medically underserved population, as defined by section 330(b)(3); and Guidelines. 
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124 STAT. 636 PUBLIC LAW 111–148—MAR. 23, 2010 
‘‘(B) a significant portion of which is a health profes-
sional shortage area as designated under section 332.’’. 
SEC. 5314. FELLOWSHIP TRAINING IN PUBLIC HEALTH. 
294n et seq.), as amended by section 5206, is further amended by adding at the end the following: 
‘‘SEC. 778. FELLOWSHIP TRAINING IN APPLIED PUBLIC HEALTH EPIDE-

MIOLOGY, PUBLIC HEALTH LABORATORY SCIENCE, PUBLIC HEALTH INFORMATICS, AND EXPANSION OF THE EPIDEMIC INTELLIGENCE SERVICE. 
‘‘(a) I NGENERAL .—The Secretary may carry out activities to 
address documented workforce shortages in State and local health departments in the critical areas of applied public health epidemi-ology and public health laboratory science and informatics and may expand the Epidemic Intelligence Service. 
‘‘(b) S
PECIFIC USES.—In carrying out subsection (a), the Sec-

retary shall provide for the expansion of existing fellowship pro-grams operated through the Centers for Disease Control and Prevention in a manner that is designed to alleviate shortages of the type described in subsection (a). 
‘‘(c) O
THER PROGRAMS .—The Secretary may provide for the 
expansion of other applied epidemiology training programs that meet objectives similar to the objectives of the programs described in subsection (b). 
‘‘(d) W

‘‘(d) W
ORK OBLIGATION .—Participation in fellowship training 
programs under this section shall be deemed to be service for purposes of satisfying work obligations stipulated in contracts under section 338I(j). 
‘‘(e) G
ENERAL SUPPORT .—Amounts may be used from grants 
awarded under this section to expand the Public Health Informatics Fellowship Program at the Centers for Disease Control and Preven-tion to better support all public health systems at all levels of government. 
‘‘(f) A

‘‘(f) A
to be appropriated to carry out this section $39,500,000 for each of fiscal years 2010 through 2013, of which— 
‘‘(1) $5,000,000 shall be made available in each such fiscal 
year for epidemiology fellowship training program activities under subsections (b) and (c); 
‘‘(2) $5,000,000 shall be made available in each such fiscal 
year for laboratory fellowship training programs under sub-section (b);

‘‘(3) $5,000,000 shall be made available in each such fiscal 
year for the Public Health Informatics Fellowship Program under subsection (e); and 
‘‘(4) $24,500,000 shall be made available for expanding 
the Epidemic Intelligence Service under subsection (a).’’. 
SEC. 5315. UNITED STATES PUBLIC HEALTH SCIENCES TRACK. 
Title II of the Public Health Service Act (42 U.S.C. 202 et 
seq.) is amended by adding at the end the following: 42 USC 295f–3.

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124 STAT. 637 PUBLIC LAW 111–148—MAR. 23, 2010 
‘‘PART D—UNITED STATES PUBLIC HEALTH 
SCIENCES TRACK 
‘‘SEC. 271. ESTABLISHMENT. 
‘‘(a) U NITED STATES PUBLIC HEALTH SERVICES TRACK .— 
‘‘(1) I N GENERAL .—There is hereby authorized to be estab-

lished a United States Public Health Sciences Track (referred to in this part as the ‘Track’), at sites to be selected by the Secretary, with authority to grant appropriate advanced degrees in a manner that uniquely emphasizes team-based service, public health, epidemiology, and emergency prepared-ness and response. It shall be so organized as to graduate not less than— 
‘‘(A) 150 medical students annually, 10 of whom shall

be awarded studentships to the Uniformed Services Univer-sity of Health Sciences; 
‘‘(B) 100 dental students annually; ‘‘(C) 250 nursing students annually; ‘‘(D) 100 public health students annually; ‘‘(E) 100 behavioral and mental health professional 
students annually; 
‘‘(F) 100 physician assistant or nurse practitioner stu-
dents annually; and 
‘‘(G) 50 pharmacy students annually. 
‘‘(2) L
OCATIONS .—The Track shall be located at existing

and accredited, affiliated health professions education training programs at academic health centers located in regions of the United States determined appropriate by the Surgeon General, in consultation with the National Health Care Workforce Commission established in section 5101 of the Patient Protec-tion and Affordable Care Act. ‘‘(b) N
UMBER OF GRADUATES .—Except as provided in subsection

(a), the number of persons to be graduated from the Track shall be prescribed by the Secretary. In so prescribing the number of persons to be graduated from the Track, the Secretary shall institute actions necessary to ensure the maximum number of first- year enrollments in the Track consistent with the academic capacity of the affiliated sites and the needs of the United States for medical, dental, and nursing personnel. 
‘‘(c) D
EVELOPMENT .—The development of the Track may be

EVELOPMENT .—The development of the Track may be 
by such phases as the Secretary may prescribe subject to the requirements of subsection (a). 
‘‘(d) I
NTEGRATED LONGITUDINAL PLAN.—The Surgeon General 
shall develop an integrated longitudinal plan for health professions continuing education throughout the continuum of health-related education, training, and practice. Training under such plan shall emphasize patient-centered, interdisciplinary, and care coordination

skills. Experience with deployment of emergency response teams shall be included during the clinical experiences. 
‘‘(e) F
ACULTY DEVELOPMENT .—The Surgeon General shall 
develop faculty development programs and curricula in decentral-ized venues of health care, to balance urban, tertiary, and inpatient venues. 
‘‘SEC. 272. ADMINISTRATION. 
‘‘(a) I NGENERAL .—The business of the Track shall be conducted

by the Surgeon General with funds appropriated for and provided 42 USC 239 l–1. 42 USC 239 l. 
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124 STAT. 638 PUBLIC LAW 111–148—MAR. 23, 2010 
by the Department of Health and Human Services. The National 
Health Care Workforce Commission shall assist the Surgeon Gen-eral in an advisory capacity. 
‘‘(b) F
ACULTY .— 
‘‘(1) I N GENERAL .—The Surgeon General, after considering

the recommendations of the National Health Care Workforce Commission, shall obtain the services of such professors, instructors, and administrative and other employees as may be necessary to operate the Track, but utilize when possible, existing affiliated health professions training institutions. Mem-bers of the faculty and staff shall be employed under salary schedules and granted retirement and other related benefits prescribed by the Secretary so as to place the employees of the Track

so as to place the employees of the Track faculty on a comparable basis with the employees of fully accredited schools of the health professions within the United States.

‘‘(2) T
ITLES .—The Surgeon General may confer academic 
titles, as appropriate, upon the members of the faculty. 
‘‘(3) N ONAPPLICATION OF PROVISIONS .—The limitations in 
section 5373 of title 5, United States Code, shall not apply to the authority of the Surgeon General under paragraph (1) to prescribe salary schedules and other related benefits. ‘‘(c) A
GREEMENTS .—The Surgeon General may negotiate agree-

ments with agencies of the Federal Government to utilize on a reimbursable basis appropriate existing Federal medical resources located in the United States (or locations selected in accordance with section 271(a)(2)). Under such agreements the facilities con-cerned will retain their identities and basic missions. The Surgeon General may negotiate affiliation agreements with accredited universities and health professions training institutions in the United States. Such agreements may include

in the United States. Such agreements may include provisions for pay-ments for educational services provided students participating in Department of Health and Human Services educational programs.

‘‘(d) P
ROGRAMS .—The Surgeon General may establish the fol-
lowing educational programs for Track students: 
‘‘(1) Postdoctoral, postgraduate, and technological pro-
grams. 
‘‘(2) A cooperative program for medical, dental, physician 
assistant, pharmacy, behavioral and mental health, public health, and nursing students. 
‘‘(3) Other programs that the Surgeon General determines 
necessary in order to operate the Track in a cost-effective manner. ‘‘(e) C

ONTINUING MEDICAL EDUCATION .—The Surgeon General 
shall establish programs in continuing medical education for mem-bers of the health professions to the end that high standards of health care may be maintained within the United States. 
‘‘(f) A
UTHORITY OF THE SURGEON GENERAL .— 
‘‘(1) I N GENERAL .—The Surgeon General is authorized— 
‘‘(A) to enter into contracts with, accept grants from,

and make grants to any nonprofit entity for the purpose of carrying out cooperative enterprises in medical, dental, physician assistant, pharmacy, behavioral and mental health, public health, and nursing research, consultation, and education; 
‘‘(B) to enter into contracts with entities under which 
the Surgeon General may furnish the services of such Contracts. Grants.

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124 STAT. 639 PUBLIC LAW 111–148—MAR. 23, 2010 
professional, technical, or clerical personnel as may be nec-
essary to fulfill cooperative enterprises undertaken by the Track; 
‘‘(C) to accept, hold, administer, invest, and spend any 
gift, devise, or bequest of personal property made to the Track, including any gift, devise, or bequest for the support of an academic chair, teaching, research, or demonstration project; 
‘‘(D) to enter into agreements with entities that may

be utilized by the Track for the purpose of enhancing the activities of the Track in education, research, and technological applications of knowledge; and 
‘‘(E) to accept the voluntary services of guest scholars 
and other persons. ‘‘(2) L
IMITATION .—The Surgeon General may not enter into 
any contract with an entity if the contract would obligate the Track to make outlays in advance of the enactment of budget authority for such outlays. 
‘‘(3) S

‘‘(3) S
CIENTISTS .—Scientists or other medical, dental, or 
nursing personnel utilized by the Track under an agreement described in paragraph (1) may be appointed to any position within the Track and may be permitted to perform such duties within the Track as the Surgeon General may approve. 
‘‘(4) V
OLUNTEER SERVICES .—A person who provides vol-

untary services under the authority of subparagraph (E) of paragraph (1) shall be considered to be an employee of the Federal Government for the purposes of chapter 81 of title 5, relating to compensation for work-related injuries, and to be an employee of the Federal Government for the purposes of chapter 171 of title 28, relating to tort claims. Such a person who is not otherwise employed by the Federal Government shall not be considered to be a Federal employee for any other purpose by

to be a Federal employee for any other purpose by reason of the provision of such services.

‘‘SEC. 273. STUDENTS; SELECTION; OBLIGATION. 
‘‘(a) S TUDENT SELECTION .— 
‘‘(1) I N GENERAL .—Medical, dental, physician assistant, 
pharmacy, behavioral and mental health, public health, and nursing students at the Track shall be selected under proce-dures prescribed by the Surgeon General. In so prescribing, the Surgeon General shall consider the recommendations of the National Health Care Workforce Commission. 
‘‘(2) P
RIORITY .—In developing admissions procedures under

paragraph (1), the Surgeon General shall ensure that such procedures give priority to applicant medical, dental, physician assistant, pharmacy, behavioral and mental health, public health, and nursing students from rural communities and underrepresented minorities. ‘‘(b) C
ONTRACT AND SERVICE OBLIGATION .— 
‘‘(1) C ONTRACT .—Upon being admitted to the Track, a med-

ical, dental, physician assistant, pharmacy, behavioral and mental health, public health, or nursing student shall enter into a written contract with the Surgeon General that shall contain— 
‘‘(A) an agreement under which— 
‘‘(i) subject to subparagraph (B), the Surgeon Gen-
eral agrees to provide the student with tuition (or 42 USC 239 l–2.

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124 STAT. 640 PUBLIC LAW 111–148—MAR. 23, 2010 
tuition remission) and a student stipend (described 
in paragraph (2)) in each school year for a period of years (not to exceed 4 school years) determined by the student, during which period the student is enrolled in the Track at an affiliated or other partici-pating health professions institution pursuant to an agreement between the Track and such institution; and 
‘‘(ii) subject to subparagraph (B), the student 
agrees—

agrees— 
‘‘(I) to accept the provision of such tuition and 
student stipend to the student; 
‘‘(II) to maintain enrollment at the Track until 
the student completes the course of study involved; 
‘‘(III) while enrolled in such course of study, 
to maintain an acceptable level of academic standing (as determined by the Surgeon General); 
‘‘(IV) if pursuing a degree from a school of

‘‘(IV) if pursuing a degree from a school of 
medicine or osteopathic medicine, dental, public health, or nursing school or a physician assistant, pharmacy, or behavioral and mental health profes-sional program, to complete a residency or intern-ship in a specialty that the Surgeon General deter-mines is appropriate; and 
‘‘(V) to serve for a period of time (referred

‘‘(V) to serve for a period of time (referred 
to in this part as the ‘period of obligated service’) within the Commissioned Corps of the Public Health Service equal to 2 years for each school year during which such individual was enrolled at the College, reduced as provided for in para-graph (3); 
‘‘(B) a provision that any financial obligation of the

United States arising out of a contract entered into under this part and any obligation of the student which is condi-tioned thereon, is contingent upon funds being appropriated to carry out this part; 
‘‘(C) a statement of the damages to which the United 
States is entitled for the student’s breach of the contract; and 
‘‘(D) such other statements of the rights and liabilities 
of the Secretary and of the individual, not inconsistent with the provisions of this part. ‘‘(2) T

UITION AND STUDENT STIPEND .— 
‘‘(A) T UITION REMISSION RATES .—The Surgeon General, 
based on the recommendations of the National Health Care Workforce Commission, shall establish Federal tuition

remission rates to be used by the Track to provide reimbursement to affiliated and other participating health professions institutions for the cost of educational services provided by such institutions to Track students. The agree-ment entered into by such participating institutions under paragraph (1)(A)(i) shall contain an agreement to accept as payment in full the established remission rate under this subparagraph. 
‘‘(B) S
TIPEND .—The Surgeon General, based on the rec-

ommendations of the National Health Care Workforce 
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124 STAT. 641 PUBLIC LAW 111–148—MAR. 23, 2010 
Commission, shall establish and update Federal stipend 
rates for payment to students under this part. ‘‘(3) R
EDUCTIONS IN THE PERIOD OF OBLIGATED SERVICE .— 
The period of obligated service under paragraph (1)(A)(ii)(V) shall be reduced— 
‘‘(A) in the case of a student who elects to participate

in a high-needs speciality residency (as determined by the National Health Care Workforce Commission), by 3 months for each year of such participation (not to exceed a total of 12 months); and 
‘‘(B) in the case of a student who, upon completion

of their residency, elects to practice in a Federal medical facility (as defined in section 781(e)) that is located in a health professional shortage area (as defined in section 332), by 3 months for year of full-time practice in such a facility (not to exceed a total of 12 months). 
‘‘(c) S
ECOND 2 YEARS OF SERVICE .—During the third and fourth

years in which a medical, dental, physician assistant, pharmacy, behavioral and mental health, public health, or nursing student is enrolled in the Track, training should be designed to prioritize clinical rotations in Federal medical facilities in health professional shortage areas, and emphasize a balance of hospital and community- based experiences, and training within interdisciplinary teams. 
‘‘(d) D
ENTIST , PHYSICIAN ASSISTANT , PHARMACIST , BEHAVIORAL

AND MENTAL HEALTH PROFESSIONAL , P UBLIC HEALTH PROFES -
SIONAL , AND NURSE TRAINING .—The Surgeon General shall estab-

lish provisions applicable with respect to dental, physician assistant, pharmacy, behavioral and mental health, public health, and nursing students that are comparable to those for medical students under this section, including service obligations, tuition support, and sti-pend support. The Surgeon General shall give priority to health professions training institutions that train medical, dental, physi-cian assistant, pharmacy, behavioral and mental health, public health, and nursing students

health, public health, and nursing students for some significant period of time together, but at a minimum have a discrete and shared core cur-riculum.

in consultation with the Secretary, the Director of the Centers for Disease Control and Prevention, and other appropriate military and Federal government agencies, shall develop criteria for the appointment of highly qualified Track faculty, medical, dental, physician assistant, pharmacy, behavioral and mental health, public health, and nursing students, and graduates to elite Federal dis-aster preparedness teams to train and to respond to public health emergencies, natural disasters,

to public health emergencies, natural disasters, bioterrorism events, and other emer-gencies.

‘‘(f) S
TUDENT DROPPED FROM TRACK IN AFFILIATE SCHOOL .— 
A medical, dental, physician assistant, pharmacy, behavioral and mental health, public health, or nursing student who, under regula-tions prescribed by the Surgeon General, is dropped from the Track in an affiliated school for deficiency in conduct or studies, or for other reasons, shall be liable to the United States for all tuition and stipend support provided to the student. Regulations. Criteria.

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124 STAT. 642 PUBLIC LAW 111–148—MAR. 23, 2010 
‘‘SEC. 274. FUNDING. 
‘‘Beginning with fiscal year 2010, the Secretary shall transfer 
from the Public Health and Social Services Emergency Fund such sums as may be necessary to carry out this part.’’. 
Subtitle E—Supporting the Existing Health 
Care Workforce 
SEC. 5401. CENTERS OF EXCELLENCE. 
Section 736 of the Public Health Service Act (42 U.S.C. 293) 
is amended by striking subsection (h) and inserting the following:

‘‘(h) F ORMULA FOR ALLOCATIONS .— 
‘‘(1) A LLOCATIONS .—Based on the amount appropriated 
under subsection (i) for a fiscal year, the following subpara-graphs shall apply as appropriate: 
‘‘(A) I
N GENERAL .—If the amounts appropriated under 
subsection (i) for a fiscal year are $24,000,000 or less— 
‘‘(i) the Secretary shall make available $12,000,000 
for grants under subsection (a) to health professions schools that meet the conditions described in sub-section (c)(2)(A); and

‘‘(ii) and available after grants are made with funds 
under clause (i), the Secretary shall make available— 
‘‘(I) 60 percent of such amount for grants under 
subsection (a) to health professions schools that meet the conditions described in paragraph (3) or (4) of subsection (c) (including meeting the conditions under subsection (e)); and 
‘‘(II) 40 percent of such amount for grants 
under subsection (a) to health professions schools that meet the conditions described in subsection (c)(5).

‘‘(B) F
UNDING IN EXCESS OF $24 ,000,000.—If amounts 
appropriated under subsection (i) for a fiscal year exceed $24,000,000 but are less than $30,000,000— 
‘‘(i) 80 percent of such excess amounts shall be 
made available for grants under subsection (a) to health professions schools that meet the requirements described in paragraph (3) or (4) of subsection (c) (including meeting conditions pursuant to subsection (e)); and 
‘‘(ii) 20 percent of such excess amount shall be

‘‘(ii) 20 percent of such excess amount shall be 
made available for grants under subsection (a) to health professions schools that meet the conditions described in subsection (c)(5). ‘‘(C) F
UNDING IN EXCESS OF $30 ,000,000.—If amounts 
appropriated under subsection (i) for a fiscal year exceed $30,000,000 but are less than $40,000,000, the Secretary shall make available— 
‘‘(i) not less than $12,000,000 for grants under

‘‘(i) not less than $12,000,000 for grants under 
subsection (a) to health professions schools that meet the conditions described in subsection (c)(2)(A); 
‘‘(ii) not less than $12,000,000 for grants under 
subsection (a) to health professions schools that meet the conditions described in paragraph (3) or (4) of Applicability. Grants. Effective date. 42 USC 239 l–3.

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124 STAT. 643 PUBLIC LAW 111–148—MAR. 23, 2010 
subsection (c) (including meeting conditions pursuant 
to subsection (e)); 
‘‘(iii) not less than $6,000,000 for grants under 
subsection (a) to health professions schools that meet the conditions described in subsection (c)(5); and 
‘‘(iv) after grants are made with funds under

‘‘(iv) after grants are made with funds under 
clauses (i) through (iii), any remaining excess amount for grants under subsection (a) to health professions schools that meet the conditions described in para-graph (2)(A), (3), (4), or (5) of subsection (c). ‘‘(D) F
UNDING IN EXCESS OF $40 ,000,000.—If amounts 
appropriated under subsection (i) for a fiscal year are $40,000,000 or more, the Secretary shall make available— 
‘‘(i) not less than $16,000,000 for grants under

‘‘(i) not less than $16,000,000 for grants under 
‘‘(ii) not less than $16,000,000 for grants under 
subsection (a) to health professions schools that meet the conditions described in paragraph (3) or (4) of subsection (c) (including meeting conditions pursuant to subsection (e)); 
‘‘(iii) not less than $8,000,000 for grants under

clauses (i) through (iii), any remaining funds for grants under subsection (a) to health professions schools that meet the conditions described in paragraph (2)(A), (3), (4), or (5) of subsection (c). 
‘‘(2) N
O LIMITATION .—Nothing in this subsection shall be

construed as limiting the centers of excellence referred to in this section to the designated amount, or to preclude such entities from competing for grants under this section. 
‘‘(3) M
‘‘(A) I N GENERAL .—With respect to activities for which

a grant made under this part are authorized to be expended, the Secretary may not make such a grant to a center of excellence for any fiscal year unless the center agrees to maintain expenditures of non-Federal amounts for such activities at a level that is not less than the level of such expenditures maintained by the center for the fiscal year preceding the fiscal year for which the school receives such a grant. 
‘‘(B) U
SE OF FEDERAL FUNDS .—With respect to any

SE OF FEDERAL FUNDS .—With respect to any 
Federal amounts received by a center of excellence and available for carrying out activities for which a grant under 
this part is authorized to be expended, the center shall, before expending the grant, expend the Federal amounts obtained from sources other than the grant, unless given prior approval from the Secretary. 
‘‘(i) A
to be appropriated to carry out this section—

to be appropriated to carry out this section— 
‘‘(1) $50,000,000 for each of the fiscal years 2010 through 
2015; and 
‘‘(2) and such sums as are necessary for each subsequent 
fiscal year.’’. 
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124 STAT. 644 PUBLIC LAW 111–148—MAR. 23, 2010 
SEC. 5402. HEALTH CARE PROFESSIONALS TRAINING FOR DIVERSITY. 
(a) L OAN REPAYMENTS AND FELLOWSHIPS REGARDING FACULTY  
POSITIONS .—Section 738(a)(1) of the Public Health Service Act (42 
U.S.C. 293b(a)(1)) is amended by striking ‘‘$20,000 of the principal and interest of the educational loans of such individuals.’’ and inserting ‘‘$30,000 of the principal and interest of the educational loans of such individuals.’’. 
(b) S

(b) S
CHOLARSHIPS FOR DISADVANTAGED STUDENTS .—Section 
740(a) of such Act (42 U.S.C. 293d(a)) is amended by striking ‘‘$37,000,000’’ and all that follows through ‘‘2002’’ and inserting ‘‘$51,000,000 for fiscal year 2010, and such sums as may be nec-essary for each of the fiscal years 2011 through 2014’’. 
(c) R
EAUTHORIZATION FOR LOAN REPAYMENTS AND FELLOWSHIPS  
REGARDING FACULTY POSITIONS .—Section 740(b) of such Act (42

U.S.C. 293d(b)) is amended by striking ‘‘appropriated’’ and all that follows through the period at the end and inserting ‘‘appropriated, $5,000,000 for each of the fiscal years 2010 through 2014.’’. 
(d) R
EAUTHORIZATION FOR EDUCATIONAL ASSISTANCE IN THE  
HEALTH PROFESSIONS REGARDING INDIVIDUALS FROM A DISADVAN -
TAGED BACKGROUND .—Section 740(c) of such Act (42 U.S.C. 293d(c))

is amended by striking the first sentence and inserting the fol-lowing: ‘‘For the purpose of grants and contracts under section 739(a)(1), there is authorized to be appropriated $60,000,000 for fiscal year 2010 and such sums as may be necessary for each of the fiscal years 2011 through 2014.’’ 
SEC. 5403. INTERDISCIPLINARY, COMMUNITY-BASED LINKAGES. 
(a) A REA HEALTH EDUCATION CENTERS .—Section 751 of the 
Public Health Service Act (42 U.S.C. 294a) is amended to read as follows:

‘‘SEC. 751. AREA HEALTH EDUCATION CENTERS. 
‘‘(a) E STABLISHMENT OF AWARDS .—The Secretary shall make 
the following 2 types of awards in accordance with this section: 
‘‘(1) I NFRASTRUCTURE DEVELOPMENT AWARD .—The Sec-

retary shall make awards to eligible entities to enable such entities to initiate health care workforce educational programs or to continue to carry out comparable programs that are oper-ating at the time the award is made by planning, developing, operating, and evaluating an area health education center pro-gram. 
‘‘(2) P
OINT OF SERVICE MAINTENANCE AND ENHANCEMENT  
AWARD .—The Secretary shall make awards to eligible entities

to maintain and improve the effectiveness and capabilities of an existing area health education center program, and make other modifications to the program that are appropriate due to changes in demographics, needs of the populations served, or other similar issues affecting the area health education center program. For the purposes of this section, the term ‘Program’ refers to the area health education center program. ‘‘(b) E
LIGIBLE ENTITIES ; APPLICATION .— 
‘‘(1) E LIGIBLE ENTITIES .—

‘‘(1) E LIGIBLE ENTITIES .— 
‘‘(A) I NFRASTRUCTURE DEVELOPMENT .—For purposes of 
subsection (a)(1), the term ‘eligible entity’ means a school of medicine or osteopathic medicine, an incorporated consortium of such schools, or the parent institutions of such a school. With respect to a State in which no area Definitions. 
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124 STAT. 645 PUBLIC LAW 111–148—MAR. 23, 2010 
health education center program is in operation, the Sec-
retary may award a grant or contract under subsection (a)(1) to a school of nursing. 
‘‘(B) P
OINT OF SERVICE MAINTENANCE AND ENHANCE -
MENT .—For purposes of subsection (a)(2), the term ‘eligible

entity’ means an entity that has received funds under this section, is operating an area health education center program, including an area health education center or cen-ters, and has a center or centers that are no longer eligible to receive financial assistance under subsection (a)(1). ‘‘(2) A
PPLICATION .—An eligible entity desiring to receive

an award under this section shall submit to the Secretary an application at such time, in such manner, and containing such information as the Secretary may require. ‘‘(c) U
‘‘(1) R EQUIRED ACTIVITIES .—An eligible entity shall use 
amounts awarded under a grant under subsection (a)(1) or (a)(2) to carry out the following activities: 
‘‘(A) Develop and implement strategies, in coordination

with the applicable one-stop delivery system under section 134(c) of the Workforce Investment Act of 1998, to recruit individuals from underrepresented minority populations or from disadvantaged or rural backgrounds into health professions, and support such individuals in attaining such careers. 
‘‘(B) Develop and implement strategies to foster and

provide community-based training and education to individ-uals seeking careers in health professions within under-served areas for the purpose of developing and maintaining a diverse health care workforce that is prepared to deliver high-quality care, with an emphasis on primary care, in underserved areas or for health disparity populations, in collaboration with other Federal and State health care workforce development programs, the State workforce agency, and local workforce investment

workforce agency, and local workforce investment boards, and in health care safety net sites.

‘‘(C) Prepare individuals to more effectively provide 
health services to underserved areas and health disparity populations through field placements or preceptorships in 
conjunction with community-based organizations, accred-ited primary care residency training programs, Federally qualified health centers, rural health clinics, public health departments, or other appropriate facilities. 
‘‘(D) Conduct and participate in interdisciplinary

training that involves physicians, physician assistants, nurse practitioners, nurse midwives, dentists, psycholo-gists, pharmacists, optometrists, community health workers, public and allied health professionals, or other health professionals, as practicable. 
‘‘(E) Deliver or facilitate continuing education and 
information dissemination programs for health care profes-sionals, with an emphasis on individuals providing care in underserved areas and for health disparity populations.

‘‘(F) Propose and implement effective program and out-
comes measurement and evaluation strategies. Grants. 
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124 STAT. 646 PUBLIC LAW 111–148—MAR. 23, 2010 
‘‘(G) Establish a youth public health program to expose 
and recruit high school students into health careers, with a focus on careers in public health. ‘‘(2) I
NNOVATIVE OPPORTUNITIES .—An eligible entity may 
use amounts awarded under a grant under subsection (a)(1) or subsection (a)(2) to carry out any of the following activities: 
‘‘(A) Develop and implement innovative curricula in

collaboration with community-based accredited primary care residency training programs, Federally qualified health centers, rural health clinics, behavioral and mental health facilities, public health departments, or other appro-priate facilities, with the goal of increasing the number of primary care physicians and other primary care pro-viders prepared to serve in underserved areas and health disparity populations. 
‘‘(B) Coordinate community-based participatory

‘‘(B) Coordinate community-based participatory 
research with academic health centers, and facilitate rapid flow and dissemination of evidence-based health care information, research results, and best practices to improve quality, efficiency, and effectiveness of health care and health care systems within community settings. 
‘‘(C) Develop and implement other strategies to address

identified workforce needs and increase and enhance the health care workforce in the area served by the area health education center program. 
‘‘(d) R
‘‘(1) A REA HEALTH EDUCATION CENTER PROGRAM .—In car-
rying out this section, the Secretary shall ensure the following: 
‘‘(A) An entity that receives an award under this section

shall conduct at least 10 percent of clinical education required for medical students in community settings that are removed from the primary teaching facility of the con-tracting institution for grantees that operate a school of medicine or osteopathic medicine. In States in which an entity that receives an award under this section is a nursing school or its parent institution, the Secretary shall alternatively ensure that— 
‘‘(i) the nursing school conducts at least 10 percent

of clinical education required for nursing students in community settings that are remote from the primary teaching facility of the school; and 
‘‘(ii) the entity receiving the award maintains a 
written agreement with a school of medicine or osteo-pathic medicine to place students from that school in training sites in the area health education center program area. 
‘‘(B) An entity receiving funds under subsection (a)(2)

does not distribute such funding to a center that is eligible to receive funding under subsection (a)(1). ‘‘(2) A
REA HEALTH EDUCATION CENTER .—The Secretary shall 
ensure that each area health education center program includes at least 1 area health education center, and that each such center— 
‘‘(A) is a public or private organization whose structure, 
governance, and operation is independent from the awardee and the parent institution of the awardee;

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124 STAT. 647 PUBLIC LAW 111–148—MAR. 23, 2010 
‘‘(B) is not a school of medicine or osteopathic medicine, 
the parent institution of such a school, or a branch campus or other subunit of a school of medicine or osteopathic medicine or its parent institution, or a consortium of such entities; 
‘‘(C) designates an underserved area or population to

be served by the center which is in a location removed from the main location of the teaching facilities of the schools participating in the program with such center and does not duplicate, in whole or in part, the geographic area or population served by any other center; 
‘‘(D) fosters networking and collaboration among 
communities and between academic health centers and community-based centers; 
‘‘(E) serves communities with a demonstrated need

of health professionals in partnership with academic med-ical centers; 
‘‘(F) addresses the health care workforce needs of the 
communities served in coordination with the public workforce investment system; and 
‘‘(G) has a community-based governing or advisory 
board that reflects the diversity of the communities involved. 
‘‘(e) M
ATCHING FUNDS .—With respect to the costs of operating

a program through a grant under this section, to be eligible for financial assistance under this section, an entity shall make avail-able (directly or through contributions from State, county or munic-ipal governments, or the private sector) recurring non-Federal con-tributions in cash or in kind, toward such costs in an amount that is equal to not less than 50 percent of such costs. At least 25 percent of the total required non-Federal contributions shall be in cash. An entity may apply to the

shall be in cash. An entity may apply to the Secretary for a waiver of not more than 75 percent of the matching fund amount required by the entity for each of the first 3 years the entity is funded through a grant under subsection (a)(1).

‘‘(f) L
IMITATION .—Not less than 75 percent of the total amount 
provided to an area health education center program under sub-section (a)(1) or (a)(2) shall be allocated to the area health education centers participating in the program under this section. To provide needed flexibility to newly funded area health education center programs, the Secretary may waive the requirement in the sentence for the first 2 years of a new area health education center program funded under subsection (a)(1).

‘‘(g) A
WARD .—An award to an entity under this section shall 
be not less than $250,000 annually per area health education center included in the program involved. If amounts appropriated to carry 
out this section are not sufficient to comply with the preceding sentence, the Secretary may reduce the per center amount provided for in such sentence as necessary, provided the distribution estab-lished in subsection (j)(2) is maintained. 
‘‘(h) P
ROJECT TERMS .—

‘‘(h) P
ROJECT TERMS .— 
the period during which payments may be made under an award under subsection (a)(1) may not exceed— 
‘‘(A) in the case of a program, 12 years; or ‘‘(B) in the case of a center within a program, 6 years. Waiver authority. 
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124 STAT. 648 PUBLIC LAW 111–148—MAR. 23, 2010 
‘‘(2) E XCEPTION .—The periods described in paragraph (1) 
shall not apply to programs receiving point of service mainte-nance and enhancement awards under subsection (a)(2) to maintain existing centers and activities. ‘‘(i) I
NAPPLICABILITY OF PROVISION .—Notwithstanding any other 
provision of this title, section 791(a) shall not apply to an area health education center funded under this section. 
‘‘(j) A
UTHORIZATION OF APPROPRIATIONS .—

‘‘(j) A
‘‘(1) I N GENERAL .—There is authorized to be appropriated 
to carry out this section $125,000,000 for each of the fiscal years 2010 through 2014. 
‘‘(2) R
EQUIREMENTS .—Of the amounts appropriated for a 
fiscal year under paragraph (1)— 
‘‘(A) not more than 35 percent shall be used for awards 
under subsection (a)(1); 
‘‘(B) not less than 60 percent shall be used for awards 
under subsection (a)(2);

under subsection (a)(2); 
‘‘(C) not more than 1 percent shall be used for grants 
and contracts to implement outcomes evaluation for the area health education centers; and 
‘‘(D) not more than 4 percent shall be used for grants 
and contracts to provide technical assistance to entities receiving awards under this section. ‘‘(3) C
ARRYOVER FUNDS .—An entity that receives an award

under this section may carry over funds from 1 fiscal year to another without obtaining approval from the Secretary. In no case may any funds be carried over pursuant to the pre-ceding sentence for more than 3 years. ‘‘(k) S
ENSE OF CONGRESS .—It is the sense of the Congress 
that every State have an area health education center program in effect under this section.’’. 
(b) C
ONTINUING EDUCATIONAL SUPPORT FOR HEALTH PROFES -
SIONALS SERVING IN UNDERSERVED COMMUNITIES .—Part D of title

VII of the Public Health Service Act (42 U.S.C. 294 et seq.) is amended by striking section 752 and inserting the following: 
‘‘SEC. 752. CONTINUING EDUCATIONAL SUPPORT FOR HEALTH 
PROFESSIONALS SERVING IN UNDERSERVED COMMU-NITIES. 
‘‘(a) I NGENERAL .—The Secretary shall make grants to, and

enter into contracts with, eligible entities to improve health care, increase retention, increase representation of minority faculty mem-bers, enhance the practice environment, and provide information dissemination and educational support to reduce professional isola-tion through the timely dissemination of research findings using relevant resources. 
‘‘(b) E
LIGIBLE ENTITIES .—For purposes of this section, the term 
‘eligible entity’ means an entity described in section 799(b).

‘‘(c) A PPLICATION .—An eligible entity desiring to receive an 
award under this section shall submit to the Secretary an applica-tion at such time, in such manner, and containing such information as the Secretary may require. 
‘‘(d) U
awarded under a grant or contract under this section to provide Definition. Grants. 
Contracts. 42 USC 294b.

Contracts. 42 USC 294b. 
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124 STAT. 649 PUBLIC LAW 111–148—MAR. 23, 2010 
innovative supportive activities to enhance education through dis-
tance learning, continuing educational activities, collaborative con-ferences, and electronic and telelearning activities, with priority for primary care. 
‘‘(e) A
UTHORIZATION .—There is authorized to be appropriated 
to carry out this section $5,000,000 for each of the fiscal years 2010 through 2014, and such sums as may be necessary for each subsequent fiscal year.’’.

SEC. 5404. WORKFORCE DIVERSITY GRANTS. 
Section 821 of the Public Health Service Act (42 U.S.C. 296m) 
(A) by striking ‘‘The Secretary may’’ and inserting the 
following: ‘‘(1) A
UTHORITY .—The Secretary may’’; 
(B) by striking ‘‘pre-entry preparation, and retention 
activities’’ and inserting the following: ‘‘stipends for diploma or associate degree nurses to enter a bridge or degree

completion program, student scholarships or stipends for accelerated nursing degree programs, pre-entry prepara-tion, advanced education preparation, and retention activi-ties’’; and (2) in subsection (b)— 
(A) by striking ‘‘First’’ and all that follows through 
‘‘including the’’ and inserting ‘‘National Advisory Council on Nurse Education and Practice and consult with nursing associations including the National Coalition of Ethnic Minority Nurse Associations,’’; and

(B) by inserting before the period the following: ‘‘, 
and other organizations determined appropriate by the Sec-retary’’. 
SEC. 5405. PRIMARY CARE EXTENSION PROGRAM. 
Part P of title III of the Public Health Service Act (42 U.S.C. 
280g et seq.), as amended by section 5313, is further amended by adding at the end the following: 
‘‘SEC. 399W. PRIMARY CARE EXTENSION PROGRAM. 
‘‘(a) E STABLISHMENT , PURPOSE AND DEFINITION .— 

Director of the Agency for Healthcare Research and Quality, shall establish a Primary Care Extension Program. 
‘‘(2) P
URPOSE .—The Primary Care Extension Program shall

provide support and assistance to primary care providers to educate providers about preventive medicine, health promotion, chronic disease management, mental and behavioral health services (including substance abuse prevention and treatment services), and evidence-based and evidence-informed therapies and techniques, in order to enable providers to incorporate such matters into their practice and to improve community health by working with community-based health connectors (referred to in this

health connectors (referred to in this section as ‘Health Extension Agents’).

‘‘(3) D
‘‘(A) H EALTH EXTENSION AGENT .—The term ‘Health 
Extension Agent’ means any local, community-based health worker who facilitates and provides assistance to primary care practices by implementing quality improvement or 42 USC 280g–12. 
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124 STAT. 650 PUBLIC LAW 111–148—MAR. 23, 2010 
system redesign, incorporating the principles of the patient- 
centered medical home to provide high-quality, effective, efficient, and safe primary care and to provide guidance to patients in culturally and linguistically appropriate ways, and linking practices to diverse health system resources. 
‘‘(B) P
RIMARY CARE PROVIDER .—The term ‘primary care

provider’ means a clinician who provides integrated, acces-sible health care services and who is accountable for addressing a large majority of personal health care needs, including providing preventive and health promotion serv-ices for men, women, and children of all ages, developing a sustained partnership with patients, and practicing in the context of family and community, as recognized by a State licensing or regulatory authority, unless otherwise specified in this section. 
‘‘(b) G

‘‘(b) G
RANTS TOESTABLISH STATE HUBS AND LOCAL PRIMARY  
CAREEXTENSION AGENCIES .— 
‘‘(1) G RANTS .—The Secretary shall award competitive 
grants to States for the establishment of State- or multistate- level primary care Primary Care Extension Program State Hubs (referred to in this section as ‘Hubs’). 
‘‘(2) C
OMPOSITION OF HUBS .—A Hub established by a State 
pursuant to paragraph (1)— 
‘‘(A) shall consist of, at a minimum, the State health

department, the entity responsible for administering the State Medicaid program (if other than the State health department), the State-level entity administering the Medi-care program, and the departments of 1 or more health professions schools in the State that train providers in primary care; and 
‘‘(B) may include entities such as hospital associations,

primary care practice-based research networks, health professional societies, State primary care associations, State licensing boards, organizations with a contract with the Secretary under section 1153 of the Social Security Act, consumer groups, and other appropriate entities. 
‘‘(c) S
TATE AND LOCAL ACTIVITIES .— 
‘‘(1) H UB ACTIVITIES .—Hubs established under a grant 
under subsection (b) shall— 
‘‘(A) submit to the Secretary a plan to coordinate func-

tions with quality improvement organizations and area health education centers if such entities are members of the Hub not described in subsection (b)(2)(A); 
‘‘(B) contract with a county- or local-level entity that 
shall serve as the Primary Care Extension Agency to 
administer the services described in paragraph (2); 
‘‘(C) organize and administer grant funds to county- 
or local-level Primary Care Extension Agencies that serve a catchment area, as determined by the State; and

‘‘(D) organize State-wide or multistate networks of 
local-level Primary Care Extension Agencies to share and disseminate information and practices. ‘‘(2) L
OCAL PRIMARY CARE EXTENSION AGENCY ACTIVITIES .— 
‘‘(A) R EQUIRED ACTIVITIES .—Primary Care Extension 
Agencies established by a Hub under paragraph (1) shall— Contracts. Plan.

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124 STAT. 651 PUBLIC LAW 111–148—MAR. 23, 2010 
‘‘(i) assist primary care providers to implement 
a patient-centered medical home to improve the acces-sibility, quality, and efficiency of primary care services, including health homes; 
‘‘(ii) develop and support primary care learning

‘‘(ii) develop and support primary care learning 
communities to enhance the dissemination of research findings for evidence-based practice, assess implementation of practice improvement, share best practices, and involve community clinicians in the generation of new knowledge and identification of important questions for research; 
‘‘(iii) participate in a national network of Primary

Care Extension Hubs and propose how the Primary Care Extension Agency will share and disseminate les-sons learned and best practices; and 
‘‘(iv) develop a plan for financial sustainability 
involving State, local, and private contributions, to pro-vide for the reduction in Federal funds that is expected after an initial 6-year period of program establishment, infrastructure development, and planning. ‘‘(B) D
ISCRETIONARY ACTIVITIES .—Primary Care Exten-

sion Agencies established by a Hub under paragraph (1) may— 
‘‘(i) provide technical assistance, training, and 
organizational support for community health teams established under section 3602 of the Patient Protec-tion and Affordable Care Act; 
‘‘(ii) collect data and provision of primary care 
provider feedback from standardized measurements of processes and outcomes to aid in continuous perform-ance improvement;

‘‘(iii) collaborate with local health departments, 
community health centers, tribes and tribal entities, and other community agencies to identify community health priorities and local health workforce needs, and participate in community-based efforts to address the social and primary determinants of health, strengthen the local primary care workforce, and eliminate health disparities; 
‘‘(iv) develop measures to monitor the impact of

‘‘(iv) develop measures to monitor the impact of 
the proposed program on the health of practice enrollees and of the wider community served; and 
‘‘(v) participate in other activities, as determined 
appropriate by the Secretary. 
‘‘(d) F
EDERAL PROGRAM ADMINISTRATION .— 
‘‘(1) G RANTS ; TYPES .—Grants awarded under subsection (b) 
shall be— 
‘‘(A) program grants, that are awarded to State or

multistate entities that submit fully-developed plans for the implementation of a Hub, for a period of 6 years; or 
‘‘(B) planning grants, that are awarded to State or 
multistate entities with the goal of developing a plan for a Hub, for a period of 2 years. ‘‘(2) A
PPLICATIONS .—To be eligible for a grant under sub-
section (b), a State or multistate entity shall submit to the Plan.

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124 STAT. 652 PUBLIC LAW 111–148—MAR. 23, 2010 
Secretary an application, at such time, in such manner, and 
containing such information as the Secretary may require. 
‘‘(3) E VALUATION .—A State that receives a grant under 
subsection (b) shall be evaluated at the end of the grant period by an evaluation panel appointed by the Secretary. 
‘‘(4) C
ONTINUING SUPPORT .—After the sixth year in which

assistance is provided to a State under a grant awarded under subsection (b), the State may receive additional support under this section if the State program has received satisfactory evaluations with respect to program performance and the merits of the State sustainability plan, as determined by the Secretary. 
‘‘(5) L
IMITATION .—A State shall not use in excess of 10

percent of the amount received under a grant to carry out administrative activities under this section. Funds awarded pursuant to this section shall not be used for funding direct patient care. ‘‘(e) R
EQUIREMENTS ON THE SECRETARY .—In carrying out this

section, the Secretary shall consult with the heads of other Federal agencies with demonstrated experience and expertise in health care and preventive medicine, such as the Centers for Disease Control and Prevention, the Substance Abuse and Mental Health Administration, the Health Resources and Services Administration, the National Institutes of Health, the Office of the National Coordi-nator for Health Information Technology, the Indian Health Service, the Agricultural Cooperative Extension

Service, the Agricultural Cooperative Extension Service of the Department of Agriculture, and other entities, as the Secretary determines appropriate.

‘‘(f) A
UTHORIZATION OF APPROPRIATIONS .—To awards grants as 
provided in subsection (d), there are authorized to be appropriated $120,000,000 for each of fiscal years 2011 and 2012, and such sums as may be necessary to carry out this section for each of fiscal years 2013 through 2014.’’. 
Subtitle F—Strengthening Primary Care 
and Other Workforce Improvements 
SEC. 5501. EXPANDING ACCESS TO PRIMARY CARE SERVICES AND GEN-
ERAL SURGERY SERVICES.

ERAL SURGERY SERVICES. 
(a) I NCENTIVE PAYMENT PROGRAM FOR PRIMARY CARE SERV-
ICES.— 
(1) I N GENERAL .—Section 1833 of the Social Security Act 
(42 U.S.C. 1395l) is amended by adding at the end the following new subsection: ‘‘(x) I
NCENTIVE PAYMENTS FOR PRIMARY CARESERVICES .— 
‘‘(1) I N GENERAL .—In the case of primary care services

furnished on or after January 1, 2011, and before January 1, 2016, by a primary care practitioner, in addition to the amount of payment that would otherwise be made for such 
services under this part, there also shall be paid (on a monthly or quarterly basis) an amount equal to 10 percent of the pay-ment amount for the service under this part. 
‘‘(2) D
‘‘(A) P RIMARY CARE PRACTITIONER .—The term ‘primary 
care practitioner’ means an individual—

care practitioner’ means an individual— 
‘‘(i) who— Time period. Consultation. Appointment. 
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124 STAT. 653 PUBLIC LAW 111–148—MAR. 23, 2010 
‘‘(I) is a physician (as described in section 
1861(r)(1)) who has a primary specialty designa-tion of family medicine, internal medicine, geriatric medicine, or pediatric medicine; or 
‘‘(II) is a nurse practitioner, clinical nurse spe-
cialist, or physician assistant (as those terms are defined in section 1861(aa)(5)); and ‘‘(ii) for whom primary care services accounted for

at least 60 percent of the allowed charges under this part for such physician or practitioner in a prior period as determined appropriate by the Secretary. ‘‘(B) P
RIMARY CARE SERVICES .—The term ‘primary care 
services’ means services identified, as of January 1, 2009, by the following HCPCS codes (and as subsequently modi-fied by the Secretary): 
‘‘(i) 99201 through 99215. ‘‘(ii) 99304 through 99340. ‘‘(iii) 99341 through 99350. 
‘‘(3) C
OORDINATION WITH OTHER PAYMENTS .—The amount

OORDINATION WITH OTHER PAYMENTS .—The amount 
of the additional payment for a service under this subsection and subsection (m) shall be determined without regard to any additional payment for the service under subsection (m) and this subsection, respectively. 
‘‘(4) L
tive or judicial review under section 1869, 1878, or otherwise, respecting the identification of primary care practitioners under this subsection.’’. 
(2) C

(2) C
ONFORMING AMENDMENT .—Section 1834(g)(2)(B) of the 
Social Security Act (42 U.S.C. 1395m(g)(2)(B)) is amended by adding at the end the following sentence: ‘‘Section 1833(x) shall not be taken into account in determining the amounts that would otherwise be paid pursuant to the preceding sentence.’’. (b) I
NCENTIVE PAYMENT PROGRAM FOR MAJOR SURGICAL PROCE -
DURES FURNISHED IN HEALTH PROFESSIONAL SHORTAGE AREAS .— 
(1) I N GENERAL .—Section 1833 of the Social Security Act

(42 U.S.C. 1395l), as amended by subsection (a)(1), is amended by adding at the end the following new subsection: ‘‘(y) I
NCENTIVE PAYMENTS FOR MAJOR SURGICAL PROCEDURES  
FURNISHED IN HEALTH PROFESSIONAL SHORTAGE AREAS .— 
‘‘(1) I N GENERAL .—In the case of major surgical procedures

furnished on or after January 1, 2011, and before January 1, 2016, by a general surgeon in an area that is designated (under section 332(a)(1)(A) of the Public Health Service Act) as a health professional shortage area as identified by the Secretary prior to the beginning of the year involved, in addition to the amount of payment that would otherwise be made for such services under this part, there also shall be paid (on a monthly or quarterly basis) an amount equal to 10 percent of the payment

an amount equal to 10 percent of the payment amount for the service under this part.

‘‘(2) D
‘‘(A) G ENERAL SURGEON .—In this subsection, the term 
‘general surgeon’ means a physician (as described in section 1861(r)(1)) who has designated CMS specialty code 02– General Surgery as their primary specialty code in the physician’s enrollment under section 1866(j). 
‘‘(B) M
AJOR SURGICAL PROCEDURES .—The term ‘major 
surgical procedures’ means physicians’ services which are Time period. Determination.

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124 STAT. 654 PUBLIC LAW 111–148—MAR. 23, 2010 
surgical procedures for which a 10-day or 90-day global 
period is used for payment under the fee schedule under section 1848(b). ‘‘(3) C
‘‘(4) A

‘‘(4) A
PPLICATION .—The provisions of paragraph (2) and 
(4) of subsection (m) shall apply to the determination of addi-tional payments under this subsection in the same manner as such provisions apply to the determination of additional payments under subsection (m).’’. 
(2) C
ONFORMING AMENDMENT .—Section 1834(g)(2)(B) of the

Social Security Act (42 U.S.C. 1395m(g)(2)(B)), as amended by subsection (a)(2), is amended by striking ‘‘Section 1833(x)’’ and inserting ‘‘Subsections (x) and (y) of section 1833’’ in the last sentence. (c) B
UDGET -NEUTRALITY ADJUSTMENT .—Section 1848(c)(2)(B) of 
the Social Security Act (42 U.S.C. 1395w–4(c)(2)(B)) is amended by adding at the end the following new clause: 
‘‘(vii) A
DJUSTMENT FOR CERTAIN PHYSICIAN INCEN -
TIVE PAYMENTS .—Fifty percent of the additional

expenditures under this part attributable to sub-sections (x) and (y) of section 1833 for a year (as estimated by the Secretary) shall be taken into account in applying clause (ii)(II) for 2011 and subsequent years. In lieu of applying the budget-neutrality adjust-ments required under clause (ii)(II) to relative value units to account for such costs for the year, the Sec-retary shall apply such budget-neutrality adjustments to the conversion factor otherwise determined for the year. For 2011

otherwise determined for the year. For 2011 and subsequent years, the Secretary shall increase the incentive payment otherwise applicable under section 1833(m) by a percent esti-mated to be equal to the additional expenditures esti-mated under the first sentence of this clause for such year that is applicable to physicians who primarily furnish services in areas designated (under section 332(a)(1)(A) of the Public Health Service Act) as health professional shortage areas.’’.

SEC. 5502. MEDICARE FEDERALLY QUALIFIED HEALTH CENTER 
IMPROVEMENTS. 
(a) E XPANSION OF MEDICARE -COVERED PREVENTIVE SERVICES  
ATFEDERALLY QUALIFIED HEALTH CENTERS .— 
(1) I N GENERAL .—Section 1861(aa)(3)(A) of the Social Secu-
rity Act (42 U.S.C. 1395w (aa)(3)(A)) is amended to read as follows: 
‘‘(A) services of the type described subparagraphs (A) 
through (C) of paragraph (1) and preventive services (as defined in section 1861(ddd)(3)); and’’. (2) E

(1) shall apply to services furnished on or after January 1, 2011. (b) P
ROSPECTIVE PAYMENT SYSTEM FOR FEDERALLY QUALIFIED  
HEALTH CENTERS .—Section 1834 of the Social Security Act (42 Applicability. 42 USC 1395x note. 42 USC 1395x. Applicability. 
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124 STAT. 655 PUBLIC LAW 111–148—MAR. 23, 2010 
U.S.C. 1395m) is amended by adding at the end the following 
new subsection: 
‘‘(n) D EVELOPMENT AND IMPLEMENTATION OF PROSPECTIVE PAY-
MENT SYSTEM .— 
‘‘(A) I N GENERAL .—The Secretary shall develop a

prospective payment system for payment for Federally qualified health services furnished by Federally qualified health centers under this title. Such system shall include a process for appropriately describing the services fur-nished by Federally qualified health centers. 
‘‘(B) C
OLLECTION OF DATA AND EVALUATION .—The Sec-

retary shall require Federally qualified health centers to submit to the Secretary such information as the Secretary may require in order to develop and implement the prospec-tive payment system under this paragraph and paragraph (2), respectively, including the reporting of services using HCPCS codes. ‘‘(2) I
‘‘(A) I N GENERAL .—Notwithstanding section

‘‘(A) I N GENERAL .—Notwithstanding section 
1833(a)(3)(B), the Secretary shall provide, for cost reporting periods beginning on or after October 1, 2014, for payments for Federally qualified health services furnished by Feder-ally qualified health centers under this title in accordance with the prospective payment system developed by the Secretary under paragraph (1). 
‘‘(B) P
AYMENTS .— 
‘‘(i) I NITIAL PAYMENTS .—The Secretary shall imple-

ment such prospective payment system so that the estimated amount of expenditures under this title for Federally qualified health services in the first year that the prospective payment system is implemented is equal to 103 percent of the estimated amount of expenditures under this title that would have occurred for such services in such year if the system had not been implemented. 
‘‘(ii) P
AYMENTS IN SUBSEQUENT YEARS .—In the year

AYMENTS IN SUBSEQUENT YEARS .—In the year 
after the first year of implementation of such system, and in each subsequent year, the payment rate for Federally qualified health services furnished in the year shall be equal to the payment rate established for such services furnished in the preceding year under this subparagraph increased by the percentage increase in the MEI (as defined in 1842(i)(3)) for the year involved.’’. 
SEC. 5503. DISTRIBUTION OF ADDITIONAL RESIDENCY POSITIONS.

(a) I NGENERAL .—Section 1886(h) of the Social Security Act 
(42 U.S.C. 1395ww(h)) is amended— 
(1) in paragraph (4)(F)(i), by striking ‘‘paragraph (7)’’ and 
inserting ‘‘paragraphs (7) and (8)’’; 
(2) in paragraph (4)(H)(i), by striking ‘‘paragraph (7)’’ and 
(3) in paragraph (7)(E), by inserting ‘‘or paragraph (8)’’ 
before the period at the end; and 
(4) by adding at the end the following new paragraph: ‘‘(8) D

ISTRIBUTION OF ADDITIONAL RESIDENCY POSITIONS .— Effective date. 
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124 STAT. 656 PUBLIC LAW 111–148—MAR. 23, 2010 
‘‘(A) R EDUCTIONS IN LIMIT BASED ON UNUSED POSI -
TIONS .— 

(ii), if a hospital’s reference resident level (as defined in subparagraph (H)(i)) is less than the otherwise applicable resident limit (as defined in subparagraph (H)(iii)), effective for portions of cost reporting periods occurring on or after July 1, 2011, the otherwise applicable resident limit shall be reduced by 65 percent of the difference between such otherwise applicable resident limit and such reference resident level. 
‘‘(ii) E

‘‘(ii) E
XCEPTIONS .—This subparagraph shall not 
apply to— 
‘‘(I) a hospital located in a rural area (as 
defined in subsection (d)(2)(D)(ii)) with fewer than 250 acute care inpatient beds; 
‘‘(II) a hospital that was part of a qualifying

‘‘(II) a hospital that was part of a qualifying 
entity which had a voluntary residency reduction plan approved under paragraph (6)(B) or under the authority of section 402 of Public Law 90– 248, if the hospital demonstrates to the Secretary that it has a specified plan in place for filling the unused positions by not later than 2 years after the date of enactment of this paragraph; or 
‘‘(III) a hospital described in paragraph 
(4)(H)(v). 
‘‘(B) D
ISTRIBUTION .—

‘‘(B) D
ISTRIBUTION .— 
‘‘(i) I N GENERAL .—The Secretary shall increase the

otherwise applicable resident limit for each qualifying hospital that submits an application under this subparagraph by such number as the Secretary may approve for portions of cost reporting periods occurring on or after July 1, 2011. The aggregate number of increases in the otherwise applicable resident limit under this subparagraph shall be equal to the aggre-gate reduction in such limits attributable to subpara-graph (A) (as estimated by the Secretary). 
‘‘(ii) R

‘‘(ii) R
EQUIREMENTS .—Subject to clause (iii), a hos-
pital that receives an increase in the otherwise applicable resident limit under this subparagraph shall ensure, during the 5-year period beginning on the date of such increase, that— 
‘‘(I) the number of full-time equivalent primary 
care residents, as defined in paragraph (5)(H) (as determined by the Secretary), excluding any addi-

tional positions under subclause (II), is not less than the average number of full-time equivalent primary care residents (as so determined) during the 3 most recent cost reporting periods ending prior to the date of enactment of this paragraph; and 
‘‘(II) not less than 75 percent of the positions 
attributable to such increase are in a primary care or general surgery residency (as determined by the Secretary). Deadline. Effective date.

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124 STAT. 657 PUBLIC LAW 111–148—MAR. 23, 2010 
The Secretary may determine whether a hospital has 
met the requirements under this clause during such 5-year period in such manner and at such time as the Secretary determines appropriate, including at the end of such 5-year period. 
‘‘(iii) R
EDISTRIBUTION OF POSITIONS IF HOSPITAL  
NO LONGER MEETS CERTAIN REQUIREMENTS .—In the

NO LONGER MEETS CERTAIN REQUIREMENTS .—In the 
case where the Secretary determines that a hospital described in clause (ii) does not meet either of the requirements under subclause (I) or (II) of such clause, the Secretary shall— 
‘‘(I) reduce the otherwise applicable resident 
limit of the hospital by the amount by which such limit was increased under this paragraph; and 
‘‘(II) provide for the distribution of positions

‘‘(II) provide for the distribution of positions 
attributable to such reduction in accordance with the requirements of this paragraph. 
‘‘(C) C
ONSIDERATIONS IN REDISTRIBUTION .—In deter-
mining for which hospitals the increase in the otherwise applicable resident limit is provided under subparagraph (B), the Secretary shall take into account— 
‘‘(i) the demonstration likelihood of the hospital

filling the positions made available under this para-graph within the first 3 cost reporting periods begin-ning on or after July 1, 2011, as determined by the Secretary; and 
‘‘(ii) whether the hospital has an accredited rural 
training track (as described in paragraph (4)(H)(iv)). ‘‘(D) P
RIORITY FOR CERTAIN AREAS .—In determining for

RIORITY FOR CERTAIN AREAS .—In determining for 
which hospitals the increase in the otherwise applicable resident limit is provided under subparagraph (B), subject to subparagraph (E), the Secretary shall distribute the increase to hospitals based on the following factors: 
‘‘(i) Whether the hospital is located in a State 
with a resident-to-population ratio in the lowest quar-tile (as determined by the Secretary). 
‘‘(ii) Whether the hospital is located in a State,

a territory of the United States, or the District of Columbia that is among the top 10 States, territories, or Districts in terms of the ratio of— 
‘‘(I) the total population of the State, territory, 
or District living in an area designated (under such section 332(a)(1)(A)) as a health professional shortage area (as of the date of enactment of this paragraph); to 
‘‘(II) the total population of the State, territory,

or District (as determined by the Secretary based on the most recent available population data pub-lished by the Bureau of the Census). ‘‘(iii) Whether the hospital is located in a rural 
area (as defined in subsection (d)(2)(D)(ii)). ‘‘(E) R
ESERVATION OF POSITIONS FOR CERTAIN HOS -
PITALS .— 
‘‘(i) I N GENERAL .—Subject to clause (ii), the Sec-
retary shall reserve the positions available for distribu-tion under this paragraph as follows: Effective date.

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124 STAT. 658 PUBLIC LAW 111–148—MAR. 23, 2010 
‘‘(I) 70 percent of such positions for distribu-
tion to hospitals described in clause (i) of subpara-graph (D). 
‘‘(II) 30 percent of such positions for distribu-
tion to hospitals described in clause (ii) and (iii) of such subparagraph. ‘‘(ii) E
XCEPTION IF POSITIONS NOT REDISTRIBUTED  
BY JULY 1 , 2011.—In the case where the Secretary does

not distribute positions to hospitals in accordance with clause (i) by July 1, 2011, the Secretary shall distribute such positions to other hospitals in accordance with the considerations described in subparagraph (C) and the priority described in subparagraph (D). ‘‘(F) L
IMITATION .—A hospital may not receive more 
than 75 full-time equivalent additional residency positions under this paragraph. 
‘‘(G) A
PPLICATION OF PER RESIDENT AMOUNTS FOR PRI -

MARY CARE AND NONPRIMARY CARE .—With respect to addi-
tional residency positions in a hospital attributable to the increase provided under this paragraph, the approved FTE per resident amounts are deemed to be equal to the hospital per resident amounts for primary care and nonprimary care computed under paragraph (2)(D) for that hospital. 
‘‘(H) D
EFINITIONS .—In this paragraph: 
‘‘(i) R EFERENCE RESIDENT LEVEL .—The term ‘ref-

erence resident level’ means, with respect to a hospital, the highest resident level for any of the 3 most recent cost reporting periods (ending before the date of the enactment of this paragraph) of the hospital for which a cost report has been settled (or, if not, submitted (subject to audit)), as determined by the Secretary. 
‘‘(ii) R
ESIDENT LEVEL .—The term ‘resident level’ 
has the meaning given such term in paragraph (7)(C)(i). 
‘‘(iii) O

‘‘(iii) O
THERWISE APPLICABLE RESIDENT LIMIT .—The 
term ‘otherwise applicable resident limit’ means, with respect to a hospital, the limit otherwise applicable under subparagraphs (F)(i) and (H) of paragraph (4) on the resident level for the hospital determined with-out regard to this paragraph but taking into account paragraph (7)(A).’’. 
(b) IME.— 
(1) I
N GENERAL .—Section 1886(d)(5)(B)(v) of the Social 
Security Act (42 U.S.C. 1395ww(d)(5)(B)(v)), in the second sen-tence, is amended—

(A) by striking ‘‘subsection (h)(7)’’ and inserting ‘‘sub-
sections (h)(7) and (h)(8)’’; and 
(B) by striking ‘‘it applies’’ and inserting ‘‘they apply’’. 
(2) C
ONFORMING AMENDMENT .—Section 1886(d)(5)(B) of the 
Social Security Act (42 U.S.C. 1395ww(d)(5)(B)) is amended by adding at the end the following clause: 
‘‘(x) For discharges occurring on or after July 1, 2011,

insofar as an additional payment amount under this subpara-graph is attributable to resident positions distributed to a hos-pital under subsection (h)(8)(B), the indirect teaching adjust-ment factor shall be computed in the same manner as provided under clause (ii) with respect to such resident positions.’’. Effective date. Deadline.

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124 STAT. 659 PUBLIC LAW 111–148—MAR. 23, 2010 
(c) C ONFORMING AMENDMENT .—Section 422(b)(2) of the Medi-
care Prescription Drug, Improvement, and Modernization Act of 2003 (Public Law 108–173) is amended by striking ‘‘section 1886(h)(7)’’ and all that follows and inserting ‘‘paragraphs (7) and (8) of subsection (h) of section 1886 of the Social Security Act’’. 
SEC. 5504. COUNTING RESIDENT TIME IN NONPROVIDER SETTINGS. 
(a) GME.—Section 1886(h)(4)(E) of the Social Security Act (42

U.S.C. 1395ww(h)(4)(E)) is amended— 
(1) by striking ‘‘shall be counted and that all the time’’ 
and inserting ‘‘shall be counted and that— 
‘‘(i) effective for cost reporting periods beginning 
before July 1, 2010, all the time;’’; 
(2) in clause (i), as inserted by paragraph (1), by striking 
the period at the end and inserting ‘‘; and’’; 
(3) by inserting after clause (i), as so inserted, the following 
‘‘(ii) effective for cost reporting periods beginning

on or after July 1, 2010, all the time so spent by a resident shall be counted towards the determination of full-time equivalency, without regard to the setting in which the activities are performed, if a hospital incurs the costs of the stipends and fringe benefits of the resident during the time the resident spends in that setting. If more than one hospital incurs these costs, either directly or through a third party, such hospitals shall count a proportional share of the time, as determined

a proportional share of the time, as determined by written agreement between the hos-pitals, that a resident spends training in that setting.’’; and

(4) by adding at the end the following flush sentence: ‘‘Any hospital claiming under this subparagraph for time spent in a nonprovider setting shall maintain and make available to the Secretary records regarding the amount of such time and such amount in comparison with amounts of such time in such base year as the Secretary shall specify.’’. 
(b) IME.—Section 1886(d)(5)(B)(iv) of the Social Security Act 
(42 U.S.C. 1395ww(d)(5)) is amended—

(42 U.S.C. 1395ww(d)(5)) is amended— 
(1) by striking ‘‘(iv) Effective for discharges occurring on 
or after October 1, 1997’’ and inserting ‘‘(iv)(I) Effective for discharges occurring on or after October 1, 1997, and before July 1, 2010’’; and 
(2) by inserting after clause (I), as inserted by paragraph 
(1), the following new subparagraph: 
‘‘(II) Effective for discharges occurring on or after July

1, 2010, all the time spent by an intern or resident in patient care activities in a nonprovider setting shall be counted towards the determination of full-time equivalency if a hospital incurs the costs of the stipends and fringe benefits of the intern or resident during the time the intern or resident spends in that setting. If more than one hospital incurs these costs, either directly or through a third party, such hospitals shall count a proportional share of the time, as determined by

proportional share of the time, as determined by written agreement between the hospitals, that a resident spends training in that setting.’’.

Time period. Records. Effective dates. 42 USC 1395ww 
note. 
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124 STAT. 660 PUBLIC LAW 111–148—MAR. 23, 2010 
(c) A PPLICATION .—The amendments made by this section shall

not be applied in a manner that requires reopening of any settled hospital cost reports as to which there is not a jurisdictionally proper appeal pending as of the date of the enactment of this Act on the issue of payment for indirect costs of medical education under section 1886(d)(5)(B) of the Social Security Act (42 U.S.C. 1395ww(d)(5)(B)) or for direct graduate medical education costs under section 1886(h) of such Act (42 U.S.C. 1395ww(h)).

SEC. 5505. RULES FOR COUNTING RESIDENT TIME FOR DIDACTIC AND 
SCHOLARLY ACTIVITIES AND OTHER ACTIVITIES. 
(a) GME.—Section 1886(h) of the Social Security Act (42 U.S.C. 
1395ww(h)), as amended by section 5504, is amended— 
(1) in paragraph (4)— 
(A) in subparagraph (E), by striking ‘‘Such rules’’ and 
inserting ‘‘Subject to subparagraphs (J) and (K), such rules’’; and 
graphs: 
‘‘(J) T
REATMENT OF CERTAIN NONPROVIDER AND

‘‘(J) T
REATMENT OF CERTAIN NONPROVIDER AND  
DIDACTIC ACTIVITIES .—Such rules shall provide that all time

spent by an intern or resident in an approved medical residency training program in a nonprovider setting that is primarily engaged in furnishing patient care (as defined in paragraph (5)(K)) in non-patient care activities, such as didactic conferences and seminars, but not including research not associated with the treatment or diagnosis of a particular patient, as such time and activities are defined by the Secretary, shall be counted toward the deter-mination of full-time equivalency.

determining the hospital’s number of full-time equivalent residents for purposes of this subsection, all the time that is spent by an intern or resident in an approved medical residency training program on vacation, sick leave, or other approved leave, as such time is defined by the Secretary, and that does not prolong the total time the resident is participating in the approved program beyond the normal duration of the program shall be counted toward the deter-mination of full-time

be counted toward the deter-mination of full-time equivalency.’’; and (2) in paragraph (5), by adding at the end the following

‘‘(K) N
ONPROVIDER SETTING THAT IS PRIMARILY  
ENGAGED IN FURNISHING PATIENT CARE .—The term ‘nonpro-
vider setting that is primarily engaged in furnishing patient care’ means a nonprovider setting in which the primary activity is the care and treatment of patients, as defined by the Secretary.’’. 
(b) IME D
ETERMINATIONS .—Section 1886(d)(5)(B) of such Act 
(42 U.S.C. 1395ww(d)(5)(B)) is amended by adding at the end the following new clause:

‘‘(x)(I) The provisions of subparagraph (K) of sub-
section (h)(4) shall apply under this subparagraph in the same manner as they apply under such subsection. 
‘‘(II) In determining the hospital’s number of full- 
time equivalent residents for purposes of this subpara-graph, all the time spent by an intern or resident Applicability. Definition. 42 USC 1395ww 
note.

note. 
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124 STAT. 661 PUBLIC LAW 111–148—MAR. 23, 2010 
in an approved medical residency training program 
in non-patient care activities, such as didactic con-ferences and seminars, as such time and activities are defined by the Secretary, that occurs in the hospital shall be counted toward the determination of full-time equivalency if the hospital— 
‘‘(aa) is recognized as a subsection (d) hospital; ‘‘(bb) is recognized as a subsection (d) Puerto 
Rico hospital;

Rico hospital; 
‘‘(cc) is reimbursed under a reimbursement 
system authorized under section 1814(b)(3); or 
‘‘(dd) is a provider-based hospital outpatient 
department. ‘‘(III) In determining the hospital’s number of full-

time equivalent residents for purposes of this subpara-graph, all the time spent by an intern or resident in an approved medical residency training program in research activities that are not associated with the treatment or diagnosis of a particular patient, as such time and activities are defined by the Secretary, shall not be counted toward the determination of full-time equivalency.’’. 
(c) E
FFECTIVE DATES .— 
(1) I N GENERAL .—Except as otherwise provided, the Sec-

retary of Health and Human Services shall implement the amendments made by this section in a manner so as to apply to cost reporting periods beginning on or after January 1, 1983. 
(2) GME.—Section 1886(h)(4)(J) of the Social Security Act, 
as added by subsection (a)(1)(B), shall apply to cost reporting periods beginning on or after July 1, 2009. 
(3) IME.—Section 1886(d)(5)(B)(x)(III) of the Social Security

Act, as added by subsection (b), shall apply to cost reporting periods beginning on or after October 1, 2001. Such section, as so added, shall not give rise to any inference as to how the law in effect prior to such date should be interpreted. 
SEC. 5506. PRESERVATION OF RESIDENT CAP POSITIONS FROM 
CLOSED HOSPITALS. 
(a) GME.—Section 1886(h)(4)(H) of the Social Security Act (42 
U.S.C. Section 1395ww(h)(4)(H)) is amended by adding at the end the following new clause: 
‘‘(vi) R

‘‘(vi) R
EDISTRIBUTION OF RESIDENCY SLOTS AFTER  
A HOSPITAL CLOSES .— 
‘‘(I) I N GENERAL .—Subject to the succeeding

‘‘(I) I N GENERAL .—Subject to the succeeding 
provisions of this clause, the Secretary shall, by regulation, establish a process under which, in the case where a hospital (other than a hospital described in clause (v)) with an approved medical residency program closes on or after a date that is 2 years before the date of enactment of this clause, the Secretary shall increase the otherwise applicable resident limit under this paragraph for other hospitals in accordance with this clause.

‘‘(II) P
RIORITY FOR HOSPITALS IN CERTAIN  
AREAS .—Subject to the succeeding provisions of 
this clause, in determining for which hospitals the Regulations. Applicability. 
42 USC 1395ww note. 
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124 STAT. 662 PUBLIC LAW 111–148—MAR. 23, 2010 
increase in the otherwise applicable resident limit 
is provided under such process, the Secretary shall distribute the increase to hospitals in the following priority order (with preference given within each category to hospitals that are members of the same affiliated group (as defined by the Secretary under clause (ii)) as the closed hospital): 
‘‘(aa) First, to hospitals located in the

‘‘(aa) First, to hospitals located in the 
same core-based statistical area as, or a core- based statistical area contiguous to, the hos-pital that closed. 
‘‘(bb) Second, to hospitals located in the 
same State as the hospital that closed. 
‘‘(cc) Third, to hospitals located in the 
same region of the country as the hospital that closed. 
‘‘(dd) Fourth, only if the Secretary is not

‘‘(dd) Fourth, only if the Secretary is not 
able to distribute the increase to hospitals described in item (cc), to qualifying hospitals in accordance with the provisions of paragraph (8). ‘‘(III) R
EQUIREMENT HOSPITAL LIKELY TO FILL  
POSITION WITHIN CERTAIN TIME PERIOD .—The Sec-

retary may only increase the otherwise applicable resident limit of a hospital under such process if the Secretary determines the hospital has dem-onstrated a likelihood of filling the positions made available under this clause within 3 years. 
‘‘(IV) L
IMITATION .—The aggregate number of

‘‘(IV) L
IMITATION .—The aggregate number of 
increases in the otherwise applicable resident limits for hospitals under this clause shall be equal to the number of resident positions in the approved medical residency programs that closed on or after the date described in subclause (I). 
‘‘(V) A
DMINISTRATION .—Chapter 35 of title 44, 
United States Code, shall not apply to the implementation of this clause.’’. 
(b) IME.—Section 1886(d)(5)(B)(v) of the Social Security Act

(42 U.S.C. 1395ww(d)(5)(B)(v)), in the second sentence, as amended by section 5503, is amended by striking ‘‘subsections (h)(7) and (h)(8)’’ and inserting ‘‘subsections (h)(4)(H)(vi), (h)(7), and (h)(8)’’. 
(c) A
PPLICATION .—The amendments made by this section shall

not be applied in a manner that requires reopening of any settled hospital cost reports as to which there is not a jurisdictionally proper appeal pending as of the date of the enactment of this Act on the issue of payment for indirect costs of medical education 
under section 1886(d)(5)(B) of the Social Security Act (42 U.S.C. 1395ww(d)(5)(B)) or for direct graduate medical education costs under section 1886(h) of such Act (42 U.S.C. Section 1395ww(h)). 
(d) E

(d) E
FFECT ON TEMPORARY FTE C APADJUSTMENTS .—The Sec-
retary of Health and Human Services shall give consideration to the effect of the amendments made by this section on any temporary adjustment to a hospital’s FTE cap under section 413.79(h) of title 42, Code of Federal Regulations (as in effect on the date of enactment of this Act) in order to ensure that there is no duplication of FTE slots. Such amendments shall not affect the 42 USC 1395ww 
note. Determination.

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124 STAT. 663 PUBLIC LAW 111–148—MAR. 23, 2010 
application of section 1886(h)(4)(H)(v) of the Social Security Act 
(42 U.S.C. 1395ww(h)(4)(H)(v)). 
(e) C ONFORMING AMENDMENT .—Section 1886(h)(7)(E) of the 
Social Security Act (42 U.S.C. 1395ww(h)(7)(E)), as amended by section 5503(a), is amended by striking ‘‘paragraph or paragraph (8)’’ and inserting ‘‘this paragraph, paragraph (8), or paragraph (4)(H)(vi)’’. 
SEC. 5507. DEMONSTRATION PROJECTS TO ADDRESS HEALTH PROFES-

SIONS WORKFORCE NEEDS; EXTENSION OF FAMILY-TO- FAMILY HEALTH INFORMATION CENTERS. 
(a) A UTHORITY TOCONDUCT DEMONSTRATION PROJECTS .—Title 
XX of the Social Security Act (42 U.S.C. 1397 et seq.) is amended by adding at the end the following: 
‘‘SEC. 2008. DEMONSTRATION PROJECTS TO ADDRESS HEALTH 
PROFESSIONS WORKFORCE NEEDS. 
‘‘(a) D EMONSTRATION PROJECTS TOPROVIDE LOW-INCOME  
INDIVIDUALS WITHOPPORTUNITIES FOR EDUCATION , TRAINING , AND 
CAREER ADVANCEMENT TOADDRESS HEALTH PROFESSIONS

CAREER ADVANCEMENT TOADDRESS HEALTH PROFESSIONS  
WORKFORCE NEEDS .— 
‘‘(1) A UTHORITY TO AWARD GRANTS .—The Secretary, in con-
sultation with the Secretary of Labor, shall award grants to eligible entities to conduct demonstration projects that are designed to provide eligible individuals with the opportunity to obtain education and training for occupations in the health care field that pay well and are expected to either experience labor shortages or be in high demand. 
‘‘(2) R

‘‘(2) R
‘‘(A) A ID AND SUPPORTIVE SERVICES .— 
‘‘(i) I N GENERAL .—A demonstration project con-
ducted by an eligible entity awarded a grant under this section shall, if appropriate, provide eligible individuals participating in the project with financial aid, child care, case management, and other supportive services. 
‘‘(ii) T
REATMENT .—Any aid, services, or incentives

REATMENT .—Any aid, services, or incentives 
provided to an eligible beneficiary participating in a demonstration project under this section shall not be considered income, and shall not be taken into account for purposes of determining the individual’s eligibility for, or amount of, benefits under any means-tested program. ‘‘(B) C
ONSULTATION AND COORDINATION .—An eligible

ONSULTATION AND COORDINATION .—An eligible 
entity applying for a grant to carry out a demonstration project under this section shall demonstrate in the applica-tion that the entity has consulted with the State agency responsible for administering the State TANF program, the local workforce investment board in the area in which

the project is to be conducted (unless the applicant is such board), the State workforce investment board estab-lished under section 111 of the Workforce Investment Act of 1998, and the State Apprenticeship Agency recognized under the Act of August 16, 1937 (commonly known as the ‘National Apprenticeship Act’) (or if no agency has been recognized in the State, the Office of Apprenticeship of the Department of Labor) and that the project will be carried out in coordination with such entities. 42

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124 STAT. 664 PUBLIC LAW 111–148—MAR. 23, 2010 
‘‘(C) A SSURANCE OF OPPORTUNITIES FOR INDIAN POPU -
LATIONS .—The Secretary shall award at least 3 grants 
under this subsection to an eligible entity that is an Indian tribe, tribal organization, or Tribal College or University. ‘‘(3) R
EPORTS AND EVALUATION .— 
‘‘(A) E LIGIBLE ENTITIES .—An eligible entity awarded

a grant to conduct a demonstration project under this sub-section shall submit interim reports to the Secretary on the activities carried out under the project and a final report on such activities upon the conclusion of the entities’ participation in the project. Such reports shall include assessments of the effectiveness of such activities with respect to improving outcomes for the eligible individuals participating in the project and with respect to addressing health professions workforce

to addressing health professions workforce needs in the areas in which the project is conducted.

tract, or interagency agreement, evaluate the demonstra-tion projects conducted under this subsection. Such evalua-tion shall include identification of successful activities for creating opportunities for developing and sustaining, particularly with respect to low-income individuals and other entry-level workers, a health professions workforce that has accessible entry points, that meets high standards for education, training, certification, and professional development, and that provides

and professional development, and that provides increased wages and afford-able benefits, including health care coverage, that are responsive to the workforce’s needs.

‘‘(C) R
EPORT TO CONGRESS .—The Secretary shall submit 
interim reports and, based on the evaluation conducted under subparagraph (B), a final report to Congress on the demonstration projects conducted under this subsection. ‘‘(4) D
‘‘(A) E LIGIBLE ENTITY .—The term ‘eligible entity’ means

a State, an Indian tribe or tribal organization, an institu-tion of higher education, a local workforce investment board established under section 117 of the Workforce Investment Act of 1998, a sponsor of an apprenticeship program reg-istered under the National Apprenticeship Act or a commu-nity-based organization. 
‘‘(B) E
‘‘(i) I N GENERAL .—The term ‘eligible individual’ 
means a individual receiving assistance under the State TANF program. 
‘‘(ii) O

‘‘(ii) O
THER LOW -INCOME INDIVIDUALS .—Such term 
may include other low-income individuals described 
by the eligible entity in its application for a grant under this section. ‘‘(C) I
‘Indian tribe’ and ‘tribal organization’ have the meaning given such terms in section 4 of the Indian Self-Determina-tion and Education Assistance Act (25 U.S.C. 450b). 
‘‘(D) I
NSTITUTION OF HIGHER EDUCATION .—The term

NSTITUTION OF HIGHER EDUCATION .—The term 
‘institution of higher education’ has the meaning given that term in section 101 of the Higher Education Act of 1965 (20 U.S.C. 1001). Grants. 
Contracts. Grants. 
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124 STAT. 665 PUBLIC LAW 111–148—MAR. 23, 2010 
‘‘(E) S TATE .—The term ‘State’ means each of the 50 
States, the District of Columbia, the Commonwealth of Puerto Rico, the United States Virgin Islands, Guam, and American Samoa. 
‘‘(F) S
TATE TANF PROGRAM .—The term ‘State TANF 
program’ means the temporary assistance for needy fami-lies program funded under part A of title IV. 
‘‘(G) T
RIBAL COLLEGE OR UNIVERSITY .—The term ‘Tribal

RIBAL COLLEGE OR UNIVERSITY .—The term ‘Tribal 
College or University’ has the meaning given that term in section 316(b) of the Higher Education Act of 1965 (20 U.S.C. 1059c(b)). 
‘‘(b) D
EMONSTRATION PROJECT TODEVELOP TRAINING AND CER-
TIFICATION PROGRAMS FOR PERSONAL OR HOME CAREAIDES.— 
‘‘(1) A UTHORITY TO AWARD GRANTS .—Not later than 18

months after the date of enactment of this section, the Secretary shall award grants to eligible entities that are States to conduct demonstration projects for purposes of developing core training competencies and certification programs for personal or home care aides. The Secretary shall— 
‘‘(A) evaluate the efficacy of the core training com-

petencies described in paragraph (3)(A) for newly hired personal or home care aides and the methods used by States to implement such core training competencies in accordance with the issues specified in paragraph (3)(B); and 
‘‘(B) ensure that the number of hours of training pro-

vided by States under the demonstration project with respect to such core training competencies are not less than the number of hours of training required under any applicable State or Federal law or regulation. ‘‘(2) D
URATION .—A demonstration project shall be con-
ducted under this subsection for not less than 3 years. 
‘‘(3) C ORE TRAINING COMPETENCIES FOR PERSONAL OR HOME  
CARE AIDES .— 
‘‘(A) I N GENERAL .—The core training competencies for

personal or home care aides described in this subparagraph include competencies with respect to the following areas: 
‘‘(i) The role of the personal or home care aide 
(including differences between a personal or home care aide employed by an agency and a personal or home care aide employed directly by the health care con-sumer or an independent provider). 
‘‘(ii) Consumer rights, ethics, and confidentiality

(including the role of proxy decision-makers in the case where a health care consumer has impaired deci-sion-making capacity). 
‘‘(iii) Communication, cultural and linguistic com-
petence and sensitivity, problem solving, behavior management, and relationship skills. 
‘‘(iv) Personal care skills. ‘‘(v) Health care support. ‘‘(vi) Nutritional support. ‘‘(vii) Infection control. ‘‘(viii) Safety and emergency training. ‘‘(ix) Training specific to an individual consumer’s

needs (including older individuals, younger individuals with disabilities, individuals with developmental Evaluation. Deadline. 
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124 STAT. 666 PUBLIC LAW 111–148—MAR. 23, 2010 
disabilities, individuals with dementia, and individuals 
with mental and behavioral health needs). 
‘‘(x) Self-Care. 
‘‘(B) I MPLEMENTATION .—The implementation issues 
specified in this subparagraph include the following: 
‘‘(i) The length of the training. ‘‘(ii) The appropriate trainer to student ratio. ‘‘(iii) The amount of instruction time spent in the 
classroom as compared to on-site in the home or a facility.

‘‘(iv) Trainer qualifications. ‘‘(v) Content for a ‘hands-on’ and written certifi-
cation exam. 
‘‘(vi) Continuing education requirements. 
‘‘(4) A
PPLICATION AND SELECTION CRITERIA .— 
‘‘(i) N UMBER OF STATES .—The Secretary shall enter 
into agreements with not more than 6 States to conduct demonstration projects under this subsection. 
‘‘(ii) R
EQUIREMENTS FOR STATES .—An agreement 
entered into under clause (i) shall require that a participating State—

‘‘(I) implement the core training competencies 
described in paragraph (3)(A); and 
‘‘(II) develop written materials and protocols 
for such core training competencies, including the development of a certification test for personal or home care aides who have completed such training competencies. ‘‘(iii) C
ONSULTATION AND COLLABORATION WITH  
COMMUNITY AND VOCATIONAL COLLEGES .—The Sec-

retary shall encourage participating States to consult with community and vocational colleges regarding the development of curricula to implement the project with respect to activities, as applicable, which may include consideration of such colleges as partners in such implementation. ‘‘(B) A
PPLICATION AND ELIGIBILITY .—A State seeking 
to participate in the project shall— 
‘‘(i) submit an application to the Secretary con-

taining such information and at such time as the Sec-retary may specify; 
‘‘(ii) meet the selection criteria established under 
subparagraph (C); and 
‘‘(iii) meet such additional criteria as the Secretary 
may specify. 
‘‘(C) S
ELECTION CRITERIA .—In selecting States to 
participate in the program, the Secretary shall establish criteria to ensure (if applicable with respect to the activities involved)—

‘‘(i) geographic and demographic diversity; ‘‘(ii) that participating States offer medical assist-
ance for personal care services under the State Med-icaid plan; 
‘‘(iii) that the existing training standards for per-
sonal or home care aides in each participating State— Contracts. 
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124 STAT. 667 PUBLIC LAW 111–148—MAR. 23, 2010 
‘‘(I) are different from such standards in the 
other participating States; and 
‘‘(II) are different from the core training com-
petencies described in paragraph (3)(A); ‘‘(iv) that participating States do not reduce the 
number of hours of training required under applicable State law or regulation after being selected to partici-pate in the project; and 
‘‘(v) that participating States recruit a minimum

number of eligible health and long-term care providers to participate in the project. ‘‘(D) T
ECHNICAL ASSISTANCE .—The Secretary shall pro-
vide technical assistance to States in developing written materials and protocols for such core training competencies. ‘‘(5) E
‘‘(A) E VALUATION .—The Secretary shall develop an

experimental or control group testing protocol in consulta-tion with an independent evaluation contractor selected by the Secretary. Such contractor shall evaluate— 
‘‘(i) the impact of core training competencies

‘‘(i) the impact of core training competencies 
described in paragraph (3)(A), including curricula developed to implement such core training com-petencies, for personal or home care aides within each participating State on job satisfaction, mastery of job skills, beneficiary and family caregiver satisfaction with services, and additional measures determined by the Secretary in consultation with the expert panel; 
‘‘(ii) the impact of providing such core training

competencies on the existing training infrastructure and resources of States; and 
‘‘(iii) whether a minimum number of hours of ini-
tial training should be required for personal or home care aides and, if so, what minimum number of hours should be required. ‘‘(B) R
EPORTS .— 
‘‘(i) R EPORT ON INITIAL IMPLEMENTATION .—Not

‘‘(i) R EPORT ON INITIAL IMPLEMENTATION .—Not 
later than 2 years after the date of enactment of this section, the Secretary shall submit to Congress a report on the initial implementation of activities conducted under the demonstration project, including any avail-able results of the evaluation conducted under subpara-graph (A) with respect to such activities, together with such recommendations for legislation or administrative action as the Secretary determines appropriate. 
‘‘(ii) F

‘‘(ii) F
INAL REPORT .—Not later than 1 year after 
the completion of the demonstration project, the Sec-retary shall submit to Congress a report containing the results of the evaluation conducted under subpara-graph (A), together with such recommendations for legislation or administrative action as the Secretary determines appropriate. 
‘‘(6) D
‘‘(A) E LIGIBLE HEALTH AND LONG -TERM CARE PRO -
VIDER .—The term ‘eligible health and long-term care pro-

vider’ means a personal or home care agency (including personal or home care public authorities), a nursing home, a home health agency (as defined in section 1861(o)), or Contracts. 
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124 STAT. 668 PUBLIC LAW 111–148—MAR. 23, 2010 
any other health care provider the Secretary determines 
appropriate which— 
‘‘(i) is licensed or authorized to provide services 
in a participating State; and 
‘‘(ii) receives payment for services under title XIX. 
‘‘(B) P ERSONAL CARE SERVICES .—The term ‘personal 
care services’ has the meaning given such term for purposes of title XIX. 
‘‘(C) P
ERSONAL OR HOME CARE AIDE .—The term ‘per-

sonal or home care aide’ means an individual who helps individuals who are elderly, disabled, ill, or mentally dis-abled (including an individual with Alzheimer’s disease or other dementia) to live in their own home or a residential care facility (such as a nursing home, assisted living facility, or any other facility the Secretary determines appropriate) by providing routine personal care services and other appropriate services to the individual.

‘‘(D) S
TATE .—The term ‘State’ has the meaning given 
that term for purposes of title XIX. 
‘‘(c) F UNDING .— 
‘‘(1) I N GENERAL .—Subject to paragraph (2), out of any 
funds in the Treasury not otherwise appropriated, there are appropriated to the Secretary to carry out subsections (a) and (b), $85,000,000 for each of fiscal years 2010 through 2014. 
‘‘(2) T
RAINING AND CERTIFICATION PROGRAMS FOR PERSONAL  
AND HOME CARE AIDES .—With respect to the demonstration

projects under subsection (b), the Secretary shall use $5,000,000 of the amount appropriated under paragraph (1) for each of fiscal years 2010 through 2012 to carry out such projects. No funds appropriated under paragraph (1) shall be used to carry out demonstration projects under subsection (b) after fiscal year 2012. ‘‘(d) N
ONAPPLICATION .— 
the preceding sections of this title shall not apply to grant awarded under this section.

‘‘(2) L
IMITATIONS ON USE OF GRANTS .—Section 2005(a) 
(other than paragraph (6)) shall apply to a grant awarded under this section to the same extent and in the same manner as such section applies to payments to States under this title.’’. (b) E
XTENSION OF FAMILY -TO-FAMILY HEALTH INFORMATION  
CENTERS .—Section 501(c)(1)(A)(iii) of the Social Security Act (42 
U.S.C. 701(c)(1)(A)(iii)) is amended by striking ‘‘fiscal year 2009’’ and inserting ‘‘each of fiscal years 2009 through 2012’’.

SEC. 5508. INCREASING TEACHING CAPACITY. 
(a) T EACHING HEALTH CENTERS TRAINING AND ENHANCE -
MENT .—Part C of title VII of the Public Health Service Act (42 
U.S.C. 293k et. seq.), as amended by section 5303, is further amended by inserting after section 749 the following: 
‘‘SEC. 749A. TEACHING HEALTH CENTERS DEVELOPMENT GRANTS. 
‘‘(a) P ROGRAM AUTHORIZED .—The Secretary may award grants

under this section to teaching health centers for the purpose of establishing new accredited or expanded primary care residency programs. 42 USC 239 l–1. Applicability. 
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124 STAT. 669 PUBLIC LAW 111–148—MAR. 23, 2010 
‘‘(b) A MOUNT AND DURATION .—Grants awarded under this sec-
tion shall be for a term of not more than 3 years and the maximum award may not be more than $500,000. 
‘‘(c) U
SE OF FUNDS .—Amounts provided under a grant under 
this section shall be used to cover the costs of— 
‘‘(1) establishing or expanding a primary care residency 
training program described in subsection (a), including costs associated with—

‘‘(A) curriculum development; ‘‘(B) recruitment, training and retention of residents 
and faculty: 
‘‘(C) accreditation by the Accreditation Council for 
Graduate Medical Education (ACGME), the American Dental Association (ADA), or the American Osteopathic Association (AOA); and 
‘‘(D) faculty salaries during the development phase; 
and ‘‘(2) technical assistance provided by an eligible entity. 
‘‘(d) A
PPLICATION .—A teaching health center seeking a grant

under this section shall submit an application to the Secretary at such time, in such manner, and containing such information as the Secretary may require. 
‘‘(e) P
REFERENCE FOR CERTAIN APPLICATIONS .—In selecting 
recipients for grants under this section, the Secretary shall give preference to any such application that documents an existing affili-ation agreement with an area health education center program as defined in sections 751 and 799B. 
‘‘(f) D

‘‘(f) D
‘‘(1) E LIGIBLE ENTITY .—The term ‘eligible entity’ means an 
organization capable of providing technical assistance including an area health education center program as defined in sections 751 and 799B. 
‘‘(2) P
RIMARY CARE RESIDENCY PROGRAM .—The term ‘pri-

mary care residency program’ means an approved graduate medical residency training program (as defined in section 340H) in family medicine, internal medicine, pediatrics, internal medi-cine-pediatrics, obstetrics and gynecology, psychiatry, general dentistry, pediatric dentistry, and geriatrics. 
‘‘(3) T
EACHING HEALTH CENTER .— 
‘‘(A) I N GENERAL .—The term ‘teaching health center’ 
means an entity that—

means an entity that— 
‘‘(i) is a community based, ambulatory patient care 
center; and 
‘‘(ii) operates a primary care residency program. 
‘‘(B) I NCLUSION OF CERTAIN ENTITIES .—Such term 
includes the following: 
‘‘(i) A Federally qualified health center (as defined 
in section 1905(l)(2)(B), of the Social Security Act). 
‘‘(ii) A community mental health center (as defined 
in section 1861(ff)(3)(B) of the Social Security Act). 
‘‘(iii) A rural health clinic, as defined in section

1861(aa) of the Social Security Act. 
‘‘(iv) A health center operated by the Indian Health 
Service, an Indian tribe or tribal organization, or an urban Indian organization (as defined in section 4 of the Indian Health Care Improvement Act). 
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124 STAT. 670 PUBLIC LAW 111–148—MAR. 23, 2010 
‘‘(v) An entity receiving funds under title X of 
the Public Health Service Act. 
‘‘(g) A UTHORIZATION OF APPROPRIATIONS .—There is authorized 
to be appropriated, $25,000,000 for fiscal year 2010, $50,000,000 for fiscal year 2011, $50,000,000 for fiscal year 2012, and such sums as may be necessary for each fiscal year thereafter to carry out this section. Not to exceed $5,000,000 annually may be used for technical assistance program grants.’’.

(b) N
ATIONAL HEALTH SERVICE CORPS TEACHING CAPACITY .— 
Section 338C(a) of the Public Health Service Act (42 U.S.C. 254m(a)) is amended to read as follows: 
‘‘(a) S
ERVICE IN FULL-TIME CLINICAL PRACTICE .—Except as pro-

vided in section 338D, each individual who has entered into a written contract with the Secretary under section 338A or 338B shall provide service in the full-time clinical practice of such individ-ual’s profession as a member of the Corps for the period of obligated service provided in such contract. For the purpose of calculating time spent in full-time clinical practice under this subsection, up to 50 percent of time spent teaching by a member of the Corps may be counted toward his or her

of the Corps may be counted toward his or her service obligation.’’.

(c) P
AYMENTS TO QUALIFIED TEACHING HEALTH CENTERS .—Part 
D of title III of the Public Health Service Act (42 U.S.C. 254b et seq.) is amended by adding at the end the following: 
‘‘Subpart XI—Support of Graduate Medical 
Education in Qualified Teaching Health Centers 
‘‘SEC. 340H. PROGRAM OF PAYMENTS TO TEACHING HEALTH CENTERS 
THAT OPERATE GRADUATE MEDICAL EDUCATION PRO-GRAMS. 
‘‘(a) P AYMENTS .—Subject to subsection (h)(2), the Secretary

shall make payments under this section for direct expenses and for indirect expenses to qualified teaching health centers that are listed as sponsoring institutions by the relevant accrediting body for expansion of existing or establishment of new approved graduate medical residency training programs. 
‘‘(b) A
MOUNT OF PAYMENTS .— 
‘‘(1) I N GENERAL .—Subject to paragraph (2), the amounts

payable under this section to qualified teaching health centers for an approved graduate medical residency training program for a fiscal year are each of the following amounts: 
‘‘(A) D
IRECT EXPENSE AMOUNT .—The amount deter-
mined under subsection (c) for direct expenses associated with sponsoring approved graduate medical residency training programs. 
‘‘(B) I
NDIRECT EXPENSE AMOUNT .—The amount deter-

mined under subsection (d) for indirect expenses associated with the additional costs relating to teaching residents in such programs. 
‘‘(2) C
APPED AMOUNT .— 
‘‘(A) I N GENERAL .—The total of the payments made 
to qualified teaching health centers under paragraph (1)(A) or paragraph (1)(B) in a fiscal year shall not exceed the amount of funds appropriated under subsection (g) for such payments for that fiscal year. 
‘‘(B) L

‘‘(B) L
IMITATION .—The Secretary shall limit the 
funding of full-time equivalent residents in order to ensure 42 USC 256h. Contracts. 
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124 STAT. 671 PUBLIC LAW 111–148—MAR. 23, 2010 
the direct and indirect payments as determined under sub-
section (c) and (d) do not exceed the total amount of funds appropriated in a fiscal year under subsection (g). 
‘‘(c) A
MOUNT OF PAYMENT FOR DIRECT GRADUATE MEDICAL EDU-
CATION .— 
‘‘(1) I N GENERAL .—The amount determined under this sub-

section for payments to qualified teaching health centers for direct graduate expenses relating to approved graduate medical residency training programs for a fiscal year is equal to the product of— 
‘‘(A) the updated national per resident amount for 
direct graduate medical education, as determined under paragraph (2); and 
‘‘(B) the average number of full-time equivalent resi-

dents in the teaching health center’s graduate approved medical residency training programs as determined under section 1886(h)(4) of the Social Security Act (without regard to the limitation under subparagraph (F) of such section) during the fiscal year. ‘‘(2) U
PDATED NATIONAL PER RESIDENT AMOUNT FOR DIRECT  
GRADUATE MEDICAL EDUCATION .—The updated per resident

amount for direct graduate medical education for a qualified teaching health center for a fiscal year is an amount determined as follows: 
‘‘(A) D
ETERMINATION OF QUALIFIED TEACHING HEALTH  
CENTER PER RESIDENT AMOUNT .—The Secretary shall com-
pute for each individual qualified teaching health center a per resident amount— 
‘‘(i) by dividing the national average per resident

amount computed under section 340E(c)(2)(D) into a wage-related portion and a non-wage related portion by applying the proportion determined under subpara-graph (B); 
‘‘(ii) by multiplying the wage-related portion by 
the factor applied under section 1886(d)(3)(E) of the Social Security Act (but without application of section 4410 of the Balanced Budget Act of 1997 (42 U.S.C. 1395ww note)) during the preceding fiscal year for the teaching health center’s area; and

‘‘(iii) by adding the non-wage-related portion to 
the amount computed under clause (ii). ‘‘(B) U
PDATING RATE .—The Secretary shall update such 
per resident amount for each such qualified teaching health center as determined appropriate by the Secretary. 
‘‘(d) A
MOUNT OF PAYMENT FOR INDIRECT MEDICAL EDUCATION .— 

section for payments to qualified teaching health centers for indirect expenses associated with the additional costs of teaching residents for a fiscal year is equal to an amount determined appropriate by the Secretary. 
‘‘(2) F
ACTORS .—In determining the amount under para-
‘‘(A) evaluate indirect training costs relative to sup-
porting a primary care residency program in qualified teaching health centers; and

‘‘(B) based on this evaluation, assure that the aggregate 
of the payments for indirect expenses under this section Determination. 
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124 STAT. 672 PUBLIC LAW 111–148—MAR. 23, 2010 
and the payments for direct graduate medical education 
as determined under subsection (c) in a fiscal year do not exceed the amount appropriated for such expenses as determined in subsection (g). ‘‘(3) I
NTERIM PAYMENT .—Before the Secretary makes a pay-

ment under this subsection pursuant to a determination of indirect expenses under paragraph (1), the Secretary may pro-vide to qualified teaching health centers a payment, in addition to any payment made under subsection (c), for expected indirect expenses associated with the additional costs of teaching resi-dents for a fiscal year, based on an estimate by the Secretary. ‘‘(e) C
LARIFICATION REGARDING RELATIONSHIP TO OTHER PAY-
MENTS FOR GRADUATE MEDICAL EDUCATION .—Payments under this

section— 
‘‘(1) shall be in addition to any payments— 
‘‘(A) for the indirect costs of medical education under 
section 1886(d)(5)(B) of the Social Security Act; 
‘‘(B) for direct graduate medical education costs under 
section 1886(h) of such Act; and 
‘‘(C) for direct costs of medical education under section 
1886(k) of such Act; ‘‘(2) shall not be taken into account in applying the limita-

tion on the number of total full-time equivalent residents under subparagraphs (F) and (G) of section 1886(h)(4) of such Act and clauses (v), (vi)(I), and (vi)(II) of section 1886(d)(5)(B) of such Act for the portion of time that a resident rotates to a hospital; and 
‘‘(3) shall not include the time in which a resident is

counted toward full-time equivalency by a hospital under para-graph (2) or under section 1886(d)(5)(B)(iv) of the Social Secu-rity Act, section 1886(h)(4)(E) of such Act, or section 340E of this Act. ‘‘(f) R
ECONCILIATION .—The Secretary shall determine any

changes to the number of residents reported by a hospital in the application of the hospital for the current fiscal year to determine the final amount payable to the hospital for the current fiscal year for both direct expense and indirect expense amounts. Based on such determination, the Secretary shall recoup any overpayments made to pay any balance due to the extent possible. The final amount so determined shall be considered a final intermediary determination for the purposes of section

determination for the purposes of section 1878 of the Social Security Act and shall be subject to administrative and judicial review under that section in the same manner as the amount of payment under section 1186(d) of such Act is subject to review under such section.

‘‘(g) F
UNDING .—To carry out this section, there are appropriated 
such sums as may be necessary, not to exceed $230,000,000, for 
the period of fiscal years 2011 through 2015. 
‘‘(h) A NNUAL REPORTING REQUIRED .— 
‘‘(1) A NNUAL REPORT .—The report required under this para-

graph for a qualified teaching health center for a fiscal year is a report that includes (in a form and manner specified by the Secretary) the following information for the residency academic year completed immediately prior to such fiscal year: 
‘‘(A) The types of primary care resident approved 
training programs that the qualified teaching health center provided for residents. Determination.

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124 STAT. 673 PUBLIC LAW 111–148—MAR. 23, 2010 
‘‘(B) The number of approved training positions for 
residents described in paragraph (4). 
‘‘(C) The number of residents described in paragraph 
(4) who completed their residency training at the end of such residency academic year and care for vulnerable popu-lations living in underserved areas. 
‘‘(D) Other information as deemed appropriate by the 
Secretary. ‘‘(2) A
UDIT AUTHORITY ; LIMITATION ON PAYMENT .—

UDIT AUTHORITY ; LIMITATION ON PAYMENT .— 
‘‘(A) A UDIT AUTHORITY .—The Secretary may audit a 
qualified teaching health center to ensure the accuracy and completeness of the information submitted in a report under paragraph (1). 
‘‘(B) L
IMITATION ON PAYMENT .—A teaching health

‘‘(B) L
IMITATION ON PAYMENT .—A teaching health 
center may only receive payment in a cost reporting period for a number of such resident positions that is greater than the base level of primary care resident positions, as determined by the Secretary. For purposes of this subparagraph, the ‘base level of primary care residents’ for a teaching health center is the level of such residents as of a base period. ‘‘(3) R
EDUCTION IN PAYMENT FOR FAILURE TO REPORT .—

EDUCTION IN PAYMENT FOR FAILURE TO REPORT .— 
‘‘(A) I N GENERAL .—The amount payable under this sec-
tion to a qualified teaching health center for a fiscal year shall be reduced by at least 25 percent if the Secretary determines that— 
‘‘(i) the qualified teaching health center has failed

to provide the Secretary, as an addendum to the quali-fied teaching health center’s application under this section for such fiscal year, the report required under paragraph (1) for the previous fiscal year; or 
‘‘(ii) such report fails to provide complete and 
accurate information required under any subparagraph of such paragraph. ‘‘(B) N
OTICE AND OPPORTUNITY TO PROVIDE ACCURATE  
AND MISSING INFORMATION .—Before imposing a reduction

under subparagraph (A) on the basis of a qualified teaching health center’s failure to provide complete and accurate information described in subparagraph (A)(ii), the Secretary shall provide notice to the teaching health center of such failure and the Secretary’s intention to impose such reduc-tion and shall provide the teaching health center with the opportunity to provide the required information within the period of 30 days beginning on the date of such notice. If the teaching health center

of such notice. If the teaching health center provides such information within such period, no reduction shall be made under subparagraph (A) on the basis of the previous failure to provide such information. ‘‘(4) R

ESIDENTS .—The residents described in this paragraph 
are those who are in part-time or full-time equivalent resident training positions at a qualified teaching health center in any approved graduate medical residency training program. ‘‘(i) R
EGULATIONS .—The Secretary shall promulgate regulations 
to carry out this section. 
‘‘(j) D EFINITIONS .—In this section: 
‘‘(1) A PPROVED GRADUATE MEDICAL RESIDENCY TRAINING

PROGRAM .—The term ‘approved graduate medical residency Deadline. Determination. 
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124 STAT. 674 PUBLIC LAW 111–148—MAR. 23, 2010 
training program’ means a residency or other postgraduate 
medical training program— 
‘‘(A) participation in which may be counted toward 
certification in a specialty or subspecialty and includes formal postgraduate training programs in geriatric medi-cine approved by the Secretary; and 
‘‘(B) that meets criteria for accreditation (as established

by the Accreditation Council for Graduate Medical Edu-cation, the American Osteopathic Association, or the Amer-ican Dental Association). ‘‘(2) P
mary care residency program’ has the meaning given that term in section 749A. 
‘‘(3) Q
UALIFIED TEACHING HEALTH CENTER .—The term 
‘qualified teaching health center’ has the meaning given the term ‘teaching health center’ in section 749A.’’. 
SEC. 5509. GRADUATE NURSE EDUCATION DEMONSTRATION.

(A) I N GENERAL .—The Secretary shall establish a grad-
uate nurse education demonstration under title XVIII of the Social Security Act (42 U.S.C. 1395 et seq.) under which an eligible hospital may receive payment for the hospital’s reasonable costs (described in paragraph (2)) for the provision of qualified clinical training to advance prac-tice nurses. 
(B) N
UMBER .—The demonstration shall include up to 
5 eligible hospitals.

5 eligible hospitals. 
(C) W RITTEN AGREEMENTS .—Eligible hospitals selected 
to participate in the demonstration shall enter into written agreements pursuant to subsection (b) in order to reimburse the eligible partners of the hospital the share of the costs attributable to each partner. (2) C
OSTS DESCRIBED .— 
(A) I N GENERAL .—Subject to subparagraph (B) and sub-
section (d), the costs described in this paragraph are the reasonable costs (as described in section 1861(v) of the

Social Security Act (42 U.S.C. 1395x(v))) of each eligible hospital for the clinical training costs (as determined by the Secretary) that are attributable to providing advanced practice registered nurses with qualified training. 
(B) L
IMITATION .—With respect to a year, the amount

reimbursed under subparagraph (A) may not exceed the amount of costs described in subparagraph (A) that are attributable to an increase in the number of advanced practice registered nurses enrolled in a program that pro-vides qualified training during the year and for which the hospital is being reimbursed under the demonstration, as compared to the average number of advanced practice registered nurses who graduated in each year during the period beginning on January 1, 2006, and ending on

beginning on January 1, 2006, and ending on December 31, 2010 (as determined by the Secretary) from the graduate nursing education program operated by the applicable school of nursing that is an eligible partner of the hospital for purposes of the demonstration. Time period. 42 USC 1395ww

note. 
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124 STAT. 675 PUBLIC LAW 111–148—MAR. 23, 2010 
(3) W AIVER AUTHORITY .—The Secretary may waive such 
requirements of titles XI and XVIII of the Social Security Act as may be necessary to carry out the demonstration. 
(4) A
Code, shall not apply to the implementation of this section. (b) W
RITTEN AGREEMENTS WITHELIGIBLE PARTNERS .—No pay-

ment shall be made under this section to an eligible hospital unless such hospital has in effect a written agreement with the eligible partners of the hospital. Such written agreement shall describe, at a minimum— 
(1) the obligations of the eligible partners with respect 
to the provision of qualified training; and 
(2) the obligation of the eligible hospital to reimburse such

eligible partners applicable (in a timely manner) for the costs of such qualified training attributable to partner. (c) E
VALUATION .—Not later than October 17, 2017, the Sec-
retary shall submit to Congress a report on the demonstration. Such report shall include an analysis of the following: 
(1) The growth in the number of advanced practice reg-
istered nurses with respect to a specific base year as a result of the demonstration. 
(2) The growth for each of the specialties described in

subparagraphs (A) through (D) of subsection (e)(1). 
(3) The costs to the Medicare program under title XVIII 
of the Social Security Act as a result of the demonstration. 
(4) Other items the Secretary determines appropriate and 
relevant. (d) F
UNDING .— 
(1) I N GENERAL .—There is hereby appropriated to the Sec-

retary, out of any funds in the Treasury not otherwise appro-priated, $50,000,000 for each of fiscal years 2012 through 2015 to carry out this section, including the design, implementation, monitoring, and evaluation of the demonstration. 
(2) P
RORATION .—If the aggregate payments to eligible hos-

pitals under the demonstration exceed $50,000,000 for a fiscal year described in paragraph (1), the Secretary shall prorate the payment amounts to each eligible hospital in order to ensure that the aggregate payments do not exceed such amount. 
(3) W
ITHOUT FISCAL YEAR LIMITATION .—Amounts appro-
priated under this subsection shall remain available without fiscal year limitation. (e) D
(1) A DVANCED PRACTICE REGISTERED NURSE .—The term

‘‘advanced practice registered nurse’’ includes the following: 
(A) A clinical nurse specialist (as defined in subsection 
(aa)(5) of section 1861 of the Social Security Act (42 U.S.C. 1395x)). 
(B) A nurse practitioner (as defined in such subsection). (C) A certified registered nurse anesthetist (as defined 
in subsection (bb)(2) of such section). 
(D) A certified nurse-midwife (as defined in subsection 
(gg)(2) of such section). (2) A
PPLICABLE NON -HOSPITAL COMMUNITY -BASED CARE SET -

TING .—The term ‘‘applicable non-hospital community-based care 
setting’’ means a non-hospital community-based care setting which has entered into a written agreement (as described in subsection (b)) with the eligible hospital participating in the Deadline. Reports. 
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124 STAT. 676 PUBLIC LAW 111–148—MAR. 23, 2010 
demonstration. Such settings include Federally qualified health 
centers, rural health clinics, and other non-hospital settings as determined appropriate by the Secretary. 
(3) A
PPLICABLE SCHOOL OF NURSING .—The term ‘‘applicable

school of nursing’’ means an accredited school of nursing (as defined in section 801 of the Public Health Service Act) which has entered into a written agreement (as described in sub-section (b)) with the eligible hospital participating in the dem-onstration. 
(4) D
EMONSTRATION .—The term ‘‘demonstration’’ means the 
graduate nurse education demonstration established under sub-section (a). 
(5) E
LIGIBLE HOSPITAL .—The term ‘‘eligible hospital’’ means

a hospital (as defined in subsection (e) of section 1861 of the Social Security Act (42 U.S.C. 1395x)) or a critical access hos-pital (as defined in subsection (mm)(1) of such section) that has a written agreement in place with— 
(A) 1 or more applicable schools of nursing; and (B) 2 or more applicable non-hospital community-based 
care settings. (6) E
LIGIBLE PARTNERS .—The term ‘‘eligible partners’’ 
(A) An applicable non-hospital community-based care 
setting.

setting. 
(B) An applicable school of nursing. 
(7) Q UALIFIED TRAINING .— 
(A) I N GENERAL .—The term ‘‘qualified training’’ means 
training— 
(i) that provides an advanced practice registered

nurse with the clinical skills necessary to provide pri-mary care, preventive care, transitional care, chronic care management, and other services appropriate for individuals entitled to, or enrolled for, benefits under part A of title XVIII of the Social Security Act, or enrolled under part B of such title; and 
(ii) subject to subparagraph (B), at least half of 
which is provided in a non-hospital community-based care setting. (B) W
AIVER OF REQUIREMENT HALF OF TRAINING BE

AIVER OF REQUIREMENT HALF OF TRAINING BE  
PROVIDED IN NON -HOSPITAL COMMUNITY -BASED CARE SET -
TING IN CERTAIN AREAS .—The Secretary may waive the 
requirement under subparagraph (A)(ii) with respect to eligible hospitals located in rural or medically underserved areas. (8) S
Subtitle G—Improving Access to Health 
Care Services 
SEC. 5601. SPENDING FOR FEDERALLY QUALIFIED HEALTH CENTERS 
(FQHCS).

(FQHCS). 
(a) I NGENERAL .—Section 330(r) of the Public Health Service 
Act (42 U.S.C. 254b(r)) is amended by striking paragraph (1) and inserting the following: 
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124 STAT. 677 PUBLIC LAW 111–148—MAR. 23, 2010 
‘‘(1) G ENERAL AMOUNTS FOR GRANTS .—For the purpose of 
carrying out this section, in addition to the amounts authorized to be appropriated under subsection (d), there is authorized to be appropriated the following:

‘‘(A) For fiscal year 2010, $2,988,821,592. ‘‘(B) For fiscal year 2011, $3,862,107,440. ‘‘(C) For fiscal year 2012, $4,990,553,440. ‘‘(D) For fiscal year 2013, $6,448,713,307. ‘‘(E) For fiscal year 2014, $7,332,924,155. ‘‘(F) For fiscal year 2015, $8,332,924,155. ‘‘(G) For fiscal year 2016, and each subsequent fiscal 
year, the amount appropriated for the preceding fiscal year adjusted by the product of— 
‘‘(i) one plus the average percentage increase in 
costs incurred per patient served; and

costs incurred per patient served; and 
‘‘(ii) one plus the average percentage increase in 
the total number of patients served.’’. 
(b) R
ULE OF CONSTRUCTION .—Section 330(r) of the Public 
Health Service Act (42 U.S.C. 254b(r)) is amended by adding at the end the following: 
‘‘(4) R
ULE OF CONSTRUCTION WITH RESPECT TO RURAL  
HEALTH CLINICS .— 
‘‘(A) I N GENERAL .—Nothing in this section shall be

construed to prevent a community health center from con-tracting with a Federally certified rural health clinic (as defined in section 1861(aa)(2) of the Social Security Act), a low-volume hospital (as defined for purposes of section 1886 of such Act), a critical access hospital, a sole commu-nity hospital (as defined for purposes of section 1886(d)(5)(D)(iii) of such Act), or a medicare-dependent share hospital (as defined for purposes of section 1886(d)(5)(G)(iv) of such Act) for the delivery

1886(d)(5)(G)(iv) of such Act) for the delivery of primary health care services that are available at the clinic or hospital to individuals who would otherwise be eligible for free or reduced cost care if that individual were able to obtain that care at the community health center. Such services may be limited in scope to those primary health care services available in that clinic or hospitals.

‘‘(B) A
SSURANCES .—In order for a clinic or hospital 
to receive funds under this section through a contract with a community health center under subparagraph (A), such clinic or hospital shall establish policies to ensure— 
‘‘(i) nondiscrimination based on the ability of a 
patient to pay; and 
‘‘(ii) the establishment of a sliding fee scale for 
low-income patients.’’. 
SEC. 5602. NEGOTIATED RULEMAKING FOR DEVELOPMENT OF METH-

ODOLOGY AND CRITERIA FOR DESIGNATING MEDICALLY UNDERSERVED POPULATIONS AND HEALTH PROFES-SIONS SHORTAGE AREAS. 
Services (in this section referred to as the ‘‘Secretary’’) shall establish, through a negotiated rulemaking process under sub-chapter 3 of chapter 5 of title 5, United States Code, a com-prehensive methodology and criteria for designation of— Deadlines. 42 USC 254b note.

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124 STAT. 678 PUBLIC LAW 111–148—MAR. 23, 2010 
(A) medically underserved populations in accordance 
with section 330(b)(3) of the Public Health Service Act (42 U.S.C. 254b(b)(3)); 
(B) health professions shortage areas under section 
332 of the Public Health Service Act (42 U.S.C. 254e). (2) F
ACTORS TO CONSIDER .—In establishing the method-
ology and criteria under paragraph (1), the Secretary— 
(A) shall consult with relevant stakeholders who will

be significantly affected by a rule (such as national, State and regional organizations representing affected entities), State health offices, community organizations, health cen-ters and other affected entities, and other interested par-ties; and 
(B) shall take into account— 
(i) the timely availability and appropriateness of 
data used to determine a designation to potential applicants for such designations; 
(ii) the impact of the methodology and criteria

(ii) the impact of the methodology and criteria 
on communities of various types and on health centers and other safety net providers; 
(iii) the degree of ease or difficulty that will face 
potential applicants for such designations in securing the necessary data; and 
(iv) the extent to which the methodology accurately 
measures various barriers that confront individuals and population groups in seeking health care services. 
(b) P
UBLICATION OF NOTICE .—In carrying out the rulemaking

process under this subsection, the Secretary shall publish the notice provided for under section 564(a) of title 5, United States Code, by not later than 45 days after the date of the enactment of this Act. 
(c) T
ARGET DATE FOR PUBLICATION OF RULE.—As part of the 
notice under subsection (b), and for purposes of this subsection, the ‘‘target date for publication’’, as referred to in section 564(a)(5) of title 5, United Sates Code, shall be July 1, 2010. 
(d) A

(d) A
PPOINTMENT OF NEGOTIATED RULEMAKING COMMITTEE AND  
FACILITATOR .—The Secretary shall provide for— 
(1) the appointment of a negotiated rulemaking committee 
under section 565(a) of title 5, United States Code, by not later than 30 days after the end of the comment period provided for under section 564(c) of such title; and 
(2) the nomination of a facilitator under section 566(c) 
of such title 5 by not later than 10 days after the date of appointment of the committee. (e) P

RELIMINARY COMMITTEE REPORT .—The negotiated rule-
making committee appointed under subsection (d) shall report to

the Secretary, by not later than April 1, 2010, regarding the commit-tee’s progress on achieving a consensus with regard to the rule-making proceeding and whether such consensus is likely to occur before one month before the target date for publication of the rule. If the committee reports that the committee has failed to make significant progress toward such consensus or is unlikely to reach such consensus by the target date, the Secretary may terminate such process and provide for the

may terminate such process and provide for the publication of a rule under this section through such other methods as the Secretary may provide. Deadlines. Deadline.

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124 STAT. 679 PUBLIC LAW 111–148—MAR. 23, 2010 
(f) F INAL COMMITTEE REPORT .—If the committee is not termi-
nated under subsection (e), the rulemaking committee shall submit a report containing a proposed rule by not later than one month before the target publication date. 
(g) I
NTERIM FINAL EFFECT .—The Secretary shall publish a rule

under this section in the Federal Register by not later than the target publication date. Such rule shall be effective and final imme-diately on an interim basis, but is subject to change and revision after public notice and opportunity for a period (of not less than 90 days) for public comment. In connection with such rule, the Secretary shall specify the process for the timely review and approval of applications for such designations pursuant to such rules and consistent with this section.

(h) P
UBLICATION OF RULE AFTER PUBLIC COMMENT .—The Sec-
retary shall provide for consideration of such comments and republication of such rule by not later than 1 year after the target publication date. 
SEC. 5603. REAUTHORIZATION OF THE WAKEFIELD EMERGENCY MED-
ICAL SERVICES FOR CHILDREN PROGRAM. 
Section 1910 of the Public Health Service Act (42 U.S.C. 300w– 
9) is amended— 
(1) in subsection (a), by striking ‘‘3-year period (with an

optional 4th year’’ and inserting ‘‘4-year period (with an optional 5th year’’; and 
(A) by striking ‘‘and such sums’’ and inserting ‘‘such 
sums’’; and 
$25,000,000 for fiscal year 2010, $26,250,000 for fiscal year 2011, $27,562,500 for fiscal year 2012, $28,940,625 for fiscal year 2013, and $30,387,656 for fiscal year 2014’’. 
SEC. 5604. CO-LOCATING PRIMARY AND SPECIALTY CARE IN COMMU-

NITY-BASED MENTAL HEALTH SETTINGS. 
Subpart 3 of part B of title V of the Public Health Service 
Act (42 U.S.C. 290bb–31 et seq.) is amended by adding at the end the following: 
‘‘SEC. 520K. AWARDS FOR CO-LOCATING PRIMARY AND SPECIALTY 
CARE IN COMMUNITY-BASED MENTAL HEALTH SET-TINGS. 
‘‘(a) D EFINITIONS .—In this section: 
‘‘(1) E LIGIBLE ENTITY .—The term ‘eligible entity’ means a 
qualified community mental health program defined under sec-tion 1913(b)(1). 
‘‘(2) S

‘‘(2) S
PECIAL POPULATIONS .—The term ‘special populations’ 
means adults with mental illnesses who have co-occurring pri-mary care conditions and chronic diseases. ‘‘(b) P
ROGRAM AUTHORIZED .—The Secretary, acting through the

Administrator shall award grants and cooperative agreements to eligible entities to establish demonstration projects for the provision of coordinated and integrated services to special populations through the co-location of primary and specialty care services in community-based mental and behavioral health settings. 
‘‘(c) A
PPLICATION .—To be eligible to receive a grant or coopera-

tive agreement under this section, an eligible entity shall submit an application to the Administrator at such time, in such manner, Grants. Contracts. 42 USC 
290bb–42. Effective date. 
Public information. Regulations. 
Federal Register, publication. 
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124 STAT. 680 PUBLIC LAW 111–148—MAR. 23, 2010 
and accompanied by such information as the Administrator may 
require, including a description of partnerships, or other arrange-ments with local primary care providers, including community health centers, to provide services to special populations. 
‘‘(d) U
‘‘(1) I N GENERAL .—For the benefit of special populations, 
an eligible entity shall use funds awarded under this section for—

‘‘(A) the provision, by qualified primary care profes-
sionals, of on site primary care services; 
‘‘(B) reasonable costs associated with medically nec-
essary referrals to qualified specialty care professionals, other coordinators of care or, if permitted by the terms of the grant or cooperative agreement, by qualified specialty care professionals on a reasonable cost basis on site at the eligible entity; 
‘‘(C) information technology required to accommodate

the clinical needs of primary and specialty care profes-sionals; or 
‘‘(D) facility modifications needed to bring primary and 
specialty care professionals on site at the eligible entity. ‘‘(2) L
IMITATION .—Not to exceed 15 percent of grant or 
cooperative agreement funds may be used for activities described in subparagraphs (C) and (D) of paragraph (1). ‘‘(e) E
VALUATION .—Not later than 90 days after a grant or

cooperative agreement awarded under this section expires, an eligible entity shall submit to the Secretary the results of an evalua-tion to be conducted by the entity concerning the effectiveness of the activities carried out under the grant or agreement. 
‘‘(f) A
to be appropriated to carry out this section, $50,000,000 for fiscal year 2010 and such sums as may be necessary for each of fiscal years 2011 through 2014.’’.

SEC. 5605. KEY NATIONAL INDICATORS. 
(a) D EFINITIONS .—In this section: 
(1) A CADEMY .—The term ‘‘Academy’’ means the National 
Academy of Sciences. 
(2) C OMMISSION .—The term ‘‘Commission’’ means the 
Commission on Key National Indicators established under sub-section (b). 
(3) I
NSTITUTE .—The term ‘‘Institute’’ means a Key National 
Indicators Institute as designated under subsection (c)(3). (b) C
OMMISSION ON KEYNATIONAL INDICATORS .—

OMMISSION ON KEYNATIONAL INDICATORS .— 
(1) E STABLISHMENT .—There is established a ‘‘Commission 
on Key National Indicators’’. 
(2) M EMBERSHIP .— 
(A) N UMBER AND APPOINTMENT .—The Commission 
shall be composed of 8 members, to be appointed equally by the majority and minority leaders of the Senate and the Speaker and minority leader of the House of Represent-atives. 
(B) P
ROHIBITED APPOINTMENTS .—Members of the

(B) P
ROHIBITED APPOINTMENTS .—Members of the 
Commission shall not include Members of Congress or other elected Federal, State, or local government officials. 
(C) Q
UALIFICATIONS .—In making appointments under 
subparagraph (A), the majority and minority leaders of 36 USC 150303 note. Deadline. 
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124 STAT. 681 PUBLIC LAW 111–148—MAR. 23, 2010 
the Senate and the Speaker and minority leader of the 
House of Representatives shall appoint individuals who have shown a dedication to improving civic dialogue and decision-making through the wide use of scientific evidence and factual information. 
(D) P
ERIOD OF APPOINTMENT .—Each member of the

(D) P
ERIOD OF APPOINTMENT .—Each member of the 
Commission shall be appointed for a 2-year term, except that 1 initial appointment shall be for 3 years. Any vacan-cies shall not affect the power and duties of the Commission but shall be filled in the same manner as the original appointment and shall last only for the remainder of that term. 
(E) D
ATE.—Members of the Commission shall be 
appointed by not later than 30 days after the date of enactment of this Act. 
(F) I

(F) I
NITIAL ORGANIZING PERIOD .—–Not later than 60 
days after the date of enactment of this Act, the Commis-sion shall develop and implement a schedule for completion of the review and reports required under subsection (d). 
(G) C
O-CHAIRPERSONS .—The Commission shall select 
2 Co-Chairpersons from among its members. 
(c) D UTIES OF THE COMMISSION .— 
(1) I N GENERAL .—The Commission shall— 
(A) conduct comprehensive oversight of a newly estab-

lished key national indicators system consistent with the purpose described in this subsection; 
(B) make recommendations on how to improve the 
key national indicators system; 
(C) coordinate with Federal Government users and 
information providers to assure access to relevant and quality data; and 
(D) enter into contracts with the Academy. 
(2) R
EPORTS .— 
(A) A NNUAL REPORT TO CONGRESS .—Not later than 1

year after the selection of the 2 Co-Chairpersons of the Commission, and each subsequent year thereafter, the Commission shall prepare and submit to the appropriate Committees of Congress and the President a report that contains a detailed statement of the recommendations, findings, and conclusions of the Commission on the activi-ties of the Academy and a designated Institute related to the establishment of a Key National Indicator System. 
(B) A
NNUAL REPORT TO THE ACADEMY .—

(B) A
NNUAL REPORT TO THE ACADEMY .— 
(i) I N GENERAL .—Not later than 6 months after 
the selection of the 2 Co-Chairpersons of the Commis-sion, and each subsequent year thereafter, the Commis-sion shall prepare and submit to the Academy and a designated Institute a report making recommenda-tions concerning potential issue areas and key indica-tors to be included in the Key National Indicators. 
(ii) L
IMITATION .—The Commission shall not have

(ii) L
IMITATION .—The Commission shall not have 
the authority to direct the Academy or, if established, the Institute, to adopt, modify, or delete any key indica-tors. 
(3) C
ONTRACT WITH THE NATIONAL ACADEMY OF SCIENCES .— 
(A) I N GENERAL .—–As soon as practicable after the 
selection of the 2 Co-Chairpersons of the Commission, the Contracts.

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124 STAT. 682 PUBLIC LAW 111–148—MAR. 23, 2010 
Co-Chairpersons shall enter into an arrangement with the 
National Academy of Sciences under which the Academy shall— 
(i) review available public and private sector 
research on the selection of a set of key national indica-tors; 
(ii) determine how best to establish a key national

indicator system for the United States, by either cre-ating its own institutional capability or designating an independent private nonprofit organization as an Institute to implement a key national indicator system; 
(iii) if the Academy designates an independent 
Institute under clause (ii), provide scientific and tech-nical advice to the Institute and create an appropriate governance mechanism that balances Academy involve-ment and the independence of the Institute; and

(iv) provide an annual report to the Commission 
addressing scientific and technical issues related to the key national indicator system and, if established, the Institute, and governance of the Institute’s budget and operations. (B) P
ARTICIPATION .—In executing the arrangement

ARTICIPATION .—In executing the arrangement 
under subparagraph (A), the National Academy of Sciences shall convene a multi-sector, multi-disciplinary process to define major scientific and technical issues associated with developing, maintaining, and evolving a Key National Indi-cator System and, if an Institute is established, to provide it with scientific and technical advice. 
(C) E
STABLISHMENT OF A KEY NATIONAL INDICATOR  
SYSTEM .— 
(i) I N GENERAL .—In executing the arrangement

(i) I N GENERAL .—In executing the arrangement 
under subparagraph (A), the National Academy of Sciences shall enable the establishment of a key national indicator system by— 
(I) creating its own institutional capability; 
or 
(II) partnering with an independent private 
nonprofit organization as an Institute to imple-ment a key national indicator system. 
(ii) I
NSTITUTE .—If the Academy designates an

(ii) I
NSTITUTE .—If the Academy designates an 
Institute under clause (i)(II), such Institute shall be a non-profit entity (as defined for purposes of section 501(c)(3) of the Internal Revenue Code of 1986) with an educational mission, a governance structure that emphasizes independence, and characteristics that make such entity appropriate for establishing a key national indicator system. 
(iii) R
ESPONSIBILITIES .—Either the Academy or the

ESPONSIBILITIES .—Either the Academy or the 
Institute designated under clause (i)(II) shall be responsible for the following: 
(I) Identifying and selecting issue areas to be 
represented by the key national indicators. 
(II) Identifying and selecting the measures 
used for key national indicators within the issue areas under subclause (I). Reports.

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124 STAT. 683 PUBLIC LAW 111–148—MAR. 23, 2010 
(III) Identifying and selecting data to populate 
the key national indicators described under sub-clause (II). 
(IV) Designing, publishing, and maintaining 
a public website that contains a freely accessible database allowing public access to the key national indicators. 
(V) Developing a quality assurance framework 
to ensure rigorous and independent processes and the selection of quality data. 
(VI) Developing a budget for the construction

(VI) Developing a budget for the construction 
and management of a sustainable, adaptable, and evolving key national indicator system that reflects all Commission funding of Academy and, if an Institute is established, Institute activities. 
(VII) Reporting annually to the Commission 
regarding its selection of issue areas, key indica-tors, data, and progress toward establishing a web- accessible database. 
(VIII) Responding directly to the Commission

(VIII) Responding directly to the Commission 
in response to any Commission recommendations and to the Academy regarding any inquiries by the Academy. (iv) G
OVERNANCE .—Upon the establishment of a

OVERNANCE .—Upon the establishment of a 
key national indicator system, the Academy shall create an appropriate governance mechanism that incorporates advisory and control functions. If an Institute is designated under clause (i)(II), the govern-ance mechanism shall balance appropriate Academy involvement and the independence of the Institute. 
(v) M
ODIFICATION AND CHANGES .—The Academy

(v) M
ODIFICATION AND CHANGES .—The Academy 
shall retain the sole discretion, at any time, to alter its approach to the establishment of a key national indicator system or, if an Institute is designated under clause (i)(II), to alter any aspect of its relationship with the Institute or to designate a different non- profit entity to serve as the Institute. 
(vi) C
ONSTRUCTION .—Nothing in this section shall

ONSTRUCTION .—Nothing in this section shall 
be construed to limit the ability of the Academy or the Institute designated under clause (i)(II) to receive private funding for activities related to the establish-ment of a key national indicator system. (D) A
NNUAL REPORT .—As part of the arrangement 
under subparagraph (A), the National Academy of Sciences shall, not later than 270 days after the date of enactment of this Act, and annually thereafter, submit to the Co-

Chairpersons of the Commission a report that contains the findings and recommendations of the Academy. 
(d) G
OVERNMENT ACCOUNTABILITY OFFICE STUDY AND  
REPORT .— 
(1) GAO STUDY .—The Comptroller General of the United

States shall conduct a study of previous work conducted by all public agencies, private organizations, or foreign countries with respect to best practices for a key national indicator system. The study shall be submitted to the appropriate author-izing committees of Congress. Reports. 
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124 STAT. 684 PUBLIC LAW 111–148—MAR. 23, 2010 
(2) GAO FINANCIAL AUDIT .—If an Institute is established 
under this section, the Comptroller General shall conduct an annual audit of the financial statements of the Institute, in accordance with generally accepted government auditing stand-ards and submit a report on such audit to the Commission and the appropriate authorizing committees of Congress. 
(3) GAO 
PROGRAMMATIC REVIEW .—The Comptroller General

PROGRAMMATIC REVIEW .—The Comptroller General 
of the United States shall conduct programmatic assessments of the Institute established under this section as determined necessary by the Comptroller General and report the findings to the Commission and to the appropriate authorizing commit-tees of Congress. (e) A
(1) I N GENERAL .—–There are authorized to be appropriated

to carry out the purposes of this section, $10,000,000 for fiscal year 2010, and $7,500,000 for each of fiscal year 2011 through 2018. 
(2) A
VAILABILITY .—–Amounts appropriated under para-
graph (1) shall remain available until expended. 
SEC. 5701. REPORTS. 
(a) R EPORTS BY SECRETARY OF HEALTH AND HUMAN SERVICES .— 
On an annual basis, the Secretary of Health and Human Services

shall submit to the appropriate Committees of Congress a report on the activities carried out under the amendments made by this title, and the effectiveness of such activities. 
(b) R
EPORTS BY RECIPIENTS OF FUNDS .—The Secretary of Health

and Human Services may require, as a condition of receiving funds under the amendments made by this title, that the entity receiving such award submit to such Secretary such reports as the such Secretary may require on activities carried out with such award, and the effectiveness of such activities. 
TITLE VI—TRANSPARENCY AND 
PROGRAM INTEGRITY 
Subtitle A—Physician Ownership and 
Other Transparency 
SEC. 6001. LIMITATION ON MEDICARE EXCEPTION TO THE PROHIBI-

TION ON CERTAIN PHYSICIAN REFERRALS FOR HOS-PITALS. 
(a) I NGENERAL .—Section 1877 of the Social Security Act (42 
U.S.C. 1395nn) is amended— 
(1) in subsection (d)(2)— 
(A) in subparagraph (A), by striking ‘‘and’’ at the end; (B) in subparagraph (B), by striking the period at 
graph: 
‘‘(C) in the case where the entity is a hospital, the

hospital meets the requirements of paragraph (3)(D).’’; 42 USC 204 note. 
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124 STAT. 685 PUBLIC LAW 111–148—MAR. 23, 2010 
(2) in subsection (d)(3)— 
(A) in subparagraph (B), by striking ‘‘and’’ at the end; (B) in subparagraph (C), by striking the period at 
graph: 
‘‘(D) the hospital meets the requirements described 
in subsection (i)(1) not later than 18 months after the date of the enactment of this subparagraph.’’; and (3) by adding at the end the following new subsection:

‘‘(i) R
EQUIREMENTS FOR HOSPITALS TOQUALIFY FOR RURAL  
PROVIDER AND HOSPITAL EXCEPTION TO OWNERSHIP OR INVESTMENT  
PROHIBITION .— 
‘‘(1) R EQUIREMENTS DESCRIBED .—For purposes of subsection 
(d)(3)(D), the requirements described in this paragraph for a hospital are as follows: 
‘‘(A) P
ROVIDER AGREEMENT .—The hospital had— 
‘‘(i) physician ownership or investment on Feb-
ruary 1, 2010; and 
‘‘(ii) a provider agreement under section 1866 in 
effect on such date. ‘‘(B) L

IMITATION ON EXPANSION OF FACILITY CAPACITY .— 
Except as provided in paragraph (3), the number of oper-ating rooms, procedure rooms, and beds for which the hos-pital is licensed at any time on or after the date of the enactment of this subsection is no greater than the number of operating rooms, procedure rooms, and beds for which the hospital is licensed as of such date. 
‘‘(C) P
REVENTING CONFLICTS OF INTEREST .— 
‘‘(i) The hospital submits to the Secretary an

‘‘(i) The hospital submits to the Secretary an 
annual report containing a detailed description of— 
‘‘(I) the identity of each physician owner or 
investor and any other owners or investors of the hospital; and 
‘‘(II) the nature and extent of all ownership 
and investment interests in the hospital. ‘‘(ii) The hospital has procedures in place to require

that any referring physician owner or investor discloses to the patient being referred, by a time that permits the patient to make a meaningful decision regarding the receipt of care, as determined by the Secretary— 
‘‘(I) the ownership or investment interest, as 
applicable, of such referring physician in the hos-pital; and 
‘‘(II) if applicable, any such ownership or 
investment interest of the treating physician. ‘‘(iii) The hospital does not condition any physician

ownership or investment interests either directly or indirectly on the physician owner or investor making or influencing referrals to the hospital or otherwise generating business for the hospital. 
‘‘(iv) The hospital discloses the fact that the hos-
pital is partially owned or invested in by physicians— 
‘‘(I) on any public website for the hospital; 
and 
‘‘(II) in any public advertising for the hospital. 
‘‘(D) E
NSURING BONA FIDE INVESTMENT .— Reports. Deadline.

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124 STAT. 686 PUBLIC LAW 111–148—MAR. 23, 2010 
‘‘(i) The percentage of the total value of the owner-
ship or investment interests held in the hospital, or in an entity whose assets include the hospital, by physi-cian owners or investors in the aggregate does not exceed such percentage as of the date of enactment of this subsection. 
‘‘(ii) Any ownership or investment interests that

the hospital offers to a physician owner or investor are not offered on more favorable terms than the terms offered to a person who is not a physician owner or investor. 
‘‘(iii) The hospital (or any owner or investor in 
the hospital) does not directly or indirectly provide loans or financing for any investment in the hospital by a physician owner or investor. 
‘‘(iv) The hospital (or any owner or investor in

‘‘(iv) The hospital (or any owner or investor in 
the hospital) does not directly or indirectly guarantee a loan, make a payment toward a loan, or otherwise subsidize a loan, for any individual physician owner or investor or group of physician owners or investors that is related to acquiring any ownership or invest-ment interest in the hospital. 
‘‘(v) Ownership or investment returns are distrib-

uted to each owner or investor in the hospital in an amount that is directly proportional to the ownership or investment interest of such owner or investor in the hospital. 
‘‘(vi) Physician owners and investors do not receive,

directly or indirectly, any guaranteed receipt of or right to purchase other business interests related to the hospital, including the purchase or lease of any prop-erty under the control of other owners or investors in the hospital or located near the premises of the hospital. 
‘‘(vii) The hospital does not offer a physician owner

or investor the opportunity to purchase or lease any property under the control of the hospital or any other owner or investor in the hospital on more favorable terms than the terms offered to an individual who is not a physician owner or investor. ‘‘(E) P
ATIENT SAFETY .— 
‘‘(i) Insofar as the hospital admits a patient and

does not have any physician available on the premises to provide services during all hours in which the hos-pital is providing services to such patient, before admit-ting the patient— 
‘‘(I) the hospital discloses such fact to a 
patient; and 
‘‘(II) following such disclosure, the hospital 
receives from the patient a signed acknowledgment that the patient understands such fact. ‘‘(ii) The hospital has the capacity to— 
‘‘(I) provide assessment and initial treatment 
for patients; and

for patients; and 
‘‘(II) refer and transfer patients to hospitals 
with the capability to treat the needs of the patient involved. 
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124 STAT. 687 PUBLIC LAW 111–148—MAR. 23, 2010 
‘‘(F) L IMITATION ON APPLICATION TO CERTAIN CON -
VERTED FACILITIES .—The hospital was not converted from 
an ambulatory surgical center to a hospital on or after the date of enactment of this subsection. ‘‘(2) P
UBLICATION OF INFORMATION REPORTED .—The Sec-

retary shall publish, and update on an annual basis, the information submitted by hospitals under paragraph (1)(C)(i) on the public Internet website of the Centers for Medicare & Medicaid Services. 
‘‘(3) E
XCEPTION TO PROHIBITION ON EXPANSION OF FACILITY  
CAPACITY .— 
‘‘(A) P ROCESS .— 
‘‘(i) E STABLISHMENT .—The Secretary shall estab-

lish and implement a process under which an applicable hospital (as defined in subparagraph (E)) may apply for an exception from the requirement under paragraph (1)(B). 
‘‘(ii) O
PPORTUNITY FOR COMMUNITY INPUT .—The 
process under clause (i) shall provide individuals and entities in the community in which the applicable hos-pital applying for an exception is located with the opportunity to provide input with respect to the application.

‘‘(iii) T
IMING FOR IMPLEMENTATION .—The Secretary 
shall implement the process under clause (i) on August 1, 2011. 
‘‘(iv) R
EGULATIONS .—Not later than July 1, 2011, 
the Secretary shall promulgate regulations to carry out the process under clause (i). ‘‘(B) F
REQUENCY .—The process described in subpara-
graph (A) shall permit an applicable hospital to apply for an exception up to once every 2 years. 
‘‘(C) P
ERMITTED INCREASE .— 
‘‘(i) I N GENERAL .—Subject to clause (ii) and

subparagraph (D), an applicable hospital granted an exception under the process described in subparagraph (A) may increase the number of operating rooms, proce-dure rooms, and beds for which the applicable hospital is licensed above the baseline number of operating rooms, procedure rooms, and beds of the applicable hospital (or, if the applicable hospital has been granted a previous exception under this paragraph, above the number of operating rooms, procedure rooms, and beds for which the

rooms, procedure rooms, and beds for which the hospital is licensed after the application of the most recent increase under such an exception).

‘‘(ii) 100 
PERCENT INCREASE LIMITATION .—The Sec-
retary shall not permit an increase in the number of operating rooms, procedure rooms, and beds for which an applicable hospital is licensed under clause (i) to the extent such increase would result in the number of operating rooms, procedure rooms, and beds for which the applicable hospital is licensed exceeding 200 percent of the baseline number of operating rooms, procedure rooms, and beds of the applicable hospital. 
‘‘(iii) B

‘‘(iii) B
ASELINE NUMBER OF OPERATING ROOMS , 
PROCEDURE ROOMS , AND BEDS .—In this paragraph, the 
term ‘baseline number of operating rooms, procedure Deadline. Deadline. 
Web posting. 
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124 STAT. 688 PUBLIC LAW 111–148—MAR. 23, 2010 
rooms, and beds’ means the number of operating rooms, 
procedure rooms, and beds for which the applicable hospital is licensed as of the date of enactment of this subsection. ‘‘(D) I
NCREASE LIMITED TO FACILITIES ON THE MAIN  
CAMPUS OF THE HOSPITAL .—Any increase in the number

of operating rooms, procedure rooms, and beds for which an applicable hospital is licensed pursuant to this para-graph may only occur in facilities on the main campus of the applicable hospital. 
‘‘(E) A
PPLICABLE HOSPITAL .—In this paragraph, the 
term ‘applicable hospital’ means a hospital— 
‘‘(i) that is located in a county in which the percent-

age increase in the population during the most recent 5-year period (as of the date of the application under subparagraph (A)) is at least 150 percent of the percentage increase in the population growth of the State in which the hospital is located during that period, as estimated by Bureau of the Census; 
‘‘(ii) whose annual percent of total inpatient admis-

sions that represent inpatient admissions under the program under title XIX is equal to or greater than the average percent with respect to such admissions for all hospitals located in the county in which the hospital is located; 
‘‘(iii) that does not discriminate against bene-
ficiaries of Federal health care programs and does not permit physicians practicing at the hospital to discriminate against such beneficiaries; 
‘‘(iv) that is located in a State in which the average

bed capacity in the State is less than the national average bed capacity; and 
‘‘(v) that has an average bed occupancy rate that 
is greater than the average bed occupancy rate in the State in which the hospital is located. ‘‘(F) P
ROCEDURE ROOMS .—In this subsection, the term

ROCEDURE ROOMS .—In this subsection, the term 
‘procedure rooms’ includes rooms in which catheterizations, angiographies, angiograms, and endoscopies are performed, except such term shall not include emergency rooms or departments (exclusive of rooms in which catheterizations, angiographies, angiograms, and endoscopies are per-formed). 
‘‘(G) P
UBLICATION OF FINAL DECISIONS .—Not later than

UBLICATION OF FINAL DECISIONS .—Not later than 
60 days after receiving a complete application under this paragraph, the Secretary shall publish in the Federal Reg-ister the final decision with respect to such application. 
‘‘(H) L
IMITATION ON REVIEW .—There shall be no 
administrative or judicial review under section 1869, sec-tion 1878, or otherwise of the process under this paragraph (including the establishment of such process). ‘‘(4) C
OLLECTION OF OWNERSHIP AND INVESTMENT INFORMA -

TION .—For purposes of subparagraphs (A)(i) and (D)(i) of para-
graph (1), the Secretary shall collect physician ownership and investment information for each hospital. 
‘‘(5) P
HYSICIAN OWNER OR INVESTOR DEFINED .—For pur-
poses of this subsection, the term ‘physician owner or investor’ means a physician (or an immediate family member of such Deadline. Federal Register, publication.

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124 STAT. 689 PUBLIC LAW 111–148—MAR. 23, 2010 
physician) with a direct or an indirect ownership or investment 
interest in the hospital. 
‘‘(6) C LARIFICATION .—Nothing in this subsection shall be 
construed as preventing the Secretary from revoking a hos-pital’s provider agreement if not in compliance with regulations implementing section 1866.’’. (b) E
(1) E NSURING COMPLIANCE .—The Secretary of Health and

Human Services shall establish policies and procedures to ensure compliance with the requirements described in sub-section (i)(1) of section 1877 of the Social Security Act, as added by subsection (a)(3), beginning on the date such require-ments first apply. Such policies and procedures may include unannounced site reviews of hospitals. 
(2) A
UDITS .—Beginning not later than November 1, 2011,

the Secretary of Health and Human Services shall conduct audits to determine if hospitals violate the requirements referred to in paragraph (1). 
SEC. 6002. TRANSPARENCY REPORTS AND REPORTING OF PHYSICIAN 
OWNERSHIP OR INVESTMENT INTERESTS. 
Part A of title XI of the Social Security Act (42 U.S.C. 1301 
et seq.) is amended by inserting after section 1128F the following new section: 
‘‘SEC. 1128G. TRANSPARENCY REPORTS AND REPORTING OF PHYSI-
CIAN OWNERSHIP OR INVESTMENT INTERESTS.

CIAN OWNERSHIP OR INVESTMENT INTERESTS. 
‘‘(a) T RANSPARENCY REPORTS .— 
‘‘(1) P AYMENTS OR OTHER TRANSFERS OF VALUE .— 
‘‘(A) I N GENERAL .—On March 31, 2013, and on the

90th day of each calendar year beginning thereafter, any applicable manufacturer that provides a payment or other transfer of value to a covered recipient (or to an entity or individual at the request of or designated on behalf of a covered recipient), shall submit to the Secretary, in such electronic form as the Secretary shall require, the following information with respect to the preceding cal-endar year:

‘‘(i) The name of the covered recipient. ‘‘(ii) The business address of the covered recipient 
and, in the case of a covered recipient who is a physi-cian, the specialty and National Provider Identifier of the covered recipient. 
‘‘(iii) The amount of the payment or other transfer 
of value. 
‘‘(iv) The dates on which the payment or other 
transfer of value was provided to the covered recipient. 
‘‘(v) A description of the form of the payment or

other transfer of value, indicated (as appropriate for all that apply) as— 
‘‘(I) cash or a cash equivalent; ‘‘(II) in-kind items or services; ‘‘(III) stock, a stock option, or any other owner-
ship interest, dividend, profit, or other return on investment; or 
‘‘(IV) any other form of payment or other 
transfer of value (as defined by the Secretary). Electronic format. 42 USC 1320a–7h. Deadline. Procedures. 
42 USC 1395nn note.

42 USC 1395nn note. 
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124 STAT. 690 PUBLIC LAW 111–148—MAR. 23, 2010 
‘‘(vi) A description of the nature of the payment 
or other transfer of value, indicated (as appropriate for all that apply) as— 
‘‘(I) consulting fees; ‘‘(II) compensation for services other than con-
sulting; 
‘‘(III) honoraria; ‘‘(IV) gift; ‘‘(V) entertainment; ‘‘(VI) food; ‘‘(VII) travel (including the specified destina-
tions);

tions); 
‘‘(VIII) education; ‘‘(IX) research; ‘‘(X) charitable contribution; ‘‘(XI) royalty or license; ‘‘(XII) current or prospective ownership or 
investment interest; 
‘‘(XIII) direct compensation for serving as fac-
ulty or as a speaker for a medical education pro-gram; 
‘‘(XIV) grant; or ‘‘(XV) any other nature of the payment or other 
transfer of value (as defined by the Secretary). ‘‘(vii) If the payment or other transfer of value

is related to marketing, education, or research specific to a covered drug, device, biological, or medical supply, the name of that covered drug, device, biological, or medical supply. 
‘‘(viii) Any other categories of information 
regarding the payment or other transfer of value the Secretary determines appropriate. ‘‘(B) S
PECIAL RULE FOR CERTAIN PAYMENTS OR OTHER  
TRANSFERS OF VALUE .—In the case where an applicable

manufacturer provides a payment or other transfer of value to an entity or individual at the request of or designated on behalf of a covered recipient, the applicable manufac-turer shall disclose that payment or other transfer of value under the name of the covered recipient. ‘‘(2) P
HYSICIAN OWNERSHIP .—In addition to the requirement

under paragraph (1)(A), on March 31, 2013, and on the 90th day of each calendar year beginning thereafter, any applicable manufacturer or applicable group purchasing organization shall submit to the Secretary, in such electronic form as the Secretary shall require, the following information regarding any owner-ship or investment interest (other than an ownership or invest-

ment interest in a publicly traded security and mutual fund, as described in section 1877(c)) held by a physician (or an immediate family member of such physician (as defined for purposes of section 1877(a))) in the applicable manufacturer or applicable group purchasing organization during the pre-ceding year: 
‘‘(A) The dollar amount invested by each physician 
holding such an ownership or investment interest. 
‘‘(B) The value and terms of each such ownership or 
investment interest.

investment interest. 
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124 STAT. 691 PUBLIC LAW 111–148—MAR. 23, 2010 
‘‘(C) Any payment or other transfer of value provided

to a physician holding such an ownership or investment interest (or to an entity or individual at the request of or designated on behalf of a physician holding such an ownership or investment interest), including the informa-tion described in clauses (i) through (viii) of paragraph (1)(A), except that in applying such clauses, ‘physician’ shall be substituted for ‘covered recipient’ each place it appears. 
‘‘(D) Any other information regarding the ownership

or investment interest the Secretary determines appro-priate. 
‘‘(b) P
ENALTIES FOR NONCOMPLIANCE .— 
‘‘(1) F AILURE TO REPORT .— 
‘‘(A) I N GENERAL .—Subject to subparagraph (B) except

as provided in paragraph (2), any applicable manufacturer or applicable group purchasing organization that fails to submit information required under subsection (a) in a timely manner in accordance with rules or regulations promulgated to carry out such subsection, shall be subject to a civil money penalty of not less than $1,000, but not more than $10,000, for each payment or other transfer of value or ownership or investment interest not reported as required under such subsection. Such

reported as required under such subsection. Such penalty shall be imposed and collected in the same manner as civil money penalties under subsection (a) of section 1128A are imposed and collected under that section.

‘‘(B) L
IMITATION .—The total amount of civil money pen-
alties imposed under subparagraph (A) with respect to each annual submission of information under subsection (a) by an applicable manufacturer or applicable group pur-chasing organization shall not exceed $150,000. ‘‘(2) K
NOWING FAILURE TO REPORT .— 

applicable manufacturer or applicable group purchasing organization that knowingly fails to submit information required under subsection (a) in a timely manner in accord-ance with rules or regulations promulgated to carry out such subsection, shall be subject to a civil money penalty of not less than $10,000, but not more than $100,000, for each payment or other transfer of value or ownership or investment interest not reported as required under such subsection. Such penalty shall be imposed

such subsection. Such penalty shall be imposed and collected in the same manner as civil money penalties under sub-section (a) of section 1128A are imposed and collected under that section.

‘‘(B) L
alties imposed under subparagraph (A) with respect to each annual submission of information under subsection (a) by an applicable manufacturer or applicable group pur-chasing organization shall not exceed $1,000,000. ‘‘(3) U
SE OF FUNDS .—Funds collected by the Secretary as 
a result of the imposition of a civil money penalty under this subsection shall be used to carry out this section. ‘‘(c) P

ROCEDURES FOR SUBMISSION OF INFORMATION AND PUBLIC  
AVAILABILITY .— 
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124 STAT. 692 PUBLIC LAW 111–148—MAR. 23, 2010 
‘‘(A) E STABLISHMENT .—Not later than October 1, 2011, 
the Secretary shall establish procedures— 
‘‘(i) for applicable manufacturers and applicable 
group purchasing organizations to submit information to the Secretary under subsection (a); and 
‘‘(ii) for the Secretary to make such information 
submitted available to the public. ‘‘(B) D
EFINITION OF TERMS .—The procedures estab-

lished under subparagraph (A) shall provide for the defini-tion of terms (other than those terms defined in subsection (e)), as appropriate, for purposes of this section. 
‘‘(C) P
UBLIC AVAILABILITY .—Except as provided in

UBLIC AVAILABILITY .—Except as provided in 
subparagraph (E), the procedures established under subparagraph (A)(ii) shall ensure that, not later than Sep-tember 30, 2013, and on June 30 of each calendar year beginning thereafter, the information submitted under sub-section (a) with respect to the preceding calendar year is made available through an Internet website that— 
‘‘(i) is searchable and is in a format that is clear 
and understandable;

and understandable; 
‘‘(ii) contains information that is presented by the

name of the applicable manufacturer or applicable group purchasing organization, the name of the covered recipient, the business address of the covered recipient, the specialty of the covered recipient, the value of the payment or other transfer of value, the date on which the payment or other transfer of value was provided to the covered recipient, the form of the pay-ment or other transfer of value, indicated (as appro-priate) under subsection (a)(1)(A)(v), the nature of the payment or other

(a)(1)(A)(v), the nature of the payment or other transfer of value, indicated (as appro-priate) under subsection (a)(1)(A)(vi), and the name of the covered drug, device, biological, or medical supply, as applicable;

‘‘(iii) contains information that is able to be easily 
aggregated and downloaded; 
‘‘(iv) contains a description of any enforcement 
actions taken to carry out this section, including any penalties imposed under subsection (b), during the pre-ceding year; 
‘‘(v) contains background information on industry- 
physician relationships; 
‘‘(vi) in the case of information submitted with

‘‘(vi) in the case of information submitted with 
respect to a payment or other transfer of value described in subparagraph (E)(i), lists such information separately from the other information submitted under subsection (a) and designates such separately listed information as funding for clinical research; 
‘‘(vii) contains any other information the Secretary 
determines would be helpful to the average consumer; 
‘‘(viii) does not contain the National Provider

‘‘(viii) does not contain the National Provider 
Identifier of the covered recipient, and 
‘‘(ix) subject to subparagraph (D), provides the 
applicable manufacturer, applicable group purchasing organization, or covered recipient an opportunity to review and submit corrections to the information sub-mitted with respect to the applicable manufacturer, Deadlines. Web posting. Deadline.

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124 STAT. 693 PUBLIC LAW 111–148—MAR. 23, 2010 
applicable group purchasing organization, or covered 
recipient, respectively, for a period of not less than 45 days prior to such information being made available to the public. ‘‘(D) C
LARIFICATION OF TIME PERIOD FOR REVIEW AND  
CORRECTIONS .—In no case may the 45-day period for review

and submission of corrections to information under subparagraph (C)(ix) prevent such information from being made available to the public in accordance with the dates described in the matter preceding clause (i) in subpara-graph (C). 
‘‘(E) D
ELAYED PUBLICATION FOR PAYMENTS MADE PURSU -
ANT TO PRODUCT RESEARCH OR DEVELOPMENT AGREEMENTS  
AND CLINICAL INVESTIGATIONS .— 
‘‘(i) I N GENERAL .—In the case of information sub-

mitted under subsection (a) with respect to a payment or other transfer of value made to a covered recipient by an applicable manufacturer pursuant to a product research or development agreement for services fur-nished in connection with research on a potential new medical technology or a new application of an existing medical technology or the development of a new drug, device, biological, or medical supply, or by an applicable manufacturer in connection with a clinical investiga-tion

in connection with a clinical investiga-tion regarding a new drug, device, biological, or medical supply, the procedures established under subparagraph (A)(ii) shall provide that such information is made available to the public on the first date described in the matter preceding clause (i) in subparagraph (C) after the earlier of the following:

‘‘(I) The date of the approval or clearance of 
the covered drug, device, biological, or medical supply by the Food and Drug Administration. 
‘‘(II) Four calendar years after the date such 
payment or other transfer of value was made. ‘‘(ii) C
ONFIDENTIALITY OF INFORMATION PRIOR TO  
PUBLICATION .—Information described in clause (i) shall

be considered confidential and shall not be subject to disclosure under section 552 of title 5, United States Code, or any other similar Federal, State, or local law, until on or after the date on which the information is made available to the public under such clause. 
‘‘(2) C
ONSULTATION .—In establishing the procedures under

paragraph (1), the Secretary shall consult with the Inspector General of the Department of Health and Human Services, affected industry, consumers, consumer advocates, and other interested parties in order to ensure that the information made available to the public under such paragraph is presented in the appropriate overall context. ‘‘(d) A
NNUAL REPORTS AND RELATION TO STATE LAWS.— 
‘‘(1) A NNUAL REPORT TO CONGRESS .—Not later than April

1 of each year beginning with 2013, the Secretary shall submit to Congress a report that includes the following: 
‘‘(A) The information submitted under subsection (a) 
during the preceding year, aggregated for each applicable manufacturer and applicable group purchasing organiza-tion that submitted such information during such year

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124 STAT. 694 PUBLIC LAW 111–148—MAR. 23, 2010 
(except, in the case of information submitted with respect 
to a payment or other transfer of value described in sub-section (c)(1)(E)(i), such information shall be included in the first report submitted to Congress after the date on which such information is made available to the public under such subsection). 
‘‘(B) A description of any enforcement actions taken

to carry out this section, including any penalties imposed under subsection (b), during the preceding year. ‘‘(2) A
NNUAL REPORTS TO STATES .—Not later than Sep-

tember 30, 2013 and on June 30 of each calendar year there-after, the Secretary shall submit to States a report that includes a summary of the information submitted under subsection (a) during the preceding year with respect to covered recipients in the State (except, in the case of information submitted with respect to a payment or other transfer of value described in subsection (c)(1)(E)(i), such information shall be included in the first report submitted to States after the date on which

submitted to States after the date on which such information is made available to the public under such subsection).

‘‘(3) R
ELATION TO STATE LAWS .— 
‘‘(A) I N GENERAL .—In the case of a payment or other

transfer of value provided by an applicable manufacturer that is received by a covered recipient (as defined in sub-section (e)) on or after January 1, 2012, subject to subpara-graph (B), the provisions of this section shall preempt any statute or regulation of a State or of a political subdivi-sion of a State that requires an applicable manufacturer (as so defined) to disclose or report, in any format, the type of information (as described in subsection (a)) regarding such payment or other

subsection (a)) regarding such payment or other transfer of value.

‘‘(B) N
O PREEMPTION OF ADDITIONAL REQUIREMENTS .— 
Subparagraph (A) shall not preempt any statute or regula-tion of a State or of a political subdivision of a State that requires the disclosure or reporting of information— 
‘‘(i) not of the type required to be disclosed or 
reported under this section; 
‘‘(ii) described in subsection (e)(10)(B), except in 
the case of information described in clause (i) of such subsection; 
‘‘(iii) by any person or entity other than an

‘‘(iii) by any person or entity other than an 
applicable manufacturer (as so defined) or a covered recipient (as defined in subsection (e)); or 
‘‘(iv) to a Federal, State, or local governmental 
agency for public health surveillance, investigation, or other public health purposes or health oversight pur-poses. ‘‘(C) Nothing in subparagraph (A) shall be construed

to limit the discovery or admissibility of information described in such subparagraph in a criminal, civil, or administrative proceeding. ‘‘(4) C
ONSULTATION .—The Secretary shall consult with the 
Inspector General of the Department of Health and Human Services on the implementation of this section. ‘‘(e) D
‘‘(1) A PPLICABLE GROUP PURCHASING ORGANIZATION .—The 
term ‘applicable group purchasing organization’ means a group

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124 STAT. 695 PUBLIC LAW 111–148—MAR. 23, 2010 
purchasing organization (as defined by the Secretary) that pur-
chases, arranges for, or negotiates the purchase of a covered drug, device, biological, or medical supply which is operating in the United States, or in a territory, possession, or common-wealth of the United States. 
‘‘(2) A
PPLICABLE MANUFACTURER .—The term ‘applicable

PPLICABLE MANUFACTURER .—The term ‘applicable 
manufacturer’ means a manufacturer of a covered drug, device, biological, or medical supply which is operating in the United States, or in a territory, possession, or commonwealth of the United States. 
‘‘(3) C
LINICAL INVESTIGATION .—The term ‘clinical investiga-
tion’ means any experiment involving 1 or more human sub-jects, or materials derived from human subjects, in which a drug or device is administered, dispensed, or used. 
‘‘(4) C

‘‘(4) C
OVERED DEVICE .—The term ‘covered device’ means 
any device for which payment is available under title XVIII or a State plan under title XIX or XXI (or a waiver of such a plan). 
‘‘(5) C
OVERED DRUG , DEVICE , BIOLOGICAL , OR MEDICAL  
SUPPLY .—The term ‘covered drug, device, biological, or medical 
supply’ means any drug, biological product, device, or medical supply for which payment is available under title XVIII or a State plan under title XIX or XXI (or a waiver of such a plan).

‘‘(6) C
OVERED RECIPIENT .— 
(B), the term ‘covered recipient’ means the following: 
‘‘(i) A physician. ‘‘(ii) A teaching hospital. 
‘‘(B) E
XCLUSION .—Such term does not include a physi-
cian who is an employee of the applicable manufacturer that is required to submit information under subsection (a). ‘‘(7) E
MPLOYEE .—The term ‘employee’ has the meaning 
given such term in section 1877(h)(2).

given such term in section 1877(h)(2). 
‘‘(8) K NOWINGLY .—The term ‘knowingly’ has the meaning 
given such term in section 3729(b) of title 31, United States Code. 
‘‘(9) M
ANUFACTURER OF A COVERED DRUG , DEVICE , 
BIOLOGICAL , OR MEDICAL SUPPLY .—The term ‘manufacturer of

a covered drug, device, biological, or medical supply’ means any entity which is engaged in the production, preparation, propagation, compounding, or conversion of a covered drug, device, biological, or medical supply (or any entity under common ownership with such entity which provides assistance or support to such entity with respect to the production, preparation, propagation, compounding, conversion, marketing, promotion, sale, or distribution of a covered drug, device, biological, or

‘‘(10) P
AYMENT OR OTHER TRANSFER OF VALUE .— 
‘‘(A) I N GENERAL .—The term ‘payment or other transfer 
of value’ means a transfer of anything of value. Such term does not include a transfer of anything of value that is made indirectly to a covered recipient through a third party in connection with an activity or service in the case where the applicable manufacturer is unaware of the identity of the covered recipient.

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124 STAT. 696 PUBLIC LAW 111–148—MAR. 23, 2010 
‘‘(B) E XCLUSIONS .—An applicable manufacturer shall 
not be required to submit information under subsection (a) with respect to the following: 
‘‘(i) A transfer of anything the value of which is

less than $10, unless the aggregate amount transferred to, requested by, or designated on behalf of the covered recipient by the applicable manufacturer during the calendar year exceeds $100. For calendar years after 2012, the dollar amounts specified in the preceding sentence shall be increased by the same percentage as the percentage increase in the consumer price index for all urban consumers (all items; U.S. city average) for the 12-month period ending with June of the pre-vious year.

‘‘(ii) Product samples that are not intended to be 
sold and are intended for patient use. 
‘‘(iii) Educational materials that directly benefit 
patients or are intended for patient use. 
‘‘(iv) The loan of a covered device for a short- 
term trial period, not to exceed 90 days, to permit evaluation of the covered device by the covered recipient. 
‘‘(v) Items or services provided under a contractual

warranty, including the replacement of a covered device, where the terms of the warranty are set forth in the purchase or lease agreement for the covered device. 
‘‘(vi) A transfer of anything of value to a covered 
recipient when the covered recipient is a patient and not acting in the professional capacity of a covered recipient. 
‘‘(vii) Discounts (including rebates). ‘‘(viii) In-kind items used for the provision of 
charity care. 
‘‘(ix) A dividend or other profit distribution from,

or ownership or investment interest in, a publicly traded security and mutual fund (as described in sec-tion 1877(c)). 
‘‘(x) In the case of an applicable manufacturer 
who offers a self-insured plan, payments for the provi-sion of health care to employees under the plan. 
‘‘(xi) In the case of a covered recipient who is

‘‘(xi) In the case of a covered recipient who is 
a licensed non-medical professional, a transfer of any-thing of value to the covered recipient if the transfer is payment solely for the non-medical professional serv-ices of such licensed non-medical professional. 
‘‘(xii) In the case of a covered recipient who is

a physician, a transfer of anything of value to the covered recipient if the transfer is payment solely for the services of the covered recipient with respect to a civil or criminal action or an administrative pro-ceeding. 
‘‘(11) P
HYSICIAN .—The term ‘physician’ has the meaning 
given that term in section 1861(r).’’. 
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124 STAT. 697 PUBLIC LAW 111–148—MAR. 23, 2010 
SEC. 6003. DISCLOSURE REQUIREMENTS FOR IN-OFFICE ANCILLARY 
SERVICES EXCEPTION TO THE PROHIBITION ON PHYSI-CIAN SELF-REFERRAL FOR CERTAIN IMAGING SERVICES. 
(a) I NGENERAL .—Section 1877(b)(2) of the Social Security Act 
(42 U.S.C. 1395nn(b)(2)) is amended by adding at the end the following new sentence: ‘‘Such requirements shall, with respect

to magnetic resonance imaging, computed tomography, positron emission tomography, and any other designated health services specified under subsection (h)(6)(D) that the Secretary determines appropriate, include a requirement that the referring physician inform the individual in writing at the time of the referral that the individual may obtain the services for which the individual is being referred from a person other than a person described in subparagraph (A)(i) and provide such individual

subparagraph (A)(i) and provide such individual with a written list of suppliers (as defined in section 1861(d)) who furnish such services in the area in which such individual resides.’’.

(b) E
FFECTIVE DATE.—The amendment made by this section 
shall apply to services furnished on or after January 1, 2010. 
SEC. 6004. PRESCRIPTION DRUG SAMPLE TRANSPARENCY. 
et seq.), as amended by section 6002, is amended by inserting after section 1128G the following new section: 
‘‘SEC. 1128H. REPORTING OF INFORMATION RELATING TO DRUG SAM-
PLES. 
‘‘(a) I NGENERAL .—Not later than April 1 of each year (begin-

ning with 2012), each manufacturer and authorized distributor of record of an applicable drug shall submit to the Secretary (in a form and manner specified by the Secretary) the following information with respect to the preceding year: 
‘‘(1) In the case of a manufacturer or authorized distributor

of record which makes distributions by mail or common carrier under subsection (d)(2) of section 503 of the Federal Food, Drug, and Cosmetic Act (21 U.S.C. 353), the identity and quantity of drug samples requested and the identity and quantity of drug samples distributed under such subsection during that year, aggregated by— 
‘‘(A) the name, address, professional designation, and

signature of the practitioner making the request under subparagraph (A)(i) of such subsection, or of any individual who makes or signs for the request on behalf of the practi-tioner; and 
‘‘(B) any other category of information determined 
appropriate by the Secretary. ‘‘(2) In the case of a manufacturer or authorized distributor

of record which makes distributions by means other than mail or common carrier under subsection (d)(3) of such section 503, the identity and quantity of drug samples requested and the identity and quantity of drug samples distributed under such subsection during that year, aggregated by— 

signature of the practitioner making the request under subparagraph (A)(i) of such subsection, or of any individual who makes or signs for the request on behalf of the practi-tioner; and 42 USC 
1320a–7i. 42 USC 1395nn 
note. 
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124 STAT. 698 PUBLIC LAW 111–148—MAR. 23, 2010 
‘‘(b) D EFINITIONS .—In this section: 
‘‘(1) A PPLICABLE DRUG .—The term ‘applicable drug’ means 
a drug— 
‘‘(A) which is subject to subsection (b) of such section 
503; and 
‘‘(B) for which payment is available under title XVIII 
or a State plan under title XIX or XXI (or a waiver of such a plan). ‘‘(2) A
UTHORIZED DISTRIBUTOR OF RECORD .—The term

UTHORIZED DISTRIBUTOR OF RECORD .—The term 
‘authorized distributor of record’ has the meaning given that term in subsection (e)(3)(A) of such section. 
‘‘(3) M
ANUFACTURER .—The term ‘manufacturer’ has the 
meaning given that term for purposes of subsection (d) of such section.’’. 
SEC. 6005. PHARMACY BENEFIT MANAGERS TRANSPARENCY REQUIRE-
MENTS. 
et seq.) is amended by inserting after section 1150 the following new section:

‘‘SEC. 1150A. PHARMACY BENEFIT MANAGERS TRANSPARENCY 
‘‘(a) P ROVISION OF INFORMATION .—A health benefits plan or 
any entity that provides pharmacy benefits management services on behalf of a health benefits plan (in this section referred to as a ‘PBM’) that manages prescription drug coverage under a con-tract with— 
‘‘(1) a PDP sponsor of a prescription drug plan or an MA 
organization offering an MA–PD plan under part D of title XVIII; or

‘‘(2) a qualified health benefits plan offered through an 
exchange established by a State under section 1311 of the Patient Protection and Affordable Care Act, 
shall provide the information described in subsection (b) to the Secretary and, in the case of a PBM, to the plan with which the PBM is under contract with, at such times, and in such form and manner, as the Secretary shall specify. 
‘‘(b) I
NFORMATION DESCRIBED .—The information described in

this subsection is the following with respect to services provided by a health benefits plan or PBM for a contract year: 
‘‘(1) The percentage of all prescriptions that were provided 
through retail pharmacies compared to mail order pharmacies, and the percentage of prescriptions for which a generic drug was available and dispensed (generic dispensing rate), by phar-macy type (which includes an independent pharmacy, chain pharmacy, supermarket pharmacy, or mass merchandiser phar-

macy that is licensed as a pharmacy by the State and that dispenses medication to the general public), that is paid by the health benefits plan or PBM under the contract. 
‘‘(2) The aggregate amount, and the type of rebates, dis-

counts, or price concessions (excluding bona fide service fees, which include but are not limited to distribution service fees, inventory management fees, product stocking allowances, and fees associated with administrative services agreements and patient care programs (such as medication compliance programs 42 USC 1320b–23. 
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124 STAT. 699 PUBLIC LAW 111–148—MAR. 23, 2010 
and patient education programs)) that the PBM negotiates 
that are attributable to patient utilization under the plan, and the aggregate amount of the rebates, discounts, or price concessions that are passed through to the plan sponsor, and the total number of prescriptions that were dispensed. 
‘‘(3) The aggregate amount of the difference between the

amount the health benefits plan pays the PBM and the amount that the PBM pays retail pharmacies, and mail order phar-macies, and the total number of prescriptions that were dis-pensed. ‘‘(c) C
ONFIDENTIALITY .—Information disclosed by a health bene-

fits plan or PBM under this section is confidential and shall not be disclosed by the Secretary or by a plan receiving the information, except that the Secretary may disclose the information in a form which does not disclose the identity of a specific PBM, plan, or prices charged for drugs, for the following purposes: 
‘‘(1) As the Secretary determines to be necessary to carry 
out this section or part D of title XVIII. 
‘‘(2) To permit the Comptroller General to review the

information provided. 
‘‘(3) To permit the Director of the Congressional Budget 
Office to review the information provided. 
‘‘(4) To States to carry out section 1311 of the Patient 
Protection and Affordable Care Act. ‘‘(d) P
ENALTIES .—The provisions of subsection (b)(3)(C) of sec-

tion 1927 shall apply to a health benefits plan or PBM that fails to provide information required under subsection (a) on a timely basis or that knowingly provides false information in the same manner as such provisions apply to a manufacturer with an agree-ment under that section.’’. 
Subtitle B—Nursing Home Transparency 
and Improvement 
PART I—IMPROVING TRANSPARENCY OF 
INFORMATION 
SEC. 6101. REQUIRED DISCLOSURE OF OWNERSHIP AND ADDITIONAL 
DISCLOSABLE PARTIES INFORMATION.

DISCLOSABLE PARTIES INFORMATION. 
(a) I NGENERAL .—Section 1124 of the Social Security Act (42 
U.S.C. 1320a–3) is amended by adding at the end the following new subsection: 
‘‘(c) R
EQUIRED DISCLOSURE OF OWNERSHIP AND ADDITIONAL  
DISCLOSABLE PARTIES INFORMATION .— 
‘‘(1) D ISCLOSURE .—A facility shall have the information 
described in paragraph (2) available— 
‘‘(A) during the period beginning on the date of the

enactment of this subsection and ending on the date such information is made available to the public under section 6101(b) of the Patient Protection and Affordable Care Act for submission to the Secretary, the Inspector General of the Department of Health and Human Services, the State in which the facility is located, and the State long-term care ombudsman in the case where the Secretary, the Time period. Applicability.

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124 STAT. 700 PUBLIC LAW 111–148—MAR. 23, 2010 
Inspector General, the State, or the State long-term care 
ombudsman requests such information; and 
‘‘(B) beginning on the effective date of the final regula-
tions promulgated under paragraph (3)(A), for reporting such information in accordance with such final regulations.

Nothing in subparagraph (A) shall be construed as authorizing a facility to dispose of or delete information described in such subparagraph after the effective date of the final regulations promulgated under paragraph (3)(A). 
‘‘(2) I
NFORMATION DESCRIBED .— 
‘‘(A) I N GENERAL .—The following information is 
described in this paragraph: 
‘‘(i) The information described in subsections (a) 
and (b), subject to subparagraph (C). 
‘‘(ii) The identity of and information on—

‘‘(ii) The identity of and information on— 
‘‘(I) each member of the governing body of 
the facility, including the name, title, and period of service of each such member; 
‘‘(II) each person or entity who is an officer, 
director, member, partner, trustee, or managing employee of the facility, including the name, title, and period of service of each such person or entity; and 
‘‘(III) each person or entity who is an addi-

tional disclosable party of the facility. ‘‘(iii) The organizational structure of each addi-
tional disclosable party of the facility and a description of the relationship of each such additional disclosable party to the facility and to one another. ‘‘(B) S
PECIAL RULE WHERE INFORMATION IS ALREADY  
REPORTED OR SUBMITTED .—To the extent that information

reported by a facility to the Internal Revenue Service on Form 990, information submitted by a facility to the Securi-ties and Exchange Commission, or information otherwise submitted to the Secretary or any other Federal agency contains the information described in clauses (i), (ii), or (iii) of subparagraph (A), the facility may provide such Form or such information submitted to meet the require-ments of paragraph (1). 
‘‘(C) S
PECIAL RULE .—In applying subparagraph (A)(i)—

PECIAL RULE .—In applying subparagraph (A)(i)— 
‘‘(i) with respect to subsections (a) and (b), ‘owner-
ship or control interest’ shall include direct or indirect interests, including such interests in intermediate enti-ties; and 
‘‘(ii) subsection (a)(3)(A)(ii) shall include the owner

of a whole or part interest in any mortgage, deed of trust, note, or other obligation secured, in whole or in part, by the entity or any of the property or assets thereof, if the interest is equal to or exceeds 5 percent of the total property or assets of the entirety. 
‘‘(3) R
EPORTING .— 
‘‘(A) I N GENERAL .—Not later than the date that is

2 years after the date of the enactment of this subsection, the Secretary shall promulgate final regulations requiring, effective on the date that is 90 days after the date on which such final regulations are published in the Federal Register, a facility to report the information described in Regulations. Effective date. Federal Register, publication.

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124 STAT. 701 PUBLIC LAW 111–148—MAR. 23, 2010 
paragraph (2) to the Secretary in a standardized format, 
and such other regulations as are necessary to carry out this subsection. Such final regulations shall ensure that the facility certifies, as a condition of participation and payment under the program under title XVIII or XIX, that the information reported by the facility in accordance with such final regulations is, to the best of the facility’s knowledge, accurate and current. 
‘‘(B) G

‘‘(B) G
UIDANCE .—The Secretary shall provide guidance 
and technical assistance to States on how to adopt the standardized format under subparagraph (A). ‘‘(4) N
O EFFECT ON EXISTING REPORTING REQUIREMENTS .— 
Nothing in this subsection shall reduce, diminish, or alter any reporting requirement for a facility that is in effect as of the date of the enactment of this subsection. 
‘‘(5) D
‘‘(A) A DDITIONAL DISCLOSABLE PARTY .—The term ‘addi-

tional disclosable party’ means, with respect to a facility, any person or entity who— 
‘‘(i) exercises operational, financial, or managerial 
control over the facility or a part thereof, or provides policies or procedures for any of the operations of the facility, or provides financial or cash management serv-ices to the facility; 
‘‘(ii) leases or subleases real property to the facility,

or owns a whole or part interest equal to or exceeding 5 percent of the total value of such real property; or 
‘‘(iii) provides management or administrative serv-
ices, management or clinical consulting services, or accounting or financial services to the facility. ‘‘(B) F
ACILITY .—The term ‘facility’ means a disclosing 
entity which is— 
‘‘(i) a skilled nursing facility (as defined in section 
1819(a)); or 
‘‘(ii) a nursing facility (as defined in section 
1919(a)). ‘‘(C) M

ANAGING EMPLOYEE .—The term ‘managing 
employee’ means, with respect to a facility, an individual (including a general manager, business manager, adminis-trator, director, or consultant) who directly or indirectly manages, advises, or supervises any element of the prac-tices, finances, or operations of the facility. 
‘‘(D) O
RGANIZATIONAL STRUCTURE .—The term ‘organiza-
tional structure’ means, in the case of— 
‘‘(i) a corporation, the officers, directors, and share-

holders of the corporation who have an ownership interest in the corporation which is equal to or exceeds 5 percent; 
‘‘(ii) a limited liability company, the members and 
managers of the limited liability company (including, as applicable, what percentage each member and man-ager has of the ownership interest in the limited liability company); 
‘‘(iii) a general partnership, the partners of the 
general partnership; Certification.

general partnership; Certification. 
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124 STAT. 702 PUBLIC LAW 111–148—MAR. 23, 2010 
‘‘(iv) a limited partnership, the general partners 
and any limited partners of the limited partnership who have an ownership interest in the limited partner-ship which is equal to or exceeds 10 percent; 
‘‘(v) a trust, the trustees of the trust; ‘‘(vi) an individual, contact information for the indi-
vidual; and 
‘‘(vii) any other person or entity, such information 
as the Secretary determines appropriate.’’. 
(b) P

(b) P
UBLIC AVAILABILITY OF INFORMATION .—Not later than the 
date that is 1 year after the date on which the final regulations promulgated under section 1124(c)(3)(A) of the Social Security Act, as added by subsection (a), are published in the Federal Register, the Secretary of Health and Human Services shall make the information reported in accordance with such final regulations avail-able to the public in accordance with procedures established by the Secretary. 
(c) C

(c) C
(1) I N GENERAL .— 
(A) S KILLED NURSING FACILITIES .—Section 1819(d)(1) 
of the Social Security Act (42 U.S.C. 1395i–3(d)(1)) is amended by striking subparagraph (B) and redesignating subparagraph (C) as subparagraph (B). 
(B) N
URSING FACILITIES .—Section 1919(d)(1) of the 
Social Security Act (42 U.S.C. 1396r(d)(1)) is amended by striking subparagraph (B) and redesignating subparagraph (C) as subparagraph (B). (2) E

FFECTIVE DATE .—The amendments made by paragraph 
(1) shall take effect on the date on which the Secretary makes the information described in subsection (b)(1) available to the public under such subsection. 
SEC. 6102. ACCOUNTABILITY REQUIREMENTS FOR SKILLED NURSING 
FACILITIES AND NURSING FACILITIES. 
et seq.), as amended by sections 6002 and 6004, is amended by inserting after section 1128H the following new section:

‘‘SEC. 1128I. ACCOUNTABILITY REQUIREMENTS FOR FACILITIES. 
‘‘(a) D EFINITION OF FACILITY .—In this section, the term ‘facility’ 
means— 
‘‘(1) a skilled nursing facility (as defined in section 1819(a)); 
or 
‘‘(2) a nursing facility (as defined in section 1919(a)). 
‘‘(b) E FFECTIVE COMPLIANCE AND ETHICS PROGRAMS .— 
‘‘(1) R EQUIREMENT .—On or after the date that is 36 months

after the date of the enactment of this section, a facility shall, with respect to the entity that operates the facility (in this subparagraph referred to as the ‘operating organization’ or ‘organization’), have in operation a compliance and ethics pro-gram that is effective in preventing and detecting criminal, civil, and administrative violations under this Act and in pro-moting quality of care consistent with regulations developed under paragraph (2). 
‘‘(2) D
EVELOPMENT OF REGULATIONS .—

‘‘(2) D
EVELOPMENT OF REGULATIONS .— 
‘‘(A) I N GENERAL .—Not later than the date that is 
2 years after such date of the enactment, the Secretary, Deadlines. Effective date. 42 USC 
1320a–7j. 42 USC 
1395i–3 note. Deadline. 
Procedures. 42 USC 1320a–3 note. 
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124 STAT. 703 PUBLIC LAW 111–148—MAR. 23, 2010 
working jointly with the Inspector General of the Depart-
ment of Health and Human Services, shall promulgate regulations for an effective compliance and ethics program for operating organizations, which may include a model compliance program. 
‘‘(B) D
ESIGN OF REGULATIONS .—Such regulations with

respect to specific elements or formality of a program shall, in the case of an organization that operates 5 or more facilities, vary with the size of the organization, such that larger organizations should have a more formal program and include established written policies defining the stand-ards and procedures to be followed by its employees. Such requirements may specifically apply to the corporate level management of multi unit nursing home chains. 
‘‘(C) E

date of the promulgation of regulations under this para-graph, the Secretary shall complete an evaluation of the compliance and ethics programs required to be established under this subsection. Such evaluation shall determine if such programs led to changes in deficiency citations, changes in quality performance, or changes in other metrics of patient quality of care. The Secretary shall submit to Congress a report on such evaluation and shall include in such report such recommendations

shall include in such report such recommendations regarding changes in the requirements for such programs as the Secretary determines appropriate. ‘‘(3) R

EQUIREMENTS FOR COMPLIANCE AND ETHICS PRO -
GRAMS .—In this subsection, the term ‘compliance and ethics 
program’ means, with respect to a facility, a program of the operating organization that— 
‘‘(A) has been reasonably designed, implemented, and 
enforced so that it generally will be effective in preventing and detecting criminal, civil, and administrative violations under this Act and in promoting quality of care; and 
‘‘(B) includes at least the required components specified

in paragraph (4). ‘‘(4) R
EQUIRED COMPONENTS OF PROGRAM .—The required 
components of a compliance and ethics program of an operating organization are the following: 
‘‘(A) The organization must have established compli-
ance standards and procedures to be followed by its employees and other agents that are reasonably capable of reducing the prospect of criminal, civil, and administra-tive violations under this Act. 
‘‘(B) Specific individuals within high-level personnel

of the organization must have been assigned overall respon-sibility to oversee compliance with such standards and procedures and have sufficient resources and authority to assure such compliance. 
‘‘(C) The organization must have used due care not 
to delegate substantial discretionary authority to individ-uals whom the organization knew, or should have known through the exercise of due diligence, had a propensity to engage in criminal, civil, and administrative violations under this Act.

‘‘(D) The organization must have taken steps to commu-
nicate effectively its standards and procedures to all Definition. Reports. 
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124 STAT. 704 PUBLIC LAW 111–148—MAR. 23, 2010 
employees and other agents, such as by requiring participa-
tion in training programs or by disseminating publications that explain in a practical manner what is required. 
‘‘(E) The organization must have taken reasonable

steps to achieve compliance with its standards, such as by utilizing monitoring and auditing systems reasonably designed to detect criminal, civil, and administrative viola-tions under this Act by its employees and other agents and by having in place and publicizing a reporting system whereby employees and other agents could report violations by others within the organization without fear of retribu-tion. 
‘‘(F) The standards must have been consistently

‘‘(F) The standards must have been consistently 
enforced through appropriate disciplinary mechanisms, including, as appropriate, discipline of individuals respon-sible for the failure to detect an offense. 
‘‘(G) After an offense has been detected, the organiza-

tion must have taken all reasonable steps to respond appro-priately to the offense and to prevent further similar offenses, including any necessary modification to its pro-gram to prevent and detect criminal, civil, and administra-tive violations under this Act. 
‘‘(H) The organization must periodically undertake 
reassessment of its compliance program to identify changes necessary to reflect changes within the organization and its facilities. 
‘‘(c) Q

‘‘(c) Q
UALITY ASSURANCE AND PERFORMANCE IMPROVEMENT PRO-
GRAM .— 
‘‘(1) I N GENERAL .—Not later than December 31, 2011, the

Secretary shall establish and implement a quality assurance and performance improvement program (in this subparagraph referred to as the ‘QAPI program’) for facilities, including multi unit chains of facilities. Under the QAPI program, the Secretary shall establish standards relating to quality assurance and performance improvement with respect to facilities and provide technical assistance to facilities on the development of best practices in order to meet such standards. Not later than 1 year

to meet such standards. Not later than 1 year after the date on which the regulations are promulgated under paragraph (2), a facility must submit to the Secretary a plan for the facility to meet such standards and implement such best practices, including how to coordinate the implementation of such plan with quality assessment and assurance activities conducted under sections 1819(b)(1)(B) and 1919(b)(1)(B), as applicable.

‘‘(2) R
tions to carry out this subsection.’’. 
SEC. 6103. NURSING HOME COMPARE MEDICARE WEBSITE. 
(1) I N GENERAL .—Section 1819 of the Social Security Act 
(42 U.S.C. 1395i–3) is amended— 
(A) by redesignating subsection (i) as subsection (j); 
and 
(B) by inserting after subsection (h) the following new 
‘‘(i) N URSING HOME COMPARE WEBSITE .—

‘‘(i) N URSING HOME COMPARE WEBSITE .— 
‘‘(1) I NCLUSION OF ADDITIONAL INFORMATION .— Plan. Standards. Deadlines. 
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124 STAT. 705 PUBLIC LAW 111–148—MAR. 23, 2010 
‘‘(A) I N GENERAL .—The Secretary shall ensure that the

Department of Health and Human Services includes, as part of the information provided for comparison of nursing homes on the official Internet website of the Federal Government for Medicare beneficiaries (commonly referred to as the ‘Nursing Home Compare’ Medicare website) (or a successor website), the following information in a manner that is prominent, updated on a timely basis, easily acces-sible, readily understandable to consumers of long-term care services, and searchable:

‘‘(i) Staffing data for each facility (including resi-
dent census data and data on the hours of care pro-vided per resident per day) based on data submitted under section 1128I(g), including information on staffing turnover and tenure, in a format that is clearly understandable to consumers of long-term care services and allows such consumers to compare differences in staffing between facilities and State and national aver-ages for the facilities. Such format shall include—

‘‘(I) concise explanations of how to interpret 
the data (such as a plain English explanation of data reflecting ‘nursing home staff hours per resi-dent day’); 
‘‘(II) differences in types of staff (such as 
training associated with different categories of staff); 
‘‘(III) the relationship between nurse staffing 
levels and quality of care; and 
‘‘(IV) an explanation that appropriate staffing 
levels vary based on patient case mix. ‘‘(ii) Links to State Internet websites with informa-

tion regarding State survey and certification programs, links to Form 2567 State inspection reports (or a suc-cessor form) on such websites, information to guide consumers in how to interpret and understand such reports, and the facility plan of correction or other response to such report. Any such links shall be posted on a timely basis. 
‘‘(iii) The standardized complaint form developed

under section 1128I(f), including explanatory material on what complaint forms are, how they are used, and how to file a complaint with the State survey and certification program and the State long-term care ombudsman program. 
‘‘(iv) Summary information on the number, type, 
severity, and outcome of substantiated complaints. 
‘‘(v) The number of adjudicated instances of 
criminal violations by a facility or the employees of a facility—

‘‘(I) that were committed inside the facility; ‘‘(II) with respect to such instances of viola-
tions or crimes committed inside of the facility that were the violations or crimes of abuse, neglect, and exploitation, criminal sexual abuse, or other violations or crimes that resulted in serious bodily injury; and 
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124 STAT. 706 PUBLIC LAW 111–148—MAR. 23, 2010 
‘‘(III) the number of civil monetary penalties 
levied against the facility, employees, contractors, and other agents. 
‘‘(B) D
EADLINE FOR PROVISION OF INFORMATION .— 
(ii), the Secretary shall ensure that the information described in subparagraph (A) is included on such website (or a successor website) not later than 1 year after the date of the enactment of this subsection. 
‘‘(ii) E

‘‘(ii) E
XCEPTION .—The Secretary shall ensure that 
the information described in subparagraph (A)(i) is included on such website (or a successor website) not later than the date on which the requirements under section 1128I(g) are implemented. 
‘‘(2) R
EVIEW AND MODIFICATION OF WEBSITE .— 
‘‘(A) I N GENERAL .—The Secretary shall establish a 
process— 
‘‘(i) to review the accuracy, clarity of presentation,

timeliness, and comprehensiveness of information reported on such website as of the day before the date of the enactment of this subsection; and 
‘‘(ii) not later than 1 year after the date of the 
enactment of this subsection, to modify or revamp such website in accordance with the review conducted under clause (i). ‘‘(B) C
ONSULTATION .—In conducting the review under 
subparagraph (A)(i), the Secretary shall consult with—

‘‘(i) State long-term care ombudsman programs; ‘‘(ii) consumer advocacy groups; ‘‘(iii) provider stakeholder groups; and ‘‘(iv) any other representatives of programs or 
groups the Secretary determines appropriate.’’. 
(2) T
IMELINESS OF SUBMISSION OF SURVEY AND CERTIFI -
CATION INFORMATION .— 
(A) I N GENERAL .—Section 1819(g)(5) of the Social Secu-
rity Act (42 U.S.C. 1395i–3(g)(5)) is amended by adding at the end the following new subparagraph: 
‘‘(E) S

‘‘(E) S
UBMISSION OF SURVEY AND CERTIFICATION  
INFORMATION TO THE SECRETARY .—In order to improve the

timeliness of information made available to the public under subparagraph (A) and provided on the Nursing Home Compare Medicare website under subsection (i), each State shall submit information respecting any survey or certifi-cation made respecting a skilled nursing facility (including any enforcement actions taken by the State) to the Sec-retary not later than the date on which the State sends such information to the facility. The Secretary shall use the information submitted under the

shall use the information submitted under the preceding sentence to update the information provided on the Nursing Home Compare Medicare website as expeditiously as practicable but not less frequently than quarterly.’’.

(B) E
FFECTIVE DATE .—The amendment made by this 
paragraph shall take effect 1 year after the date of the enactment of this Act. (3) S
PECIAL FOCUS FACILITY PROGRAM .—Section 1819(f) of 
the Social Security Act (42 U.S.C. 1395i–3(f)) is amended by adding at the end the following new paragraph: 42 USC 1395i–3 note. Deadline. Procedures.

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124 STAT. 707 PUBLIC LAW 111–148—MAR. 23, 2010 
‘‘(8) S PECIAL FOCUS FACILITY PROGRAM .— 
‘‘(A) I N GENERAL .—The Secretary shall conduct a spe-
cial focus facility program for enforcement of requirements for skilled nursing facilities that the Secretary has identi-fied as having substantially failed to meet applicable requirement of this Act. 
‘‘(B) P
ERIODIC SURVEYS .—Under such program the Sec-
retary shall conduct surveys of each facility in the program not less than once every 6 months.’’.

(b) N
URSING FACILITIES .— 
(1) I N GENERAL .—Section 1919 of the Social Security Act 
(42 U.S.C. 1396r) is amended— 
and 
‘‘(1) I NCLUSION OF ADDITIONAL INFORMATION .— 

the data (such as plain English explanation of data reflecting ‘nursing home staff hours per resi-dent day’); 

tion regarding State survey and certification programs, links to Form 2567 State inspection reports (or a suc-cessor form) on such websites, information to guide consumers in how to interpret and understand such reports, and the facility plan of correction or other response to such report. Any such links shall be posted on a timely basis.

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124 STAT. 708 PUBLIC LAW 111–148—MAR. 23, 2010 
‘‘(iii) The standardized complaint form developed 
‘‘(v) The number of adjudicated instances of

criminal violations by a facility or the employees of a facility— 
‘‘(I) that were committed inside of the facility; 
and 
‘‘(II) with respect to such instances of viola-
tions or crimes committed outside of the facility, that were violations or crimes that resulted in the serious bodily injury of an elder. 
‘‘(B) D

‘‘(ii) E
XCEPTION .—The Secretary shall ensure that

‘‘(2) R
process— 

‘‘(i) State long-term care ombudsman programs; ‘‘(ii) consumer advocacy groups; ‘‘(iii) provider stakeholder groups; ‘‘(iv) skilled nursing facility employees and their 
representatives; and 
‘‘(v) any other representatives of programs or 
(2) T
(A) I N GENERAL .—Section 1919(g)(5) of the Social Secu-

rity Act (42 U.S.C. 1396r(g)(5)) is amended by adding at the end the following new subparagraph: 
‘‘(E) S
INFORMATION TO THE SECRETARY .—In order to improve the 
timeliness of information made available to the public under subparagraph (A) and provided on the Nursing Home Deadline. Deadline. Procedures.

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124 STAT. 709 PUBLIC LAW 111–148—MAR. 23, 2010 
Compare Medicare website under subsection (i), each State

shall submit information respecting any survey or certifi-cation made respecting a nursing facility (including any enforcement actions taken by the State) to the Secretary not later than the date on which the State sends such information to the facility. The Secretary shall use the information submitted under the preceding sentence to update the information provided on the Nursing Home Compare Medicare website as expeditiously as practicable but not less frequently than quarterly.’’. 
(B) E

(B) E
PECIAL FOCUS FACILITY PROGRAM .—Section 1919(f) of 
the Social Security Act (42 U.S.C. 1396r(f)) is amended by adding at the end of the following new paragraph: 
‘‘(10) S
PECIAL FOCUS FACILITY PROGRAM .— 

cial focus facility program for enforcement of requirements for nursing facilities that the Secretary has identified as having substantially failed to meet applicable requirements of this Act. 
‘‘(B) P
retary shall conduct surveys of each facility in the program not less often than once every 6 months.’’. 
(c) A
VAILABILITY OF REPORTS ON SURVEYS , CERTIFICATIONS , AND 
COMPLAINT INVESTIGATIONS .—

COMPLAINT INVESTIGATIONS .— 
(1) S KILLED NURSING FACILITIES .—Section 1819(d)(1) of the 
Social Security Act (42 U.S.C. 1395i–3(d)(1)), as amended by section 6101, is amended by adding at the end the following new subparagraph: 
‘‘(C) A
VAILABILITY OF SURVEY , CERTIFICATION , AND COM -
PLAINT INVESTIGATION REPORTS .—A skilled nursing facility 
must— 
‘‘(i) have reports with respect to any surveys, cer-

tifications, and complaint investigations made respecting the facility during the 3 preceding years available for any individual to review upon request; and 
‘‘(ii) post notice of the availability of such reports 
in areas of the facility that are prominent and acces-sible to the public. 
The facility shall not make available under clause (i) identi-fying information about complainants or residents.’’. (2) N
URSING FACILITIES .—Section 1919(d)(1) of the Social

Security Act (42 U.S.C. 1396r(d)(1)), as amended by section 6101, is amended by adding at the end the following new subparagraph: 
‘‘(V) A
PLAINT INVESTIGATION REPORTS .—A nursing facility must— 
tifications, and complaint investigations made respecting the facility during the 3 preceding years available for any individual to review upon request; and Public 
information. 42 USC 
1396r note.

1396r note. 
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124 STAT. 710 PUBLIC LAW 111–148—MAR. 23, 2010 
The facility shall not make available under clause (i) identi-fying information about complainants or residents.’’. (3) E
section shall take effect 1 year after the date of the enactment of this Act. (d) G
UIDANCE TO STATES ON FORM 2567 S TATE INSPECTION

REPORTS AND COMPLAINT INVESTIGATION REPORTS .— 
(1) G UIDANCE .—The Secretary of Health and Human Serv-

ices (in this subtitle referred to as the ‘‘Secretary’’) shall provide guidance to States on how States can establish electronic links to Form 2567 State inspection reports (or a successor form), complaint investigation reports, and a facility’s plan of correc-tion or other response to such Form 2567 State inspection reports (or a successor form) on the Internet website of the State that provides information on skilled nursing facilities and nursing facilities and the Secretary shall, if

nursing facilities and the Secretary shall, if possible, include such information on Nursing Home Compare.

(2) R
EQUIREMENT .—Section 1902(a)(9) of the Social Security 
Act (42 U.S.C. 1396a(a)(9)) is amended— 
(A) by striking ‘‘and’’ at the end of subparagraph (B); (B) by striking the semicolon at the end of subpara-
graph (C) and inserting ‘‘, and’’; and 
graph: 
‘‘(D) that the State maintain a consumer-oriented

website providing useful information to consumers regarding all skilled nursing facilities and all nursing facili-ties in the State, including for each facility, Form 2567 State inspection reports (or a successor form), complaint investigation reports, the facility’s plan of correction, and such other information that the State or the Secretary considers useful in assisting the public to assess the quality of long term care options and the quality of care provided by individual facilities;’’.

(A) N URSING FACILITY .—The term ‘‘nursing facility’’ has 
the meaning given such term in section 1919(a) of the Social Security Act (42 U.S.C. 1396r(a)). 
(B) S
ECRETARY .—The term ‘‘Secretary’’ means the Sec-
retary of Health and Human Services. 
(C) S KILLED NURSING FACILITY .—The term ‘‘skilled 
nursing facility’’ has the meaning given such term in sec-tion 1819(a) of the Social Security Act (42 U.S.C. 1395i– 3(a)). 
(e) D

(e) D
EVELOPMENT OF CONSUMER RIGHTS INFORMATION PAGE 
ONNURSING HOME COMPARE WEBSITE .—Not later than 1 year 
after the date of enactment of this Act, the Secretary shall ensure that the Department of Health and Human Services, as part of the information provided for comparison of nursing facilities on the Nursing Home Compare Medicare website develops and includes a consumer rights information page that contains links to descrip-tions of, and information with respect to, the following:

(1) The documentation on nursing facilities that is available 
to the public. 42 USC 1395i–3 note. Deadline. 42 USC 
1395i–3 note. 42 USC 
1395i–3 note. Web posting. 42 USC 
1395i–3 note. Public 
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124 STAT. 711 PUBLIC LAW 111–148—MAR. 23, 2010 
(2) General information and tips on choosing a nursing 
facility that meets the needs of the individual. 
(3) General information on consumer rights with respect 
to nursing facilities. 
(4) The nursing facility survey process (on a national and 
State-specific basis). 
(5) On a State-specific basis, the services available through 
the State long-term care ombudsman for such State. 
SEC. 6104. REPORTING OF EXPENDITURES.

SEC. 6104. REPORTING OF EXPENDITURES. 
Section 1888 of the Social Security Act (42 U.S.C. 1395yy) 
is amended by adding at the end the following new subsection: 
‘‘(f) R EPORTING OF DIRECT CAREEXPENDITURES .— 
‘‘(1) I N GENERAL .—For cost reports submitted under this

title for cost reporting periods beginning on or after the date that is 2 years after the date of the enactment of this subsection, skilled nursing facilities shall separately report expenditures for wages and benefits for direct care staff (breaking out (at a minimum) registered nurses, licensed professional nurses, certified nurse assistants, and other medical and therapy staff). 
‘‘(2) M
ODIFICATION OF FORM .—The Secretary, in consulta-

tion with private sector accountants experienced with Medicare and Medicaid nursing facility home cost reports, shall redesign such reports to meet the requirement of paragraph (1) not later than 1 year after the date of the enactment of this sub-section. 
‘‘(3) C
ATEGORIZATION BY FUNCTIONAL ACCOUNTS .—Not later

than 30 months after the date of the enactment of this sub-section, the Secretary, working in consultation with the Medi-care Payment Advisory Commission, the Medicaid and CHIP Payment and Access Commission, the Inspector General of the Department of Health and Human Services, and other expert parties the Secretary determines appropriate, shall take the expenditures listed on cost reports, as modified under para-graph (1), submitted by skilled nursing facilities and categorize such

by skilled nursing facilities and categorize such expenditures, regardless of any source of payment for such expenditures, for each skilled nursing facility into the following functional accounts on an annual basis:

‘‘(A) Spending on direct care services (including 
nursing, therapy, and medical services). 
‘‘(B) Spending on indirect care (including housekeeping 
and dietary services). 
‘‘(C) Capital assets (including building and land costs). ‘‘(D) Administrative services costs. 
‘‘(4) A
VAILABILITY OF INFORMATION SUBMITTED .—The Sec-
retary shall establish procedures to make information on expenditures submitted under this subsection readily available

to interested parties upon request, subject to such requirements as the Secretary may specify under the procedures established under this paragraph.’’. 
SEC. 6105. STANDARDIZED COMPLAINT FORM. 
(a) I NGENERAL .—Section 1128I of the Social Security Act, 
as added and amended by this Act, is amended by adding at the end the following new subsection: 
‘‘(f) S
TANDARDIZED COMPLAINT FORM.— 
‘‘(1) D EVELOPMENT BY THE SECRETARY .—The Secretary shall

develop a standardized complaint form for use by a resident 42 USC 1320a–7j. Procedures. 
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124 STAT. 712 PUBLIC LAW 111–148—MAR. 23, 2010 
(or a person acting on the resident’s behalf) in filing a complaint 
with a State survey and certification agency and a State long- term care ombudsman program with respect to a facility. 
‘‘(2) C
OMPLAINT FORMS AND RESOLUTION PROCESSES .— 
‘‘(A) C OMPLAINT FORMS .—The State must make the 
standardized complaint form developed under paragraph (1) available upon request to—

‘‘(i) a resident of a facility; and ‘‘(ii) any person acting on the resident’s behalf. 
‘‘(B) C
OMPLAINT RESOLUTION PROCESS .—The State must

OMPLAINT RESOLUTION PROCESS .—The State must 
establish a complaint resolution process in order to ensure that the legal representative of a resident of a facility or other responsible party is not denied access to such resident or otherwise retaliated against if they have com-plained about the quality of care provided by the facility or other issues relating to the facility. Such complaint resolution process shall include— 
‘‘(i) procedures to assure accurate tracking of com-

plaints received, including notification to the complain-ant that a complaint has been received; 
‘‘(ii) procedures to determine the likely severity 
of a complaint and for the investigation of the com-plaint; and 
‘‘(iii) deadlines for responding to a complaint and 
for notifying the complainant of the outcome of the investigation. 
‘‘(3) R
ULE OF CONSTRUCTION .—Nothing in this subsection

ULE OF CONSTRUCTION .—Nothing in this subsection 
shall be construed as preventing a resident of a facility (or a person acting on the resident’s behalf) from submitting a complaint in a manner or format other than by using the standardized complaint form developed under paragraph (1) (including submitting a complaint orally).’’. (b) E
shall take effect 1 year after the date of the enactment of this Act.

SEC. 6106. ENSURING STAFFING ACCOUNTABILITY. 
Section 1128I of the Social Security Act, as added and amended 
by this Act, is amended by adding at the end the following new subsection: 
‘‘(g) S
UBMISSION OF STAFFING INFORMATION BASED ON PAYROLL  
DATA IN A UNIFORM FORMAT .—Beginning not later than 2 years

after the date of the enactment of this subsection, and after con-sulting with State long-term care ombudsman programs, consumer advocacy groups, provider stakeholder groups, employees and their representatives, and other parties the Secretary deems appropriate, the Secretary shall require a facility to electronically submit to the Secretary direct care staffing information (including information with respect to agency and contract staff) based on payroll and other verifiable and auditable data

payroll and other verifiable and auditable data in a uniform format (according to specifications established by the Secretary in consultation with such programs, groups, and parties). Such specifications shall require that the information submitted under the preceding sen-tence—

‘‘(1) specify the category of work a certified employee per-
forms (such as whether the employee is a registered nurse, Deadline. 42 USC 
1320a–7j note. 
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124 STAT. 713 PUBLIC LAW 111–148—MAR. 23, 2010 
licensed practical nurse, licensed vocational nurse, certified 
nursing assistant, therapist, or other medical personnel); 
‘‘(2) include resident census data and information on resi-
dent case mix; 
‘‘(3) include a regular reporting schedule; and ‘‘(4) include information on employee turnover and tenure 
and on the hours of care provided by each category of certified employees referenced in paragraph (1) per resident per day.

Nothing in this subsection shall be construed as preventing the Secretary from requiring submission of such information with respect to specific categories, such as nursing staff, before other categories of certified employees. Information under this subsection with respect to agency and contract staff shall be kept separate from information on employee staffing.’’. 
SEC. 6107. GAO STUDY AND REPORT ON FIVE-STAR QUALITY RATING 
SYSTEM.

SYSTEM. 
(a) S TUDY .—The Comptroller General of the United States (in 
this section referred to as the ‘‘Comptroller General’’) shall conduct a study on the Five-Star Quality Rating System for nursing homes of the Centers for Medicare & Medicaid Services. Such study shall include an analysis of— 
(1) how such system is being implemented; (2) any problems associated with such system or its 
implementation; and 
(3) how such system could be improved. 
(b) R

(b) R
EPORT .—Not later than 2 years after the date of enactment 
of this Act, the Comptroller General shall submit to Congress a report containing the results of the study conducted under sub-section (a), together with recommendations for such legislation and administrative action as the Comptroller General determines appro-priate. 
PART II—TARGETING ENFORCEMENT 
SEC. 6111. CIVIL MONEY PENALTIES. 
(a) S KILLED NURSING FACILITIES .—

(1) I N GENERAL .—Section 1819(h)(2)(B)(ii) of the Social 
Security Act (42 U.S.C. 1395i–3(h)(2)(B)(ii)) is amended— 
(A) by striking ‘‘P ENALTIES .—The Secretary’’ and 
inserting ‘‘ PENALTIES .— 
the Secretary’’; and 
(B) by adding at the end the following new subclauses: 
‘‘(II) R EDUCTION OF CIVIL MONEY PENALTIES  
IN CERTAIN CIRCUMSTANCES .—Subject to subclause

IN CERTAIN CIRCUMSTANCES .—Subject to subclause 
(III), in the case where a facility self-reports and promptly corrects a deficiency for which a penalty was imposed under this clause not later than 10 calendar days after the date of such imposition, the Secretary may reduce the amount of the pen-alty imposed by not more than 50 percent. 
‘‘(III) P
ROHIBITIONS ON REDUCTION FOR CER -
TAIN DEFICIENCIES .— 
‘‘(aa) R EPEAT DEFICIENCIES .—The Sec-

retary may not reduce the amount of a penalty under subclause (II) if the Secretary had Deadline. 
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124 STAT. 714 PUBLIC LAW 111–148—MAR. 23, 2010 
reduced a penalty imposed on the facility in 
the preceding year under such subclause with respect to a repeat deficiency. 
‘‘(bb) C
ERTAIN OTHER DEFICIENCIES .—The

‘‘(bb) C
ERTAIN OTHER DEFICIENCIES .—The 
Secretary may not reduce the amount of a penalty under subclause (II) if the penalty is imposed on the facility for a deficiency that is found to result in a pattern of harm or widespread harm, immediately jeopardizes the health or safety of a resident or residents of the facility, or results in the death of a resi-dent of the facility. ‘‘(IV) C
OLLECTION OF CIVIL MONEY PEN -
ALTIES .—In the case of a civil money penalty

ALTIES .—In the case of a civil money penalty 
imposed under this clause, the Secretary shall issue regulations that— 
‘‘(aa) subject to item (cc), not later than 
30 days after the imposition of the penalty, provide for the facility to have the opportunity to participate in an independent informal dis-pute resolution process which generates a written record prior to the collection of such penalty; 
‘‘(bb) in the case where the penalty is

‘‘(bb) in the case where the penalty is 
imposed for each day of noncompliance, pro-vide that a penalty may not be imposed for any day during the period beginning on the initial day of the imposition of the penalty and ending on the day on which the informal dispute resolution process under item (aa) is completed; 
‘‘(cc) may provide for the collection of such

‘‘(cc) may provide for the collection of such 
civil money penalty and the placement of such amounts collected in an escrow account under the direction of the Secretary on the earlier of the date on which the informal dispute reso-lution process under item (aa) is completed or the date that is 90 days after the date of the imposition of the penalty; 
‘‘(dd) may provide that such amounts col-
lected are kept in such account pending the resolution of any subsequent appeals;

‘‘(ee) in the case where the facility success-
fully appeals the penalty, may provide for the return of such amounts collected (plus interest) to the facility; and 
‘‘(ff) in the case where all such appeals

‘‘(ff) in the case where all such appeals 
are unsuccessful, may provide that some por-tion of such amounts collected may be used to support activities that benefit residents, including assistance to support and protect residents of a facility that closes (voluntarily or involuntarily) or is decertified (including offsetting costs of relocating residents to home and community-based settings or another facility), projects that support resident and Time period. Deadline. Regulations.

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124 STAT. 715 PUBLIC LAW 111–148—MAR. 23, 2010 
family councils and other consumer involve-
ment in assuring quality care in facilities, and facility improvement initiatives approved by the Secretary (including joint training of facility staff and surveyors, technical assist-ance for facilities implementing quality assur-ance programs, the appointment of temporary management firms, and other activities approved by the Secretary).’’. 
(2) C
ONFORMING AMENDMENT .—The second sentence of sec-

tion 1819(h)(5) of the Social Security Act (42 U.S.C. 1395i– 3(h)(5)) is amended by inserting ‘‘(ii)(IV),’’ after ‘‘(i),’’. (b) N
(1) I N GENERAL .—Section 1919(h)(3)(C)(ii) of the Social 
Security Act (42 U.S.C. 1396r(h)(3)(C)) is amended— 
the Secretary’’; and

‘‘(III) P

‘‘(III) P
retary may not reduce the amount of a penalty under subclause (II) if the Secretary had reduced a penalty imposed on the facility in the preceding year under such subclause with respect to a repeat deficiency. 
‘‘(bb) C

30 days after the imposition of the penalty, provide for the facility to have the opportunity to participate in an independent informal dis-pute resolution process which generates a written record prior to the collection of such penalty; Deadline. Regulations. Deadline.

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124 STAT. 716 PUBLIC LAW 111–148—MAR. 23, 2010 

are unsuccessful, may provide that some por-tion of such amounts collected may be used to support activities that benefit residents, including assistance to support and protect residents of a facility that closes (voluntarily or involuntarily) or is decertified (including offsetting costs of relocating residents to home and community-based settings or another facility), projects that support resident and family councils and other consumer involve-ment in assuring quality care in facilities, and

in assuring quality care in facilities, and facility improvement initiatives approved by

the Secretary (including joint training of facility staff and surveyors, technical assist-ance for facilities implementing quality assur-ance programs, the appointment of temporary management firms, and other activities approved by the Secretary).’’. 
(2) C
ONFORMING AMENDMENT .—Section 1919(h)(5)(8) of the 
Social Security Act (42 U.S.C. 1396r(h)(5)(8)) is amended by inserting ‘‘(ii)(IV),’’ after ‘‘(i),’’. (c) E

shall take effect 1 year after the date of the enactment of this Act. 
SEC. 6112. NATIONAL INDEPENDENT MONITOR DEMONSTRATION 
PROJECT. 
Inspector General of the Department of Health and Human Services, shall conduct a demonstration project to develop, test, and implement an independent monitor program to oversee 42 USC 
1320a–7j note. 42 USC 
1395i–3 note. Time period.

1395i–3 note. Time period. 
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124 STAT. 717 PUBLIC LAW 111–148—MAR. 23, 2010 
interstate and large intrastate chains of skilled nursing facili-
ties and nursing facilities. 
(2) S ELECTION .—The Secretary shall select chains of skilled 
nursing facilities and nursing facilities described in paragraph (1) to participate in the demonstration project under this section from among those chains that submit an application to the Secretary at such time, in such manner, and containing such information as the Secretary may require.

(3) D
URATION .—The Secretary shall conduct the demonstra-
tion project under this section for a 2-year period. 
(4) I MPLEMENTATION .—The Secretary shall implement the 
demonstration project under this section not later than 1 year after the date of the enactment of this Act. (b) R
EQUIREMENTS .—The Secretary shall evaluate chains

selected to participate in the demonstration project under this sec-tion based on criteria selected by the Secretary, including where evidence suggests that a number of the facilities of the chain are experiencing serious safety and quality of care problems. Such criteria may include the evaluation of a chain that includes a number of facilities participating in the ‘‘Special Focus Facility’’ program (or a successor program) or multiple facilities with a record of repeated serious safety and

with a record of repeated serious safety and quality of care deficiencies.

(c) R
ESPONSIBILITIES .—An independent monitor that enters into 
a contract with the Secretary to participate in the conduct of the demonstration project under this section shall— 
(1) conduct periodic reviews and prepare root-cause quality 
and deficiency analyses of a chain to assess if facilities of the chain are in compliance with State and Federal laws and regulations applicable to the facilities; 
(2) conduct sustained oversight of the efforts of the chain,

whether publicly or privately held, to achieve compliance by facilities of the chain with State and Federal laws and regula-tions applicable to the facilities; 
(3) analyze the management structure, distribution of 
expenditures, and nurse staffing levels of facilities of the chain in relation to resident census, staff turnover rates, and tenure; 
(4) report findings and recommendations with respect to

such reviews, analyses, and oversight to the chain and facilities of the chain, to the Secretary, and to relevant States; and 
(5) publish the results of such reviews, analyses, and over-
sight. (d) I
MPLEMENTATION OF RECOMMENDATIONS .— 
(1) R ECEIPT OF FINDING BY CHAIN .—Not later than 10 days 
after receipt of a finding of an independent monitor under subsection (c)(4), a chain participating in the demonstration project shall submit to the independent monitor a report—

(A) outlining corrective actions the chain will take 
to implement the recommendations in such report; or 
(B) indicating that the chain will not implement such 
recommendations, and why it will not do so. (2) R
ECEIPT OF REPORT BY INDEPENDENT MONITOR .—Not

ECEIPT OF REPORT BY INDEPENDENT MONITOR .—Not 
later than 10 days after receipt of a report submitted by a chain under paragraph (1), an independent monitor shall finalize its recommendations and submit a report to the chain and facilities of the chain, the Secretary, and the State or States, as appropriate, containing such final recommendations. Reports. Deadline. Publication. Reports. Review. Contracts. Evaluation. Deadline.

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124 STAT. 718 PUBLIC LAW 111–148—MAR. 23, 2010 
(e) C OST OF APPOINTMENT .—A chain shall be responsible for 
a portion of the costs associated with the appointment of inde-pendent monitors under the demonstration project under this sec-tion. The chain shall pay such portion to the Secretary (in an amount and in accordance with procedures established by the Sec-retary). 
(f) W
AIVER AUTHORITY .—The Secretary may waive such require-

ments of titles XVIII and XIX of the Social Security Act (42 U.S.C. 1395 et seq.; 1396 et seq.) as may be necessary for the purpose of carrying out the demonstration project under this section. 
(g) A
(h) D
(1) A DDITIONAL DISCLOSABLE PARTY .—The term ‘‘additional

disclosable party’’ has the meaning given such term in section 1124(c)(5)(A) of the Social Security Act, as added by section 4201(a). 
(2) F
ACILITY .—The term ‘‘facility’’ means a skilled nursing 
facility or a nursing facility. 
(3) N URSING FACILITY .—The term ‘‘nursing facility’’ has 
(4) S
ECRETARY .—The term ‘‘Secretary’’ means the Secretary

of Health and Human Services, acting through the Assistant Secretary for Planning and Evaluation. 
(5) S
KILLED NURSING FACILITY .—The term ‘‘skilled nursing 
facility’’ has the meaning given such term in section 1819(a) of the Social Security Act (42 U.S.C. 1395(a)). (i) E
(1) E VALUATION .—The Secretary, in consultation with the 
Inspector General of the Department of Health and Human Services, shall evaluate the demonstration project conducted under this section.

(2) R
EPORT .—Not later than 180 days after the completion 
of the demonstration project under this section, the Secretary shall submit to Congress a report containing the results of the evaluation conducted under paragraph (1), together with recommendations— 
(A) as to whether the independent monitor program 
should be established on a permanent basis; 
(B) if the Secretary recommends that such program 
be so established, on appropriate procedures and mecha-nisms for such establishment; and

(C) for such legislation and administrative action as 
the Secretary determines appropriate. 
SEC. 6113. NOTIFICATION OF FACILITY CLOSURE. 
‘‘(h) N
OTIFICATION OF FACILITY CLOSURE .— 
‘‘(1) I N GENERAL .—Any individual who is the administrator 
of a facility must— 42 USC 
1320a–7j. Payment. 
Procedures.

Procedures. 
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124 STAT. 719 PUBLIC LAW 111–148—MAR. 23, 2010 
‘‘(A) submit to the Secretary, the State long-term care 
ombudsman, residents of the facility, and the legal rep-resentatives of such residents or other responsible parties, written notification of an impending closure— 
‘‘(i) subject to clause (ii), not later than the date 
that is 60 days prior to the date of such closure; and 
‘‘(ii) in the case of a facility where the Secretary

terminates the facility’s participation under this title, not later than the date that the Secretary determines appropriate; ‘‘(B) ensure that the facility does not admit any new 
residents on or after the date on which such written notification is submitted; and 
‘‘(C) include in the notice a plan for the transfer and

adequate relocation of the residents of the facility by a specified date prior to closure that has been approved by the State, including assurances that the residents will be transferred to the most appropriate facility or other setting in terms of quality, services, and location, taking into consideration the needs, choice, and best interests of each resident. ‘‘(2) R
ELOCATION .— 
‘‘(A) I N GENERAL .—The State shall ensure that, before

a facility closes, all residents of the facility have been successfully relocated to another facility or an alternative home and community-based setting. 
‘‘(B) C
ONTINUATION OF PAYMENTS UNTIL RESIDENTS  
RELOCATED .—The Secretary may, as the Secretary deter-

mines appropriate, continue to make payments under this title with respect to residents of a facility that has sub-mitted a notification under paragraph (1) during the period beginning on the date such notification is submitted and ending on the date on which the resident is successfully relocated. ‘‘(3) S
ANCTIONS .—Any individual who is the administrator 
of a facility that fails to comply with the requirements of paragraph (1)— 
‘‘(A) shall be subject to a civil monetary penalty of

up to $100,000; 
‘‘(B) may be subject to exclusion from participation 
in any Federal health care program (as defined in section 1128B(f)); and 
‘‘(C) shall be subject to any other penalties that may 
be prescribed by law. ‘‘(4) P
ROCEDURE .—The provisions of section 1128A (other 
than subsections (a) and (b) and the second sentence of sub-

section (f)) shall apply to a civil money penalty or exclusion under paragraph (3) in the same manner as such provisions apply to a penalty or proceeding under section 1128A(a).’’. (b) C
ONFORMING AMENDMENTS .—Section 1819(h)(4) of the Social 
Security Act (42 U.S.C. 1395i–3(h)(4)) is amended— 
(1) in the first sentence, by striking ‘‘the Secretary shall 
terminate’’ and inserting ‘‘the Secretary, subject to section 1128I(h), shall terminate’’; and

(2) in the second sentence, by striking ‘‘subsection (c)(2)’’ 
and inserting ‘‘subsection (c)(2) and section 1128I(h)’’. Applicability. Time period. Plans. Notification. 
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124 STAT. 720 PUBLIC LAW 111–148—MAR. 23, 2010 
SEC. 6114. NATIONAL DEMONSTRATION PROJECTS ON CULTURE 
CHANGE AND USE OF INFORMATION TECHNOLOGY IN NURSING HOMES. 
(a) I NGENERAL .—The Secretary shall conduct 2 demonstration

projects, 1 for the development of best practices in skilled nursing facilities and nursing facilities that are involved in the culture change movement (including the development of resources for facili-ties to find and access funding in order to undertake culture change) and 1 for the development of best practices in skilled nursing facilities and nursing facilities for the use of information technology to improve resident care. 
(b) C
ONDUCT OF DEMONSTRATION PROJECTS .—

(b) C
ONDUCT OF DEMONSTRATION PROJECTS .— 
(1) G RANT AWARD .—Under each demonstration project con-
ducted under this section, the Secretary shall award 1 or more grants to facility-based settings for the development of best practices described in subsection (a) with respect to the dem-onstration project involved. Such award shall be made on a competitive basis and may be allocated in 1 lump-sum payment. 
(2) C
ONSIDERATION OF SPECIAL NEEDS OF RESIDENTS .—Each

demonstration project conducted under this section shall take into consideration the special needs of residents of skilled nursing facilities and nursing facilities who have cognitive impairment, including dementia. (c) D
URATION AND IMPLEMENTATION .— 
(1) D URATION .—The demonstration projects shall each be 
conducted for a period not to exceed 3 years. 
(2) I MPLEMENTATION .—The demonstration projects shall

each be implemented not later than 1 year after the date of the enactment of this Act. (d) D
(1) N URSING FACILITY .—The term ‘‘nursing facility’’ has 
(2) S
(3) S KILLED NURSING FACILITY .—The term ‘‘skilled nursing

facility’’ has the meaning given such term in section 1819(a) of the Social Security Act (42 U.S.C. 1395(a)). (e) A
(f) R
EPORT .—Not later than 9 months after the completion

of the demonstration project, the Secretary shall submit to Congress a report on such project, together with recommendations for such legislation and administrative action as the Secretary determines appropriate. 
PART III—IMPROVING STAFF TRAINING 
SEC. 6121. DEMENTIA AND ABUSE PREVENTION TRAINING. 
(1) I N GENERAL .—Section 1819(f)(2)(A)(i)(I) of the Social

Security Act (42 U.S.C. 1395i–3(f)(2)(A)(i)(I)) is amended by Recommenda- tions. Deadline. 42 USC 1395i–3 
note. 42 USC 1320a–7j 
note. 
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124 STAT. 721 PUBLIC LAW 111–148—MAR. 23, 2010 
inserting ‘‘(including, in the case of initial training and, if 
the Secretary determines appropriate, in the case of ongoing training, dementia management training, and patient abuse prevention training’’ before ‘‘, (II)’’. 
(2) C
LARIFICATION OF DEFINITION OF NURSE AIDE .—Section 
1819(b)(5)(F) of the Social Security Act (42 U.S.C. 1395i– 3(b)(5)(F)) is amended by adding at the end the following flush sentence:

‘‘Such term includes an individual who provides such serv-ices through an agency or under a contract with the facility.’’. 
(b) N
(1) I N GENERAL .—Section 1919(f)(2)(A)(i)(I) of the Social 
Security Act (42 U.S.C. 1396r(f)(2)(A)(i)(I)) is amended by inserting ‘‘(including, in the case of initial training and, if the Secretary determines appropriate, in the case of ongoing training, dementia management training, and patient abuse prevention training’’ before ‘‘, (II)’’.

(2) C
1919(b)(5)(F) of the Social Security Act (42 U.S.C. 1396r(b)(5)(F)) is amended by adding at the end the following flush sentence: 
(c) E
Subtitle C—Nationwide Program for Na-

tional and State Background Checks on Direct Patient Access Employees of Long-term Care Facilities and Providers 
SEC. 6201. NATIONWIDE PROGRAM FOR NATIONAL AND STATE BACK-
GROUND CHECKS ON DIRECT PATIENT ACCESS EMPLOYEES OF LONG-TERM CARE FACILITIES AND PRO-VIDERS. 

(in this section referred to as the ‘‘Secretary’’), shall establish a program to identify efficient, effective, and economical procedures for long term care facilities or providers to conduct background checks on prospective direct patient access employees on a nation-wide basis (in this subsection, such program shall be referred to as the ‘‘nationwide program’’). Except for the following modifica-tions, the Secretary shall carry out the nationwide program under similar terms and conditions as

program under similar terms and conditions as the pilot program under section 307 of the Medicare Prescription Drug, Improvement, and Mod-ernization Act of 2003 (Public Law 108–173; 117 Stat. 2257), including the prohibition on hiring abusive workers and the authorization of the imposition of penalties by a participating State under subsection (b)(3)(A) and (b)(6), respectively, of such section 307:

(1) A
GREEMENTS .— 42 USC 1320a–7 l. 42 USC 1395i–3 
note. 
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124 STAT. 722 PUBLIC LAW 111–148—MAR. 23, 2010 
(A) N EWLY PARTICIPATING STATES .—The Secretary shall 
enter into agreements with each State— 
(i) that the Secretary has not entered into an 
agreement with under subsection (c)(1) of such section 307; 
(ii) that agrees to conduct background checks 
under the nationwide program on a Statewide basis; and 
(iii) that submits an application to the Secretary 
containing such information and at such time as the Secretary may specify. (B) C

ERTAIN PREVIOUSLY PARTICIPATING STATES .—The 
Secretary shall enter into agreements with each State— 
(i) that the Secretary has entered into an agree-
ment with under such subsection (c)(1), but only in the case where such agreement did not require the State to conduct background checks under the program established under subsection (a) of such section 307 on a Statewide basis; 
under the nationwide program on a Statewide basis; and

containing such information and at such time as the Secretary may specify. 
(2) N
ONAPPLICATION OF SELECTION CRITERIA .—The selection 
criteria required under subsection (c)(3)(B) of such section 307 shall not apply. 
(3) R
EQUIRED FINGERPRINT CHECK AS PART OF CRIMINAL  
HISTORY BACKGROUND CHECK .—The procedures established 
under subsection (b)(1) of such section 307 shall— 
(A) require that the long-term care facility or provider

(or the designated agent of the long-term care facility or provider) obtain State and national criminal history back-ground checks on the prospective employee through such means as the Secretary determines appropriate, efficient, and effective that utilize a search of State-based abuse and neglect registries and databases, including the abuse and neglect registries of another State in the case where

a prospective employee previously resided in that State, State criminal history records, the records of any pro-ceedings in the State that may contain disqualifying information about prospective employees (such as pro-ceedings conducted by State professional licensing and dis-ciplinary boards and State Medicaid Fraud Control Units), and Federal criminal history records, including a finger-print check using the Integrated Automated Fingerprint Identification System of the Federal Bureau of

(B) require States to describe and test methods that 
reduce duplicative fingerprinting, including providing for the development of ‘‘rap back’’ capability by the State such that, if a direct patient access employee of a long-term care facility or provider is convicted of a crime following the initial criminal history background check conducted

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124 STAT. 723 PUBLIC LAW 111–148—MAR. 23, 2010 
with respect to such employee, and the employee’s finger-
prints match the prints on file with the State law enforce-ment department, the department will immediately inform the State and the State will immediately inform the long- term care facility or provider which employs the direct patient access employee of such conviction; and 
(C) require that criminal history background checks

conducted under the nationwide program remain valid for a period of time specified by the Secretary. (4) S
TATE REQUIREMENTS .—An agreement entered into 
under paragraph (1) shall require that a participating State— 
(A) be responsible for monitoring compliance with the 
requirements of the nationwide program; 
(B) have procedures in place to— 
(i) conduct screening and criminal history back-
ground checks under the nationwide program in accord-ance with the requirements of this section;

(ii) monitor compliance by long-term care facilities 
and providers with the procedures and requirements of the nationwide program; 
(iii) as appropriate, provide for a provisional period

of employment by a long-term care facility or provider of a direct patient access employee, not to exceed 60 days, pending completion of the required criminal his-tory background check and, in the case where the employee has appealed the results of such background check, pending completion of the appeals process, during which the employee shall be subject to direct on-site supervision (in accordance with procedures established by the State to ensure that a long-term care facility or provider

ensure that a long-term care facility or provider furnishes such direct on-site supervision);

provisional employee or an employee may appeal or dispute the accuracy of the information obtained in a background check performed under the nationwide program, including the specification of criteria for appeals for direct patient access employees found to have disqualifying information which shall include consideration of the passage of time, extenuating cir-cumstances, demonstration of rehabilitation, and rel-evancy of the particular disqualifying information with respect to the current

information with respect to the current employment of the individual;

(v) provide for the designation of a single State 
agency as responsible for— 
(I) overseeing the coordination of any State 
and national criminal history background checks requested by a long-term care facility or provider (or the designated agent of the long-term care facility or provider) utilizing a search of State and Federal criminal history records, including a fingerprint check of such records; 
(II) overseeing the design of appropriate pri-

vacy and security safeguards for use in the review of the results of any State or national criminal history background checks conducted regarding a Procedures. 
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124 STAT. 724 PUBLIC LAW 111–148—MAR. 23, 2010 
prospective direct patient access employee to deter-
mine whether the employee has any conviction for a relevant crime; 
(III) immediately reporting to the long-term 
care facility or provider that requested the criminal history background check the results of such review; and 
(IV) in the case of an employee with a convic-

tion for a relevant crime that is subject to reporting under section 1128E of the Social Security Act (42 U.S.C. 1320a–7e), reporting the existence of such conviction to the database established under that section; (vi) determine which individuals are direct patient 
access employees (as defined in paragraph (6)(B)) for purposes of the nationwide program; 
(vii) as appropriate, specify offenses, including

convictions for violent crimes, for purposes of the nationwide program; and 
(viii) describe and test methods that reduce

(viii) describe and test methods that reduce 
duplicative fingerprinting, including providing for the development of ‘‘rap back’’ capability such that, if a direct patient access employee of a long-term care facility or provider is convicted of a crime following the initial criminal history background check conducted with respect to such employee, and the employee’s fingerprints match the prints on file with the State law enforcement department— 
(I) the department will immediately inform

(I) the department will immediately inform 
the State agency designated under clause (v) and such agency will immediately inform the facility or provider which employs the direct patient access employee of such conviction; and 
(II) the State will provide, or will require the 
facility to provide, to the employee a copy of the results of the criminal history background check conducted with respect to the employee at no charge in the case where the individual requests such a copy. 
(5) P

(5) P
AYMENTS .— 
(A) N EWLY PARTICIPATING STATES .— 
(i) I N GENERAL .—As part of the application sub-
mitted by a State under paragraph (1)(A)(iii), the State shall guarantee, with respect to the costs to be incurred by the State in carrying out the nationwide program, that the State will make available (directly or through 
donations from public or private entities) a particular amount of non-Federal contributions, as a condition of receiving the Federal match under clause (ii). 
(ii) F

(ii) F
EDERAL MATCH .—The payment amount to 
each State that the Secretary enters into an agreement with under paragraph (1)(A) shall be 3 times the amount that the State guarantees to make available under clause (i), except that in no case may the pay-ment amount exceed $3,000,000. (B) P
REVIOUSLY PARTICIPATING STATES .— 
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124 STAT. 725 PUBLIC LAW 111–148—MAR. 23, 2010 
mitted by a State under paragraph (1)(B)(iii), the State shall guarantee, with respect to the costs to be incurred by the State in carrying out the nationwide program, that the State will make available (directly or through donations from public or private entities) a particular amount of non-Federal contributions, as a condition of receiving the Federal match under clause (ii). 
(ii) F

(ii) F
each State that the Secretary enters into an agreement with under paragraph (1)(B) shall be 3 times the amount that the State guarantees to make available under clause (i), except that in no case may the pay-ment amount exceed $1,500,000. 
(6) D
EFINITIONS .—Under the nationwide program: 
(A) C ONVICTION FOR A RELEVANT CRIME .—The term 
‘‘conviction for a relevant crime’’ means any Federal or State criminal conviction for—

(i) any offense described in section 1128(a) of the 
Social Security Act (42 U.S.C. 1320a–7); or 
(ii) such other types of offenses as a participating 
State may specify for purposes of conducting the pro-gram in such State. (B) D
ISQUALIFYING INFORMATION .—The term ‘‘disquali-
fying information’’ means a conviction for a relevant crime or a finding of patient or resident abuse. 
(C) F
INDING OF PATIENT OR RESIDENT ABUSE .—The

(C) F
INDING OF PATIENT OR RESIDENT ABUSE .—The 
term ‘‘finding of patient or resident abuse’’ means any substantiated finding by a State agency under section 1819(g)(1)(C) or 1919(g)(1)(C) of the Social Security Act (42 U.S.C. 1395i–3(g)(1)(C), 1396r(g)(1)(C)) or a Federal agency that a direct patient access employee has com-mitted— 
(i) an act of patient or resident abuse or neglect 
or a misappropriation of patient or resident property; or 
(ii) such other types of acts as a participating

(ii) such other types of acts as a participating 
State may specify for purposes of conducting the pro-gram in such State. (D) D
IRECT PATIENT ACCESS EMPLOYEE .—The term

IRECT PATIENT ACCESS EMPLOYEE .—The term 
‘‘direct patient access employee’’ means any individual who has access to a patient or resident of a long-term care facility or provider through employment or through a con-tract with such facility or provider and has duties that involve (or may involve) one-on-one contact with a patient or resident of the facility or provider, as determined by

the State for purposes of the nationwide program. Such term does not include a volunteer unless the volunteer has duties that are equivalent to the duties of a direct patient access employee and those duties involve (or may involve) one-on-one contact with a patient or resident of the long-term care facility or provider. 
(E) L
ONG-TERM CARE FACILITY OR PROVIDER .—The term

ONG-TERM CARE FACILITY OR PROVIDER .—The term 
‘‘long-term care facility or provider’’ means the following facilities or providers which receive payment for services under title XVIII or XIX of the Social Security Act: 
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124 STAT. 726 PUBLIC LAW 111–148—MAR. 23, 2010 
(i) A skilled nursing facility (as defined in section 
1819(a) of the Social Security Act (42 U.S.C. 1395i– 3(a))). 
(ii) A nursing facility (as defined in section 1919(a) 
of such Act (42 U.S.C. 1396r(a))). 
(iii) A home health agency. (iv) A provider of hospice care (as defined in section 
1861(dd)(1) of such Act (42 U.S.C. 1395x(dd)(1))). 
(v) A long-term care hospital (as described in sec-

tion 1886(d)(1)(B)(iv) of such Act (42 U.S.C. 1395ww(d)(1)(B)(iv))). 
(vi) A provider of personal care services. (vii) A provider of adult day care. (viii) A residential care provider that arranges for, 
or directly provides, long-term care services, including an assisted living facility that provides a level of care established by the Secretary. 
(ix) An intermediate care facility for the mentally 
retarded (as defined in section 1905(d) of such Act (42 U.S.C. 1396d(d))).

(x) Any other facility or provider of long-term care 
services under such titles as the participating State determines appropriate. 
(7) E
(A) E VALUATION .— 
(i) I N GENERAL .—The Inspector General of the 
Department of Health and Human Services shall con-duct an evaluation of the nationwide program. 
(ii) I
NCLUSION OF SPECIFIC TOPICS .—The evaluation 
conducted under clause (i) shall include the following: 
(I) A review of the various procedures imple-

mented by participating States for long-term care facilities or providers, including staffing agencies, to conduct background checks of direct patient access employees under the nationwide program and identification of the most appropriate, effi-cient, and effective procedures for conducting such background checks. 
(II) An assessment of the costs of conducting 
such background checks (including start up and administrative costs).

(III) A determination of the extent to which 
conducting such background checks leads to any unintended consequences, including a reduction in the available workforce for long-term care facilities or providers. 
(IV) An assessment of the impact of the nation-
wide program on reducing the number of incidents of neglect, abuse, and misappropriation of resident property to the extent practicable. 
(V) An evaluation of other aspects of the

(V) An evaluation of other aspects of the 
nationwide program, as determined appropriate by the Secretary. 
(B) R
EPORT .—Not later than 180 days after the comple-
tion of the nationwide program, the Inspector General of the Department of Health and Human Services shall 
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124 STAT. 727 PUBLIC LAW 111–148—MAR. 23, 2010 
submit a report to Congress containing the results of the 
evaluation conducted under subparagraph (A). 
(b) F UNDING .— 
(1) N OTIFICATION .—The Secretary of Health and Human 
Services shall notify the Secretary of the Treasury of the amount necessary to carry out the nationwide program under this section for the period of fiscal years 2010 through 2012, except that in no case shall such amount exceed $160,000,000. 
(2) T
RANSFER OF FUNDS .—

(2) T
RANSFER OF FUNDS .— 
not otherwise appropriated, the Secretary of the Treasury shall provide for the transfer to the Secretary of Health and Human Services of the amount specified as necessary to carry out the nationwide program under paragraph (1). Such amount shall remain available until expended. 
(B) R
ESERVATION OF FUNDS FOR CONDUCT OF EVALUA -
TION .—The Secretary may reserve not more than

TION .—The Secretary may reserve not more than 
$3,000,000 of the amount transferred under subparagraph (A) to provide for the conduct of the evaluation under subsection (a)(7)(A). 
Subtitle D—Patient-Centered Outcomes 
Research 
SEC. 6301. PATIENT-CENTERED OUTCOMES RESEARCH. 
(a) I NGENERAL .—Title XI of the Social Security Act (42 U.S.C. 
1301 et seq.) is amended by adding at the end the following new part: 
‘‘P
ARTD—C OMPARATIVE CLINICAL EFFECTIVENESS RESEARCH

‘‘COMPARATIVE CLINICAL EFFECTIVENESS RESEARCH  
‘‘SEC. 1181. (a) D EFINITIONS .—In this section: 
‘‘(1) B OARD .—The term ‘Board’ means the Board of Gov-
ernors established under subsection (f). 
‘‘(2) C OMPARATIVE CLINICAL EFFECTIVENESS RESEARCH ; 
RESEARCH .— 
‘‘(A) I N GENERAL .—The terms ‘comparative clinical

effectiveness research’ and ‘research’ mean research evalu-ating and comparing health outcomes and the clinical effectiveness, risks, and benefits of 2 or more medical treat-ments, services, and items described in subparagraph (B). 
‘‘(B) M
EDICAL TREATMENTS , SERVICES , AND ITEMS  
DESCRIBED .—The medical treatments, services, and items

described in this subparagraph are health care interven-tions, protocols for treatment, care management, and delivery, procedures, medical devices, diagnostic tools, pharmaceuticals (including drugs and biologicals), integra-tive health practices, and any other strategies or items being used in the treatment, management, and diagnosis of, or prevention of illness or injury in, individuals. ‘‘(3) C
ONFLICT OF INTEREST .—The term ‘conflict of interest’

means an association, including a financial or personal associa-tion, that have the potential to bias or have the appearance 42 USC 1320e. 
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124 STAT. 728 PUBLIC LAW 111–148—MAR. 23, 2010 
of biasing an individual’s decisions in matters related to the 
Institute or the conduct of activities under this section. 
‘‘(4) R EAL CONFLICT OF INTEREST .—The term ‘real conflict

of interest’ means any instance where a member of the Board, the methodology committee established under subsection (d)(6), or an advisory panel appointed under subsection (d)(4), or a close relative of such member, has received or could receive either of the following: 
‘‘(A) A direct financial benefit of any amount deriving 
from the result or findings of a study conducted under this section. 
‘‘(B) A financial benefit from individuals or companies

that own or manufacture medical treatments, services, or items to be studied under this section that in the aggregate exceeds $10,000 per year. For purposes of the preceding sentence, a financial benefit includes honoraria, fees, stock, or other financial benefit and the current value of the member or close relative’s already existing stock holdings, in addition to any direct financial benefit deriving from the results or findings of a study conducted under this section. 
‘‘(b) P

‘‘(b) P
ATIENT -CENTERED OUTCOMES RESEARCH INSTITUTE .— 
‘‘(1) E STABLISHMENT .—There is authorized to be established 
a nonprofit corporation, to be known as the ‘Patient-Centered Outcomes Research Institute’ (referred to in this section as the ‘Institute’) which is neither an agency nor establishment of the United States Government. 
‘‘(2) A
PPLICATION OF PROVISIONS .—The Institute shall be

subject to the provisions of this section, and, to the extent consistent with this section, to the District of Columbia Non-profit Corporation Act. 
‘‘(3) F
UNDING OF COMPARATIVE CLINICAL EFFECTIVENESS  
RESEARCH .—For fiscal year 2010 and each subsequent fiscal

year, amounts in the Patient-Centered Outcomes Research Trust Fund (referred to in this section as the ‘PCORTF’) under section 9511 of the Internal Revenue Code of 1986 shall be available, without further appropriation, to the Institute to carry out this section. ‘‘(c) P
URPOSE .—The purpose of the Institute is to assist patients,

clinicians, purchasers, and policy-makers in making informed health decisions by advancing the quality and relevance of evidence con-cerning the manner in which diseases, disorders, and other health conditions can effectively and appropriately be prevented, diagnosed, treated, monitored, and managed through research and evidence synthesis that considers variations in patient subpopula-tions, and the dissemination of research findings with respect to the relative health outcomes, clinical

respect to the relative health outcomes, clinical effectiveness, and appropriate-ness of the medical treatments, services, and items described in subsection (a)(2)(B).

‘‘(d) D
UTIES .— 
‘‘(1) I DENTIFYING RESEARCH PRIORITIES AND ESTABLISHING  
RESEARCH PROJECT AGENDA .— 
‘‘(A) I DENTIFYING RESEARCH PRIORITIES .—The Institute 
shall identify national priorities for research, taking into account factors of disease incidence, prevalence, and burden in the United States (with emphasis on chronic conditions), gaps in evidence in terms of clinical outcomes, practice District of Columbia.

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124 STAT. 729 PUBLIC LAW 111–148—MAR. 23, 2010 
variations and health disparities in terms of delivery and

outcomes of care, the potential for new evidence to improve patient health, well-being, and the quality of care, the effect on national expenditures associated with a health care treatment, strategy, or health conditions, as well as patient needs, outcomes, and preferences, the relevance to patients and clinicians in making informed health decisions, and priorities in the National Strategy for quality care established under section 399H of the Public Health Service Act that are consistent with

Institute shall establish and update a research project agenda for research to address the priorities identified under subparagraph (A), taking into consideration the types of research that might address each priority and the relative value (determined based on the cost of con-ducting research compared to the potential usefulness of the information produced by research) associated with the different types of research, and such other factors as the Institute determines appropriate. ‘‘(2) C

ARRYING OUT RESEARCH PROJECT AGENDA .— 
‘‘(A) R ESEARCH .—The Institute shall carry out the 
research project agenda established under paragraph (1)(B) in accordance with the methodological standards adopted under paragraph (9) using methods, including the following: 
‘‘(i) Systematic reviews and assessments of existing 
and future research and evidence including original research conducted subsequent to the date of the enact-ment of this section.

‘‘(ii) Primary research, such as randomized clinical 
trials, molecularly informed trials, and observational studies. 
‘‘(iii) Any other methodologies recommended by the 
methodology committee established under paragraph (6) that are adopted by the Board under paragraph (9). ‘‘(B) C
ONTRACTS FOR THE MANAGEMENT OF FUNDING  
AND CONDUCT OF RESEARCH .— 
‘‘(i) C ONTRACTS .— 
‘‘(I) I N GENERAL .—In accordance with the

‘‘(I) I N GENERAL .—In accordance with the 
research project agenda established under para-graph (1)(B), the Institute shall enter into con-tracts for the management of funding and conduct of research in accordance with the following: 
‘‘(aa) Appropriate agencies and instrumen-
talities of the Federal Government. 
‘‘(bb) Appropriate academic research, pri-
vate sector research, or study-conducting enti-ties. ‘‘(II) P
REFERENCE .—In entering into contracts

REFERENCE .—In entering into contracts 
under subclause (I), the Institute shall give pref-erence to the Agency for Healthcare Research and Quality and the National Institutes of Health, but only if the research to be conducted or managed under such contract is authorized by the governing statutes of such Agency or Institutes. 
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124 STAT. 730 PUBLIC LAW 111–148—MAR. 23, 2010 
‘‘(ii) C ONDITIONS FOR CONTRACTS .—A contract 
entered into under this subparagraph shall require that the agency, instrumentality, or other entity— 
‘‘(I) abide by the transparency and conflicts 
of interest requirements under subsection (h) that apply to the Institute with respect to the research managed or conducted under such contract; 
‘‘(II) comply with the methodological standards 
adopted under paragraph (9) with respect to such research;

‘‘(III) consult with the expert advisory panels 
for clinical trials and rare disease appointed under clauses (ii) and (iii), respectively, of paragraph (4)(A); 
‘‘(IV) subject to clause (iv), permit a researcher 
who conducts original research under the contract for the agency, instrumentality, or other entity to have such research published in a peer-reviewed journal or other publication; 
‘‘(V) have appropriate processes in place to

‘‘(V) have appropriate processes in place to 
manage data privacy and meet ethical standards for the research; 
‘‘(VI) comply with the requirements of the 
Institute for making the information available to the public under paragraph (8); and 
‘‘(VII) comply with other terms and conditions 
determined necessary by the Institute to carry out the research agenda adopted under paragraph (2). ‘‘(iii) C
OVERAGE OF COPAYMENTS OR COINSUR -
ANCE .—A contract entered into under this subpara-

graph may allow for the coverage of copayments or coinsurance, or allow for other appropriate measures, to the extent that such coverage or other measures are necessary to preserve the validity of a research project, such as in the case where the research project must be blinded. 
‘‘(iv) R
EQUIREMENTS FOR PUBLICATION OF  
RESEARCH .—Any research published under clause

(ii)(IV) shall be within the bounds of and entirely con-sistent with the evidence and findings produced under the contract with the Institute under this subpara-graph. If the Institute determines that those require-ments are not met, the Institute shall not enter into another contract with the agency, instrumentality, or entity which managed or conducted such research for a period determined appropriate by the Institute (but not less than 5 years). ‘‘(C) R

EVIEW AND UPDATE OF EVIDENCE .—The Institute 
shall review and update evidence on a periodic basis as appropriate. 
‘‘(D) T
AKING INTO ACCOUNT POTENTIAL DIFFERENCES .—

AKING INTO ACCOUNT POTENTIAL DIFFERENCES .— 
Research shall be designed, as appropriate, to take into account the potential for differences in the effectiveness of health care treatments, services, and items as used with various subpopulations, such as racial and ethnic minorities, women, age, and groups of individuals with different comorbidities, genetic and molecular sub-types,

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124 STAT. 731 PUBLIC LAW 111–148—MAR. 23, 2010 
or quality of life preferences and include members of such 
subpopulations as subjects in the research as feasible and appropriate. 
‘‘(E) D
IFFERENCES IN TREATMENT MODALITIES .—

‘‘(E) D
IFFERENCES IN TREATMENT MODALITIES .— 
Research shall be designed, as appropriate, to take into account different characteristics of treatment modalities that may affect research outcomes, such as the phase of the treatment modality in the innovation cycle and the impact of the skill of the operator of the treatment modality. ‘‘(3) D
ATA COLLECTION .— 
‘‘(A) I N GENERAL .—The Secretary shall, with appro-

priate safeguards for privacy, make available to the Institute such data collected by the Centers for Medicare & Medicaid Services under the programs under titles XVIII, XIX, and XXI, as well as provide access to the data net-works developed under section 937(f) of the Public Health Service Act, as the Institute and its contractors may require to carry out this section. The Institute may also request and obtain data from Federal, State, or private entities, including data from clinical

or private entities, including data from clinical databases and registries.

‘‘(B) U
SE OF DATA .—The Institute shall only use data 
provided to the Institute under subparagraph (A) in accord-ance with laws and regulations governing the release and use of such data, including applicable confidentiality and privacy standards. ‘‘(4) A
PPOINTING EXPERT ADVISORY PANELS .— 
‘‘(A) A PPOINTMENT .— 
‘‘(i) I N GENERAL .—The Institute may appoint

‘‘(i) I N GENERAL .—The Institute may appoint 
permanent or ad hoc expert advisory panels as deter-mined appropriate to assist in identifying research priorities and establishing the research project agenda under paragraph (1) and for other purposes. 
‘‘(ii) E
XPERT ADVISORY PANELS FOR CLINICAL  
TRIALS .—The Institute shall appoint expert advisory

panels in carrying out randomized clinical trials under the research project agenda under paragraph (2)(A)(ii). Such expert advisory panels shall advise the Institute and the agency, instrumentality, or entity conducting the research on the research question involved and the research design or protocol, including important patient subgroups and other parameters of the research. Such panels shall be available as a resource for technical questions that may arise during the con-duct of such

‘‘(iii) E
XPERT ADVISORY PANEL FOR RARE DISEASE .— 
In the case of a research study for rare disease, the Institute shall appoint an expert advisory panel for purposes of assisting in the design of the research study and determining the relative value and feasi-bility of conducting the research study. ‘‘(B) C
OMPOSITION .—An expert advisory panel

OMPOSITION .—An expert advisory panel 
appointed under subparagraph (A) shall include representa-tives of practicing and research clinicians, patients, and experts in scientific and health services research, health services delivery, and evidence-based medicine who have experience in the relevant topic, and as appropriate, experts

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124 STAT. 732 PUBLIC LAW 111–148—MAR. 23, 2010 
in integrative health and primary prevention strategies. 
The Institute may include a technical expert of each manu-facturer or each medical technology that is included under the relevant topic, project, or category for which the panel is established. ‘‘(5) S
UPPORTING PATIENT AND CONSUMER REPRESENTA -
TIVES .—The Institute shall provide support and resources to

help patient and consumer representatives effectively partici-pate on the Board and expert advisory panels appointed by the Institute under paragraph (4). 
‘‘(6) E
STABLISHING METHODOLOGY COMMITTEE .— 
‘‘(A) I N GENERAL .—The Institute shall establish a 
standing methodology committee to carry out the functions described in subparagraph (C). 
‘‘(B) A
PPOINTMENT AND COMPOSITION .—The method-

ology committee established under subparagraph (A) shall be composed of not more than 15 members appointed by the Comptroller General of the United States. Members appointed to the methodology committee shall be experts in their scientific field, such as health services research, clinical research, comparative clinical effectiveness research, biostatistics, genomics, and research methodolo-gies. Stakeholders with such expertise may be appointed to the methodology committee. In addition to the

to the methodology committee. In addition to the members appointed under the first sentence, the Directors of the National Institutes of Health and the Agency for Healthcare Research and Quality (or their designees) shall each be included as members of the methodology com-mittee.

‘‘(C) F
UNCTIONS .—Subject to subparagraph (D), the 
methodology committee shall work to develop and improve the science and methods of comparative clinical effective-ness research by, not later than 18 months after the establishment of the Institute, directly or through sub-contract, developing and periodically updating the fol-lowing: 
‘‘(i) Methodological standards for research. Such

methodological standards shall provide specific criteria for internal validity, generalizability, feasibility, and timeliness of research and for health outcomes meas-ures, risk adjustment, and other relevant aspects of research and assessment with respect to the design of research. Any methodological standards developed and updated under this subclause shall be scientifically based and include methods by which new information, data, or advances in technology are considered and incorporated

in technology are considered and incorporated into ongoing research projects by the Institute, as appropriate. The process for developing and updating such standards shall include input from relevant experts, stakeholders, and decisionmakers, and shall provide opportunities for public comment. Such standards shall also include methods by which patient subpopulations can be accounted for and evalu-ated in different types of research. As appropriate, such standards shall build on existing work on

such standards shall build on existing work on meth-odological standards for defined categories of health interventions and for each of the major categories of Deadline.

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124 STAT. 733 PUBLIC LAW 111–148—MAR. 23, 2010 
comparative clinical effectiveness research methods 
(determined as of the date of enactment of the Patient Protection and Affordable Care Act). 
‘‘(ii) A translation table that is designed to provide 
guidance and act as a reference for the Board to deter-mine research methods that are most likely to address each specific research question. ‘‘(D) C
ONSULTATION AND CONDUCT OF EXAMINATIONS .—

ONSULTATION AND CONDUCT OF EXAMINATIONS .— 
The methodology committee may consult and contract with the Institute of Medicine of the National Academies and academic, nonprofit, or other private and governmental entities with relevant expertise to carry out activities described in subparagraph (C) and may consult with rel-evant stakeholders to carry out such activities. 
‘‘(E) R
EPORTS .—The methodology committee shall

‘‘(E) R
EPORTS .—The methodology committee shall 
submit reports to the Board on the committee’s performance of the functions described in subparagraph (C). Reports shall contain recommendations for the Institute to adopt methodological standards developed and updated by the methodology committee as well as other actions deemed necessary to comply with such methodological standards. ‘‘(7) P
ROVIDING FOR A PEER -REVIEW PROCESS FOR PRIMARY  
RESEARCH .—

‘‘(A) I N GENERAL .—The Institute shall ensure that there 
is a process for peer review of primary research described in subparagraph (A)(ii) of paragraph (2) that is conducted under such paragraph. Under such process— 
‘‘(i) evidence from such primary research shall be 
reviewed to assess scientific integrity and adherence to methodological standards adopted under paragraph (9); and 
‘‘(ii) a list of the names of individuals contributing

to any peer-review process during the preceding year or years shall be made public and included in annual reports in accordance with paragraph (10)(D). ‘‘(B) C
OMPOSITION .—Such peer-review process shall be 
designed in a manner so as to avoid bias and conflicts of interest on the part of the reviewers and shall be com-posed of experts in the scientific field relevant to the research under review. 
‘‘(C) U
SE OF EXISTING PROCESSES .— 
‘‘(i) P ROCESSES OF ANOTHER ENTITY .—In the case

‘‘(i) P ROCESSES OF ANOTHER ENTITY .—In the case 
where the Institute enters into a contract or other agreement with another entity for the conduct or management of research under this section, the Institute may utilize the peer-review process of such entity if such process meets the requirements under subparagraphs (A) and (B). 
‘‘(ii) P
ROCESSES OF APPROPRIATE MEDICAL JOUR -
NALS .—The Institute may utilize the peer-review

NALS .—The Institute may utilize the peer-review 
process of appropriate medical journals if such process meets the requirements under subparagraphs (A) and (B). 
‘‘(8) R
ELEASE OF RESEARCH FINDINGS .— 
‘‘(A) I N GENERAL .—The Institute shall, not later than 
90 days after the conduct or receipt of research findings under this part, make such research findings available Deadline. Lists. 
Public information. Recommenda- 
tions.

tions. 
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124 STAT. 734 PUBLIC LAW 111–148—MAR. 23, 2010 
to clinicians, patients, and the general public. The Institute 
shall ensure that the research findings— 
‘‘(i) convey the findings of research in a manner 
that is comprehensible and useful to patients and pro-viders in making health care decisions; 
‘‘(ii) fully convey findings and discuss consider-
ations specific to certain subpopulations, risk factors, and comorbidities, as appropriate; 
‘‘(iii) include limitations of the research and what

further research may be needed as appropriate; 
‘‘(iv) not be construed as mandates for practice 
guidelines, coverage recommendations, payment, or policy recommendations; and 
‘‘(v) not include any data which would violate the 
privacy of research participants or any confidentiality agreements made with respect to the use of data under this section. ‘‘(B) D
EFINITION OF RESEARCH FINDINGS .—In this para-
graph, the term ‘research findings’ means the results of a study or assessment. ‘‘(9) A

shall adopt the national priorities identified under paragraph (1)(A), the research project agenda established under paragraph (1)(B), the methodological standards developed and updated by the methodology committee under paragraph (6)(C)(i), and any peer-review process provided under paragraph (7) by majority vote. In the case where the Institute does not adopt such processes in accordance with the preceding sentence, the processes shall be referred to the appropriate staff or entity within the

to the appropriate staff or entity within the Institute (or, in the case of the methodological stand-ards, the methodology committee) for further review.

‘‘(10) A
NNUAL REPORTS .—The Institute shall submit an 
annual report to Congress and the President, and shall make the annual report available to the public. Such report shall contain— 
‘‘(A) a description of the activities conducted under 
this section, research priorities identified under paragraph (1)(A) and methodological standards developed and updated by the methodology committee under paragraph (6)(C)(i) that are adopted under paragraph (9) during the preceding year;

‘‘(B) the research project agenda and budget of the 
Institute for the following year; 
‘‘(C) any administrative activities conducted by the 
Institute during the preceding year; 
‘‘(D) the names of individuals contributing to any peer- 
review process under paragraph (7), without identifying them with a particular research project; and 
‘‘(E) any other relevant information (including informa-

tion on the membership of the Board, expert advisory panels, methodology committee, and the executive staff of the Institute, any conflicts of interest with respect to these individuals, and any bylaws adopted by the Board during the preceding year). 
‘‘(e) A
‘‘(1) I N GENERAL .—Subject to paragraph (2), the Board shall 
carry out the duties of the Institute. Public information.

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124 STAT. 735 PUBLIC LAW 111–148—MAR. 23, 2010 
‘‘(2) N ONDELEGABLE DUTIES .—The activities described in 
subsections (d)(1) and (d)(9) are nondelegable. ‘‘(f) B
OARD OF GOVERNORS .— 
‘‘(1) I N GENERAL .—The Institute shall have a Board of 
Governors, which shall consist of the following members: 
‘‘(A) The Director of Agency for Healthcare Research 
and Quality (or the Director’s designee). 
‘‘(B) The Director of the National Institutes of Health 
(or the Director’s designee).

(or the Director’s designee). 
‘‘(C) Seventeen members appointed, not later than 6 
months after the date of enactment of this section, by the Comptroller General of the United States as follows: 
‘‘(i) 3 members representing patients and health 
care consumers. 
‘‘(ii) 5 members representing physicians and pro-
viders, including at least 1 surgeon, nurse, State- licensed integrative health care practitioner, and rep-resentative of a hospital. 
‘‘(iii) 3 members representing private payers, of

whom at least 1 member shall represent health insur-ance issuers and at least 1 member shall represent employers who self-insure employee benefits. 
‘‘(iv) 3 members representing pharmaceutical, 
device, and diagnostic manufacturers or developers. 
‘‘(v) 1 member representing quality improvement 
or independent health service researchers. 
‘‘(vi) 2 members representing the Federal Govern-
ment or the States, including at least 1 member rep-resenting a Federal health program or agency. 
‘‘(2) Q

range of perspectives and collectively have scientific expertise in clinical health sciences research, including epidemiology, decisions sciences, health economics, and statistics. In appointing the Board, the Comptroller General of the United States shall consider and disclose any conflicts of interest in accordance with subsection (h)(4)(B). Members of the Board shall be recused from relevant Institute activities in the case where the member (or an immediate family member of such member) has

an immediate family member of such member) has a real conflict of interest directly related to the research project or the matter that could affect or be affected by such participation.

‘‘(3) T
ERMS ; VACANCIES .—A member of the Board shall be 
appointed for a term of 6 years, except with respect to the members first appointed, whose terms of appointment shall be staggered evenly over 2-year increments. No individual shall be appointed to the Board for more than 2 terms. Vacancies shall be filled in the same manner as the original appointment was made. 
‘‘(4) C
HAIRPERSON AND VICE -CHAIRPERSON .—The Comp-

troller General of the United States shall designate a Chair-person and Vice Chairperson of the Board from among the members of the Board. Such members shall serve as Chair-person or Vice Chairperson for a period of 3 years. 
‘‘(5) C
OMPENSATION .—Each member of the Board who is

OMPENSATION .—Each member of the Board who is 
not an officer or employee of the Federal Government shall be entitled to compensation (equivalent to the rate provided for level IV of the Executive Schedule under section 5315 of Designation. Deadline. Establishment. 
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124 STAT. 736 PUBLIC LAW 111–148—MAR. 23, 2010 
title 5, United States Code) and expenses incurred while per-
forming the duties of the Board. An officer or employee of the Federal government who is a member of the Board shall be exempt from compensation. 
‘‘(6) D
IRECTOR AND STAFF ; EXPERTS AND CONSULTANTS .—

IRECTOR AND STAFF ; EXPERTS AND CONSULTANTS .— 
The Board may employ and fix the compensation of an Execu-tive Director and such other personnel as may be necessary to carry out the duties of the Institute and may seek such assistance and support of, or contract with, experts and consult-ants that may be necessary for the performance of the duties of the Institute. 
‘‘(7) M
EETINGS AND HEARINGS .—The Board shall meet and

EETINGS AND HEARINGS .—The Board shall meet and 
hold hearings at the call of the Chairperson or a majority of its members. Meetings not solely concerning matters of per-sonnel shall be advertised at least 7 days in advance and open to the public. A majority of the Board members shall constitute a quorum, but a lesser number of members may meet and hold hearings. ‘‘(g) F
INANCIAL AND GOVERNMENTAL OVERSIGHT .— 
‘‘(1) C ONTRACT FOR AUDIT .—The Institute shall provide for

the conduct of financial audits of the Institute on an annual basis by a private entity with expertise in conducting financial audits. 
‘‘(2) R
EVIEW AND ANNUAL REPORTS .— 
‘‘(A) R EVIEW .—The Comptroller General of the United 
States shall review the following: 
‘‘(i) Not less frequently than on an annual basis, 
the financial audits conducted under paragraph (1). 
‘‘(ii) Not less frequently than every 5 years, the

processes established by the Institute, including the research priorities and the conduct of research projects, in order to determine whether information produced by such research projects is objective and credible, is produced in a manner consistent with the require-ments under this section, and is developed through a transparent process. 
‘‘(iii) Not less frequently than every 5 years, the

dissemination and training activities and data net-works established under section 937 of the Public Health Service Act, including the methods and prod-ucts used to disseminate research, the types of training conducted and supported, and the types and functions of the data networks established, in order to determine whether the activities and data are produced in a manner consistent with the requirements under such section. 
‘‘(iv) Not less frequently than every 5 years, the

overall effectiveness of activities conducted under this section and the dissemination, training, and capacity building activities conducted under section 937 of the Public Health Service Act. Such review shall include an analysis of the extent to which research findings are used by health care decision-makers, the effect of the dissemination of such findings on reducing prac-tice variation and disparities in health care, and the effect of the research conducted and disseminated on

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124 STAT. 737 PUBLIC LAW 111–148—MAR. 23, 2010 
innovation and the health care economy of the United 
States. 
‘‘(v) Not later than 8 years after the date of enact-

ment of this section, the adequacy and use of the funding for the Institute and the activities conducted under section 937 of the Public Health Service Act, including a determination as to whether, based on the utilization of research findings by public and pri-vate payers, funding sources for the Patient-Centered Outcomes Research Trust Fund under section 9511 of the Internal Revenue Code of 1986 are appropriate and whether such sources of funding should be contin-ued or adjusted. ‘‘(B) A

NNUAL REPORTS .—Not later than April 1 of each 
year, the Comptroller General of the United States shall submit to Congress a report containing the results of the review conducted under subparagraph (A) with respect to the preceding year (or years, if applicable), together with recommendations for such legislation and administrative action as the Comptroller General determines appropriate. 
‘‘(h) E
NSURING TRANSPARENCY , CREDIBILITY , AND ACCESS .—The

Institute shall establish procedures to ensure that the following requirements for ensuring transparency, credibility, and access are met: 
‘‘(1) P
UBLIC COMMENT PERIODS .—The Institute shall provide

for a public comment period of not less than 45 days and not more than 60 days prior to the adoption under subsection (d)(9) of the national priorities identified under subsection (d)(1)(A), the research project agenda established under sub-section (d)(1)(B), the methodological standards developed and updated by the methodology committee under subsection (d)(6)(C)(i), and the peer-review process provided under para-graph (7), and after the release of draft findings with respect to systematic

of draft findings with respect to systematic reviews of existing research and evidence.

‘‘(2) A
DDITIONAL FORUMS .—The Institute shall support 
forums to increase public awareness and obtain and incorporate public input and feedback through media (such as an Internet website) on research priorities, research findings, and other duties, activities, or processes the Institute determines appro-priate. 
‘‘(3) P
UBLIC AVAILABILITY .—The Institute shall make avail-
able to the public and disclose through the official public Inter-net website of the Institute the following:

‘‘(A) Information contained in research findings as 
specified in subsection (d)(9). 
‘‘(B) The process and methods for the conduct of

‘‘(B) The process and methods for the conduct of 
research, including the identity of the entity and the inves-tigators conducing such research and any conflicts of interests of such parties, any direct or indirect links the entity has to industry, and research protocols, including measures taken, methods of research and analysis, research results, and such other information the Institute deter-mines appropriate) concurrent with the release of research findings.

‘‘(C) Notice of public comment periods under paragraph 
(1), including deadlines for public comments. 
Notice. Web posting. Procedures. Recommenda- 
tions. 
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124 STAT. 738 PUBLIC LAW 111–148—MAR. 23, 2010 
‘‘(D) Subsequent comments received during each of the 
public comment periods. 
‘‘(E) In accordance with applicable laws and processes 
and as the Institute determines appropriate, proceedings of the Institute. ‘‘(4) D
ISCLOSURE OF CONFLICTS OF INTEREST .— 
‘‘(A) I N GENERAL .—A conflict of interest shall be dis-
closed in the following manner: 
‘‘(i) By the Institute in appointing members to

‘‘(i) By the Institute in appointing members to 
an expert advisory panel under subsection (d)(4), in selecting individuals to contribute to any peer-review process under subsection (d)(7), and for employment as executive staff of the Institute. 
‘‘(ii) By the Comptroller General in appointing 
members of the methodology committee under sub-section (d)(6); 
‘‘(iii) By the Institute in the annual report under

subsection (d)(10), except that, in the case of individ-uals contributing to any such peer review process, such description shall be in a manner such that those individuals cannot be identified with a particular research project. ‘‘(B) M
ANNER OF DISCLOSURE .—Conflicts of interest

shall be disclosed as described in subparagraph (A) as soon as practicable on the Internet web site of the Institute and of the Government Accountability Office. The informa-tion disclosed under the preceding sentence shall include the type, nature, and magnitude of the interests of the individual involved, except to the extent that the individual recuses himself or herself from participating in the consid-eration of or any other activity with respect to the study as to which the potential

‘‘(i) R
ULES .—The Institute, its Board or staff, shall be prohibited 
from accepting gifts, bequeaths, or donations of services or property. In addition, the Institute shall be prohibited from establishing a corporation or generating revenues from activities other than 
as provided under this section. 
‘‘(j) R
ULES OF CONSTRUCTION .— 
‘‘(1) C OVERAGE .—Nothing in this section shall be con-
strued— 
‘‘(A) to permit the Institute to mandate coverage,

reimbursement, or other policies for any public or private payer; or 
‘‘(B) as preventing the Secretary from covering the 
routine costs of clinical care received by an individual enti-tled to, or enrolled for, benefits under title XVIII, XIX, or XXI in the case where such individual is participating in a clinical trial and such costs would otherwise be covered under such title with respect to the beneficiary.’’. 
(b) D
ISSEMINATION AND BUILDING CAPACITY FOR RESEARCH .—

Title IX of the Public Health Service Act (42 U.S.C. 299 et seq.), as amended by section 3606, is further amended by inserting after section 936 the following: 
‘‘SEC. 937. DISSEMINATION AND BUILDING CAPACITY FOR RESEARCH. 
‘‘(a) I NGENERAL .— 42 USC 299b–37. Web posting. 
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124 STAT. 739 PUBLIC LAW 111–148—MAR. 23, 2010 
‘‘(1) D ISSEMINATION .—The Office of Communication and

Knowledge Transfer (referred to in this section as the ‘Office’) at the Agency for Healthcare Research and Quality (or any other relevant office designated by Agency for Healthcare Research and Quality), in consultation with the National Institutes of Health, shall broadly disseminate the research findings that are published by the Patient Centered Outcomes Research Institute established under section 1181(b) of the Social Security Act (referred to in this section as the ‘Institute’) and other

to in this section as the ‘Institute’) and other government-funded research relevant to comparative clinical effectiveness research. The Office shall create informa-tional tools that organize and disseminate research findings for physicians, health care providers, patients, payers, and policy makers. The Office shall also develop a publicly available resource database that collects and contains government-funded evidence and research from public, private, not-for profit, and academic sources.

dissemination of the Institute’s research findings and govern-ment-funded research relevant to comparative clinical effective-ness research to physicians, health care providers, patients, vendors of health information technology focused on clinical decision support, appropriate professional associations, and Federal and private health plans. Materials, forums, and media used to disseminate the findings, informational tools, and resource databases shall—

‘‘(A) include a description of considerations for specific 
subpopulations, the research methodology, and the limita-tions of the research, and the names of the entities, agen-cies, instrumentalities, and individuals who conducted any research which was published by the Institute; and 
‘‘(B) not be construed as mandates, guidelines, or rec-
ommendations for payment, coverage, or treatment. 
‘‘(b) I
NCORPORATION OF RESEARCH FINDINGS .—The Office, in

consultation with relevant medical and clinical associations, shall assist users of health information technology focused on clinical decision support to promote the timely incorporation of research findings disseminated under subsection (a) into clinical practices and to promote the ease of use of such incorporation. 
‘‘(c) F
EEDBACK .—The Office shall establish a process to receive

feedback from physicians, health care providers, patients, and ven-dors of health information technology focused on clinical decision support, appropriate professional associations, and Federal and pri-vate health plans about the value of the information disseminated and the assistance provided under this section. 
‘‘(d) R

preclude the Institute from making its research findings publicly available as required under section 1181(d)(8) of the Social Security Act. 
‘‘(e) T
RAINING OF RESEARCHERS .—The Agency for Health Care

Research and Quality, in consultation with the National Institutes of Health, shall build capacity for comparative clinical effectiveness research by establishing a grant program that provides for the training of researchers in the methods used to conduct such research, including systematic reviews of existing research and primary research such as clinical trials. At a minimum, such Public 

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124 STAT. 740 PUBLIC LAW 111–148—MAR. 23, 2010 
training shall be in methods that meet the methodological standards 
adopted under section 1181(d)(9) of the Social Security Act. 
‘‘(f) B UILDING DATA FOR RESEARCH .—The Secretary shall pro-

vide for the coordination of relevant Federal health programs to build data capacity for comparative clinical effectiveness research, including the development and use of clinical registries and health outcomes research data networks, in order to develop and maintain a comprehensive, interoperable data network to collect, link, and analyze data on outcomes and effectiveness from multiple sources, including electronic health records. 
‘‘(g) A
UTHORITY TOCONTRACT WITH THE INSTITUTE .—Agencies

and instrumentalities of the Federal Government may enter into agreements with the Institute, and accept and retain funds, for the conduct and support of research described in this part, provided that the research to be conducted or supported under such agree-ments is authorized under the governing statutes of such agencies and instrumentalities.’’. 
(c) I
NGENERAL .—Part D of title XI of the Social Security

Act, as added by subsection (a), is amended by adding at the end the following new section: 
‘‘
LIMITATIONS ON CERTAIN USES OF COMPARATIVE CLINICAL  
EFFECTIVENESS RESEARCH  
‘‘SEC. 1182. (a) The Secretary may only use evidence and 
findings from research conducted under section 1181 to make a determination regarding coverage under title XVIII if such use is through an iterative and transparent process which includes public comment and considers the effect on subpopulations.

‘‘(b) Nothing in section 1181 shall be construed as— 
‘‘(1) superceding or modifying the coverage of items or 
services under title XVIII that the Secretary determines are reasonable and necessary under section 1862(l)(1); or 
‘‘(2) authorizing the Secretary to deny coverage of items 
or services under such title solely on the basis of comparative clinical effectiveness research. ‘‘(c)(1) The Secretary shall not use evidence or findings from

comparative clinical effectiveness research conducted under section 1181 in determining coverage, reimbursement, or incentive pro-grams under title XVIII in a manner that treats extending the life of an elderly, disabled, or terminally ill individual as of lower value than extending the life of an individual who is younger, nondisabled, or not terminally ill. 
‘‘(2) Paragraph (1) shall not be construed as preventing the

Secretary from using evidence or findings from such comparative clinical effectiveness research in determining coverage, reimburse-ment, or incentive programs under title XVIII based upon a comparison of the difference in the effectiveness of alternative treat-ments in extending an individual’s life due to the individual’s age, disability, or terminal illness. 
‘‘(d)(1) The Secretary shall not use evidence or findings from

comparative clinical effectiveness research conducted under section 1181 in determining coverage, reimbursement, or incentive pro-grams under title XVIII in a manner that precludes, or with the intent to discourage, an individual from choosing a health care treatment based on how the individual values the tradeoff between 
extending the length of their life and the risk of disability. 
‘‘(2)(A) Paragraph (1) shall not be construed to— 42 USC 1320e–1.

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124 STAT. 741 PUBLIC LAW 111–148—MAR. 23, 2010 
‘‘(i) limit the application of differential copayments under 
title XVIII based on factors such as cost or type of service; or 
‘‘(ii) prevent the Secretary from using evidence or findings

from such comparative clinical effectiveness research in deter-mining coverage, reimbursement, or incentive programs under such title based upon a comparison of the difference in the effectiveness of alternative health care treatments in extending an individual’s life due to that individual’s age, disability, or terminal illness. ‘‘(3) Nothing in the provisions of, or amendments made by

the Patient Protection and Affordable Care Act, shall be construed to limit comparative clinical effectiveness research or any other research, evaluation, or dissemination of information concerning the likelihood that a health care treatment will result in disability. 
‘‘(e) The Patient-Centered Outcomes Research Institute estab-

lished under section 1181(b)(1) shall not develop or employ a dollars- per-quality adjusted life year (or similar measure that discounts the value of a life because of an individual’s disability) as a threshold to establish what type of health care is cost effective or recommended. The Secretary shall not utilize such an adjusted life year (or such a similar measure) as a threshold to determine coverage, reimbursement, or incentive programs under title XVIII.’’. 
(d) I

(d) I
NGENERAL .—Part D of title XI of the Social Security 
Act, as added by subsection (a) and amended by subsection (c), is amended by adding at the end the following new section: 
‘‘
TRUST FUND TRANSFERS TO PATIENT -CENTERED OUTCOMES  
RESEARCH TRUST FUND  
‘‘SEC. 1183. (a) I NGENERAL .—The Secretary shall provide for

the transfer, from the Federal Hospital Insurance Trust Fund under section 1817 and the Federal Supplementary Medical Insurance Trust Fund under section 1841, in proportion (as estimated by the Secretary) to the total expenditures during such fiscal year that are made under title XVIII from the respective trust fund, to the Patient-Centered Outcomes Research Trust Fund (referred to in this section as the ‘PCORTF’) under section 9511 of the Internal Revenue Code of 1986, of the following:

‘‘(1) For fiscal year 2013, an amount equal to $1 multiplied 
by the average number of individuals entitled to benefits under part A, or enrolled under part B, of title XVIII during such fiscal year. 
‘‘(2) For each of fiscal years 2014, 2015, 2016, 2017, 2018, 
and 2019, an amount equal to $2 multiplied by the average number of individuals entitled to benefits under part A, or enrolled under part B, of title XVIII during such fiscal year. ‘‘(b) A

DJUSTMENTS FOR INCREASES IN HEALTH CARESPENDING .— 
In the case of any fiscal year beginning after September 30, 2014, the dollar amount in effect under subsection (a)(2) for such fiscal year shall be equal to the sum of such dollar amount for the previous fiscal year (determined after the application of this sub-section), plus an amount equal to the product of— 
‘‘(1) such dollar amount for the previous fiscal year, multi-
plied by 
‘‘(2) the percentage increase in the projected per capita

amount of National Health Expenditures, as most recently pub-lished by the Secretary before the beginning of the fiscal year.’’. 42 USC 1320e–2. 
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124 STAT. 742 PUBLIC LAW 111–148—MAR. 23, 2010 
(e) P ATIENT -CENTERED OUTCOMES RESEARCH TRUST FUND; 
FINANCING FOR TRUST FUND.— 
(1) E STABLISHMENT OF TRUST FUND .— 
(A) I N GENERAL .—Subchapter A of chapter 98 of the 
Internal Revenue Code of 1986 (relating to establishment of trust funds) is amended by adding at the end the fol-lowing new section: 
‘‘SEC. 9511. PATIENT-CENTERED OUTCOMES RESEARCH TRUST FUND. 
‘‘(a) C REATION OF TRUST FUND.—There is established in the

Treasury of the United States a trust fund to be known as the ‘Patient-Centered Outcomes Research Trust Fund’ (hereafter in this section referred to as the ‘PCORTF’), consisting of such amounts as may be appropriated or credited to such Trust Fund as provided in this section and section 9602(b). 
‘‘(b) T
RANSFERS TO FUND.— 
‘‘(1) A PPROPRIATION .—There are hereby appropriated to the 
Trust Fund the following:

Trust Fund the following: 
‘‘(A) For fiscal year 2010, $10,000,000. ‘‘(B) For fiscal year 2011, $50,000,000. ‘‘(C) For fiscal year 2012, $150,000,000. ‘‘(D) For fiscal year 2013— 
‘‘(i) an amount equivalent to the net revenues 
received in the Treasury from the fees imposed under subchapter B of chapter 34 (relating to fees on health insurance and self-insured plans) for such fiscal year; and 
‘‘(ii) $150,000,000. 
‘‘(E) For each of fiscal years 2014, 2015, 2016, 2017, 
2018, and 2019—

2018, and 2019— 
The amounts appropriated under subparagraphs (A), (B), (C), (D)(ii), and (E)(ii) shall be transferred from the general fund of the Treasury, from funds not otherwise appro-priated. ‘‘(2) T
RUST FUND TRANSFERS .—In addition to the amounts

RUST FUND TRANSFERS .—In addition to the amounts 
appropriated under paragraph (1), there shall be credited to the PCORTF the amounts transferred under section 1183 of the Social Security Act. 
‘‘(3) L
IMITATION ON TRANSFERS TO PCORTF .—No amount

IMITATION ON TRANSFERS TO PCORTF .—No amount 
may be appropriated or transferred to the PCORTF on and after the date of any expenditure from the PCORTF which is not an expenditure permitted under this section. The deter-mination of whether an expenditure is so permitted shall be made without regard to— 
‘‘(A) any provision of law which is not contained or 
referenced in this chapter or in a revenue Act, and 
‘‘(B) whether such provision of law is a subsequently

enacted provision or directly or indirectly seeks to waive the application of this paragraph. 
‘‘(c) T
RUSTEE .—The Secretary of the Treasury shall be a trustee 
of the PCORTF. 26 USC 9511. 
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124 STAT. 743 PUBLIC LAW 111–148—MAR. 23, 2010 
‘‘(d) E XPENDITURES FROM FUND.— 
‘‘(1) A MOUNTS AVAILABLE TO THE PATIENT -CENTERED OUT -
COMES RESEARCH INSTITUTE .—Subject to paragraph (2), 
amounts in the PCORTF are available, without further appro-priation, to the Patient-Centered Outcomes Research Institute established under section 1181(b) of the Social Security Act for carrying out part D of title XI of the Social Security Act (as in effect on the date of enactment of such Act). 
‘‘(2) T

‘‘(2) T
‘‘(A) I N GENERAL .—The trustee of the PCORTF shall 
provide for the transfer from the PCORTF of 20 percent of the amounts appropriated or credited to the PCORTF for each of fiscal years 2011 through 2019 to the Secretary of Health and Human Services to carry out section 937 of the Public Health Service Act. 
‘‘(B) A
VAILABILITY .—Amounts transferred under 
subparagraph (A) shall remain available until expended. 
‘‘(C) R EQUIREMENTS .—Of the amounts transferred

‘‘(C) R EQUIREMENTS .—Of the amounts transferred 
under subparagraph (A) with respect to a fiscal year, the Secretary of Health and Human Services shall distribute— 
‘‘(i) 80 percent to the Office of Communication 
and Knowledge Transfer of the Agency for Healthcare Research and Quality (or any other relevant office designated by Agency for Healthcare Research and Quality) to carry out the activities described in section 937 of the Public Health Service Act; and

‘‘(ii) 20 percent to the Secretary to carry out the 
activities described in such section 937. 
‘‘(e) N
ETREVENUES .—For purposes of this section, the term 
‘net revenues’ means the amount estimated by the Secretary of the Treasury based on the excess of— 
‘‘(1) the fees received in the Treasury under subchapter 
B of chapter 34, over 
‘‘(2) the decrease in the tax imposed by chapter 1 resulting 
from the fees imposed by such subchapter. ‘‘(f) T

ERMINATION .—No amounts shall be available for expendi-
ture from the PCORTF after September 30, 2019, and any amounts in such Trust Fund after such date shall be transferred to the general fund of the Treasury.’’. 
(B) C
LERICAL AMENDMENT .—The table of sections for 
subchapter A of chapter 98 of such Code is amended by adding at the end the following new item: 
‘‘Sec. 9511. Patient-centered outcomes research trust fund.’’.

(2) F INANCING FOR FUND FROM FEES ON INSURED AND SELF - 
INSURED HEALTH PLANS .— 
(A) G ENERAL RULE .—Chapter 34 of the Internal Rev-
enue Code of 1986 is amended by adding at the end the following new subchapter: 
‘‘Subchapter B—Insured and Self-Insured Health Plans 
‘‘Sec. 4375. Health insurance. 
‘‘Sec. 4376. Self-insured health plans. 
‘‘Sec. 4377. Definitions and special rules. 
‘‘SEC. 4375. HEALTH INSURANCE. 
‘‘(a) I MPOSITION OF FEE.—There is hereby imposed on each

specified health insurance policy for each policy year ending after 26 USC 4375. Definition. 
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124 STAT. 744 PUBLIC LAW 111–148—MAR. 23, 2010 
September 30, 2012, a fee equal to the product of $2 ($1 in the 
case of policy years ending during fiscal year 2013) multiplied by the average number of lives covered under the policy. 
‘‘(b) L
IABILITY FOR FEE.—The fee imposed by subsection (a) 
shall be paid by the issuer of the policy. 
‘‘(c) S PECIFIED HEALTH INSURANCE POLICY .—For purposes of 
this section: 
‘‘(1) I N GENERAL .—Except as otherwise provided in this

section, the term ‘specified health insurance policy’ means any accident or health insurance policy (including a policy under a group health plan) issued with respect to individuals residing in the United States. 
‘‘(2) E
XEMPTION FOR CERTAIN POLICIES .—The term ‘specified 
health insurance policy’ does not include any insurance if substantially all of its coverage is of excepted benefits described in section 9832(c). 
‘‘(3) T
REATMENT OF PREPAID HEALTH COVERAGE ARRANGE -
MENTS .—

MENTS .— 
‘‘(A) I N GENERAL .—In the case of any arrangement 
described in subparagraph (B), such arrangement shall be treated as a specified health insurance policy, and the person referred to in such subparagraph shall be treated as the issuer. 
‘‘(B) D
ESCRIPTION OF ARRANGEMENTS .—An arrange-

‘‘(B) D
ment is described in this subparagraph if under such arrangement fixed payments or premiums are received as consideration for any person’s agreement to provide or arrange for the provision of accident or health coverage to residents of the United States, regardless of how such coverage is provided or arranged to be provided. 
‘‘(d) A
DJUSTMENTS FOR INCREASES IN HEALTH CARE 
SPENDING .—In the case of any policy year ending in any fiscal

year beginning after September 30, 2014, the dollar amount in effect under subsection (a) for such policy year shall be equal to the sum of such dollar amount for policy years ending in the previous fiscal year (determined after the application of this sub-
section), plus an amount equal to the product of— 
‘‘(1) such dollar amount for policy years ending in the 
previous fiscal year, multiplied by 

amount of National Health Expenditures, as most recently pub-lished by the Secretary before the beginning of the fiscal year. ‘‘(e) T
ERMINATION .—This section shall not apply to policy years 
ending after September 30, 2019. 
‘‘SEC. 4376. SELF-INSURED HEALTH PLANS. 
‘‘(a) I MPOSITION OF FEE.—In the case of any applicable self-

insured health plan for each plan year ending after September 30, 2012, there is hereby imposed a fee equal to $2 ($1 in the case of plan years ending during fiscal year 2013) multiplied by the average number of lives covered under the plan. 
‘‘(b) L
IABILITY FOR FEE.— 
‘‘(1) I N GENERAL .—The fee imposed by subsection (a) shall 
be paid by the plan sponsor. 
‘‘(2) P LAN SPONSOR .—For purposes of paragraph (1) the 
term ‘plan sponsor’ means— Definition. 26 USC 4376. Definition.

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124 STAT. 745 PUBLIC LAW 111–148—MAR. 23, 2010 
‘‘(A) the employer in the case of a plan established 
or maintained by a single employer, 
‘‘(B) the employee organization in the case of a plan 
established or maintained by an employee organization, 
‘‘(C) in the case of— 
‘‘(i) a plan established or maintained by 2 or more 
employers or jointly by 1 or more employers and 1 or more employee organizations,

‘‘(ii) a multiple employer welfare arrangement, or ‘‘(iii) a voluntary employees’ beneficiary association 
described in section 501(c)(9), the association, com-mittee, joint board of trustees, or other similar group of representatives of the parties who establish or main-tain the plan, or ‘‘(D) the cooperative or association described in sub-
section (c)(2)(F) in the case of a plan established or main-tained by such a cooperative or association. 
‘‘(c) A

‘‘(c) A
PPLICABLE SELF-INSURED HEALTH PLAN.—For purposes 
of this section, the term ‘applicable self-insured health plan’ means any plan for providing accident or health coverage if— 
‘‘(1) any portion of such coverage is provided other than 
through an insurance policy, and 
‘‘(2) such plan is established or maintained— 
‘‘(A) by 1 or more employers for the benefit of their 
employees or former employees, 
‘‘(B) by 1 or more employee organizations for the benefit

of their members or former members, 
‘‘(C) jointly by 1 or more employers and 1 or more 
employee organizations for the benefit of employees or former employees, 
‘‘(D) by a voluntary employees’ beneficiary association 
described in section 501(c)(9), 
‘‘(E) by any organization described in section 501(c)(6), 
or 
‘‘(F) in the case of a plan not described in the preceding

subparagraphs, by a multiple employer welfare arrange-ment (as defined in section 3(40) of Employee Retirement Income Security Act of 1974), a rural electric cooperative (as defined in section 3(40)(B)(iv) of such Act), or a rural 
telephone cooperative association (as defined in section 3(40)(B)(v) of such Act). 
‘‘(d) A
SPENDING .—In the case of any plan year ending in any fiscal

year beginning after September 30, 2014, the dollar amount in effect under subsection (a) for such plan year shall be equal to the sum of such dollar amount for plan years ending in the previous fiscal year (determined after the application of this subsection), plus an amount equal to the product of— 
‘‘(1) such dollar amount for plan years ending in the pre-
vious fiscal year, multiplied by 

ERMINATION .—This section shall not apply to plan years 
ending after September 30, 2019. Definition. 
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124 STAT. 746 PUBLIC LAW 111–148—MAR. 23, 2010 
‘‘SEC. 4377. DEFINITIONS AND SPECIAL RULES. 
‘‘(a) D EFINITIONS .—For purposes of this subchapter— 
‘‘(1) A CCIDENT AND HEALTH COVERAGE .—The term ‘accident 
and health coverage’ means any coverage which, if provided by an insurance policy, would cause such policy to be a specified health insurance policy (as defined in section 4375(c)). 
‘‘(2) I
NSURANCE POLICY .—The term ‘insurance policy’ means

any policy or other instrument whereby a contract of insurance is issued, renewed, or extended. 
‘‘(3) U
NITED STATES .—The term ‘United States’ includes 
any possession of the United States. ‘‘(b) T
REATMENT OF GOVERNMENTAL ENTITIES .— 
‘‘(1) I N GENERAL .—For purposes of this subchapter— 
‘‘(A) the term ‘person’ includes any governmental 
entity, and 
‘‘(B) notwithstanding any other law or rule of law,

governmental entities shall not be exempt from the fees imposed by this subchapter except as provided in paragraph (2). ‘‘(2) T
REATMENT OF EXEMPT GOVERNMENTAL PROGRAMS .— 
In the case of an exempt governmental program, no fee shall be imposed under section 4375 or section 4376 on any covered life under such program. 
‘‘(3) E
XEMPT GOVERNMENTAL PROGRAM DEFINED .—For pur-
poses of this subchapter, the term ‘exempt governmental pro-gram’ means—

‘‘(A) any insurance program established under title 
‘‘(B) the medical assistance program established by 
title XIX or XXI of the Social Security Act, 
‘‘(C) any program established by Federal law for pro-
viding medical care (other than through insurance policies) to individuals (or the spouses and dependents thereof) by reason of such individuals being members of the Armed Forces of the United States or veterans, and

‘‘(D) any program established by Federal law for pro-
viding medical care (other than through insurance policies) to members of Indian tribes (as defined in section 4(d) of the Indian Health Care Improvement Act). 
‘‘(c) T
REATMENT AS TAX.—For purposes of subtitle F, the fees 
imposed by this subchapter shall be treated as if they were taxes. 
‘‘(d) N OCOVER OVER TO POSSESSIONS .—Notwithstanding any

other provision of law, no amount collected under this subchapter shall be covered over to any possession of the United States.’’. 
(B) C
LERICAL AMENDMENTS .— 
(i) Chapter 34 of such Code is amended by striking 
the chapter heading and inserting the following: 26 USC 4377. 
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124 STAT. 747 PUBLIC LAW 111–148—MAR. 23, 2010 
‘‘CHAPTER 34—TAXES ON CERTAIN INSURANCE 
POLICIES 
‘‘SUBCHAPTER A . POLICIES ISSUED BY FOREIGN INSURERS  
‘‘SUBCHAPTER B . INSURED AND SELF -INSURED HEALTH PLANS  
‘‘Subchapter A—Policies Issued By Foreign Insurers’’. 
(ii) The table of chapters for subtitle D of such 
Code is amended by striking the item relating to chapter 34 and inserting the following new item: 
‘‘CHAPTER 34—T AXES ON CERTAIN INSURANCE POLICIES ’’.

(f) T AX-EXEMPT STATUS OF THE PATIENT -CENTERED OUTCOMES  
RESEARCH INSTITUTE .—Subsection 501(l) of the Internal Revenue 
Code of 1986 is amended by adding at the end the following new paragraph: 
‘‘(4) The Patient-Centered Outcomes Research Institute 
established under section 1181(b) of the Social Security Act.’’. 
SEC. 6302. FEDERAL COORDINATING COUNCIL FOR COMPARATIVE 
EFFECTIVENESS RESEARCH. 
Notwithstanding any other provision of law, the Federal Coordi-

nating Council for Comparative Effectiveness Research established under section 804 of Division A of the American Recovery and Reinvestment Act of 2009 (42 U.S.C. 299b–8), including the require-ment under subsection (e)(2) of such section, shall terminate on the date of enactment of this Act. 
Subtitle E—Medicare, Medicaid, and CHIP 
Program Integrity Provisions 
SEC. 6401. PROVIDER SCREENING AND OTHER ENROLLMENT REQUIRE-
MENTS UNDER MEDICARE, MEDICAID, AND CHIP.

MENTS UNDER MEDICARE, MEDICAID, AND CHIP. 
(a) M EDICARE .—Section 1866(j) of the Social Security Act (42 
U.S.C. 1395cc(j)) is amended— 
(1) in paragraph (1)(A), by adding at the end the following:

‘‘Such process shall include screening of providers and suppliers in accordance with paragraph (2), a provisional period of enhanced oversight in accordance with paragraph (3), disclosure requirements in accordance with paragraph (4), the imposition of temporary enrollment moratoria in accordance with para-graph (5), and the establishment of compliance programs in accordance with paragraph (6).’’;

(2) by redesignating paragraph (2) as paragraph (7); and (3) by inserting after paragraph (1) the following: ‘‘(2) P
ROVIDER SCREENING .— 
‘‘(A) P ROCEDURES .—Not later than 180 days after the

date of enactment of this paragraph, the Secretary, in consultation with the Inspector General of the Department of Health and Human Services, shall establish procedures under which screening is conducted with respect to pro-viders of medical or other items or services and suppliers under the program under this title, the Medicaid program under title XIX, and the CHIP program under title XXI. Deadline. Termination 
date. 42 USC 2996–8 
note. 26 USC 501.

note. 26 USC 501. 
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124 STAT. 748 PUBLIC LAW 111–148—MAR. 23, 2010 
‘‘(B) L EVEL OF SCREENING .—The Secretary shall deter-
mine the level of screening conducted under this paragraph according to the risk of fraud, waste, and abuse, as deter-mined by the Secretary, with respect to the category of provider of medical or other items or services or supplier. Such screening— 
‘‘(i) shall include a licensure check, which may 
include such checks across States; and 
‘‘(ii) may, as the Secretary determines appropriate

based on the risk of fraud, waste, and abuse described in the preceding sentence, include— 
‘‘(I) a criminal background check; ‘‘(II) fingerprinting; ‘‘(III) unscheduled and unannounced site 
visits, including preenrollment site visits; 
‘‘(IV) database checks (including such checks 
across States); and 
‘‘(V) such other screening as the Secretary 
‘‘(C) A
PPLICATION FEES .— 
‘‘(i) I NDIVIDUAL PROVIDERS .—Except as provided in

clause (iii), the Secretary shall impose a fee on each individual provider of medical or other items or services or supplier (such as a physician, physician assistant, nurse practitioner, or clinical nurse specialist) with respect to which screening is conducted under this paragraph in an amount equal to— 
‘‘(I) for 2010, $200; and ‘‘(II) for 2011 and each subsequent year, the

amount determined under this clause for the pre-ceding year, adjusted by the percentage change in the consumer price index for all urban con-sumers (all items; United States city average) for the 12-month period ending with June of the pre-vious year. ‘‘(ii) I
NSTITUTIONAL PROVIDERS .—Except as pro-

vided in clause (iii), the Secretary shall impose a fee on each institutional provider of medical or other items or services or supplier (such as a hospital or skilled nursing facility) with respect to which screening is conducted under this paragraph in an amount equal to— 
‘‘(I) for 2010, $500; and ‘‘(II) for 2011 and each subsequent year, the

amount determined under this clause for the pre-ceding year, adjusted by the percentage change in the consumer price index for all urban con-sumers (all items; United States city average) for the 12-month period ending with June of the pre-vious year. ‘‘(iii) H
ARDSHIP EXCEPTION ; WAIVER FOR CERTAIN  
MEDICAID PROVIDERS .—The Secretary may, on a case-

by-case basis, exempt a provider of medical or other items or services or supplier from the imposition of an application fee under this subparagraph if the Sec-retary determines that the imposition of the application fee would result in a hardship. The Secretary may Determination. Determination. 
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124 STAT. 749 PUBLIC LAW 111–148—MAR. 23, 2010 
waive the application fee under this subparagraph for 
providers enrolled in a State Medicaid program for whom the State demonstrates that imposition of the fee would impede beneficiary access to care. 
‘‘(iv) U
SE OF FUNDS .—Amounts collected as a result

SE OF FUNDS .—Amounts collected as a result 
of the imposition of a fee under this subparagraph shall be used by the Secretary for program integrity efforts, including to cover the costs of conducting screening under this paragraph and to carry out this subsection and section 1128J. ‘‘(D) A
PPLICATION AND ENFORCEMENT .— 
‘‘(i) N EW PROVIDERS OF SERVICES AND SUPPLIERS .—

The screening under this paragraph shall apply, in the case of a provider of medical or other items or services or supplier who is not enrolled in the program under this title, title XIX , or title XXI as of the date of enactment of this paragraph, on or after the date that is 1 year after such date of enactment. 
‘‘(ii) C
URRENT PROVIDERS OF SERVICES AND SUP -
PLIERS .—The screening under this paragraph shall

apply, in the case of a provider of medical or other items or services or supplier who is enrolled in the program under this title, title XIX, or title XXI as of such date of enactment, on or after the date that is 2 years after such date of enactment. 
‘‘(iii) R
EVALIDATION OF ENROLLMENT .—Effective

‘‘(iii) R
EVALIDATION OF ENROLLMENT .—Effective 
beginning on the date that is 180 days after such date of enactment, the screening under this paragraph shall apply with respect to the revalidation of enroll-ment of a provider of medical or other items or services or supplier in the program under this title, title XIX, or title XXI. 
‘‘(iv) L
IMITATION ON ENROLLMENT AND REVALIDA -
TION OF ENROLLMENT .—In no case may a provider of

medical or other items or services or supplier who has not been screened under this paragraph be initially enrolled or reenrolled in the program under this title, title XIX, or title XXI on or after the date that is 3 years after such date of enactment. ‘‘(E) E
XPEDITED RULEMAKING .—The Secretary may 
promulgate an interim final rule to carry out this para-graph. ‘‘(3) P
ROVISIONAL PERIOD OF ENHANCED OVERSIGHT FOR NEW  
PROVIDERS OF SERVICES AND SUPPLIERS .—

PROVIDERS OF SERVICES AND SUPPLIERS .— 
‘‘(A) I N GENERAL .—The Secretary shall establish proce-

dures to provide for a provisional period of not less than 30 days and not more than 1 year during which new providers of medical or other items or services and sup-pliers, as the Secretary determines appropriate, including categories of providers or suppliers, would be subject to enhanced oversight, such as prepayment review and pay-ment caps, under the program under this title, the Medicaid program under title XIX. and the CHIP program under title XXI. 
‘‘(B) I

‘‘(B) I
MPLEMENTATION .—The Secretary may establish 
by program instruction or otherwise the procedures under this paragraph. Procedures. Effective date. 
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124 STAT. 750 PUBLIC LAW 111–148—MAR. 23, 2010 
‘‘(4) I NCREASED DISCLOSURE REQUIREMENTS .— 
‘‘(A) D ISCLOSURE .—A provider of medical or other items

or services or supplier who submits an application for enrollment or revalidation of enrollment in the program under this title, title XIX, or title XXI on or after the date that is 1 year after the date of enactment of this paragraph shall disclose (in a form and manner and at such time as determined by the Secretary) any current or previous affiliation (directly or indirectly) with a provider of medical or other items or services or supplier that has uncollected debt, has been or is subject

that has uncollected debt, has been or is subject to a payment suspension under a Federal health care program (as defined in section 1128B(f)), has been excluded from participation under the program under this title, the Medicaid program under title XIX, or the CHIP program under title XXI, or has had its billing privileges denied or revoked.

‘‘(B) A
UTHORITY TO DENY ENROLLMENT .—If the Sec-
retary determines that such previous affiliation poses an undue risk of fraud, waste, or abuse, the Secretary may deny such application. Such a denial shall be subject to appeal in accordance with paragraph (7). ‘‘(5) A
UTHORITY TO ADJUST PAYMENTS OF PROVIDERS OF  
SERVICES AND SUPPLIERS WITH THE SAME TAX IDENTIFICATION  
NUMBER FOR PAST -DUE OBLIGATIONS .— 
‘‘(A) I N GENERAL .—Notwithstanding any other provi-

sion of this title, in the case of an applicable provider of services or supplier, the Secretary may make any nec-essary adjustments to payments to the applicable provider of services or supplier under the program under this title in order to satisfy any past-due obligations described in subparagraph (B)(ii) of an obligated provider of services or supplier. 
‘‘(B) D
‘‘(i) I N GENERAL .—The term ‘applicable provider

of services or supplier’ means a provider of services or supplier that has the same taxpayer identification number assigned under section 6109 of the Internal Revenue Code of 1986 as is assigned to the obligated provider of services or supplier under such section, regardless of whether the applicable provider of serv-ices or supplier is assigned a different billing number or national provider identification number under the program under this title than is assigned to the obli-gated provider of

than is assigned to the obli-gated provider of services or supplier.

‘‘(ii) O
BLIGATED PROVIDER OF SERVICES OR SUP -
PLIER .—The term ‘obligated provider of services or sup-
plier’ means a provider of services or supplier that owes a past-due obligation under the program under this title (as determined by the Secretary). 
‘‘(6) T
EMPORARY MORATORIUM ON ENROLLMENT OF NEW PRO -
VIDERS .— 
‘‘(A) I N GENERAL .—The Secretary may impose a tem-

porary moratorium on the enrollment of new providers of services and suppliers, including categories of providers of services and suppliers, in the program under this title, under the Medicaid program under title XIX, or under Determination. Determination. 
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124 STAT. 751 PUBLIC LAW 111–148—MAR. 23, 2010 
the CHIP program under title XXI if the Secretary deter-
mines such moratorium is necessary to prevent or combat fraud, waste, or abuse under either such program. 
‘‘(B) L
IMITATION ON REVIEW .—There shall be no judicial 
review under section 1869, section 1878, or otherwise, of a temporary moratorium imposed under subparagraph (A). ‘‘(7) C
OMPLIANCE PROGRAMS .— 
‘‘(A) I N GENERAL .—On or after the date of implementa-

tion determined by the Secretary under subparagraph (C), a provider of medical or other items or services or supplier within a particular industry sector or category shall, as a condition of enrollment in the program under this title, title XIX, or title XXI, establish a compliance program that contains the core elements established under subpara-graph (B) with respect to that provider or supplier and industry or category. 
‘‘(B) E
STABLISHMENT OF CORE ELEMENTS .—The Sec-

‘‘(B) E
retary, in consultation with the Inspector General of the Department of Health and Human Services, shall establish core elements for a compliance program under subpara-graph (A) for providers or suppliers within a particular industry or category. 
‘‘(C) T
IMELINE FOR IMPLEMENTATION .—The Secretary

shall determine the timeline for the establishment of the core elements under subparagraph (B) and the date of the implementation of subparagraph (A) for providers or suppliers within a particular industry or category. The Secretary shall, in determining such date of implementa-tion, consider the extent to which the adoption of compli-ance programs by a provider of medical or other items or services or supplier is widespread in a particular industry sector or with respect to a particular

industry sector or with respect to a particular provider or supplier category.’’.

(b) M
EDICAID .— 
(1) S TATE PLAN AMENDMENT .—Section 1902(a) of the Social 
Security Act (42 U.S.C. 1396a(a)), as amended by section 4302(b), is amended— 
(i) by striking ‘‘and’’ at the end of paragraph (75); (ii) by striking the period at the end of paragraph 
(76) and inserting a semicolon; and 
(iii) by inserting after paragraph (76) the following: 
‘‘(77) provide that the State shall comply with provider

and supplier screening, oversight, and reporting requirements in accordance with subsection (ii);’’; and 
‘‘(ii) P
ROVIDER AND SUPPLIER SCREENING , O VERSIGHT , AND 
REPORTING REQUIREMENTS .—For purposes of subsection (a)(77), the 
requirements of this subsection are the following: 
‘‘(1) S CREENING .—The State complies with the process for 
screening providers and suppliers under this title, as estab-lished by the Secretary under section 1886(j)(2).

‘‘(2) P
PROVIDERS AND SUPPLIERS .—The State complies with proce-
dures to provide for a provisional period of enhanced oversight for new providers and suppliers under this title, as established by the Secretary under section 1886(j)(3). Determination. 
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124 STAT. 752 PUBLIC LAW 111–148—MAR. 23, 2010 
‘‘(3) D ISCLOSURE REQUIREMENTS .—The State requires pro-
viders and suppliers under the State plan or under a waiver of the plan to comply with the disclosure requirements estab-lished by the Secretary under section 1886(j)(4). 
‘‘(4) T
VIDERS OR SUPPLIERS .— 
‘‘(A) T EMPORARY MORATORIUM IMPOSED BY THE SEC -
RETARY .— 
‘‘(i) I N GENERAL .—Subject to clause (ii), the State

complies with any temporary moratorium on the enroll-ment of new providers or suppliers imposed by the Secretary under section 1886(j)(6). 
‘‘(ii) E
XCEPTION .—A State shall not be required 
to comply with a temporary moratorium described in clause (i) if the State determines that the imposition of such temporary moratorium would adversely impact beneficiaries’ access to medical assistance. ‘‘(B) M
ORATORIUM ON ENROLLMENT OF PROVIDERS AND

ORATORIUM ON ENROLLMENT OF PROVIDERS AND  
SUPPLIERS .—At the option of the State, the State imposes,

for purposes of entering into participation agreements with providers or suppliers under the State plan or under a waiver of the plan, periods of enrollment moratoria, or numerical caps or other limits, for providers or suppliers identified by the Secretary as being at high-risk for fraud, waste, or abuse as necessary to combat fraud, waste, or abuse, but only if the State determines that the imposition of any such period, cap, or other limits would not adversely impact beneficiaries’ access to

not adversely impact beneficiaries’ access to medical assistance. ‘‘(5) C

OMPLIANCE PROGRAMS .—The State requires providers 
and suppliers under the State plan or under a waiver of the plan to establish, in accordance with the requirements of section 1866(j)(7), a compliance program that contains the core ele-ments established under subparagraph (B) of that section 1866(j)(7) for providers or suppliers within a particular industry or category. 
‘‘(6) R
EPORTING OF ADVERSE PROVIDER ACTIONS .—The State

EPORTING OF ADVERSE PROVIDER ACTIONS .—The State 
complies with the national system for reporting criminal and civil convictions, sanctions, negative licensure actions, and other adverse provider actions to the Secretary, through the Adminis-trator of the Centers for Medicare & Medicaid Services, in accordance with regulations of the Secretary. 
‘‘(7) E
NROLLMENT AND NPI OF ORDERING OR REFERRING PRO -
VIDERS .—The State requires— 
‘‘(A) all ordering or referring physicians or other profes-

sionals to be enrolled under the State plan or under a waiver of the plan as a participating provider; and 
‘‘(B) the national provider identifier of any ordering 
or referring physician or other professional to be specified on any claim for payment that is based on an order or referral of the physician or other professional. ‘‘(8) O
THER STATE OVERSIGHT .—Nothing in this subsection

shall be interpreted to preclude or limit the ability of a State to engage in provider and supplier screening or enhanced pro-vider and supplier oversight activities beyond those required by the Secretary.’’. 
(2) D
ISCLOSURE OF MEDICARE TERMINATED PROVIDERS AND  
SUPPLIERS TO STATES .—The Administrator of the Centers for 42 USC 1395cc note. Determination. Determination.

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124 STAT. 753 PUBLIC LAW 111–148—MAR. 23, 2010 
Medicare & Medicaid Services shall establish a process for

making available to the each State agency with responsibility for administering a State Medicaid plan (or a waiver of such plan) under title XIX of the Social Security Act or a child health plan under title XXI the name, national provider identi-fier, and other identifying information for any provider of med-ical or other items or services or supplier under the Medicare program under title XVIII or under the CHIP program under title XXI that is terminated from participation under that pro-gram

terminated from participation under that pro-gram within 30 days of the termination (and, with respect to all such providers or suppliers who are terminated from the Medicare program on the date of enactment of this Act, within 90 days of such date).

(3) C
ONFORMING AMENDMENT .—Section 1902(a)(23) of the 
Social Security Act (42 U.S.C. 1396a), is amended by inserting before the semicolon at the end the following: ‘‘or by a provider or supplier to which a moratorium under subsection (ii)(4) is applied during the period of such moratorium’’. (c) CHIP.—Section 2107(e)(1) of the Social Security Act (42 
U.S.C. 1397gg(e)(1)), as amended by section 2101(d), is amended— 
(1) by redesignating subparagraphs (D) through (M) as

subparagraphs (E) through (N), respectively; and 
(2) by inserting after subparagraph (C), the following: 
‘‘(D) Subsections (a)(77) and (ii) of section 1902 
(relating to provider and supplier screening, oversight, and reporting requirements).’’. 
SEC. 6402. ENHANCED MEDICARE AND MEDICAID PROGRAM INTEG-
RITY PROVISIONS. 
(a) I NGENERAL .—Part A of title XI of the Social Security

Act (42 U.S.C. 1301 et seq.), as amended by sections 6002, 6004, and 6102, is amended by inserting after section 1128I the following new section: 
‘‘SEC. 1128J. MEDICARE AND MEDICAID PROGRAM INTEGRITY PROVI-
SIONS. 
‘‘(a) D ATAMATCHING .— 
‘‘(1) I NTEGRATED DATA REPOSITORY .— 
‘‘(A) I NCLUSION OF CERTAIN DATA .— 
‘‘(i) I N GENERAL .—The Integrated Data Repository 
of the Centers for Medicare & Medicaid Services shall include, at a minimum, claims and payment data from the following:

‘‘(I) The programs under titles XVIII and XIX 
(including parts A, B, C, and D of title XVIII). 
‘‘(II) The program under title XXI. ‘‘(III) Health-related programs administered 
by the Secretary of Veterans Affairs. 
‘‘(IV) Health-related programs administered by 
the Secretary of Defense. 
‘‘(V) The program of old-age, survivors, and 
disability insurance benefits established under title II. 
‘‘(VI) The Indian Health Service and the Con-
tract Health Service program. ‘‘(ii) P

RIORITY FOR INCLUSION OF CERTAIN DATA .— 
Inclusion of the data described in subclause (I) of such clause in the Integrated Data Repository shall be a 42 USC 1320a–7k. 
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124 STAT. 754 PUBLIC LAW 111–148—MAR. 23, 2010 
priority. Data described in subclauses (II) through (VI) 
of such clause shall be included in the Integrated Data Repository as appropriate. ‘‘(B) D
ATA SHARING AND MATCHING .— 
‘‘(i) I N GENERAL .—The Secretary shall enter into

agreements with the individuals described in clause (ii) under which such individuals share and match data in the system of records of the respective agencies of such individuals with data in the system of records of the Department of Health and Human Services for the purpose of identifying potential fraud, waste, and abuse under the programs under titles XVIII and XIX. 
‘‘(ii) I
NDIVIDUALS DESCRIBED .—The following 
individuals are described in this clause:

individuals are described in this clause: 
‘‘(I) The Commissioner of Social Security. ‘‘(II) The Secretary of Veterans Affairs. ‘‘(III) The Secretary of Defense. ‘‘(IV) The Director of the Indian Health 
Service. ‘‘(iii) D
EFINITION OF SYSTEM OF RECORDS .—For pur-
poses of this paragraph, the term ‘system of records’ has the meaning given such term in section 552a(a)(5) of title 5, United States Code. 
‘‘(2) A
CCESS TO CLAIMS AND PAYMENT DATABASES .—For pur-

poses of conducting law enforcement and oversight activities and to the extent consistent with applicable information, pri-vacy, security, and disclosure laws, including the regulations promulgated under the Health Insurance Portability and Accountability Act of 1996 and section 552a of title 5, United States Code, and subject to any information systems security requirements under such laws or otherwise required by the Secretary, the Inspector General of the Department of Health and Human

General of the Department of Health and Human Services and the Attorney General shall have access to claims and payment data of the Department of Health and Human Services and its contractors related to titles XVIII, XIX, and XXI. ‘‘(b) OIG A

UTHORITY TOOBTAIN INFORMATION .— 
‘‘(1) I N GENERAL .—Notwithstanding and in addition to any 
other provision of law, the Inspector General of the Department of Health and Human Services may, for purposes of protecting the integrity of the programs under titles XVIII and XIX, obtain information from any individual (including a beneficiary provided all applicable privacy protections are followed) or entity that— 
‘‘(A) is a provider of medical or other items or services,

supplier, grant recipient, contractor, or subcontractor; or 
‘‘(B) directly or indirectly provides, orders, manufac-
tures, distributes, arranges for, prescribes, supplies, or receives medical or other items or services payable by any Federal health care program (as defined in section 1128B(f)) regardless of how the item or service is paid for, or to whom such payment is made. ‘‘(2) I
NCLUSION OF CERTAIN INFORMATION .—Information

NCLUSION OF CERTAIN INFORMATION .—Information 
which the Inspector General may obtain under paragraph (1) includes any supporting documentation necessary to validate claims for payment or payments under title XVIII or XIX, Contracts. 
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124 STAT. 755 PUBLIC LAW 111–148—MAR. 23, 2010 
including a prescribing physician’s medical records for an indi-

vidual who is prescribed an item or service which is covered under part B of title XVIII, a covered part D drug (as defined in section 1860D–2(e)) for which payment is made under an MA–PD plan under part C of such title, or a prescription drug plan under part D of such title, and any records necessary for evaluation of the economy, efficiency, and effectiveness of the programs under titles XVIII and XIX. ‘‘(c) A
DMINISTRATIVE REMEDY FOR KNOWING PARTICIPATION BY

BENEFICIARY IN HEALTH CAREFRAUD SCHEME .— 
‘‘(1) I N GENERAL .—In addition to any other applicable rem-
edies, if an applicable individual has knowingly participated in a Federal health care fraud offense or a conspiracy to commit a Federal health care fraud offense, the Secretary shall impose an appropriate administrative penalty commensurate with the offense or conspiracy. 
‘‘(2) A
PPLICABLE INDIVIDUAL .—For purposes of paragraph 
(1), the term ‘applicable individual’ means an individual—

‘‘(A) entitled to, or enrolled for, benefits under part 
A of title XVIII or enrolled under part B of such title; 
‘‘(B) eligible for medical assistance under a State plan 
under title XIX or under a waiver of such plan; or 
‘‘(C) eligible for child health assistance under a child 
health plan under title XXI. 
‘‘(d) R EPORTING AND RETURNING OF OVERPAYMENTS .— 
‘‘(1) I N GENERAL .—If a person has received an overpayment, 
the person shall— 
‘‘(A) report and return the overpayment to the Sec-

retary, the State, an intermediary, a carrier, or a con-tractor, as appropriate, at the correct address; and 
‘‘(B) notify the Secretary, State, intermediary, carrier, 
or contractor to whom the overpayment was returned in writing of the reason for the overpayment. ‘‘(2) D
EADLINE FOR REPORTING AND RETURNING OVERPAY -
MENTS .—An overpayment must be reported and returned under 
paragraph (1) by the later of— 
‘‘(A) the date which is 60 days after the date on which

the overpayment was identified; or 
‘‘(B) the date any corresponding cost report is due, 
if applicable. ‘‘(3) E
NFORCEMENT .—Any overpayment retained by a per-
son after the deadline for reporting and returning the overpay-ment under paragraph (2) is an obligation (as defined in section 3729(b)(3) of title 31, United States Code) for purposes of section 3729 of such title. 
‘‘(4) D
‘‘(A) K NOWING AND KNOWINGLY .—The terms ‘knowing’

and ‘knowingly’ have the meaning given those terms in section 3729(b) of title 31, United States Code. 
‘‘(B) O
VERPAYMENT .—The term ‘‘overpayment’’ means 
any funds that a person receives or retains under title XVIII or XIX to which the person, after applicable reconcili-ation, is not entitled under such title. 
‘‘(C) P
ERSON .— 
‘‘(i) I N GENERAL .—The term ‘person’ means a pro-

vider of services, supplier, medicaid managed care organization (as defined in section 1903(m)(1)(A)), Notification. Definition. Penalty. 
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124 STAT. 756 PUBLIC LAW 111–148—MAR. 23, 2010 
Medicare Advantage organization (as defined in section 
1859(a)(1)), or PDP sponsor (as defined in section 1860D–41(a)(13)). 
‘‘(ii) E
XCLUSION .—Such term does not include a 
beneficiary. 
‘‘(e) I NCLUSION OF NATIONAL PROVIDER IDENTIFIER ON ALL 
APPLICATIONS AND CLAIMS .—The Secretary shall promulgate a regu-

lation that requires, not later than January 1, 2011, all providers of medical or other items or services and suppliers under the programs under titles XVIII and XIX that qualify for a national provider identifier to include their national provider identifier on all applications to enroll in such programs and on all claims for payment submitted under such programs.’’. 
(b) A
CCESS TO DATA.— 
(1) M EDICARE PART D .—Section 1860D–15(f)(2) of the Social

Security Act (42 U.S.C. 1395w–116(f)(2)) is amended by striking ‘‘may be used by’’ and all that follows through the period at the end and inserting ‘‘may be used— 
‘‘(A) by officers, employees, and contractors of the 
Department of Health and Human Services for the pur-poses of, and to the extent necessary in— 
‘‘(i) carrying out this section; and ‘‘(ii) conducting oversight, evaluation, and enforce-
ment under this title; and ‘‘(B) by the Attorney General and the Comptroller Gen-

eral of the United States for the purposes of, and to the extent necessary in, carrying out health oversight activi-ties.’’. (2) D
ATA MATCHING .—Section 552a(a)(8)(B) of title 5, 
United States Code, is amended— 
(A) in clause (vii), by striking ‘‘or’’ at the end; (B) in clause (viii), by inserting ‘‘or’’ after the semicolon; 
and 
‘‘(ix) matches performed by the Secretary of Health

and Human Services or the Inspector General of the Department of Health and Human Services with respect to potential fraud, waste, and abuse, including matches of a system of records with non-Federal 
records;’’. 
(3) M
ATCHING AGREEMENTS WITH THE COMMISSIONER OF  
SOCIAL SECURITY .—Section 205(r) of the Social Security Act 
(42 U.S.C. 405(r)) is amended by adding at the end the following new paragraph: 
‘‘(9)(A) The Commissioner of Social Security shall, upon

the request of the Secretary or the Inspector General of the Department of Health and Human Services— 
‘‘(i) enter into an agreement with the Secretary or 
such Inspector General for the purpose of matching data in the system of records of the Social Security Administra-tion and the system of records of the Department of Health and Human Services; and 
‘‘(ii) include in such agreement safeguards to assure 
the maintenance of the confidentiality of any information disclosed. Contracts. 42 USC

1395w–115. Regulations. 
Deadline. 
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124 STAT. 757 PUBLIC LAW 111–148—MAR. 23, 2010 
‘‘(B) For purposes of this paragraph, the term ‘system of 
records’ has the meaning given such term in section 552a(a)(5) of title 5, United States Code.’’. (c) W
ITHHOLDING OF FEDERAL MATCHING PAYMENTS FOR STATES  
THAT FAILTOREPORT ENROLLEE ENCOUNTER DATA IN THE MED-
ICAID STATISTICAL INFORMATION SYSTEM .—Section 1903(i) of the 
Social Security Act (42 U.S.C. 1396b(i)) is amended—

(1) in paragraph (23), by striking ‘‘or’’ at the end; (2) in paragraph (24), by striking the period at the end 
and inserting ‘‘; or’’; and 
(3) by adding at the end the following new paragraph:. ‘‘(25) with respect to any amounts expended for medical 
assistance for individuals for whom the State does not report enrollee encounter data (as defined by the Secretary) to the Medicaid Statistical Information System (MSIS) in a timely manner (as determined by the Secretary).’’. (d) P

ERMISSIVE EXCLUSIONS AND CIVILMONETARY PENALTIES .— 
(1) P ERMISSIVE EXCLUSIONS .—Section 1128(b) of the Social 
Security Act (42 U.S.C. 1320a–7(b)) is amended by adding at the end the following new paragraph: 
‘‘(16) M
AKING FALSE STATEMENTS OR MISREPRESENTATION  
OF MATERIAL FACTS .—Any individual or entity that knowingly

makes or causes to be made any false statement, omission, or misrepresentation of a material fact in any application, agreement, bid, or contract to participate or enroll as a provider of services or supplier under a Federal health care program (as defined in section 1128B(f)), including Medicare Advantage organizations under part C of title XVIII, prescription drug plan sponsors under part D of title XVIII, medicaid managed care organizations under title XIX, and entities that apply to

under title XIX, and entities that apply to participate as providers of services or suppliers in such managed care organizations and such plans.’’.

(2) C
IVIL MONETARY PENALTIES .— 
(A) I N GENERAL .—Section 1128A(a) of the Social Secu-
rity Act (42 U.S.C. 1320a–7a(a)) is amended— 
(i) in paragraph (1)(D), by striking ‘‘was excluded’’ 
and all that follows through the period at the end and inserting ‘‘was excluded from the Federal health care program (as defined in section 1128B(f)) under which the claim was made pursuant to Federal law.’’;

(ii) in paragraph (6), by striking ‘‘or’’ at the end; (iii) by inserting after paragraph (7), the following 
new paragraphs: 
‘‘(8) orders or prescribes a medical or other item or service 
during a period in which the person was excluded from a Federal health care program (as so defined), in the case where 
the person knows or should know that a claim for such medical or other item or service will be made under such a program; 
‘‘(9) knowingly makes or causes to be made any false state-

ment, omission, or misrepresentation of a material fact in any application, bid, or contract to participate or enroll as a provider of services or a supplier under a Federal health care program (as so defined), including Medicare Advantage organizations under part C of title XVIII, prescription drug plan sponsors under part D of title XVIII, medicaid managed care organiza-tions under title XIX, and entities that apply to participate

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124 STAT. 758 PUBLIC LAW 111–148—MAR. 23, 2010 
as providers of services or suppliers in such managed care 
organizations and such plans; 
‘‘(10) knows of an overpayment (as defined in paragraph 
(4) of section 1128J(d)) and does not report and return the overpayment in accordance with such section;’’; 
(iv) in the first sentence— 
(I) by striking the ‘‘or’’ after ‘‘prohibited rela-
tionship occurs;’’; and 
(II) by striking ‘‘act)’’ and inserting ‘‘act; or

in cases under paragraph (9), $50,000 for each false statement or misrepresentation of a material fact)’’; and (v) in the second sentence, by striking ‘‘purpose)’’ 
and inserting ‘‘purpose; or in cases under paragraph (9), an assessment of not more than 3 times the total amount claimed for each item or service for which payment was made based upon the application con-taining the false statement or misrepresentation of a material fact)’’. (B) C
LARIFICATION OF TREATMENT OF CERTAIN CHARI -

TABLE AND OTHER INNOCUOUS PROGRAMS .—Section 
1128A(i)(6) of the Social Security Act (42 U.S.C. 1320a– 7a(i)(6)) is amended— 
(i) in subparagraph (C), by striking ‘‘or’’ at the 
end; 
(ii) in subparagraph (D), as redesignated by section 
4331(e) of the Balanced Budget Act of 1997 (Public Law 105–33), by striking the period at the end and inserting a semicolon; 
(iii) by redesignating subparagraph (D), as added

by section 4523(c) of such Act, as subparagraph (E) and striking the period at the end and inserting ‘‘; or’’; and 
(iv) by adding at the end the following new sub-
paragraphs: ‘‘(F) any other remuneration which promotes access 
to care and poses a low risk of harm to patients and Federal health care programs (as defined in section 1128B(f) and designated by the Secretary under regula-tions); 
‘‘(G) the offer or transfer of items or services for free

or less than fair market value by a person, if— 
‘‘(i) the items or services consist of coupons, 
rebates, or other rewards from a retailer; 
‘‘(ii) the items or services are offered or transferred 
on equal terms available to the general public, regard-
less of health insurance status; and 
‘‘(iii) the offer or transfer of the items or services

is not tied to the provision of other items or services reimbursed in whole or in part by the program under title XVIII or a State health care program (as defined in section 1128(h)); ‘‘(H) the offer or transfer of items or services for free 
‘‘(i) the items or services are not offered as part 
of any advertisement or solicitation; Regulations.

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124 STAT. 759 PUBLIC LAW 111–148—MAR. 23, 2010 
‘‘(ii) the items or services are not tied to the provi-
sion of other services reimbursed in whole or in part by the program under title XVIII or a State health care program (as so defined); 
‘‘(iii) there is a reasonable connection between the 
items or services and the medical care of the individual; and 
‘‘(iv) the person provides the items or services after

determining in good faith that the individual is in financial need; or ‘‘(I) effective on a date specified by the Secretary (but

not earlier than January 1, 2011), the waiver by a PDP sponsor of a prescription drug plan under part D of title XVIII or an MA organization offering an MA–PD plan under part C of such title of any copayment for the first fill of a covered part D drug (as defined in section 1860D– 2(e)) that is a generic drug for individuals enrolled in the prescription drug plan or MA–PD plan, respectively.’’. 
(e) T
ESTIMONIAL SUBPOENA AUTHORITY IN EXCLUSION -ONLY

CASES .—Section 1128(f) of the Social Security Act (42 U.S.C. 1320a– 
7(f)) is amended by adding at the end the following new paragraph: 
‘‘(4) The provisions of subsections (d) and (e) of section

205 shall apply with respect to this section to the same extent as they are applicable with respect to title II. The Secretary may delegate the authority granted by section 205(d) (as made applicable to this section) to the Inspector General of the Department of Health and Human Services for purposes of any investigation under this section.’’. (f) H
EALTH CAREFRAUD .— 
(1) K ICKBACKS .—Section 1128B of the Social Security Act

(42 U.S.C. 1320a–7b) is amended by adding at the end the following new subsection: ‘‘(g) In addition to the penalties provided for in this section 
or section 1128A, a claim that includes items or services resulting from a violation of this section constitutes a false or fraudulent claim for purposes of subchapter III of chapter 37 of title 31, United States Code.’’. 
(2) R
EVISING THE INTENT REQUIREMENT .—Section 1128B

EVISING THE INTENT REQUIREMENT .—Section 1128B 
of the Social Security Act (42 U.S.C. 1320a–7b), as amended by paragraph (1), is amended by adding at the end the following new subsection: ‘‘(h) With respect to violations of this section, a person need 
not have actual knowledge of this section or specific intent to commit a violation of this section.’’. 
(g) S
URETY BOND REQUIREMENTS .— 
(1) D URABLE MEDICAL EQUIPMENT .—Section 1834(a)(16)(B)

of the Social Security Act (42 U.S.C. 1395m(a)(16)(B)) is amended by inserting ‘‘that the Secretary determines is commensurate with the volume of the billing of the supplier’’ before the period at the end. 
(2) H
OME HEALTH AGENCIES .—Section 1861(o)(7)(C) of the 
Social Security Act (42 U.S.C. 1395x(o)(7)(C)) is amended by inserting ‘‘that the Secretary determines is commensurate with the volume of the billing of the home health agency’’ before the semicolon at the end. 
(3) R

(3) R
EQUIREMENTS FOR CERTAIN OTHER PROVIDERS OF SERV -
ICES AND SUPPLIERS .—Section 1862 of the Social Security Act Applicability. 
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124 STAT. 760 PUBLIC LAW 111–148—MAR. 23, 2010 
(42 U.S.C. 1395y) is amended by adding at the end the following 
new subsection: ‘‘(n) R
EQUIREMENT OF A SURETY BOND FOR CERTAIN PROVIDERS  
OFSERVICES AND SUPPLIERS .— 
‘‘(1) I N GENERAL .—The Secretary may require a provider

of services or supplier described in paragraph (2) to provide the Secretary on a continuing basis with a surety bond in a form specified by the Secretary in an amount (not less than $50,000) that the Secretary determines is commensurate with the volume of the billing of the provider of services or supplier. The Secretary may waive the requirement of a bond under the preceding sentence in the case of a provider of services or supplier that provides a comparable surety bond under State law.

‘‘(2) P
ROVIDER OF SERVICES OR SUPPLIER DESCRIBED .—A 
provider of services or supplier described in this paragraph is a provider of services or supplier the Secretary determines appropriate based on the level of risk involved with respect to the provider of services or supplier, and consistent with the surety bond requirements under sections 1834(a)(16)(B) and 1861(o)(7)(C).’’. (h) S
USPENSION OF MEDICARE AND MEDICAID PAYMENTS  
PENDING INVESTIGATION OF CREDIBLE ALLEGATIONS OF FRAUD .—

(1) M EDICARE .—Section 1862 of the Social Security Act 
(42 U.S.C. 1395y), as amended by subsection (g)(3), is amended by adding at the end the following new subsection: ‘‘(o) S
USPENSION OF PAYMENTS PENDING INVESTIGATION OF  
CREDIBLE ALLEGATIONS OF FRAUD .— 
‘‘(1) I N GENERAL .—The Secretary may suspend payments

to a provider of services or supplier under this title pending an investigation of a credible allegation of fraud against the provider of services or supplier, unless the Secretary determines there is good cause not to suspend such payments. 
‘‘(2) C
Inspector General of the Department of Health and Human Services in determining whether there is a credible allegation of fraud against a provider of services or supplier. 
‘‘(3) P

‘‘(3) P
promulgate regulations to carry out this subsection and section 1903(i)(2)(C).’’. 
(2) M
EDICAID .—Section 1903(i)(2) of such Act (42 U.S.C. 
1396b(i)(2)) is amended— 
(A) in subparagraph (A), by striking ‘‘or’’ at the end; 
and 
(B) by inserting after subparagraph (B), the following: ‘‘(C) by any individual or entity to whom the State

has failed to suspend payments under the plan during any period when there is pending an investigation of a credible allegation of fraud against the individual or entity, as determined by the State in accordance with regulations promulgated by the Secretary for purposes of section 1862(o) and this subparagraph, unless the State determines in accordance with such regulations there is good cause not to suspend such payments; or’’. 
(i) I
NCREASED FUNDING TOFIGHT FRAUD AND ABUSE .—

NCREASED FUNDING TOFIGHT FRAUD AND ABUSE .— 
(1) I N GENERAL .—Section 1817(k) of the Social Security 
Act (42 U.S.C. 1395i(k)) is amended— Determination. Determination. Waiver authority. 
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124 STAT. 761 PUBLIC LAW 111–148—MAR. 23, 2010 
(A) by adding at the end the following new paragraph: 
‘‘(7) A DDITIONAL FUNDING .—In addition to the funds other-

wise appropriated to the Account from the Trust Fund under paragraphs (3) and (4) and for purposes described in paragraphs (3)(C) and (4)(A), there are hereby appropriated an additional $10,000,000 to such Account from such Trust Fund for each of fiscal years 2011 through 2020. The funds appropriated under this paragraph shall be allocated in the same proportion as the total funding appropriated with respect to paragraphs (3)(A) and (4)(A) was allocated with respect to fiscal year 2010, and

allocated with respect to fiscal year 2010, and shall be available without further appropriation until expended.’’; and

(B) in paragraph (4)(A), by inserting ‘‘until expended’’ 
after ‘‘appropriation’’. (2) I
NDEXING OF AMOUNTS APPROPRIATED .— 
(A) D EPARTMENTS OF HEALTH AND HUMAN SERVICES  
AND JUSTICE .—Section 1817(k)(3)(A)(i) of the Social Secu-
rity Act (42 U.S.C. 1395i(k)(3)(A)(i)) is amended— 
(i) in subclause (III), by inserting ‘‘and’’ at the 
end; 
(ii) in subclause (IV)— 
(I) by striking ‘‘for each of fiscal years 2007,

(I) by striking ‘‘for each of fiscal years 2007, 
2008, 2009, and 2010’’ and inserting ‘‘for each fiscal year after fiscal year 2006’’; and 
(II) by striking ‘‘; and’’ and inserting a period; 
and (iii) by striking subclause (V). 
(B) O
FFICE OF THE INSPECTOR GENERAL OF THE DEPART -
MENT OF HEALTH AND HUMAN SERVICES .—Section 
1817(k)(3)(A)(ii) of such Act (42 U.S.C. 1395i(k)(3)(A)(ii)) is amended— 
(i) in subclause (VIII), by inserting ‘‘and’’ at the 
end; 
(ii) in subclause (IX)—

end; 
(ii) in subclause (IX)— 
(I) by striking ‘‘for each of fiscal years 2008, 
2009, and 2010’’ and inserting ‘‘for each fiscal year after fiscal year 2007’’; and 
and (iii) by striking subclause (X). 
(C) F
EDERAL BUREAU OF INVESTIGATION .—Section 
1817(k)(3)(B) of the Social Security Act (42 U.S.C. 1395i(k)(3)(B)) is amended— 
(i) in clause (vii), by inserting ‘‘and’’ at the end; (ii) in clause (viii)—

and (iii) by striking clause (ix). 
(D) M
EDICARE INTEGRITY PROGRAM .—Section 
1817(k)(4)(C) of the Social Security Act (42 U.S.C. 1395i(k)(4)(C)) is amended by adding at the end the fol-lowing new clause: 
‘‘(ii) For each fiscal year after 2010, by the percent-

age increase in the consumer price index for all urban 
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124 STAT. 762 PUBLIC LAW 111–148—MAR. 23, 2010 
consumers (all items; United States city average) over 
the previous year.’’. 
(j) M EDICARE INTEGRITY PROGRAM AND MEDICAID INTEGRITY  
PROGRAM .— 
(1) M EDICARE INTEGRITY PROGRAM .— 
(A) R EQUIREMENT TO PROVIDE PERFORMANCE STATIS -
TICS.—Section 1893(c) of the Social Security Act (42 U.S.C. 
1395ddd(c)) is amended— 
(i) in paragraph (3), by striking ‘‘and’’ at the end; (ii) by redesignating paragraph (4) as paragraph 
(5); and

(5); and 
(iii) by inserting after paragraph (3) the following 
‘‘(4) the entity agrees to provide the Secretary and the 
Inspector General of the Department of Health and Human Services with such performance statistics (including the number and amount of overpayments recovered, the number of fraud referrals, and the return on investment of such activities by the entity) as the Secretary or the Inspector General may request; and’’. 
(B) E

(B) E
VALUATIONS AND ANNUAL REPORT .—Section 1893 
of the Social Security Act (42 U.S.C. 1395ddd) is amended by adding at the end the following new subsection: 
‘‘(i) E
VALUATIONS AND ANNUAL REPORT .— 
‘‘(1) E VALUATIONS .—The Secretary shall conduct evalua-
tions of eligible entities which the Secretary contracts with under the Program not less frequently than every 3 years. 
‘‘(2) A
NNUAL REPORT .—Not later than 180 days after the

NNUAL REPORT .—Not later than 180 days after the 
end of each fiscal year (beginning with fiscal year 2011), the Secretary shall submit a report to Congress which identifies— 
‘‘(A) the use of funds, including funds transferred from 
the Federal Hospital Insurance Trust Fund under section 1817 and the Federal Supplementary Insurance Trust Fund under section 1841, to carry out this section; and 
‘‘(B) the effectiveness of the use of such funds.’’. (C) F

LEXIBILITY IN PURSUING FRAUD AND ABUSE .—Sec-
tion 1893(a) of the Social Security Act (42 U.S.C. 1395ddd(a)) is amended by inserting ‘‘, or otherwise,’’ after ‘‘entities’’. (2) M
EDICAID INTEGRITY PROGRAM .— 
TICS.—Section 1936(c)(2) of the Social Security Act (42 
U.S.C. 1396u–6(c)(2)) is amended— 
(i) by redesignating subparagraph (D) as subpara-
graph (E); and 
(ii) by inserting after subparagraph (C) the fol-

lowing new subparagraph: ‘‘(D) The entity agrees to provide the Secretary and 
the Inspector General of the Department of Health and Human Services with such performance statistics (including the number and amount of overpayments recov-ered, the number of fraud referrals, and the return on investment of such activities by the entity) as the Secretary or the Inspector General may request.’’. 
(B) E
VALUATIONS AND ANNUAL REPORT .—Section

(B) E
VALUATIONS AND ANNUAL REPORT .—Section 
1936(e) of the Social Security Act (42 U.S.C. 1396u–7(e)) is amended— 42 USC 1396u–6. 
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124 STAT. 763 PUBLIC LAW 111–148—MAR. 23, 2010 
(i) by redesignating paragraph (4) as paragraph 
(5); and 
(ii) by inserting after paragraph (3) the following 
‘‘(4) E VALUATIONS .—The Secretary shall conduct evalua-
tions of eligible entities which the Secretary contracts with under the Program not less frequently than every 3 years.’’. (k) E
XPANDED APPLICATION OF HARDSHIP WAIVERS FOR EXCLU -
SIONS .—Section 1128(c)(3)(B) of the Social Security Act (42 U.S.C.

1320a–7(c)(3)(B)) is amended by striking ‘‘individuals entitled to benefits under part A of title XVIII or enrolled under part B of such title, or both’’ and inserting ‘‘beneficiaries (as defined in section 1128A(i)(5)) of that program’’. 
SEC. 6403. ELIMINATION OF DUPLICATION BETWEEN THE 
HEALTHCARE INTEGRITY AND PROTECTION DATA BANK AND THE NATIONAL PRACTITIONER DATA BANK. 
(a) I NFORMATION REPORTED BY FEDERAL AGENCIES AND HEALTH

PLANS .—Section 1128E of the Social Security Act (42 U.S.C. 1320a– 
7e) is amended— 
(1) by striking subsection (a) and inserting the following: 
‘‘(a) I NGENERAL .—The Secretary shall maintain a national

health care fraud and abuse data collection program under this section for the reporting of certain final adverse actions (not including settlements in which no findings of liability have been made) against health care providers, suppliers, or practitioners as required by subsection (b), with access as set forth in subsection (d), and shall furnish the information collected under this section to the National Practitioner Data Bank established pursuant to the Health Care Quality Improvement Act

to the Health Care Quality Improvement Act of 1986 (42 U.S.C. 11101 et seq.).’’;

(2) by striking subsection (d) and inserting the following: 
‘‘(d) A
CCESS TO REPORTED INFORMATION .— 
‘‘(1) A VAILABILITY .—The information collected under this 
section shall be available from the National Practitioner Data Bank to the agencies, authorities, and officials which are pro-vided under section 1921(b) information reported under section 1921(a). 
‘‘(2) F
EES FOR DISCLOSURE .—The Secretary may establish

EES FOR DISCLOSURE .—The Secretary may establish 
or approve reasonable fees for the disclosure of information under this section. The amount of such a fee may not exceed the costs of processing the requests for disclosure and of pro-viding such information. Such fees shall be available to the Secretary to cover such costs.’’; 
(3) by striking subsection (f) and inserting the following: 
‘‘(f) A
PPROPRIATE COORDINATION .—In implementing this section,

the Secretary shall provide for the maximum appropriate coordina-tion with part B of the Health Care Quality Improvement Act of 1986 (42 U.S.C. 11131 et seq.) and section 1921.’’; and 
(4) in subsection (g)— 
(A) in paragraph (1)(A)— 
(i) in clause (iii)— 
(I) by striking ‘‘or State’’ each place it appears; (II) by redesignating subclauses (II) and (III) 
as subclauses (III) and (IV), respectively; and 
(III) by inserting after subclause (I) the fol-
lowing new subclause:

lowing new subclause: 
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124 STAT. 764 PUBLIC LAW 111–148—MAR. 23, 2010 
‘‘(II) any dismissal or closure of the pro-
ceedings by reason of the provider, supplier, or practitioner surrendering their license or leaving the State or jurisdiction’’; and (ii) by striking clause (iv) and inserting the fol-
lowing: 
‘‘(iv) Exclusion from participation in a Federal 
health care program (as defined in section 1128B(f)).’’; (B) in paragraph (3)—

(i) by striking subparagraphs (D) and (E); and (ii) by redesignating subparagraph (F) as subpara-
graph (D); and (C) in subparagraph (D) (as so redesignated), by 
striking ‘‘or State’’. 
(b) I
NFORMATION REPORTED BY STATE LAW OR FRAUD ENFORCE -
MENT AGENCIES .—Section 1921 of the Social Security Act (42 U.S.C. 
1396r–2) is amended— 
(i) by striking ‘‘ SYSTEM .—The State’’ and all that 
follows through the semicolon and inserting SYSTEM .—

‘‘(A) L ICENSING OR CERTIFICATION ACTIONS .—The State 
must have in effect a system of reporting the following information with respect to formal proceedings (as defined by the Secretary in regulations) concluded against a health care practitioner or entity by a State licensing or certifi-cation agency:’’; 
(ii) by redesignating subparagraphs (A) through 
(D) as clauses (i) through (iv), respectively, and indenting appropriately; 
(iii) in subparagraph (A)(iii) (as so redesignated)—

(I) by striking ‘‘the license of’’ and inserting 
‘‘license or the right to apply for, or renew, a license by’’; and 
(II) by inserting ‘‘nonrenewability,’’ after ‘‘vol-
untary surrender,’’; and (iv) by adding at the end the following new 
subparagraph: ‘‘(B) O
THER FINAL ADVERSE ACTIONS .—The State must

THER FINAL ADVERSE ACTIONS .—The State must 
have in effect a system of reporting information with respect to any final adverse action (not including settle-ments in which no findings of liability have been made) taken against a health care provider, supplier, or practi-tioner by a State law or fraud enforcement agency.’’; and 
(B) in paragraph (2), by striking ‘‘the authority

described in paragraph (1)’’ and inserting ‘‘a State licensing or certification agency or State law or fraud enforcement agency’’; (2) in subsection (b)— 
(A) by striking paragraph (2) and inserting the fol-
lowing: ‘‘(2) to State licensing or certification agencies and Federal 
agencies responsible for the licensing and certification of health care providers, suppliers, and licensed health care practi-tioners;’’; Reports. Reports. 
Regulations.

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124 STAT. 765 PUBLIC LAW 111–148—MAR. 23, 2010 
(B) in each of paragraphs (4) and (6), by inserting 
‘‘, but only with respect to information provided pursuant to subsection (a)(1)(A)’’ before the comma at the end; 
(C) by striking paragraph (5) and inserting the fol-
lowing: ‘‘(5) to State law or fraud enforcement agencies,’’; 
(D) by redesignating paragraphs (7) and (8) as para-
graphs (8) and (9), respectively; and 
(E) by inserting after paragraph (6) the following new

paragraph: ‘‘(7) to health plans (as defined in section 1128C(c));’’; (3) by redesignating subsection (d) as subsection (h), and 
by inserting after subsection (c) the following new subsections: ‘‘(d) D
ISCLOSURE AND CORRECTION OF INFORMATION .— 
‘‘(1) D ISCLOSURE .—With respect to information reported 
pursuant to subsection (a)(1), the Secretary shall— 
‘‘(A) provide for disclosure of the information, upon

request, to the health care practitioner who, or the entity that, is the subject of the information reported; and 
‘‘(B) establish procedures for the case where the health 
care practitioner or entity disputes the accuracy of the information reported. ‘‘(2) C
ORRECTIONS .—Each State licensing or certification

agency and State law or fraud enforcement agency shall report corrections of information already reported about any formal proceeding or final adverse action described in subsection (a), in such form and manner as the Secretary prescribes by regula-tion. ‘‘(e) F
EES FOR DISCLOSURE .—The Secretary may establish or

approve reasonable fees for the disclosure of information under this section. The amount of such a fee may not exceed the costs of processing the requests for disclosure and of providing such information. Such fees shall be available to the Secretary to cover such costs. 
‘‘(f) P
ROTECTION FROM LIABILITY FOR REPORTING .—No person

or entity, including any agency designated by the Secretary in subsection (b), shall be held liable in any civil action with respect to any reporting of information as required under this section, without knowledge of the falsity of the information contained in 
the report. 
‘‘(g) R
EFERENCES .—For purposes of this section: 
‘‘(1) S TATE LICENSING OR CERTIFICATION AGENCY .—The term

‘State licensing or certification agency’ includes any authority of a State (or of a political subdivision thereof) responsible for the licensing of health care practitioners (or any peer review organization or private accreditation entity reviewing the serv-ices provided by health care practitioners) or entities. 
‘‘(2) S
TATE LAW OR FRAUD ENFORCEMENT AGENCY .—The 
term ‘State law or fraud enforcement agency’ includes—

‘‘(A) a State law enforcement agency; and ‘‘(B) a State medicaid fraud control unit (as defined 
in section 1903(q)). ‘‘(3) F
INAL ADVERSE ACTION .— 
term ‘final adverse action’ includes— Reports. 
Regulations. Procedures. 
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124 STAT. 766 PUBLIC LAW 111–148—MAR. 23, 2010 
‘‘(i) civil judgments against a health care provider, 
supplier, or practitioner in State court related to the delivery of a health care item or service; 
‘‘(ii) State criminal convictions related to the 
delivery of a health care item or service; 
‘‘(iii) exclusion from participation in State health 
care programs (as defined in section 1128(h)); 
‘‘(iv) any licensing or certification action described

in subsection (a)(1)(A) taken against a supplier by a State licensing or certification agency; and 
‘‘(v) any other adjudicated actions or decisions that 
the Secretary shall establish by regulation. ‘‘(B) E
XCEPTION .—Such term does not include any 
action with respect to a malpractice claim.’’; and (4) in subsection (h), as so redesignated, by striking ‘‘The

Secretary’’ and all that follows through the period at the end and inserting ‘‘In implementing this section, the Secretary shall provide for the maximum appropriate coordination with part B of the Health Care Quality Improvement Act of 1986 (42 U.S.C. 11131 et seq.) and section 1128E.’’. (c) C
ONFORMING AMENDMENT .—Section 1128C(a)(1) of the 
Social Security Act (42 U.S.C. 1320a–7c(a)(1)) is amended— 
(1) in subparagraph (C), by adding ‘‘and’’ after the comma 
at the end;

at the end; 
(2) in subparagraph (D), by striking ‘‘, and’’ and inserting 
(3) by striking subparagraph (E). 
(d) T RANSITION PROCESS ; EFFECTIVE DATE.— 
(1) I N GENERAL .—Effective on the date of enactment of

this Act, the Secretary of Health and Human Services (in this section referred to as the ‘‘Secretary’’) shall implement a transition process under which, by not later than the end of the transition period described in paragraph (5), the Sec-retary shall cease operating the Healthcare Integrity and Protection Data Bank established under section 1128E of the Social Security Act (as in effect before the effective date speci-fied in paragraph (6)) and shall transfer all data collected in the

(6)) and shall transfer all data collected in the Healthcare Integrity and Protection Data Bank to the National Practitioner Data Bank established pursuant to the Health Care Quality Improvement Act of 1986 (42 U.S.C. 11101 et seq.). During such transition process, the Secretary shall have in effect appropriate procedures to ensure that data collec-tion and access to the Healthcare Integrity and Protection Data Bank and the National Practitioner Data Bank are not disrupted.

(2) R
tions to carry out the amendments made by subsections (a) and (b). 
(3) F
UNDING .— 
(A) A VAILABILITY OF FEES .—Fees collected pursuant

to section 1128E(d)(2) of the Social Security Act prior to the effective date specified in paragraph (6) for the disclo-sure of information in the Healthcare Integrity and Protec-tion Data Bank shall be available to the Secretary, without fiscal year limitation, for payment of costs related to the transition process described in paragraph (1). Any such fees remaining after the transition period is complete shall Procedures. 42 USC 1320a–7e 
note.

note. 
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124 STAT. 767 PUBLIC LAW 111–148—MAR. 23, 2010 
be available to the Secretary, without fiscal year limitation, 
for payment of the costs of operating the National Practi-tioner Data Bank. 
(B) A
VAILABILITY OF ADDITIONAL FUNDS .—In addition

to the fees described in subparagraph (A), any funds avail-able to the Secretary or to the Inspector General of the Department of Health and Human Services for a purpose related to combating health care fraud, waste, or abuse shall be available to the extent necessary for operating the Healthcare Integrity and Protection Data Bank during the transition period, including systems testing and other activities necessary to ensure that information formerly reported to the Healthcare Integrity and

formerly reported to the Healthcare Integrity and Protection Data Bank will be accessible through the National Practitioner Data Bank after the end of such transition period. (4) S

PECIAL PROVISION FOR ACCESS TO THE NATIONAL  
PRACTITIONER DATA BANK BY THE DEPARTMENT OF VETERANS  
AFFAIRS .— 
of law, during the 1-year period that begins on the effective date specified in paragraph (6), the information described in subparagraph (B) shall be available from the National Practitioner Data Bank to the Secretary of Veterans Affairs without charge. 
(B) I
NFORMATION DESCRIBED .—For purposes of

(B) I
NFORMATION DESCRIBED .—For purposes of 
subparagraph (A), the information described in this subparagraph is the information that would, but for the amendments made by this section, have been available to the Secretary of Veterans Affairs from the Healthcare Integrity and Protection Data Bank. (5) T
RANSITION PERIOD DEFINED .—For purposes of this sub-
section, the term ‘‘transition period’’ means the period that begins on the date of enactment of this Act and ends on the later of—

(A) the date that is 1 year after such date of enactment; 
or 
(B) the effective date of the regulations promulgated 
under paragraph (2). (6) E
FFECTIVE DATE .—The amendments made by sub-
sections (a), (b), and (c) shall take effect on the first day after the final day of the transition period. 
SEC. 6404. MAXIMUM PERIOD FOR SUBMISSION OF MEDICARE CLAIMS 
REDUCED TO NOT MORE THAN 12 MONTHS. 
(a) R EDUCING MAXIMUM PERIOD FOR SUBMISSION .—

(a) R EDUCING MAXIMUM PERIOD FOR SUBMISSION .— 
(1) P ART A .—Section 1814(a) of the Social Security Act 
(42 U.S.C. 1395f(a)(1)) is amended— 
(A) in paragraph (1), by striking ‘‘period of 3 calendar 
years’’ and all that follows through the semicolon and inserting ‘‘period ending 1 calendar year after the date of service;’’; and 
(B) by adding at the end the following new sentence:

‘‘In applying paragraph (1), the Secretary may specify exceptions to the 1 calendar year period specified in such paragraph.’’ (2) P
ART B .— Time period. 
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124 STAT. 768 PUBLIC LAW 111–148—MAR. 23, 2010 
(A) Section 1842(b)(3) of such Act (42 U.S.C. 
1395u(b)(3)(B)) is amended— 
(i) in subparagraph (B), in the flush language fol-

lowing clause (ii), by striking ‘‘close of the calendar year following the year in which such service is fur-nished (deeming any service furnished in the last 3 months of any calendar year to have been furnished in the succeeding calendar year)’’ and inserting ‘‘period ending 1 calendar year after the date of service’’; and 
(ii) by adding at the end the following new sen-

tence: ‘‘In applying subparagraph (B), the Secretary may specify exceptions to the 1 calendar year period specified in such subparagraph.’’ (B) Section 1835(a) of such Act (42 U.S.C. 1395n(a)) 
(i) in paragraph (1), by striking ‘‘period of 3 cal-
endar years’’ and all that follows through the semicolon and inserting ‘‘period ending 1 calendar year after the date of service;’’; and 

tence: ‘‘In applying paragraph (1), the Secretary may specify exceptions to the 1 calendar year period speci-fied in such paragraph.’’ 
(b) E
(1) I N GENERAL .—The amendments made by subsection 
(a) shall apply to services furnished on or after January 1, 2010. 
(2) S
ERVICES FURNISHED BEFORE 2010 .—In the case of serv-

ices furnished before January 1, 2010, a bill or request for payment under section 1814(a)(1), 1842(b)(3)(B), or 1835(a) shall be filed not later that December 31, 2010. 
SEC. 6405. PHYSICIANS WHO ORDER ITEMS OR SERVICES REQUIRED 
TO BE MEDICARE ENROLLED PHYSICIANS OR ELIGIBLE PROFESSIONALS. 
(a) DME.—Section 1834(a)(11)(B) of the Social Security Act

(42 U.S.C. 1395m(a)(11)(B)) is amended by striking ‘‘physician’’ and inserting ‘‘physician enrolled under section 1866(j) or an eligible professional under section 1848(k)(3)(B) that is enrolled under sec-tion 1866(j)’’. 
(b) H
OME HEALTH SERVICES .— 
(1) P ART A .—Section 1814(a)(2) of such Act (42 U.S.C.

1395(a)(2)) is amended in the matter preceding subparagraph (A) by inserting ‘‘in the case of services described in subpara-graph (C), a physician enrolled under section 1866(j) or an eligible professional under section 1848(k)(3)(B),’’ before ‘‘or, in the case of services’’. 
(2) P
ART B .—Section 1835(a)(2) of such Act (42 U.S.C.

1395n(a)(2)) is amended in the matter preceding subparagraph (A) by inserting ‘‘, or in the case of services described in subparagraph (A), a physician enrolled under section 1866(j) or an eligible professional under section 1848(k)(3)(B),’’ after ‘‘a physician’’. (c) A
PPLICATION TO OTHER ITEMS OR SERVICES .—The Secretary

may extend the requirement applied by the amendments made by subsections (a) and (b) to durable medical equipment and home health services (relating to requiring certifications and written 42 USC 1395f note. 42 USC 1395f. Deadline. 42 USC 1395f 
note. 
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124 STAT. 769 PUBLIC LAW 111–148—MAR. 23, 2010 
orders to be made by enrolled physicians and health professions)

to all other categories of items or services under title XVIII of the Social Security Act (42 U.S.C. 1395 et seq.), including covered part D drugs as defined in section 1860D–2(e) of such Act (42 U.S.C. 1395w–102), that are ordered, prescribed, or referred by a physician enrolled under section 1866(j) of such Act (42 U.S.C. 1395cc(j)) or an eligible professional under section 1848(k)(3)(B) of such Act (42 U.S.C. 1395w–4(k)(3)(B)). 
(d) E

shall apply to written orders and certifications made on or after July 1, 2010. 
SEC. 6406. REQUIREMENT FOR PHYSICIANS TO PROVIDE DOCUMENTA-
TION ON REFERRALS TO PROGRAMS AT HIGH RISK OF WASTE AND ABUSE. 
(a) P HYSICIANS AND OTHER SUPPLIERS .—Section 1842(h) of the 
Social Security Act (42 U.S.C. 1395u(h)) is amended by adding at the end the following new paragraph: 
‘‘(9) The Secretary may revoke enrollment, for a period of not

more than one year for each act, for a physician or supplier under section 1866(j) if such physician or supplier fails to maintain and, upon request of the Secretary, provide access to documentation relating to written orders or requests for payment for durable medical equipment, certifications for home health services, or refer-rals for other items or services written or ordered by such physician or supplier under this title, as specified by the Secretary.’’. 
(b) P

(b) P
ROVIDERS OF SERVICES .—Section 1866(a)(1) of such Act 
(42 U.S.C. 1395cc) is further amended— 
(1) in subparagraph (U), by striking at the end ‘‘and’’; (2) in subparagraph (V), by striking the period at the 
end and adding ‘‘; and’’; and 
(3) by adding at the end the following new subparagraph: 
‘‘(W) maintain and, upon request of the Secretary, pro-

vide access to documentation relating to written orders or requests for payment for durable medical equipment, certifications for home health services, or referrals for other items or services written or ordered by the provider under this title, as specified by the Secretary.’’. 
(c) OIG P
ERMISSIVE EXCLUSION AUTHORITY .—Section

ERMISSIVE EXCLUSION AUTHORITY .—Section 
1128(b)(11) of the Social Security Act (42 U.S.C. 1320a–7(b)(11)) is amended by inserting ‘‘, ordering, referring for furnishing, or certifying the need for’’ after ‘‘furnishing’’. 
(d) E
shall apply to orders, certifications, and referrals made on or after January 1, 2010. 
SEC. 6407. FACE TO FACE ENCOUNTER WITH PATIENT REQUIRED

BEFORE PHYSICIANS MAY CERTIFY ELIGIBILITY FOR HOME HEALTH SERVICES OR DURABLE MEDICAL EQUIP-MENT UNDER MEDICARE. 
(a) C ONDITION OF PAYMENT FOR HOME HEALTH SERVICES .— 
(1) P ART A .—Section 1814(a)(2)(C) of such Act is amended— 
(A) by striking ‘‘and such services’’ and inserting ‘‘such 
services’’; and 
(B) by inserting after ‘‘care of a physician’’ the fol-

lowing: ‘‘, and, in the case of a certification made by a physician after January 1, 2010, prior to making such 42 USC 1395f. 42 USC 1320a–7 
note. 42 USC 1395f 
note. 
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124 STAT. 770 PUBLIC LAW 111–148—MAR. 23, 2010 
certification the physician must document that the physi-
cian himself or herself has had a face-to-face encounter (including through use of telehealth, subject to the require-ments in section 1834(m), and other than with respect to encounters that are incident to services involved) with the individual within a reasonable timeframe as deter-mined by the Secretary’’. (2) P
ART B .—Section 1835(a)(2)(A) of the Social Security 
Act is amended—

Act is amended— 
(A) by striking ‘‘and’’ before ‘‘(iii)’’; and (B) by inserting after ‘‘care of a physician’’ the fol-

lowing: ‘‘, and (iv) in the case of a certification after January 1, 2010, prior to making such certification the physician must document that the physician has had a face-to-face encounter (including through use of telehealth and other than with respect to encounters that are incident to services involved) with the individual during the 6-month period preceding such certification, or other reasonable timeframe as determined by the Secretary’’. 
(b) C

(b) C
ONDITION OF PAYMENT FOR DURABLE MEDICAL EQUIP -
MENT .—Section 1834(a)(11)(B) of the Social Security Act (42 U.S.C. 
1395m(a)(11)(B)) is amended— 
(1) by striking ‘‘O RDER .—The Secretary’’ and inserting 
‘‘ORDER .— 
‘‘(i) I N GENERAL .—The Secretary’’; and 
‘‘(ii) R EQUIREMENT FOR FACE TO FACE  
ENCOUNTER .—The Secretary shall require that such

an order be written pursuant to the physician docu-menting that a physician, a physician assistant, a nurse practitioner, or a clinical nurse specialist (as those terms are defined in section 1861(aa)(5)) has had a face-to-face encounter (including through use of telehealth under subsection (m) and other than with respect to encounters that are incident to services involved) with the individual involved during the 6- month period preceding such written order, or other reasonable timeframe as

written order, or other reasonable timeframe as determined by the Secretary.’’.

(c) A
PPLICATION TO OTHER AREAS UNDER MEDICARE .—The Sec-
retary may apply the face-to-face encounter requirement described in the amendments made by subsections (a) and (b) to other items and services for which payment is provided under title XVIII of the Social Security Act based upon a finding that such an decision would reduce the risk of waste, fraud, or abuse. 
(d) A
PPLICATION TO MEDICAID .—The requirements pursuant to

the amendments made by subsections (a) and (b) shall apply in the case of physicians making certifications for home health services under title XIX of the Social Security Act in the same manner and to the same extent as such requirements apply in the case of physicians making such certifications under title XVIII of such Act. 
SEC. 6408. ENHANCED PENALTIES. 
(a) C IVIL MONETARY PENALTIES FOR FALSE STATEMENTS OR  
DELAYING INSPECTIONS .—Section 1128A(a) of the Social Security

Act (42 U.S.C. 1320a–7a(a)), as amended by section 5002(d)(2)(A), is amended— 42 USC 1395f note. 42 USC 1395f 
note. 42 USC 1395n. 
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124 STAT. 771 PUBLIC LAW 111–148—MAR. 23, 2010 
(1) in paragraph (6), by striking ‘‘or’’ at the end; and 
(2) by inserting after paragraph (7) the following new para-
graphs: 
‘‘(8) knowingly makes, uses, or causes to be made or used, 
a false record or statement material to a false or fraudulent claim for payment for items and services furnished under a Federal health care program; or 
‘‘(9) fails to grant timely access, upon reasonable request

(as defined by the Secretary in regulations), to the Inspector General of the Department of Health and Human Services, for the purpose of audits, investigations, evaluations, or other statutory functions of the Inspector General of the Department of Health and Human Services;’’; and 
(3) in the first sentence— 
(A) by striking ‘‘or in cases under paragraph (7)’’ and 
inserting ‘‘in cases under paragraph (7)’’; and 
(B) by striking ‘‘act)’’ and inserting ‘‘act, in cases under

paragraph (8), $50,000 for each false record or statement, or in cases under paragraph (9), $15,000 for each day of the failure described in such paragraph)’’. 
(b) M
EDICARE ADVANTAGE AND PARTD P LANS .— 
(1) E NSURING TIMELY INSPECTIONS RELATING TO CONTRACTS  
WITH MA ORGANIZATIONS .—Section 1857(d)(2) of such Act (42 
U.S.C. 1395w–27(d)(2)) is amended— 
(A) in subparagraph (A), by inserting ‘‘timely’’ before 
‘‘inspect’’; and 
(B) in subparagraph (B), by inserting ‘‘timely’’ before

‘‘audit and inspect’’. (2) M
ARKETING VIOLATIONS .—Section 1857(g)(1) of the 
Social Security Act (42 U.S.C. 1395w–27(g)(1)) is amended— 
(A) in subparagraph (F), by striking ‘‘or’’ at the end; (B) by inserting after subparagraph (G) the following 
new subparagraphs: 
‘‘(H) except as provided under subparagraph (C) or 
(D) of section 1860D–1(b)(1), enrolls an individual in any plan under this part without the prior consent of the indi-vidual or the designee of the individual;

‘‘(I) transfers an individual enrolled under this part 
from one plan to another without the prior consent of the individual or the designee of the individual or solely for the purpose of earning a commission; 
‘‘(J) fails to comply with marketing restrictions 
described in subsections (h) and (j) of section 1851 or applicable implementing regulations or guidance; or 
‘‘(K) employs or contracts with any individual or entity

who engages in the conduct described in subparagraphs (A) through (J) of this paragraph;’’; and 
(C) by adding at the end the following new sentence:

‘‘The Secretary may provide, in addition to any other rem-edies authorized by law, for any of the remedies described in paragraph (2), if the Secretary determines that any employee or agent of such organization, or any provider or supplier who contracts with such organization, has engaged in any conduct described in subparagraphs (A) through (K) of this paragraph.’’. (3) P
ROVISION OF FALSE INFORMATION .—Section 
1857(g)(2)(A) of the Social Security Act (42 U.S.C. 1395w– Determination.

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124 STAT. 772 PUBLIC LAW 111–148—MAR. 23, 2010 
27(g)(2)(A)) is amended by inserting ‘‘except with respect to 
a determination under subparagraph (E), an assessment of not more than the amount claimed by such plan or plan sponsor based upon the misrepresentation or falsified information involved,’’ after ‘‘for each such determination,’’. (c) O
BSTRUCTION OF PROGRAM AUDITS .—Section 1128(b)(2) of 
the Social Security Act (42 U.S.C. 1320a–7(b)(2)) is amended—

(1) in the heading, by inserting ‘‘ OR AUDIT ’’ after ‘‘ INVESTIGA -
TION ’’; and 
(2) by striking ‘‘investigation into’’ and all that follows 
through the period and inserting ‘‘investigation or audit related to—’’ 
‘‘(i) any offense described in paragraph (1) or in 
subsection (a); or 
‘‘(ii) the use of funds received, directly or indirectly, 
from any Federal health care program (as defined in section 1128B(f)).’’. 
(d) E
FFECTIVE DATE.—

(d) E
amendments made by this section shall apply to acts committed on or after January 1, 2010. 
(2) E
XCEPTION .—The amendments made by subsection 
(b)(1) take effect on the date of enactment of this Act. 
SEC. 6409. MEDICARE SELF-REFERRAL DISCLOSURE PROTOCOL. 
(a) D EVELOPMENT OF SELF-REFERRAL DISCLOSURE PROTOCOL .— 

Services, in cooperation with the Inspector General of the Department of Health and Human Services, shall establish, not later than 6 months after the date of the enactment of this Act, a protocol to enable health care providers of services and suppliers to disclose an actual or potential violation of section 1877 of the Social Security Act (42 U.S.C. 1395nn) pursuant to a self-referral disclosure protocol (in this section referred to as an ‘‘SRDP’’). The SRDP shall include direction to health

The SRDP shall include direction to health care providers of services and suppliers on—

(A) a specific person, official, or office to whom such 
disclosures shall be made; and 
(B) instruction on the implication of the SRDP on 
corporate integrity agreements and corporate compliance agreements. (2) P
UBLICATION ON INTERNET WEBSITE OF SRDP INFORMA -
TION .—The Secretary of Health and Human Services shall post

information on the public Internet website of the Centers for Medicare & Medicaid Services to inform relevant stakeholders of how to disclose actual or potential violations pursuant to an SRDP. 
(3) R
ELATION TO ADVISORY OPINIONS .—The SRDP shall be 
separate from the advisory opinion process set forth in regula-tions implementing section 1877(g) of the Social Security Act. (b) R
EDUCTION IN AMOUNTS OWED.—The Secretary of Health

and Human Services is authorized to reduce the amount due and owing for all violations under section 1877 of the Social Security Act to an amount less than that specified in subsection (g) of such section. In establishing such amount for a violation, the Sec-retary may consider the following factors: Deadline. 42 USC 1395nn 
note. 42 USC 1320a–7 
note.

note. 
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124 STAT. 773 PUBLIC LAW 111–148—MAR. 23, 2010 
(1) The nature and extent of the improper or illegal prac-
tice. 
(2) The timeliness of such self-disclosure. (3) The cooperation in providing additional information 
related to the disclosure. 
(4) Such other factors as the Secretary considers appro-
priate. (c) R
EPORT .—Not later than 18 months after the date on which

the SRDP protocol is established under subsection (a)(1), the Sec-retary shall submit to Congress a report on the implementation of this section. Such report shall include— 
(1) the number of health care providers of services and 
suppliers making disclosures pursuant to the SRDP; 
(2) the amounts collected pursuant to the SRDP; (3) the types of violations reported under the SRDP; and (4) such other information as may be necessary to evaluate 
the impact of this section.

the impact of this section. 
SEC. 6410. ADJUSTMENTS TO THE MEDICARE DURABLE MEDICAL 
EQUIPMENT, PROSTHETICS, ORTHOTICS, AND SUPPLIES COMPETITIVE ACQUISITION PROGRAM. 
(a) E XPANSION OF ROUND 2 OF THE DME C OMPETITIVE BIDDING  
PROGRAM .—Section 1847(a)(1) of the Social Security Act (42 U.S.C. 
1395w–3(a)(1)) is amended— 
(1) in subparagraph (B)(i)(II), by striking ‘‘70’’ and inserting 
‘‘91’’; and 
(2) in subparagraph (D)(ii)—

(2) in subparagraph (D)(ii)— 
(A) in subclause (I), by striking ‘‘and’’ at the end; (B) by redesignating subclause (II) as subclause (III); 
and 
(C) by inserting after subclause (I) the following new 
subclause: 
‘‘(II) the Secretary shall include the next 21 
largest metropolitan statistical areas by total popu-lation (after those selected under subclause (I)) for such round; and’’. 
(b) R
EQUIREMENT TO EITHER COMPETITIVELY BIDAREAS OR

EQUIREMENT TO EITHER COMPETITIVELY BIDAREAS OR  
USECOMPETITIVE BIDPRICES BY 2016.—Section 1834(a)(1)(F) of 
the Social Security Act (42 U.S.C. 1395m(a)(1)(F)) is amended— 
(A) by inserting ‘‘(and, in the case of covered items 
furnished on or after January 1, 2016, subject to clause (iii), shall)’’ after ‘‘may’’; and 

‘‘(iii) in the case of covered items furnished on 
or after January 1, 2016, the Secretary shall continue to make such adjustments described in clause (ii) as, under such competitive acquisition programs, addi-tional covered items are phased in or information is updated as contracts under section 1847 are recom-peted in accordance with section 1847(b)(3)(B).’’. 
SEC. 6411. EXPANSION OF THE RECOVERY AUDIT CONTRACTOR (RAC)

PROGRAM. 
(a) E XPANSION TO MEDICAID .— 
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124 STAT. 774 PUBLIC LAW 111–148—MAR. 23, 2010 
(1) S TATE PLAN AMENDMENT .—Section 1902(a)(42) of the 
Social Security Act (42 U.S.C. 1396a(a)(42)) is amended— 
(A) by striking ‘‘that the records’’ and inserting ‘‘that— ‘‘(A) the records’’; (B) by inserting ‘‘and’’ after the semicolon; and (C) by adding at the end the following: ‘‘(B) not later than December 31, 2010, the State 
shall— 
‘‘(i) establish a program under which the State

contracts (consistent with State law and in the same manner as the Secretary enters into contracts with recovery audit contractors under section 1893(h), sub-ject to such exceptions or requirements as the Secretary may require for purposes of this title or a particular State) with 1 or more recovery audit contractors for the purpose of identifying underpayments and overpay-ments and recouping overpayments under the State plan and under any waiver of the State plan with respect to all services

of the State plan with respect to all services for which payment is made to any entity under such plan or waiver; and

‘‘(ii) provide assurances satisfactory to the Sec-
retary that— 
‘‘(I) under such contracts, payment shall be 
made to such a contractor only from amounts recovered; 
‘‘(II) from such amounts recovered, payment— 
‘‘(aa) shall be made on a contingent basis 
for collecting overpayments; and 
‘‘(bb) may be made in such amounts as 
the State may specify for identifying under-payments; ‘‘(III) the State has an adequate process for

entities to appeal any adverse determination made by such contractors; and 
‘‘(IV) such program is carried out in accordance 
with such requirements as the Secretary shall specify, including— 
‘‘(aa) for purposes of section 1903(a)(7), 
that amounts expended by the State to carry out the program shall be considered amounts expended as necessary for the proper and effi-cient administration of the State plan or a waiver of the plan; 
‘‘(bb) that section 1903(d) shall apply to

‘‘(bb) that section 1903(d) shall apply to 
amounts recovered under the program; and 
‘‘(cc) that the State and any such contrac-

tors under contract with the State shall coordi-nate such recovery audit efforts with other contractors or entities performing audits of entities receiving payments under the State plan or waiver in the State, including efforts with Federal and State law enforcement with respect to the Department of Justice, including the Federal Bureau of Investigations, the Inspector General of the Department of Health and Human Services, and the State medicaid fraud control unit; and’’. Deadline.

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124 STAT. 775 PUBLIC LAW 111–148—MAR. 23, 2010 
(2) C OORDINATION ; REGULATIONS .— 
(A) I N GENERAL .—The Secretary of Health and Human 
Services, acting through the Administrator of the Centers for Medicare & Medicaid Services, shall coordinate the expansion of the Recovery Audit Contractor program to Medicaid with States, particularly with respect to each State that enters into a contract with a recovery audit contractor for purposes of the State’s Medicaid program prior to December 31, 2010.

(B) R
EGULATIONS .—The Secretary of Health and 
Human Services shall promulgate regulations to carry out this subsection and the amendments made by this sub-section, including with respect to conditions of Federal financial participation, as specified by the Secretary. 
(b) E
XPANSION TO MEDICARE PARTS C AND D.—Section 1893(h) 
of the Social Security Act (42 U.S.C. 1395ddd(h)) is amended— 
(1) in paragraph (1), in the matter preceding subparagraph

(A), by striking ‘‘part A or B’’ and inserting ‘‘this title’’; 
(2) in paragraph (2), by striking ‘‘parts A and B’’ and 
inserting ‘‘this title’’; 
(3) in paragraph (3), by inserting ‘‘(not later than December 
31, 2010, in the case of contracts relating to payments made under part C or D)’’ after ‘‘2010’’; 
(4) in paragraph (4), in the matter preceding subparagraph 
(A), by striking ‘‘part A or B’’ and inserting ‘‘this title’’; and 
(5) by adding at the end the following: ‘‘(9) S

PECIAL RULES RELATING TO PARTS C AND D .—The 
Secretary shall enter into contracts under paragraph (1) to require recovery audit contractors to— 
‘‘(A) ensure that each MA plan under part C has an 
anti-fraud plan in effect and to review the effectiveness of each such anti-fraud plan; 
‘‘(B) ensure that each prescription drug plan under 
part D has an anti-fraud plan in effect and to review the effectiveness of each such anti-fraud plan;

‘‘(C) examine claims for reinsurance payments under 
section 1860D–15(b) to determine whether prescription drug plans submitting such claims incurred costs in excess of the allowable reinsurance costs permitted under para-graph (2) of that section; and 
‘‘(D) review estimates submitted by prescription drug

plans by private plans with respect to the enrollment of high cost beneficiaries (as defined by the Secretary) and to compare such estimates with the numbers of such bene-ficiaries actually enrolled by such plans.’’. 
(c) A
NNUAL REPORT .—The Secretary of Health and Human

NNUAL REPORT .—The Secretary of Health and Human 
Services, acting through the Administrator of the Centers for Medi-care & Medicaid Services, shall submit an annual report to Congress concerning the effectiveness of the Recovery Audit Contractor pro-gram under Medicaid and Medicare and shall include such reports recommendations for expanding or improving the program. 42 USC 1396a 
note.

note. 
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124 STAT. 776 PUBLIC LAW 111–148—MAR. 23, 2010 
Subtitle F—Additional Medicaid Program 
Integrity Provisions 
SEC. 6501. TERMINATION OF PROVIDER PARTICIPATION UNDER MED-
ICAID IF TERMINATED UNDER MEDICARE OR OTHER STATE PLAN. 
Section 1902(a)(39) of the Social Security Act (42 U.S.C. 42

U.S.C. 1396a(a)) is amended by inserting after ‘‘1128A,’’ the fol-lowing: ‘‘terminate the participation of any individual or entity in such program if (subject to such exceptions as are permitted with respect to exclusion under sections 1128(c)(3)(B) and 1128(d)(3)(B)) participation of such individual or entity is termi-nated under title XVIII or any other State plan under this title,’’. 
SEC. 6502. MEDICAID EXCLUSION FROM PARTICIPATION RELATING TO

CERTAIN OWNERSHIP, CONTROL, AND MANAGEMENT AFFILIATIONS. 
Section 1902(a) of the Social Security Act (42 U.S.C. 1396a(a)), 
as amended by section 6401(b), is amended by inserting after para-graph (77) the following: 
‘‘(78) provide that the State agency described in paragraph

(9) exclude, with respect to a period, any individual or entity from participation in the program under the State plan if such individual or entity owns, controls, or manages an entity that (or if such entity is owned, controlled, or managed by an individual or entity that)— 
‘‘(A) has unpaid overpayments (as defined by the Sec-
retary) under this title during such period determined by the Secretary or the State agency to be delinquent; 
‘‘(B) is suspended or excluded from participation under

or whose participation is terminated under this title during such period; or 
‘‘(C) is affiliated with an individual or entity that has 
been suspended or excluded from participation under this title or whose participation is terminated under this title during such period;’’. 
SEC. 6503. BILLING AGENTS, CLEARINGHOUSES, OR OTHER ALTER-
NATE PAYEES REQUIRED TO REGISTER UNDER MED-ICAID. 
(a) I NGENERAL .—Section 1902(a) of the Social Security Act

(42 U.S.C. 42 U.S.C. 1396a(a)), as amended by section 6502(a), is amended by inserting after paragraph (78), the following: 
‘‘(79) provide that any agent, clearinghouse, or other alter-
nate payee (as defined by the Secretary) that submits claims on behalf of a health care provider must register with the State and the Secretary in a form and manner specified by the Secretary;’’. 
SEC. 6504. REQUIREMENT TO REPORT EXPANDED SET OF DATA ELE-
MENTS UNDER MMIS TO DETECT FRAUD AND ABUSE.

MENTS UNDER MMIS TO DETECT FRAUD AND ABUSE. 
(a) I NGENERAL .—Section 1903(r)(1)(F) of the Social Security 
Act (42 U.S.C. 1396b(r)(1)(F)) is amended by inserting after ‘‘nec-essary’’ the following: ‘‘and including, for data submitted to the Secretary on or after January 1, 2010, data elements from the Determination. 
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124 STAT. 777 PUBLIC LAW 111–148—MAR. 23, 2010 
automated data system that the Secretary determines to be nec-
essary for program integrity, program oversight, and administra-tion, at such frequency as the Secretary shall determine’’. 
(b) M
ANAGED CAREORGANIZATIONS .— 
(1) I N GENERAL .—Section 1903(m)(2)(A)(xi) of the Social

Security Act (42 U.S.C. 1396b(m)(2)(A)(xi)) is amended by inserting ‘‘and for the provision of such data to the State at a frequency and level of detail to be specified by the Sec-retary’’ after ‘‘patients’’. 
(2) E
(1) shall apply with respect to contract years beginning on or after January 1, 2010. 
SEC. 6505. PROHIBITION ON PAYMENTS TO INSTITUTIONS OR ENTITIES 
LOCATED OUTSIDE OF THE UNITED STATES.

LOCATED OUTSIDE OF THE UNITED STATES. 
Section 1902(a) of the Social Security Act (42 U.S.C. 1396b(a)), 
as amended by section 6503, is amended by inserting after para-graph (79) the following new paragraph: 
‘‘(80) provide that the State shall not provide any payments 
for items or services provided under the State plan or under a waiver to any financial institution or entity located outside of the United States;’’. 
SEC. 6506. OVERPAYMENTS.

SEC. 6506. OVERPAYMENTS. 
(a) E XTENSION OF PERIOD FOR COLLECTION OF OVERPAYMENTS  
DUE TO FRAUD .— 
(1) I N GENERAL .—Section 1903(d)(2) of the Social Security 
Act (42 U.S.C. 1396b(d)(2)) is amended— 
(A) in subparagraph (C)— 
(i) in the first sentence, by striking ‘‘60 days’’ and 
inserting ‘‘1 year’’; and 
(ii) in the second sentence, by striking ‘‘60 days’’ 
and inserting ‘‘1-year period’’; and (B) in subparagraph (D)—

(i) in inserting ‘‘(i)’’ after ‘‘(D)’’; and (ii) by adding at the end the following: 
‘‘(ii) In any case where the State is unable to recover a debt

which represents an overpayment (or any portion thereof) made to a person or other entity due to fraud within 1 year of discovery because there is not a final determination of the amount of the overpayment under an administrative or judicial process (as applicable), including as a result of a judgment being under appeal, no adjustment shall be made in the Federal payment to such State on account of such overpayment (or portion thereof) before the date that is 30 days after the date on which a

date that is 30 days after the date on which a final judgment (including, if applicable, a final determination on an appeal) is made.’’.

(2) E
section take effect on the date of enactment of this Act and apply to overpayments discovered on or after that date. (b) C
ORRECTIVE ACTION .—The Secretary shall promulgate regu-
lations that require States to correct Federally identified claims overpayments, of an ongoing or recurring nature, with new Medicaid Management Information System (MMIS) edits, audits, or other appropriate corrective action. Regulations.

42 USC 1396b note. 42 USC 1396b 
note. 42 USC 1396a. 42 USC 1396b 
note. 
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124 STAT. 778 PUBLIC LAW 111–148—MAR. 23, 2010 
SEC. 6507. MANDATORY STATE USE OF NATIONAL CORRECT CODING 
INITIATIVE. 
Section 1903(r) of the Social Security Act (42 U.S.C. 1396b(r)) 
(1) in paragraph (1)(B)— 
(A) in clause (ii), by striking ‘‘and’’ at the end; (B) in clause (iii), by adding ‘‘and’’ after the semi- 
colon; and 
‘‘(iv) effective for claims filed on or after October

1, 2010, incorporate compatible methodologies of the National Correct Coding Initiative administered by the Secretary (or any successor initiative to promote correct coding and to control improper coding leading to inappropriate payment) and such other methodologies of that Initiative (or such other national correct coding methodologies) as the Secretary identifies in accord-ance with paragraph (4);’’; and 
(2) by adding at the end the following new paragraph:

‘‘(4) For purposes of paragraph (1)(B)(iv), the Secretary shall 
do the following: 
‘‘(A) Not later than September 1, 2010: 
‘‘(i) Identify those methodologies of the National Cor-
rect Coding Initiative administered by the Secretary (or any successor initiative to promote correct coding and to control improper coding leading to inappropriate payment) which are compatible to claims filed under this title. 
‘‘(ii) Identify those methodologies of such Initiative (or

such other national correct coding methodologies) that should be incorporated into claims filed under this title with respect to items or services for which States provide medical assistance under this title and no national correct coding methodologies have been established under such Initiative with respect to title XVIII. 
‘‘(iii) Notify States of— 
‘‘(I) the methodologies identified under subpara-

graphs (A) and (B) (and of any other national correct coding methodologies identified under subparagraph (B)); and 
‘‘(II) how States are to incorporate such methodolo-
gies into claims filed under this title. 
‘‘(B) Not later than March 1, 2011, submit a report to

Congress that includes the notice to States under clause (iii) of subparagraph (A) and an analysis supporting the identifica-tion of the methodologies made under clauses (i) and (ii) of subparagraph (A).’’. 
SEC. 6508. GENERAL EFFECTIVE DATE. 
(a) I NGENERAL .—Except as otherwise provided in this subtitle,

this subtitle and the amendments made by this subtitle take effect on January 1, 2011, without regard to whether final regulations to carry out such amendments and subtitle have been promulgated by that date. 
(b) D
ELAY IF STATE LEGISLATION REQUIRED .—In the case of 
a State plan for medical assistance under title XIX of the Social Security Act or a child health plan under title XXI of such Act which the Secretary of Health and Human Services determines Determination. Plan. 42 USC 1396a

note. Notification. Deadlines. Effective date. 
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124 STAT. 779 PUBLIC LAW 111–148—MAR. 23, 2010 
requires State legislation (other than legislation appropriating

funds) in order for the plan to meet the additional requirement imposed by the amendments made by this subtitle, the State plan or child health plan shall not be regarded as failing to comply with the requirements of such title solely on the basis of its failure to meet this additional requirement before the first day of the first calendar quarter beginning after the close of the first regular session of the State legislature that begins after the date of the enactment of this Act. For purposes

date of the enactment of this Act. For purposes of the previous sentence, in the case of a State that has a 2-year legislative session, each year of such session shall be deemed to be a separate regular session of the State legislature.

Subtitle G—Additional Program Integrity 
Provisions 
SEC. 6601. PROHIBITION ON FALSE STATEMENTS AND REPRESENTA-
TIONS. 
(a) P ROHIBITION .—Part 5 of subtitle B of title I of the Employee 
Retirement Income Security Act of 1974 (29 U.S.C. 1131 et seq.) is amended by adding at the end the following: 
‘‘SEC. 519. PROHIBITION ON FALSE STATEMENTS AND REPRESENTA-
TIONS. 
‘‘No person, in connection with a plan or other arrangement

that is multiple employer welfare arrangement described in section 3(40), shall make a false statement or false representation of fact, knowing it to be false, in connection with the marketing or sale of such plan or arrangement, to any employee, any member of an employee organization, any beneficiary, any employer, any employee organization, the Secretary, or any State, or the represent-ative or agent of any such person, State, or the Secretary, con-cerning—

‘‘(1) the financial condition or solvency of such plan or 
arrangement; 
‘‘(2) the benefits provided by such plan or arrangement; ‘‘(3) the regulatory status of such plan or other arrangement 
under any Federal or State law governing collective bargaining, labor management relations, or intern union affairs; or 
‘‘(4) the regulatory status of such plan or other arrangement 
regarding exemption from state regulatory authority under this Act.

This section shall not apply to any plan or arrangement that does not fall within the meaning of the term ‘multiple employer welfare arrangement’ under section 3(40)(A).’’. 
(b) C
RIMINAL PENALTIES .—Section 501 of the Employee Retire-
ment Income Security Act of 1974 (29 U.S.C. 1131) is amended— 
(1) by inserting ‘‘(a)’’ before ‘‘Any person’’; and (2) by adding at the end the following: 
‘‘(b) Any person that violates section 519 shall upon conviction

be imprisoned not more than 10 years or fined under title 18, United States Code, or both.’’. 
(c) C
ONFORMING AMENDMENT .—The table of sections for part 
5 of subtitle B of title I of the Employee Retirement Income Security Act of 1974 is amended by adding at the end the following: 
‘‘Sec. 519. Prohibition on false statement and representations.’’. 29 USC 1149.

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124 STAT. 780 PUBLIC LAW 111–148—MAR. 23, 2010 
SEC. 6602. CLARIFYING DEFINITION. 
Section 24(a)(2) of title 18, United States Code, is amended 
by inserting ‘‘or section 411, 518, or 511 of the Employee Retirement Income Security Act of 1974,’’ after ‘‘1954 of this title’’. 
SEC. 6603. DEVELOPMENT OF MODEL UNIFORM REPORT FORM. 
U.S.C. 300gg–91 et seq.) is amended by adding at the end the following:

‘‘SEC. 2794. UNIFORM FRAUD AND ABUSE REFERRAL FORMAT. 
‘‘The Secretary shall request the National Association of Insur-

ance Commissioners to develop a model uniform report form for private health insurance issuer seeking to refer suspected fraud and abuse to State insurance departments or other responsible State agencies for investigation. The Secretary shall request that the National Association of Insurance Commissioners develop rec-ommendations for uniform reporting standards for such referrals.’’. 
SEC. 6604. APPLICABILITY OF STATE LAW TO COMBAT FRAUD AND 
ABUSE.

ABUSE. 
(a) I NGENERAL .—Part 5 of subtitle B of title I of the Employee 
Retirement Income Security Act of 1974 (29 U.S.C. 1131 et seq.), as amended by section 6601, is further amended by adding at the end the following: 
‘‘SEC. 520. APPLICABILITY OF STATE LAW TO COMBAT FRAUD AND 
ABUSE. 
‘‘The Secretary may, for the purpose of identifying, preventing,

or prosecuting fraud and abuse, adopt regulatory standards estab-lishing, or issue an order relating to a specific person establishing, that a person engaged in the business of providing insurance through a multiple employer welfare arrangement described in section 3(40) is subject to the laws of the States in which such

person operates which regulate insurance in such State, notwith-standing section 514(b)(6) of this Act or the Liability Risk Retention Act of 1986, and regardless of whether the law of the State is otherwise preempted under any of such provisions. This section shall not apply to any plan or arrangement that does not fall within the meaning of the term ‘multiple employer welfare arrange-ment’ under section 3(40)(A).’’. 
(b) C
ONFORMING AMENDMENT .—The table of sections for part

5 of subtitle B of title I of the Employee Retirement Income Security Act of 1974, as amended by section 6601, is further amended by adding at the end the following: 
‘‘Sec. 520. Applicability of State law to combat fraud and abuse.’’. 
SEC. 6605. ENABLING THE DEPARTMENT OF LABOR TO ISSUE ADMINIS-
TRATIVE SUMMARY CEASE AND DESIST ORDERS AND SUMMARY SEIZURES ORDERS AGAINST PLANS THAT ARE IN FINANCIALLY HAZARDOUS CONDITION. 
(a) I NGENERAL .—Part 5 of subtitle B of title I of the Employee

Retirement Income Security Act of 1974 (29 U.S.C. 1131 et seq.), as amended by section 6604, is further amended by adding at the end the following: 29 USC 1150. 42 USC 
300gg–95. 
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124 STAT. 781 PUBLIC LAW 111–148—MAR. 23, 2010 
‘‘SEC. 521. ADMINISTRATIVE SUMMARY CEASE AND DESIST ORDERS 
AND SUMMARY SEIZURE ORDERS AGAINST MULTIPLE EMPLOYER WELFARE ARRANGEMENTS IN FINANCIALLY HAZARDOUS CONDITION. 
‘‘(a) I NGENERAL .—The Secretary may issue a cease and desist

(ex parte) order under this title if it appears to the Secretary that the alleged conduct of a multiple employer welfare arrangement described in section 3(40), other than a plan or arrangement described in subsection (g), is fraudulent, or creates an immediate danger to the public safety or welfare, or is causing or can be reasonably expected to cause significant, imminent, and irreparable public injury. 
‘‘(b) H
EARING .—A person that is adversely affected by the

issuance of a cease and desist order under subsection (a) may request a hearing by the Secretary regarding such order. The Sec-retary may require that a proceeding under this section, including all related information and evidence, be conducted in a confidential manner. 
‘‘(c) B
URDEN OF PROOF .—The burden of proof in any hearing 
conducted under subsection (b) shall be on the party requesting the hearing to show cause why the cease and desist order should be set aside. 
‘‘(d) D

‘‘(d) D
ETERMINATION .—Based upon the evidence presented at 
a hearing under subsection (b), the cease and desist order involved may be affirmed, modified, or set aside by the Secretary in whole or in part. 
‘‘(e) S
EIZURE .—The Secretary may issue a summary seizure 
order under this title if it appears that a multiple employer welfare arrangement is in a financially hazardous condition. 
‘‘(f) R
EGULATIONS .—The Secretary may promulgate such regula-

tions or other guidance as may be necessary or appropriate to carry out this section. 
‘‘(g) E
XCEPTION .—This section shall not apply to any plan or 
arrangement that does not fall within the meaning of the term ‘multiple employer welfare arrangement’ under section 3(40)(A).’’. 
(b) C

5 of subtitle B of title I of the Employee Retirement Income Security Act of 1974, as amended by section 6604, is further amended by adding at the end the following: 
‘‘Sec. 521. Administrative summary cease and desist orders and summary seizure 
orders against health plans in financially hazardous condition.’’. 
SEC. 6606. MEWA PLAN REGISTRATION WITH DEPARTMENT OF LABOR. 
Section 101(g) of the Employee Retirement Income Security 
Act of 1974 (29 U.S.C. 1021(g)) is amended—

Act of 1974 (29 U.S.C. 1021(g)) is amended— 
(1) by striking ‘‘Secretary may’’ and inserting ‘‘Secretary 
shall’’; and 
(2) by inserting ‘‘to register with the Secretary prior to 
operating in a State and may, by regulation, require such multiple employer welfare arrangements’’ after ‘‘not group health plans’’. 
SEC. 6607. PERMITTING EVIDENTIARY PRIVILEGE AND CONFIDENTIAL 
COMMUNICATIONS. 
Section 504 of the Employee Retirement Income Security Act

of 1974 (29 U.S.C. 1134) is amended by adding at the end the following: 29 USC 1151. 
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124 STAT. 782 PUBLIC LAW 111–148—MAR. 23, 2010 
‘‘(d) The Secretary may promulgate a regulation that provides 
an evidentiary privilege for, and provides for the confidentiality of communications between or among, any of the following entities or their agents, consultants, or employees:

‘‘(1) A State insurance department. ‘‘(2) A State attorney general. ‘‘(3) The National Association of Insurance Commissioners. ‘‘(4) The Department of Labor. ‘‘(5) The Department of the Treasury. ‘‘(6) The Department of Justice. ‘‘(7) The Department of Health and Human Services. ‘‘(8) Any other Federal or State authority that the Secretary 
determines is appropriate for the purposes of enforcing the provisions of this title. ‘‘(e) The privilege established under subsection (d) shall apply

to communications related to any investigation, audit, examination, or inquiry conducted or coordinated by any of the agencies. A communication that is privileged under subsection (d) shall not waive any privilege otherwise available to the communicating agency or to any person who provided the information that is communicated.’’. 
SEC. 6701. SHORT TITLE OF SUBTITLE. 
This subtitle may be cited as the ‘‘Elder Justice Act of 2009’’. 
SEC. 6702. DEFINITIONS.

SEC. 6702. DEFINITIONS. 
Except as otherwise specifically provided, any term that is 
defined in section 2011 of the Social Security Act (as added by section 6703(a)) and is used in this subtitle has the meaning given 
such term by such section. 
SEC. 6703. ELDER JUSTICE. 
(a) E LDER JUSTICE .— 
(1) I N GENERAL .—Title XX of the Social Security Act (42 
U.S.C. 1397 et seq.) is amended— 
(A) in the heading, by inserting ‘‘ AND ELDER JUS-
TICE ’’ after ‘‘ SOCIAL SERVICES ’’;

TICE ’’ after ‘‘ SOCIAL SERVICES ’’; 
(B) by inserting before section 2001 the following: 
‘‘Subtitle A—Block Grants to States for 
Social Services’’; 
and 
‘‘Subtitle B—Elder Justice 
‘‘SEC. 2011. DEFINITIONS. 
‘‘In this subtitle: 
‘‘(1) A BUSE .—The term ‘abuse’ means the knowing infliction

of physical or psychological harm or the knowing deprivation of goods or services that are necessary to meet essential needs or to avoid physical or psychological harm. 42 USC 1397j. 42 USC 1395i–3a 
note. 42 USC 1305 
note. Elder Justice Act 
of 2009. Applicability. 
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124 STAT. 783 PUBLIC LAW 111–148—MAR. 23, 2010 
‘‘(2) A DULT PROTECTIVE SERVICES .—The term ‘adult protec-
tive services’ means such services provided to adults as the Secretary may specify and includes services such as— 
‘‘(A) receiving reports of adult abuse, neglect, or exploi-
tation; 
‘‘(B) investigating the reports described in subpara-
graph (A); 
‘‘(C) case planning, monitoring, evaluation, and other 
case work and services; and 
‘‘(D) providing, arranging for, or facilitating the provi-

sion of medical, social service, economic, legal, housing, law enforcement, or other protective, emergency, or support services. ‘‘(3) C
AREGIVER .—The term ‘caregiver’ means an individual

who has the responsibility for the care of an elder, either voluntarily, by contract, by receipt of payment for care, or as a result of the operation of law, and means a family member or other individual who provides (on behalf of such individual or of a public or private agency, organization, or institution) compensated or uncompensated care to an elder who needs supportive services in any setting. 
‘‘(4) D
IRECT CARE .—The term ‘direct care’ means care by

an employee or contractor who provides assistance or long- term care services to a recipient. 
‘‘(5) E
LDER .—The term ‘elder’ means an individual age 
60 or older. 
‘‘(6) E LDER JUSTICE .—The term ‘elder justice’ means— 
‘‘(A) from a societal perspective, efforts to— 
‘‘(i) prevent, detect, treat, intervene in, and pros-
ecute elder abuse, neglect, and exploitation; and 
‘‘(ii) protect elders with diminished capacity while

maximizing their autonomy; and ‘‘(B) from an individual perspective, the recognition 
of an elder’s rights, including the right to be free of abuse, neglect, and exploitation. ‘‘(7) E
LIGIBLE ENTITY .—The term ‘eligible entity’ means a 
State or local government agency, Indian tribe or tribal organization, or any other public or private entity that is engaged in and has expertise in issues relating to elder justice or in a field necessary to promote elder justice efforts. 
‘‘(8) E

‘‘(8) E
XPLOITATION .—The term ‘exploitation’ means the 
fraudulent or otherwise illegal, unauthorized, or improper act or process of an individual, including a caregiver or fiduciary, that uses the resources of an elder for monetary or personal benefit, profit, or gain, or that results in depriving an elder of rightful access to, or use of, benefits, resources, belongings, 
or assets. 
‘‘(9) F
IDUCIARY .—The term ‘fiduciary’— 
‘‘(A) means a person or entity with the legal responsi-
bility—

bility— 
‘‘(i) to make decisions on behalf of and for the 
benefit of another person; and 
‘‘(ii) to act in good faith and with fairness; and 
‘‘(B) includes a trustee, a guardian, a conservator, an 
executor, an agent under a financial power of attorney or health care power of attorney, or a representative payee. 
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124 STAT. 784 PUBLIC LAW 111–148—MAR. 23, 2010 
‘‘(10) G RANT .—The term ‘grant’ includes a contract, coopera-
tive agreement, or other mechanism for providing financial assistance. 
‘‘(11) G
UARDIANSHIP .—The term ‘guardianship’ means— 
‘‘(A) the process by which a State court determines

that an adult individual lacks capacity to make decisions about self-care or property, and appoints another individual or entity known as a guardian, as a conservator, or by a similar term, as a surrogate decisionmaker; 
‘‘(B) the manner in which the court-appointed surrogate 
decisionmaker carries out duties to the individual and the court; or 
‘‘(C) the manner in which the court exercises oversight 
of the surrogate decisionmaker. ‘‘(12) I
NDIAN TRIBE .—

NDIAN TRIBE .— 
‘‘(A) I N GENERAL .—The term ‘Indian tribe’ has the 
meaning given such term in section 4 of the Indian Self- Determination and Education Assistance Act (25 U.S.C. 450b). 
‘‘(B) I
NCLUSION OF PUEBLO AND RANCHERIA .—The term 
‘Indian tribe’ includes any Pueblo or Rancheria. ‘‘(13) L
AW ENFORCEMENT .—The term ‘law enforcement’ 
means the full range of potential responders to elder abuse, neglect, and exploitation including—

‘‘(A) police, sheriffs, detectives, public safety officers, 
and corrections personnel; 
‘‘(B) prosecutors; ‘‘(C) medical examiners; ‘‘(D) investigators; and ‘‘(E) coroners. 
‘‘(14) L
ONG-TERM CARE .— 
‘‘(A) I N GENERAL .—The term ‘long-term care’ means 
supportive and health services specified by the Secretary for individuals who need assistance because the individuals have a loss of capacity for self-care due to illness, disability, or vulnerability. 
‘‘(B) L

‘‘(B) L
OSS OF CAPACITY FOR SELF -CARE .—For purposes 
of subparagraph (A), the term ‘loss of capacity for self- care’ means an inability to engage in 1 or more activities of daily living, including eating, dressing, bathing, manage-ment of one’s financial affairs, and other activities the Secretary determines appropriate. ‘‘(15) L
ONG-TERM CARE FACILITY .—The term ‘long-term care 
facility’ means a residential care provider that arranges for, or directly provides, long-term care. 
‘‘(16) N

‘‘(16) N
EGLECT .—The term ‘neglect’ means— 
‘‘(A) the failure of a caregiver or fiduciary to provide 
the goods or services that are necessary to maintain the health or safety of an elder; or 
‘‘(B) self-neglect. 
‘‘(17) N
URSING FACILITY .— 
‘‘(A) I N GENERAL .—The term ‘nursing facility’ has the 
meaning given such term under section 1919(a). 
‘‘(B) I NCLUSION OF SKILLED NURSING FACILITY .—The 
term ‘nursing facility’ includes a skilled nursing facility (as defined in section 1819(a)).

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124 STAT. 785 PUBLIC LAW 111–148—MAR. 23, 2010 
‘‘(18) S ELF-NEGLECT .—The term ‘self-neglect’ means an 
adult’s inability, due to physical or mental impairment or diminished capacity, to perform essential self-care tasks including— 
‘‘(A) obtaining essential food, clothing, shelter, and 
medical care; 
‘‘(B) obtaining goods and services necessary to maintain 
physical health, mental health, or general safety; or 
‘‘(C) managing one’s own financial affairs. 
‘‘(19) S
ERIOUS BODILY INJURY .—

‘‘(19) S
ERIOUS BODILY INJURY .— 
‘‘(A) I N GENERAL .—The term ‘serious bodily injury’ 
means an injury— 
‘‘(i) involving extreme physical pain; ‘‘(ii) involving substantial risk of death; ‘‘(iii) involving protracted loss or impairment of 
the function of a bodily member, organ, or mental faculty; or 
‘‘(iv) requiring medical intervention such as sur-
gery, hospitalization, or physical rehabilitation. ‘‘(B) C
RIMINAL SEXUAL ABUSE .—Serious bodily injury

RIMINAL SEXUAL ABUSE .—Serious bodily injury 
shall be considered to have occurred if the conduct causing the injury is conduct described in section 2241 (relating to aggravated sexual abuse) or 2242 (relating to sexual abuse) of title 18, United States Code, or any similar offense under State law. ‘‘(20) S
OCIAL .—The term ‘social’, when used with respect 
to a service, includes adult protective services. 
‘‘(21) S TATE LEGAL ASSISTANCE DEVELOPER .—The term

‘State legal assistance developer’ means an individual described in section 731 of the Older Americans Act of 1965. 
‘‘(22) S
TATE LONG -TERM CARE OMBUDSMAN .—The term 
‘State Long-Term Care Ombudsman’ means the State Long- Term Care Ombudsman described in section 712(a)(2) of the Older Americans Act of 1965. 
‘‘SEC. 2012. GENERAL PROVISIONS. 
‘‘(a) P ROTECTION OF PRIVACY .—In pursuing activities under this

subtitle, the Secretary shall ensure the protection of individual health privacy consistent with the regulations promulgated under section 264(c) of the Health Insurance Portability and Accountability Act of 1996 and applicable State and local privacy regulations. 
‘‘(b) R
ULE OF CONSTRUCTION .—Nothing in this subtitle shall 
be construed to interfere with or abridge an elder’s right to practice his or her religion through reliance on prayer alone for healing when this choice—

‘‘(1) is contemporaneously expressed, either orally or in 
writing, with respect to a specific illness or injury which the elder has at the time of the decision by an elder who is com-petent at the time of the decision; 
‘‘(2) is previously set forth in a living will, health care 
proxy, or other advance directive document that is validly executed and applied under State law; or 
‘‘(3) may be unambiguously deduced from the elder’s life 
history. 42 USC 
1397j–1.

1397j–1. 
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124 STAT. 786 PUBLIC LAW 111–148—MAR. 23, 2010 
‘‘PART I—NATIONAL COORDINATION OF 
ELDER JUSTICE ACTIVITIES AND RESEARCH 
‘‘Subpart A—Elder Justice Coordinating Council 
and Advisory Board on Elder Abuse, Neglect, and Exploitation 
‘‘SEC. 2021. ELDER JUSTICE COORDINATING COUNCIL. 
of the Secretary an Elder Justice Coordinating Council (in this section referred to as the ‘Council’). 
‘‘(b) M

‘‘(b) M
‘‘(1) I N GENERAL .—The Council shall be composed of the 
following members: 
‘‘(A) The Secretary (or the Secretary’s designee). ‘‘(B) The Attorney General (or the Attorney General’s 
designee). 
‘‘(C) The head of each Federal department or agency 
or other governmental entity identified by the Chair referred to in subsection (d) as having responsibilities, or administering programs, relating to elder abuse, neglect, and exploitation. ‘‘(2) R

EQUIREMENT .—Each member of the Council shall be 
an officer or employee of the Federal Government. ‘‘(c) V
ACANCIES .—Any vacancy in the Council shall not affect 
its powers, but shall be filled in the same manner as the original appointment was made. 
‘‘(d) C
HAIR .—The member described in subsection (b)(1)(A) shall 
be Chair of the Council. 
‘‘(e) M EETINGS .—The Council shall meet at least 2 times per 
year, as determined by the Chair. 
‘‘(f) D UTIES .—

‘‘(f) D UTIES .— 
‘‘(1) I N GENERAL .—The Council shall make recommenda-
tions to the Secretary for the coordination of activities of the Department of Health and Human Services, the Department of Justice, and other relevant Federal, State, local, and private agencies and entities, relating to elder abuse, neglect, and exploitation and other crimes against elders. 
‘‘(2) R
EPORT .—Not later than the date that is 2 years after

the date of enactment of the Elder Justice Act of 2009 and every 2 years thereafter, the Council shall submit to the Com-mittee on Finance of the Senate and the Committee on Ways and Means and the Committee on Energy and Commerce of the House of Representatives a report that— 
‘‘(A) describes the activities and accomplishments of, 
and challenges faced by— 
‘‘(i) the Council; and ‘‘(ii) the entities represented on the Council; and 
‘‘(B) makes such recommendations for legislation,

model laws, or other action as the Council determines to be appropriate. 
‘‘(g) P
OWERS OF THE COUNCIL .— 
‘‘(1) I NFORMATION FROM FEDERAL AGENCIES .—Subject to the 
requirements of section 2012(a), the Council may secure directly from any Federal department or agency such information as the Council considers necessary to carry out this section. Upon Recommenda- tions. 42 USC 1397k.

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124 STAT. 787 PUBLIC LAW 111–148—MAR. 23, 2010 
request of the Chair of the Council, the head of such department 
or agency shall furnish such information to the Council. 
‘‘(2) P OSTAL SERVICES .—The Council may use the United 
States mails in the same manner and under the same conditions as other departments and agencies of the Federal Government. ‘‘(h) T
RAVEL EXPENSES .—The members of the Council shall

not receive compensation for the performance of services for the Council. The members shall be allowed travel expenses, including per diem in lieu of subsistence, at rates authorized for employees of agencies under subchapter I of chapter 57 of title 5, United States Code, while away from their homes or regular places of business in the performance of services for the Council. Notwith-standing section 1342 of title 31, United States Code, the Secretary may accept the voluntary and uncompensated

may accept the voluntary and uncompensated services of the mem-bers of the Council.

‘‘(i) D
ETAIL OF GOVERNMENT EMPLOYEES .—Any Federal Govern-
ment employee may be detailed to the Council without reimburse-ment, and such detail shall be without interruption or loss of civil service status or privilege. 
‘‘(j) S
TATUS AS PERMANENT COUNCIL .—Section 14 of the Federal 
Advisory Committee Act (5 U.S.C. App.) shall not apply to the Council. 
‘‘(k) A
to be appropriated such sums as are necessary to carry out this section.

‘‘SEC. 2022. ADVISORY BOARD ON ELDER ABUSE, NEGLECT, AND 
EXPLOITATION. 
‘‘(a) E STABLISHMENT .—There is established a board to be known 
as the ‘Advisory Board on Elder Abuse, Neglect, and Exploitation’ (in this section referred to as the ‘Advisory Board’) to create short- and long-term multidisciplinary strategic plans for the development of the field of elder justice and to make recommendations to the Elder Justice Coordinating Council established under section 2021. 
‘‘(b) C

‘‘(b) C
OMPOSITION .—The Advisory Board shall be composed of 
27 members appointed by the Secretary from among members of the general public who are individuals with experience and expertise in elder abuse, neglect, and exploitation prevention, detection, treat-ment, intervention, or prosecution. 
‘‘(c) S
OLICITATION OF NOMINATIONS .—The Secretary shall pub-
lish a notice in the Federal Register soliciting nominations for the appointment of members of the Advisory Board under subsection (b).

‘‘(d) T
ERMS .— 
‘‘(1) I N GENERAL .—Each member of the Advisory Board 
shall be appointed for a term of 3 years, except that, of the members first appointed— 
‘‘(A) 9 shall be appointed for a term of 3 years; ‘‘(B) 9 shall be appointed for a term of 2 years; and ‘‘(C) 9 shall be appointed for a term of 1 year. 
‘‘(2) V
ACANCIES .— 
‘‘(A) I N GENERAL .—Any vacancy on the Advisory Board 
shall not affect its powers, but shall be filled in the same manner as the original appointment was made.

‘‘(B) F
ILLING UNEXPIRED TERM .—An individual chosen 
to fill a vacancy shall be appointed for the unexpired term of the member replaced. Notice. Federal Register, publication. 42 USC 1397k–1. 
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124 STAT. 788 PUBLIC LAW 111–148—MAR. 23, 2010 
‘‘(3) E XPIRATION OF TERMS .—The term of any member shall 
not expire before the date on which the member’s successor takes office. ‘‘(e) E
LECTION OF OFFICERS .—The Advisory Board shall elect 
a Chair and Vice Chair from among its members. The Advisory Board shall elect its initial Chair and Vice Chair at its initial meeting. 
‘‘(f) D
UTIES .— 
‘‘(1) E NHANCE COMMUNICATION ON PROMOTING QUALITY OF ,

AND PREVENTING ABUSE , NEGLECT , AND EXPLOITATION IN , LONG - 
TERM CARE .—The Advisory Board shall develop collaborative 
and innovative approaches to improve the quality of, including preventing abuse, neglect, and exploitation in, long-term care. 
‘‘(2) C
OLLABORATIVE EFFORTS TO DEVELOP CONSENSUS  
AROUND THE MANAGEMENT OF CERTAIN QUALITY -RELATED FAC -
TORS .— 
‘‘(A) I N GENERAL .—The Advisory Board shall establish

multidisciplinary panels to address, and develop consensus on, subjects relating to improving the quality of long-term care. At least 1 such panel shall address, and develop consensus on, methods for managing resident-to-resident abuse in long-term care. 
‘‘(B) A
CTIVITIES CONDUCTED .—The multidisciplinary

CTIVITIES CONDUCTED .—The multidisciplinary 
panels established under subparagraph (A) shall examine relevant research and data, identify best practices with respect to the subject of the panel, determine the best way to carry out those best practices in a practical and feasible manner, and determine an effective manner of distributing information on such subject. ‘‘(3) R
EPORT .—Not later than the date that is 18 months

after the date of enactment of the Elder Justice Act of 2009, and annually thereafter, the Advisory Board shall prepare and submit to the Elder Justice Coordinating Council, the Com-mittee on Finance of the Senate, and the Committee on Ways and Means and the Committee on Energy and Commerce of the House of Representatives a report containing— 
‘‘(A) information on the status of Federal, State, and 
local public and private elder justice activities;

‘‘(B) recommendations (including recommended prior-
ities) regarding— 
‘‘(i) elder justice programs, research, training, serv-
ices, practice, enforcement, and coordination; 
‘‘(ii) coordination between entities pursuing elder 
justice efforts and those involved in related areas that may inform or overlap with elder justice efforts, such as activities to combat violence against women and 
child abuse and neglect; and 
‘‘(iii) activities relating to adult fiduciary systems,

including guardianship and other fiduciary arrange-ments; ‘‘(C) recommendations for specific modifications needed 
in Federal and State laws (including regulations) or for programs, research, and training to enhance prevention, detection, and treatment (including diagnosis) of, interven-tion in (including investigation of), and prosecution of elder abuse, neglect, and exploitation; Panels.

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124 STAT. 789 PUBLIC LAW 111–148—MAR. 23, 2010 
‘‘(D) recommendations on methods for the most effec-
tive coordinated national data collection with respect to elder justice, and elder abuse, neglect, and exploitation; and 
‘‘(E) recommendations for a multidisciplinary strategic 
plan to guide the effective and efficient development of the field of elder justice. 
‘‘(g) P
OWERS OF THE ADVISORY BOARD .— 
‘‘(1) I NFORMATION FROM FEDERAL AGENCIES .—Subject to the

requirements of section 2012(a), the Advisory Board may secure directly from any Federal department or agency such informa-tion as the Advisory Board considers necessary to carry out this section. Upon request of the Chair of the Advisory Board, the head of such department or agency shall furnish such information to the Advisory Board. 
‘‘(2) S
HARING OF DATA AND REPORTS .—The Advisory Board

HARING OF DATA AND REPORTS .—The Advisory Board 
may request from any entity pursuing elder justice activities under the Elder Justice Act of 2009 or an amendment made by that Act, any data, reports, or recommendations generated in connection with such activities. 
‘‘(3) P
OSTAL SERVICES .—The Advisory Board may use the 
United States mails in the same manner and under the same conditions as other departments and agencies of the Federal Government. ‘‘(h) T

shall not receive compensation for the performance of services for the Advisory Board. The members shall be allowed travel expenses for up to 4 meetings per year, including per diem in lieu of subsist-ence, at rates authorized for employees of agencies under subchapter I of chapter 57 of title 5, United States Code, while away from their homes or regular places of business in the performance of services for the Advisory Board. Notwithstanding section 1342 of title 31, United States Code, the

section 1342 of title 31, United States Code, the Secretary may accept the voluntary and uncompensated services of the members of the Advisory Board.

‘‘(i) D
ment employee may be detailed to the Advisory Board without 
reimbursement, and such detail shall be without interruption or loss of civil service status or privilege. 
‘‘(j) S
TATUS AS PERMANENT ADVISORY COMMITTEE .—Section 14 
of the Federal Advisory Committee Act (5 U.S.C. App.) shall not apply to the advisory board. 
‘‘(k) A

‘‘SEC. 2023. RESEARCH PROTECTIONS. 
‘‘(a) G UIDELINES .—The Secretary shall promulgate guidelines 
to assist researchers working in the area of elder abuse, neglect, and exploitation, with issues relating to human subject protections. 
‘‘(b) D
EFINITION OF LEGALLY AUTHORIZED REPRESENTATIVE FOR  
APPLICATION OF REGULATIONS .—For purposes of the application

of subpart A of part 46 of title 45, Code of Federal Regulations, to research conducted under this subpart, the term ‘legally author-ized representative’ means, unless otherwise provided by law, the individual or judicial or other body authorized under the applicable law to consent to medical treatment on behalf of another person. 42 USC 1397k–2.

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124 STAT. 790 PUBLIC LAW 111–148—MAR. 23, 2010 
‘‘SEC. 2024. AUTHORIZATION OF APPROPRIATIONS. 
‘‘There are authorized to be appropriated to carry out this 
subpart— 
‘‘(1) for fiscal year 2011, $6,500,000; and ‘‘(2) for each of fiscal years 2012 through 2014, $7,000,000. 
‘‘Subpart B—Elder Abuse, Neglect, and 
Exploitation Forensic Centers 
‘‘SEC. 2031. ESTABLISHMENT AND SUPPORT OF ELDER ABUSE, 
NEGLECT, AND EXPLOITATION FORENSIC CENTERS.

NEGLECT, AND EXPLOITATION FORENSIC CENTERS. 
‘‘(a) I NGENERAL .—The Secretary, in consultation with the 
Attorney General, shall make grants to eligible entities to establish and operate stationary and mobile forensic centers, to develop forensic expertise regarding, and provide services relating to, elder abuse, neglect, and exploitation. 
‘‘(b) S
TATIONARY FORENSIC CENTERS .—The Secretary shall

TATIONARY FORENSIC CENTERS .—The Secretary shall 
make 4 of the grants described in subsection (a) to institutions of higher education with demonstrated expertise in forensics or commitment to preventing or treating elder abuse, neglect, or exploi-tation, to establish and operate stationary forensic centers. 
‘‘(c) M
OBILE CENTERS .—The Secretary shall make 6 of the 
grants described in subsection (a) to appropriate entities to establish and operate mobile forensic centers. 
‘‘(d) A

‘‘(d) A
UTHORIZED ACTIVITIES .— 
‘‘(1) D EVELOPMENT OF FORENSIC MARKERS AND METHODOLO -
GIES.—An eligible entity that receives a grant under this section 
shall use funds made available through the grant to assist in determining whether abuse, neglect, or exploitation occurred and whether a crime was committed and to conduct research to describe and disseminate information on— 
‘‘(A) forensic markers that indicate a case in which 
elder abuse, neglect, or exploitation may have occurred; and

‘‘(B) methodologies for determining, in such a case, 
when and how health care, emergency service, social and protective services, and legal service providers should inter-vene and when the providers should report the case to law enforcement authorities. ‘‘(2) D
EVELOPMENT OF FORENSIC EXPERTISE .—An eligible

EVELOPMENT OF FORENSIC EXPERTISE .—An eligible 
entity that receives a grant under this section shall use funds made available through the grant to develop forensic expertise regarding elder abuse, neglect, and exploitation in order to provide medical and forensic evaluation, therapeutic interven-tion, victim support and advocacy, case review, and case tracking. 
‘‘(3) C
OLLECTION OF EVIDENCE .—The Secretary, in coordina-

tion with the Attorney General, shall use data made available by grant recipients under this section to develop the capacity of geriatric health care professionals and law enforcement to collect forensic evidence, including collecting forensic evidence relating to a potential determination of elder abuse, neglect, or exploitation. ‘‘(e) A
PPLICATION .—To be eligible to receive a grant under this 
section, an entity shall submit an application to the Secretary Grants.

42 USC 1397 l. 42 USC 1397k–3. 
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124 STAT. 791 PUBLIC LAW 111–148—MAR. 23, 2010 
at such time, in such manner, and containing such information 
as the Secretary may require. 
‘‘(f) A UTHORIZATION OF APPROPRIATIONS .—There are authorized 
‘‘(1) for fiscal year 2011, $4,000,000; ‘‘(2) for fiscal year 2012, $6,000,000; and ‘‘(3) for each of fiscal years 2013 and 2014, $8,000,000. 
‘‘PART II—PROGRAMS TO PROMOTE ELDER 
JUSTICE 
‘‘SEC. 2041. ENHANCEMENT OF LONG-TERM CARE.

‘‘SEC. 2041. ENHANCEMENT OF LONG-TERM CARE. 
‘‘(a) G RANTS AND INCENTIVES FOR LONG-TERM CARESTAFFING .— 
‘‘(1) I N GENERAL .—The Secretary shall carry out activities, 
including activities described in paragraphs (2) and (3), to pro-vide incentives for individuals to train for, seek, and maintain employment providing direct care in long-term care. 
‘‘(2) S
PECIFIC PROGRAMS TO ENHANCE TRAINING , RECRUIT -
MENT , AND RETENTION OF STAFF .— 
‘‘(A) C OORDINATION WITH SECRETARY OF LABOR TO

‘‘(A) C OORDINATION WITH SECRETARY OF LABOR TO  
RECRUIT AND TRAIN LONG -TERM CARE STAFF .—The Secretary 
shall coordinate activities under this subsection with the Secretary of Labor in order to provide incentives for individ-uals to train for and seek employment providing direct care in long-term care. 
‘‘(B) C
AREER LADDERS AND WAGE OR BENEFIT INCREASES  
TO INCREASE STAFFING IN LONG -TERM CARE .— 
‘‘(i) I N GENERAL .—The Secretary shall make grants

to eligible entities to carry out programs through which the entities— 
‘‘(I) offer, to employees who provide direct care 
to residents of an eligible entity or individuals receiving community-based long-term care from an eligible entity, continuing training and varying levels of certification, based on observed clinical care practices and the amount of time the employees spend providing direct care; and 
‘‘(II) provide, or make arrangements to pro-

vide, bonuses or other increased compensation or benefits to employees who achieve certification under such a program. ‘‘(ii) A
PPLICATION .—To be eligible to receive a grant

PPLICATION .—To be eligible to receive a grant 
under this subparagraph, an eligible entity shall submit an application to the Secretary at such time, in such manner, and containing such information as the Secretary may require (which may include evidence of consultation with the State in which the eligible entity is located with respect to carrying out activities funded under the grant). 
‘‘(iii) A
UTHORITY TO LIMIT NUMBER OF  
APPLICANTS .—Nothing in this subparagraph shall be

construed as prohibiting the Secretary from limiting the number of applicants for a grant under this subparagraph. 
‘‘(3) S
PECIFIC PROGRAMS TO IMPROVE MANAGEMENT PRAC -
TICES .— Grants. Grants. 42 USC 1397m. 
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124 STAT. 792 PUBLIC LAW 111–148—MAR. 23, 2010 
‘‘(A) I N GENERAL .—The Secretary shall make grants 
to eligible entities to enable the entities to provide training and technical assistance. 
‘‘(B) A
UTHORIZED ACTIVITIES .—An eligible entity that

UTHORIZED ACTIVITIES .—An eligible entity that 
receives a grant under subparagraph (A) shall use funds made available through the grant to provide training and technical assistance regarding management practices using methods that are demonstrated to promote retention of individuals who provide direct care, such as— 
‘‘(i) the establishment of standard human resource

policies that reward high performance, including poli-cies that provide for improved wages and benefits on the basis of job reviews; 
‘‘(ii) the establishment of motivational and 
thoughtful work organization practices; 
‘‘(iii) the creation of a workplace culture that 
respects and values caregivers and their needs; 
‘‘(iv) the promotion of a workplace culture that

‘‘(iv) the promotion of a workplace culture that 
respects the rights of residents of an eligible entity or individuals receiving community-based long-term care from an eligible entity and results in improved care for the residents or the individuals; and 
‘‘(v) the establishment of other programs that pro-

mote the provision of high quality care, such as a continuing education program that provides additional hours of training, including on-the-job training, for employees who are certified nurse aides. ‘‘(C) A

under this paragraph, an eligible entity shall submit an application to the Secretary at such time, in such manner, and containing such information as the Secretary may require (which may include evidence of consultation with the State in which the eligible entity is located with respect to carrying out activities funded under the grant). 
‘‘(D) A
UTHORITY TO LIMIT NUMBER OF APPLICANTS .—

UTHORITY TO LIMIT NUMBER OF APPLICANTS .— 
Nothing in this paragraph shall be construed as prohibiting the Secretary from limiting the number of applicants for a grant under this paragraph. ‘‘(4) A
CCOUNTABILITY MEASURES .—The Secretary shall 
develop accountability measures to ensure that the activities conducted using funds made available under this subsection benefit individuals who provide direct care and increase the stability of the long-term care workforce. 
‘‘(5) D

‘‘(5) D
‘‘(A) C OMMUNITY -BASED LONG -TERM CARE .—The term 
‘community-based long-term care’ has the meaning given such term by the Secretary. 
‘‘(B) E
LIGIBLE ENTITY .—The term ‘eligible entity’ means 
‘‘(i) A long-term care facility. ‘‘(ii) A community-based long-term care entity (as 
defined by the Secretary). 
‘‘(b) C
ERTIFIED EHR T ECHNOLOGY GRANT PROGRAM .— 
‘‘(1) G RANTS AUTHORIZED .—The Secretary is authorized to

make grants to long-term care facilities for the purpose of assisting such entities in offsetting the costs related to pur-chasing, leasing, developing, and implementing certified EHR 
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124 STAT. 793 PUBLIC LAW 111–148—MAR. 23, 2010 
technology (as defined in section 1848(o)(4)) designed to improve 
patient safety and reduce adverse events and health care com-plications resulting from medication errors. 
‘‘(2) U
SE OF GRANT FUNDS .—Funds provided under grants 
under this subsection may be used for any of the following: 
‘‘(A) Purchasing, leasing, and installing computer soft-
ware and hardware, including handheld computer tech-nologies.

‘‘(B) Making improvements to existing computer soft-
ware and hardware. 
‘‘(C) Making upgrades and other improvements to 
existing computer software and hardware to enable e-pre-scribing. 
‘‘(D) Providing education and training to eligible long- 
term care facility staff on the use of such technology to implement the electronic transmission of prescription and patient information. ‘‘(3) A
‘‘(A) I N GENERAL .—To be eligible to receive a grant

under this subsection, a long-term care facility shall submit an application to the Secretary at such time, in such manner, and containing such information as the Secretary may require (which may include evidence of consultation with the State in which the long-term care facility is located with respect to carrying out activities funded under the grant). 
‘‘(B) A

Nothing in this subsection shall be construed as prohibiting the Secretary from limiting the number of applicants for a grant under this subsection. ‘‘(4) P
ARTICIPATION IN STATE HEALTH EXCHANGES .—A long-

ARTICIPATION IN STATE HEALTH EXCHANGES .—A long- 
term care facility that receives a grant under this subsection shall, where available, participate in activities conducted by a State or a qualified State-designated entity (as defined in section 3013(f) of the Public Health Service Act) under a grant under section 3013 of the Public Health Service Act to coordi-nate care and for other purposes determined appropriate by the Secretary. 
‘‘(5) A
CCOUNTABILITY MEASURES .—The Secretary shall

develop accountability measures to ensure that the activities conducted using funds made available under this subsection help improve patient safety and reduce adverse events and health care complications resulting from medication errors. ‘‘(c) A
DOPTION OF STANDARDS FOR TRANSACTIONS INVOLVING  
CLINICAL DATA BY LONG-TERM CAREFACILITIES .— 
‘‘(1) S TANDARDS AND COMPATIBILITY .—The Secretary shall

adopt electronic standards for the exchange of clinical data by long-term care facilities, including, where available, stand-ards for messaging and nomenclature. Standards adopted by the Secretary under the preceding sentence shall be compatible with standards established under part C of title XI, standards established under subsections (b)(2)(B)(i) and (e)(4) of section 1860D–4, standards adopted under section 3004 of the Public Health Service Act, and general health information technology

‘‘(2) E
LECTRONIC SUBMISSION OF DATA TO THE SECRETARY .— 
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124 STAT. 794 PUBLIC LAW 111–148—MAR. 23, 2010 
‘‘(A) I N GENERAL .—Not later than 10 years after the 
date of enactment of the Elder Justice Act of 2009, the Secretary shall have procedures in place to accept the optional electronic submission of clinical data by long-term care facilities pursuant to the standards adopted under paragraph (1). 
‘‘(B) R

section shall be construed to require a long-term care facility to submit clinical data electronically to the Sec-retary. ‘‘(3) R

tions to carry out this subsection. Such regulations shall require a State, as a condition of the receipt of funds under this part, to conduct such data collection and reporting as the Sec-retary determines are necessary to satisfy the requirements of this subsection. ‘‘(d) A

‘‘(1) for fiscal year 2011, $20,000,000; ‘‘(2) for fiscal year 2012, $17,500,000; and ‘‘(3) for each of fiscal years 2013 and 2014, $15,000,000. 
‘‘SEC. 2042. ADULT PROTECTIVE SERVICES FUNCTIONS AND GRANT 
PROGRAMS. 
‘‘(a) S ECRETARIAL RESPONSIBILITIES .— 
‘‘(1) I N GENERAL .—The Secretary shall ensure that the 
Department of Health and Human Services— 
‘‘(A) provides funding authorized by this part to State

and local adult protective services offices that investigate reports of the abuse, neglect, and exploitation of elders; 
‘‘(B) collects and disseminates data annually relating 
to the abuse, exploitation, and neglect of elders in coordina-tion with the Department of Justice; 
‘‘(C) develops and disseminates information on best 
practices regarding, and provides training on, carrying out adult protective services; 
‘‘(D) conducts research related to the provision of adult

protective services; and 
‘‘(E) provides technical assistance to States and other 
entities that provide or fund the provision of adult protec-tive services, including through grants made under sub-sections (b) and (c). ‘‘(2) A
authorized to be appropriated to carry out this subsection, $3,000,000 for fiscal year 2011 and $4,000,000 for each of fiscal years 2012 through 2014. ‘‘(b) G
RANTS TOENHANCE THE PROVISION OF ADULT PROTECTIVE  
SERVICES .—

‘‘(1) E STABLISHMENT .—There is established an adult protec-
tive services grant program under which the Secretary shall annually award grants to States in the amounts calculated under paragraph (2) for the purposes of enhancing adult protec-tive services provided by States and local units of government. 
‘‘(2) A
‘‘(A) I N GENERAL .—Subject to the availability of appro-

priations and subparagraphs (B) and (C), the amount paid to a State for a fiscal year under the program under this 42 USC 1397m–1. Deadline. 
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124 STAT. 795 PUBLIC LAW 111–148—MAR. 23, 2010 
subsection shall equal the amount appropriated for that 
year to carry out this subsection multiplied by the percent-age of the total number of elders who reside in the United States who reside in that State. 
‘‘(B) G
UARANTEED MINIMUM PAYMENT AMOUNT .— 
‘‘(i) 50 STATES .—Subject to clause (ii), if the amount

determined under subparagraph (A) for a State for a fiscal year is less than 0.75 percent of the amount appropriated for such year, the Secretary shall increase such determined amount so that the total amount paid under this subsection to the State for the year is equal to 0.75 percent of the amount so appropriated. 
‘‘(ii) T
ERRITORIES .—In the case of a State other 
than 1 of the 50 States, clause (i) shall be applied as if each reference to ‘0.75’ were a reference to ‘0.1’. ‘‘(C) P

RO RATA REDUCTIONS .—The Secretary shall make 
such pro rata reductions to the amounts described in subparagraph (A) as are necessary to comply with the requirements of subparagraph (B). ‘‘(3) A
‘‘(A) A DULT PROTECTIVE SERVICES .—Funds made avail-
able pursuant to this subsection may only be used by States and local units of government to provide adult protective services and may not be used for any other purpose. 
‘‘(B) U
SE BY AGENCY .—Each State receiving funds

SE BY AGENCY .—Each State receiving funds 
pursuant to this subsection shall provide such funds to the agency or unit of State government having legal respon-sibility for providing adult protective services within the State. 
‘‘(C) S
UPPLEMENT NOT SUPPLANT .—Each State or local

UPPLEMENT NOT SUPPLANT .—Each State or local 
unit of government shall use funds made available pursu-ant to this subsection to supplement and not supplant other Federal, State, and local public funds expended to provide adult protective services in the State. ‘‘(4) S
TATE REPORTS .—Each State receiving funds under

TATE REPORTS .—Each State receiving funds under 
this subsection shall submit to the Secretary, at such time and in such manner as the Secretary may require, a report on the number of elders served by the grants awarded under this subsection. 
‘‘(5) A
authorized to be appropriated to carry out this subsection, $100,000,000 for each of fiscal years 2011 through 2014. ‘‘(c) S
TATE DEMONSTRATION PROGRAMS .—

TATE DEMONSTRATION PROGRAMS .— 
‘‘(1) E STABLISHMENT .—The Secretary shall award grants 
to States for the purposes of conducting demonstration pro-
grams in accordance with paragraph (2). 
‘‘(2) D EMONSTRATION PROGRAMS .—Funds made available 
pursuant to this subsection may be used by States and local units of government to conduct demonstration programs that test— 
‘‘(A) training modules developed for the purpose of 
detecting or preventing elder abuse;

detecting or preventing elder abuse; 
‘‘(B) methods to detect or prevent financial exploitation 
of elders; 
‘‘(C) methods to detect elder abuse; Applicability. 
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124 STAT. 796 PUBLIC LAW 111–148—MAR. 23, 2010 
‘‘(D) whether training on elder abuse forensics 
enhances the detection of elder abuse by employees of the State or local unit of government; or 
‘‘(E) other matters relating to the detection or preven-
tion of elder abuse. ‘‘(3) A
PPLICATION .—To be eligible to receive a grant under 
this subsection, a State shall submit an application to the Secretary at such time, in such manner, and containing such information as the Secretary may require.

‘‘(4) S
TATE REPORTS .—Each State that receives funds under 
this subsection shall submit to the Secretary a report at such time, in such manner, and containing such information as the Secretary may require on the results of the demonstration program conducted by the State using funds made available under this subsection. 
‘‘(5) A
authorized to be appropriated to carry out this subsection, $25,000,000 for each of fiscal years 2011 through 2014.

‘‘SEC. 2043. LONG-TERM CARE OMBUDSMAN PROGRAM GRANTS AND 
TRAINING. 
‘‘(a) G RANTS TOSUPPORT THE LONG-TERM CARE OMBUDSMAN  
PROGRAM .— 
‘‘(1) I N GENERAL .—The Secretary shall make grants to 
eligible entities with relevant expertise and experience in abuse and neglect in long-term care facilities or long-term care ombudsman programs and responsibilities, for the purpose of— 
‘‘(A) improving the capacity of State long-term care

ombudsman programs to respond to and resolve complaints about abuse and neglect; 
‘‘(B) conducting pilot programs with State long-term 
care ombudsman offices or local ombudsman entities; and 
‘‘(C) providing support for such State long-term care 
ombudsman programs and such pilot programs (such as through the establishment of a national long-term care ombudsman resource center). ‘‘(2) A
authorized to be appropriated to carry out this subsection—

‘‘(A) for fiscal year 2011, $5,000,000; ‘‘(B) for fiscal year 2012, $7,500,000; and ‘‘(C) for each of fiscal years 2013 and 2014, $10,000,000. 
‘‘(b) O
MBUDSMAN TRAINING PROGRAMS .— 
‘‘(1) I N GENERAL .—The Secretary shall establish programs 
to provide and improve ombudsman training with respect to elder abuse, neglect, and exploitation for national organizations and State long-term care ombudsman programs. 
‘‘(2) A

authorized to be appropriated to carry out this subsection, for each of fiscal years 2011 through 2014, $10,000,000. 
‘‘SEC. 2044. PROVISION OF INFORMATION REGARDING, AND EVALUA-
TIONS OF, ELDER JUSTICE PROGRAMS. 
‘‘(a) P ROVISION OF INFORMATION .—To be eligible to receive a 
grant under this part, an applicant shall agree— 
‘‘(1) except as provided in paragraph (2), to provide the

eligible entity conducting an evaluation under subsection (b) of the activities funded through the grant with such information 42 USC 1397m–3. 42 USC 
1397m–2. 
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124 STAT. 797 PUBLIC LAW 111–148—MAR. 23, 2010 
as the eligible entity may require in order to conduct such 
evaluation; or 
‘‘(2) in the case of an applicant for a grant under section 
2041(b), to provide the Secretary with such information as the Secretary may require to conduct an evaluation or audit under subsection (c). ‘‘(b) U
SE OF ELIGIBLE ENTITIES TOCONDUCT EVALUATIONS .— 
‘‘(1) E VALUATIONS REQUIRED .—Except as provided in para-
graph (2), the Secretary shall—

graph (2), the Secretary shall— 
‘‘(A) reserve a portion (not less than 2 percent) of 
the funds appropriated with respect to each program car-ried out under this part; and 
‘‘(B) use the funds reserved under subparagraph (A) 
to provide assistance to eligible entities to conduct evalua-tions of the activities funded under each program carried out under this part. ‘‘(2) C
ERTIFIED EHR TECHNOLOGY GRANT PROGRAM NOT  
INCLUDED .—The provisions of this subsection shall not apply

to the certified EHR technology grant program under section 2041(b). 
‘‘(3) A
UTHORIZED ACTIVITIES .—A recipient of assistance 
described in paragraph (1)(B) shall use the funds made avail-able through the assistance to conduct a validated evaluation of the effectiveness of the activities funded under a program carried out under this part. 
‘‘(4) A
PPLICATIONS .—To be eligible to receive assistance

under paragraph (1)(B), an entity shall submit an application to the Secretary at such time, in such manner, and containing such information as the Secretary may require, including a proposal for the evaluation. 
‘‘(5) R
EPORTS .—Not later than a date specified by the Sec-
retary, an eligible entity receiving assistance under paragraph (1)(B) shall submit to the Secretary, the Committee on Ways

and Means and the Committee on Energy and Commerce of the House of Representatives, and the Committee on Finance of the Senate a report containing the results of the evaluation conducted using such assistance together with such rec-ommendations as the entity determines to be appropriate. ‘‘(c) E
VALUATIONS AND AUDITS OF CERTIFIED EHR T ECHNOLOGY  
GRANT PROGRAM BY THE SECRETARY .— 
‘‘(1) E VALUATIONS .—The Secretary shall conduct an evalua-

tion of the activities funded under the certified EHR technology grant program under section 2041(b). Such evaluation shall include an evaluation of whether the funding provided under the grant is expended only for the purposes for which it is made. 
‘‘(2) A
UDITS .—The Secretary shall conduct appropriate 
audits of grants made under section 2041(b). 
‘‘SEC. 2045. REPORT. 
‘‘Not later than October 1, 2014, the Secretary shall submit

to the Elder Justice Coordinating Council established under section 2021, the Committee on Ways and Means and the Committee on Energy and Commerce of the House of Representatives, and the Committee on Finance of the Senate a report— 42 USC 
1397m–4. 
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124 STAT. 798 PUBLIC LAW 111–148—MAR. 23, 2010 
‘‘(1) compiling, summarizing, and analyzing the information 
contained in the State reports submitted under subsections (b)(4) and (c)(4) of section 2042; and 
‘‘(2) containing such recommendations for legislative or 
administrative action as the Secretary determines to be appro-priate. 
‘‘SEC. 2046. RULE OF CONSTRUCTION. 
‘‘Nothing in this subtitle shall be construed as— 
‘‘(1) limiting any cause of action or other relief related

to obligations under this subtitle that is available under the law of any State, or political subdivision thereof; or 
‘‘(2) creating a private cause of action for a violation of 
this subtitle.’’. 
(2) O
PTION FOR STATE PLAN UNDER PROGRAM FOR TEM -
PORARY ASSISTANCE FOR NEEDY FAMILIES .— 
(A) I N GENERAL .—Section 402(a)(1)(B) of the Social 
Security Act (42 U.S.C. 602(a)(1)(B)) is amended by adding at the end the following new clause: 
‘‘(v) The document shall indicate whether the State

intends to assist individuals to train for, seek, and maintain employment— 
‘‘(I) providing direct care in a long-term care 
facility (as such terms are defined under section 2011); or 
‘‘(II) in other occupations related to elder care 
determined appropriate by the State for which the State identifies an unmet need for service per-sonnel, 
and, if so, shall include an overview of such assist-ance.’’. (B) E
FFECTIVE DATE .—The amendment made by

FFECTIVE DATE .—The amendment made by 
subparagraph (A) shall take effect on January 1, 2011. 
(b) P ROTECTING RESIDENTS OF LONG-TERM CARE FACILITIES .— 
(1) N ATIONAL TRAINING INSTITUTE FOR SURVEYORS .— 

Services shall enter into a contract with an entity for the purpose of establishing and operating a National Training Institute for Federal and State surveyors. Such Institute shall provide and improve the training of sur-veyors with respect to investigating allegations of abuse, neglect, and misappropriation of property in programs and long-term care facilities that receive payments under title XVIII or XIX of the Social Security Act. 
(B) A
CTIVITIES CARRIED OUT BY THE INSTITUTE .—The

CTIVITIES CARRIED OUT BY THE INSTITUTE .—The 
contract entered into under subparagraph (A) shall require the Institute established and operated under such contract to carry out the following activities: 
(i) Assess the extent to which State agencies use 
specialized surveyors for the investigation of reported allegations of abuse, neglect, and misappropriation of property in such programs and long-term care facilities. 
(ii) Evaluate how the competencies of surveyors

(ii) Evaluate how the competencies of surveyors 
may be improved to more effectively investigate reported allegations of such abuse, neglect, and mis-appropriation of property, and provide feedback to Fed-eral and State agencies on the evaluations conducted. Contracts. 42 USC 
1395i–3a. 42 USC 602 note. 42 USC 
1397m–5. 
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124 STAT. 799 PUBLIC LAW 111–148—MAR. 23, 2010 
(iii) Provide a national program of training, tools, 
and technical assistance to Federal and State surveyors on investigating reports of such abuse, neglect, and misappropriation of property. 
(iv) Develop and disseminate information on best 
practices for the investigation of such abuse, neglect, and misappropriation of property. 
(v) Assess the performance of State complaint

(v) Assess the performance of State complaint 
intake systems, in order to ensure that the intake of complaints occurs 24 hours per day, 7 days a week (including holidays). 
(vi) To the extent approved by the Secretary of 
Health and Human Services, provide a national 24 hours per day, 7 days a week (including holidays), back-up system to State complaint intake systems in order to ensure optimum national responsiveness to complaints of such abuse, neglect, and misappropria-tion of property.

(vii) Analyze and report annually on the following: 
(I) The total number and sources of complaints 
of such abuse, neglect, and misappropriation of property. 
(II) The extent to which such complaints are 
referred to law enforcement agencies. 
(III) General results of Federal and State 
investigations of such complaints. (viii) Conduct a national study of the cost to State

agencies of conducting complaint investigations of skilled nursing facilities and nursing facilities under sections 1819 and 1919, respectively, of the Social Secu-rity Act (42 U.S.C. 1395i–3; 1396r), and making rec-ommendations to the Secretary of Health and Human Services with respect to options to increase the effi-ciency and cost-effectiveness of such investigations. (C) A

priated to carry out this paragraph, for the period of fiscal years 2011 through 2014, $12,000,000. (2) G
RANTS TO STATE SURVEY AGENCIES .— 
Services shall make grants to State agencies that perform surveys of skilled nursing facilities or nursing facilities under sections 1819 or 1919, respectively, of the Social Security Act (42 U.S.C. 1395i–3; 1395r). 
(B) U

(B) U
SE OF FUNDS .—A grant awarded under subpara-
graph (A) shall be used for the purpose of designing and implementing complaint investigations systems that— 
(i) promptly prioritize complaints in order to 
ensure a rapid response to the most serious and urgent complaints; 
(ii) respond to complaints with optimum effective-
ness and timeliness; and 
(iii) optimize the collaboration between local 
authorities, consumers, and providers, including—

(I) such State agency; (II) the State Long-Term Care Ombudsman; (III) local law enforcement agencies; (IV) advocacy and consumer organizations; 
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124 STAT. 800 PUBLIC LAW 111–148—MAR. 23, 2010 
(V) State aging units; 
(VI) Area Agencies on Aging; and (VII) other appropriate entities. 
(C) A
priated to carry out this paragraph, for each of fiscal years 2011 through 2014, $5,000,000. (3) R
EPORTING OF CRIMES IN FEDERALLY FUNDED LONG - 
TERM CARE FACILITIES .—Part A of title XI of the Social Security

Act (42 U.S.C. 1301 et seq.), as amended by section 6005, is amended by inserting after section 1150A the following new section: 
‘‘
REPORTING TO LAW ENFORCEMENT OF CRIMES OCCURRING IN  
FEDERALLY FUNDED LONG -TERM CARE FACILITIES  
‘‘SEC. 1150B. (a) D ETERMINATION AND NOTIFICATION .— 
‘‘(1) D ETERMINATION .—The owner or operator of each long-

term care facility that receives Federal funds under this Act shall annually determine whether the facility received at least $10,000 in such Federal funds during the preceding year. 
‘‘(2) N
OTIFICATION .—If the owner or operator determines

under paragraph (1) that the facility received at least $10,000 in such Federal funds during the preceding year, such owner or operator shall annually notify each covered individual (as defined in paragraph (3)) of that individual’s obligation to comply with the reporting requirements described in subsection (b). 
‘‘(3) C
OVERED INDIVIDUAL DEFINED .—In this section, the

OVERED INDIVIDUAL DEFINED .—In this section, the 
term ‘covered individual’ means each individual who is an owner, operator, employee, manager, agent, or contractor of a long-term care facility that is the subject of a determination described in paragraph (1). ‘‘(b) R
EPORTING REQUIREMENTS .— 
‘‘(1) I N GENERAL .—Each covered individual shall report to

the Secretary and 1 or more law enforcement entities for the political subdivision in which the facility is located any reason-able suspicion of a crime (as defined by the law of the applicable political subdivision) against any individual who is a resident of, or is receiving care from, the facility. 
‘‘(2) T
IMING .—If the events that cause the suspicion— 
‘‘(A) result in serious bodily injury, the individual shall

report the suspicion immediately, but not later than 2 hours after forming the suspicion; and 
‘‘(B) do not result in serious bodily injury, the indi-
vidual shall report the suspicion not later than 24 hours after forming the suspicion. 
‘‘(c) P
‘‘(1) I N GENERAL .—If a covered individual violates sub-
section (b)— 
‘‘(A) the covered individual shall be subject to a civil 
money penalty of not more than $200,000; and 
‘‘(B) the Secretary may make a determination in the

same proceeding to exclude the covered individual from participation in any Federal health care program (as defined in section 1128B(f)). ‘‘(2) I
NCREASED HARM .—If a covered individual violates sub-
section (b) and the violation exacerbates the harm to the victim of the crime or results in harm to another individual— 42 USC 1320b–25.

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124 STAT. 801 PUBLIC LAW 111–148—MAR. 23, 2010 
money penalty of not more than $300,000; and 
‘‘(B) the Secretary may make a determination in the 
same proceeding to exclude the covered individual from participation in any Federal health care program (as defined in section 1128B(f)). ‘‘(3) E
XCLUDED INDIVIDUAL .—During any period for which

XCLUDED INDIVIDUAL .—During any period for which 
a covered individual is classified as an excluded individual under paragraph (1)(B) or (2)(B), a long-term care facility that employs such individual shall be ineligible to receive Federal funds under this Act. 
‘‘(4) E
XTENUATING CIRCUMSTANCES .— 
‘‘(A) I N GENERAL .—The Secretary may take into account 
the financial burden on providers with underserved popu-lations in determining any penalty to be imposed under this subsection. 
‘‘(B) U

‘‘(B) U
NDERSERVED POPULATION DEFINED .—In this 
paragraph, the term ‘underserved population’ means the population of an area designated by the Secretary as an area with a shortage of elder justice programs or a popu-lation group designated by the Secretary as having a short-age of such programs. Such areas or groups designated by the Secretary may include— 
‘‘(i) areas or groups that are geographically isolated 
(such as isolated in a rural area);

(such as isolated in a rural area); 
‘‘(ii) racial and ethnic minority populations; and ‘‘(iii) populations underserved because of special 
needs (such as language barriers, disabilities, alien status, or age). 
‘‘(d) A
DDITIONAL PENALTIES FOR RETALIATION .— 
‘‘(1) I N GENERAL .—A long-term care facility may not— 
‘‘(A) discharge, demote, suspend, threaten, harass, or

deny a promotion or other employment-related benefit to an employee, or in any other manner discriminate against an employee in the terms and conditions of employment because of lawful acts done by the employee; or 
‘‘(B) file a complaint or a report against a nurse or 
other employee with the appropriate State professional dis-ciplinary agency because of lawful acts done by the nurse or employee,

for making a report, causing a report to be made, or for taking steps in furtherance of making a report pursuant to subsection (b)(1). 
‘‘(2) P
ENALTIES FOR RETALIATION .—If a long-term care 
facility violates subparagraph (A) or (B) of paragraph (1) the facility shall be subject to a civil money penalty of not more than $200,000 or the Secretary may classify the entity as an excluded entity for a period of 2 years pursuant to section 1128(b), or both. 
‘‘(3) R

‘‘(3) R
EQUIREMENT TO POST NOTICE .—Each long-term care 
facility shall post conspicuously in an appropriate location a sign (in a form specified by the Secretary) specifying the rights of employees under this section. Such sign shall include a statement that an employee may file a complaint with the Secretary against a long-term care facility that violates the provisions of this subsection and information with respect to the manner of filing such a complaint.

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124 STAT. 802 PUBLIC LAW 111–148—MAR. 23, 2010 
‘‘(e) P ROCEDURE .—The provisions of section 1128A (other than 
subsections (a) and (b) and the second sentence of subsection (f)) shall apply to a civil money penalty or exclusion under this section in the same manner as such provisions apply to a penalty or proceeding under section 1128A(a). 
‘‘(f) D
EFINITIONS .—In this section, the terms ‘elder justice’, ‘long-

term care facility’, and ‘law enforcement’ have the meanings given those terms in section 2011.’’. 
(c) N
ATIONAL NURSE AIDEREGISTRY .— 
(1) D EFINITION OF NURSE AIDE .—In this subsection, the 
term ‘‘nurse aide’’ has the meaning given that term in sections 1819(b)(5)(F) and 1919(b)(5)(F) of the Social Security Act (42 U.S.C. 1395i–3(b)(5)(F); 1396r(b)(5)(F)). 
(2) S
(A) I N GENERAL .—The Secretary, in consultation with

appropriate government agencies and private sector organizations, shall conduct a study on establishing a national nurse aide registry. 
(B) A
REAS EVALUATED .—The study conducted under 
this subsection shall include an evaluation of— 
(i) who should be included in the registry; (ii) how such a registry would comply with Federal 
and State privacy laws and regulations; 
(iii) how data would be collected for the registry; (iv) what entities and individuals would have

access to the data collected; 
(v) how the registry would provide appropriate 
information regarding violations of Federal and State law by individuals included in the registry; 
(vi) how the functions of a national nurse aide 
registry would be coordinated with the nationwide pro-gram for national and State background checks on direct patient access employees of long-term care facili-ties and providers under section 4301; and 
(vii) how the information included in State nurse

aide registries developed and maintained under sec-tions 1819(e)(2) and 1919(e)(2) of the Social Security Act (42 U.S.C. 1395i–3(e)(2); 1396r(e)(2)(2)) would be provided as part of a national nurse aide registry. (C) C
ONSIDERATIONS .—In conducting the study and 
preparing the report required under this subsection, the Secretary shall take into consideration the findings and conclusions of relevant reports and other relevant resources, including the following:

(i) The Department of Health and Human Services 
Office of Inspector General Report, Nurse Aide Reg-
istries: State Compliance and Practices (February 2005). 
(ii) The General Accounting Office (now known 
as the Government Accountability Office) Report, Nursing Homes: More Can Be Done to Protect Resi-dents from Abuse (March 2002). 
(iii) The Department of Health and Human Serv-

ices Office of the Inspector General Report, Nurse Aide Registries: Long-Term Care Facility Compliance and Practices (July 2005). Applicability. 
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124 STAT. 803 PUBLIC LAW 111–148—MAR. 23, 2010 
(iv) The Department of Health and Human Serv-
ices Health Resources and Services Administration Report, Nursing Aides, Home Health Aides, and Related Health Care Occupations—National and Local Workforce Shortages and Associated Data Needs (2004) (in particular with respect to chapter 7 and appendix F). 
(v) The 2001 Report to CMS from the School of

(v) The 2001 Report to CMS from the School of 
Rural Public Health, Texas A&M University, Pre-venting Abuse and Neglect in Nursing Homes: The Role of Nurse Aide Registries. 
(vi) Information included in State nurse aide reg-
istries developed and maintained under sections 1819(e)(2) and 1919(e)(2) of the Social Security Act (42 U.S.C. 1395i–3(e)(2); 1396r(e)(2)(2)). (D) R
EPORT .—Not later than 18 months after the date

EPORT .—Not later than 18 months after the date 
of enactment of this Act, the Secretary shall submit to the Elder Justice Coordinating Council established under section 2021 of the Social Security Act, as added by section 1805(a), the Committee on Finance of the Senate, and the Committee on Ways and Means and the Committee on Energy and Commerce of the House of Representatives a report containing the findings and recommendations of the study conducted under this paragraph. 
(E) F

(E) F
UNDING LIMITATION .—Funding for the study con-
ducted under this subsection shall not exceed $500,000. (3) C
ONGRESSIONAL ACTION .—After receiving the report 
submitted by the Secretary under paragraph (2)(D), the Com-mittee on Finance of the Senate and the Committee on Ways and Means and the Committee on Energy and Commerce of the House of Representatives shall, as they deem appropriate, take action based on the recommendations contained in the report. 
(4) A

(4) A
UTHORIZATION OF APPROPRIATIONS .—There are author-
ized to be appropriated such sums as are necessary for the purpose of carrying out this subsection. (d) C
(1) T ITLE XX .—Title XX of the Social Security Act (42 U.S.C. 
1397 et seq.), as amended by section 6703(a), is amended— 
(A) in the heading of section 2001, by striking ‘‘ TITLE ’’ 
and inserting ‘‘ SUBTITLE ’’; and 
(B) in subtitle 1, by striking ‘‘this title’’ each place

it appears and inserting ‘‘this subtitle’’. (2) T
ITLE IV .—Title IV of the Social Security Act (42 U.S.C. 
601 et seq.) is amended— 
(A) in section 404(d)— 
(i) in paragraphs (1)(A), (2)(A), and (3)(B), by 
inserting ‘‘subtitle 1 of’’ before ‘‘title XX’’ each place it appears; 
(ii) in the heading of paragraph (2), by inserting 
‘‘
SUBTITLE 1 OF’’ before ‘‘ TITLE XX ’’; and 
(iii) in the heading of paragraph (3)(B), by inserting 
‘‘SUBTITLE 1 OF’’ before ‘‘ TITLE XX ’’; and

‘‘SUBTITLE 1 OF’’ before ‘‘ TITLE XX ’’; and 
(B) in sections 422(b), 471(a)(4), 472(h)(1), and 
473(b)(2), by inserting ‘‘subtitle 1 of’’ before ‘‘title XX’’ each place it appears. 42 USC 622, 
671–673. 42 USC 604. 42 USC 1397, 
1397a, 1397c– 1397e, 1397g. 42 USC 1397. 
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124 STAT. 804 PUBLIC LAW 111–148—MAR. 23, 2010 
(3) T ITLE XI .—Title XI of the Social Security Act (42 U.S.C. 
1301 et seq.) is amended— 
(A) in section 1128(h)(3)— 
(i) by inserting ‘‘subtitle 1 of’’ before ‘‘title XX’’; 
and 
(ii) by striking ‘‘such title’’ and inserting ‘‘such 
subtitle’’; and (B) in section 1128A(i)(1), by inserting ‘‘subtitle 1 of’’ 
before ‘‘title XX’’. 
Subtitle I—Sense of the Senate Regarding 
Medical Malpractice 
SEC. 6801. SENSE OF THE SENATE REGARDING MEDICAL MAL-

PRACTICE. 
It is the sense of the Senate that— 
(1) health care reform presents an opportunity to address 
issues related to medical malpractice and medical liability insurance; 
(2) States should be encouraged to develop and test alter-

natives to the existing civil litigation system as a way of improving patient safety, reducing medical errors, encouraging the efficient resolution of disputes, increasing the availability of prompt and fair resolution of disputes, and improving access to liability insurance, while preserving an individual’s right to seek redress in court; and 
(3) Congress should consider establishing a State dem-

onstration program to evaluate alternatives to the existing civil litigation system with respect to the resolution of medical malpractice claims. 
TITLE VII—IMPROVING ACCESS TO 
INNOVATIVE MEDICAL THERAPIES 
Subtitle A—Biologics Price Competition 
and Innovation 
SEC. 7001. SHORT TITLE. 
(a) I NGENERAL .—This subtitle may be cited as the ‘‘Biologics 
Price Competition and Innovation Act of 2009’’. 
(b) S ENSE OF THE SENATE .—It is the sense of the Senate that

a biosimilars pathway balancing innovation and consumer interests should be established. 
SEC. 7002. APPROVAL PATHWAY FOR BIOSIMILAR BIOLOGICAL PROD-
UCTS. 
(a) L ICENSURE OF BIOLOGICAL PRODUCTS AS BIOSIMILAR OR  
INTERCHANGEABLE .—Section 351 of the Public Health Service Act 
(42 U.S.C. 262) is amended— 
(1) in subsection (a)(1)(A), by inserting ‘‘under this sub-
section or subsection (k)’’ after ‘‘biologics license’’; and

(2) by adding at the end the following: 42 USC 201 note. Biologics Price 
Competition and Innovation Act of 2009. 42 USC 
1320a–7a. 42 USC 1320a–7. 
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124 STAT. 805 PUBLIC LAW 111–148—MAR. 23, 2010 
‘‘(k) L ICENSURE OF BIOLOGICAL PRODUCTS AS BIOSIMILAR OR  
INTERCHANGEABLE .— 
‘‘(1) I N GENERAL .—Any person may submit an application 
for licensure of a biological product under this subsection. 
‘‘(2) C ONTENT .— 
‘‘(i) R EQUIRED INFORMATION .—An application sub-
mitted under this subsection shall include information demonstrating that— 
‘‘(I) the biological product is biosimilar to a

‘‘(I) the biological product is biosimilar to a 
reference product based upon data derived from— 
‘‘(aa) analytical studies that demonstrate 
that the biological product is highly similar to the reference product notwithstanding minor differences in clinically inactive compo-nents; 
‘‘(bb) animal studies (including the assess-
ment of toxicity); and 
‘‘(cc) a clinical study or studies (including

‘‘(cc) a clinical study or studies (including 
the assessment of immunogenicity and pharmacokinetics or pharmacodynamics) that are sufficient to demonstrate safety, purity, and potency in 1 or more appropriate condi-tions of use for which the reference product is licensed and intended to be used and for which licensure is sought for the biological product; ‘‘(II) the biological product and reference

product utilize the same mechanism or mecha-nisms of action for the condition or conditions of use prescribed, recommended, or suggested in the proposed labeling, but only to the extent the mechanism or mechanisms of action are known for the reference product; 
‘‘(III) the condition or conditions of use pre-
scribed, recommended, or suggested in the labeling proposed for the biological product have been pre-viously approved for the reference product;

‘‘(IV) the route of administration, the dosage 
form, and the strength of the biological product are the same as those of the reference product; and 
‘‘(V) the facility in which the biological product 
is manufactured, processed, packed, or held meets standards designed to assure that the biological product continues to be safe, pure, and potent. 
‘‘(ii) D
ETERMINATION BY SECRETARY .—The Sec-

‘‘(ii) D
retary may determine, in the Secretary’s discretion, that an element described in clause (i)(I) is unnecessary in an application submitted under this subsection. 
‘‘(iii) A
DDITIONAL INFORMATION .—An application 
submitted under this subsection— 
‘‘(I) shall include publicly-available informa-
tion regarding the Secretary’s previous determina-tion that the reference product is safe, pure, and potent; and Public 

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124 STAT. 806 PUBLIC LAW 111–148—MAR. 23, 2010 
‘‘(II) may include any additional information 
in support of the application, including publicly- available information with respect to the reference product or another biological product. 
‘‘(B) I
NTERCHANGEABILITY .—An application (or a 
supplement to an application) submitted under this sub-section may include information demonstrating that the biological product meets the standards described in para-graph (4). ‘‘(3) E

VALUATION BY SECRETARY .—Upon review of an 
application (or a supplement to an application) submitted under this subsection, the Secretary shall license the biological product under this subsection if— 
‘‘(A) the Secretary determines that the information sub-
mitted in the application (or the supplement) is sufficient to show that the biological product— 
‘‘(i) is biosimilar to the reference product; or ‘‘(ii) meets the standards described in paragraph

(4), and therefore is interchangeable with the reference product; and ‘‘(B) the applicant (or other appropriate person) con-
sents to the inspection of the facility that is the subject of the application, in accordance with subsection (c). ‘‘(4) S
AFETY STANDARDS FOR DETERMINING INTERCHANGE -
ABILITY .—Upon review of an application submitted under this

subsection or any supplement to such application, the Secretary shall determine the biological product to be interchangeable with the reference product if the Secretary determines that the information submitted in the application (or a supplement to such application) is sufficient to show that— 
‘‘(A) the biological product— 
‘‘(i) is biosimilar to the reference product; and ‘‘(ii) can be expected to produce the same clinical

result as the reference product in any given patient; and ‘‘(B) for a biological product that is administered more 
than once to an individual, the risk in terms of safety or diminished efficacy of alternating or switching between use of the biological product and the reference product is not greater than the risk of using the reference product without such alternation or switch. ‘‘(5) G
ENERAL RULES .— 
‘‘(A) O NE REFERENCE PRODUCT PER APPLICATION .—A

‘‘(A) O NE REFERENCE PRODUCT PER APPLICATION .—A 
biological product, in an application submitted under this subsection, may not be evaluated against more than 1 reference product. 
‘‘(B) R
EVIEW .—An application submitted under this 
subsection shall be reviewed by the division within the Food and Drug Administration that is responsible for the review and approval of the application under which the reference product is licensed. 
‘‘(C) R
ISK EVALUATION AND MITIGATION STRATEGIES .—

ISK EVALUATION AND MITIGATION STRATEGIES .— 
The authority of the Secretary with respect to risk evalua-tion and mitigation strategies under the Federal Food, Drug, and Cosmetic Act shall apply to biological products licensed under this subsection in the same manner as Applicability. Determination. 
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124 STAT. 807 PUBLIC LAW 111–148—MAR. 23, 2010 
such authority applies to biological products licensed under 
subsection (a). ‘‘(6) E
XCLUSIVITY FOR FIRST INTERCHANGEABLE BIOLOGICAL  
PRODUCT .—Upon review of an application submitted under this

subsection relying on the same reference product for which a prior biological product has received a determination of inter-changeability for any condition of use, the Secretary shall not make a determination under paragraph (4) that the second or subsequent biological product is interchangeable for any condition of use until the earlier of— 
‘‘(A) 1 year after the first commercial marketing of

the first interchangeable biosimilar biological product to be approved as interchangeable for that reference product; 
‘‘(B) 18 months after— 
‘‘(i) a final court decision on all patents in suit 
in an action instituted under subsection (l)(6) against the applicant that submitted the application for the first approved interchangeable biosimilar biological product; or 
‘‘(ii) the dismissal with or without prejudice of

an action instituted under subsection (l)(6) against the applicant that submitted the application for the first approved interchangeable biosimilar biological product; or ‘‘(C)(i) 42 months after approval of the first inter-
changeable biosimilar biological product if the applicant that submitted such application has been sued under sub-section (l)(6) and such litigation is still ongoing within such 42-month period; or 
‘‘(ii) 18 months after approval of the first interchange-

able biosimilar biological product if the applicant that sub-mitted such application has not been sued under subsection (l)(6). 
For purposes of this paragraph, the term ‘final court decision’ means a final decision of a court from which no appeal (other than a petition to the United States Supreme Court for a writ of certiorari) has been or can be taken. 
‘‘(7) E
XCLUSIVITY FOR REFERENCE PRODUCT .— 
‘‘(A) E FFECTIVE DATE OF BIOSIMILAR APPLICATION

‘‘(A) E FFECTIVE DATE OF BIOSIMILAR APPLICATION  
APPROVAL .—Approval of an application under this sub-
section may not be made effective by the Secretary until the date that is 12 years after the date on which the reference product was first licensed under subsection (a). 
‘‘(B) F
ILING PERIOD .—An application under this sub-
section may not be submitted to the Secretary until the date that is 4 years after the date on which the reference product was first licensed under subsection (a).

‘‘(C) F
IRST LICENSURE .—Subparagraphs (A) and (B) 
shall not apply to a license for or approval of— 
‘‘(i) a supplement for the biological product that 
is the reference product; or 
‘‘(ii) a subsequent application filed by the same 
sponsor or manufacturer of the biological product that is the reference product (or a licensor, predecessor in interest, or other related entity) for— 
‘‘(I) a change (not including a modification to

‘‘(I) a change (not including a modification to 
the structure of the biological product) that results Definition. 
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124 STAT. 808 PUBLIC LAW 111–148—MAR. 23, 2010 
in a new indication, route of administration, dosing 
schedule, dosage form, delivery system, delivery device, or strength; or 
‘‘(II) a modification to the structure of the 
biological product that does not result in a change in safety, purity, or potency. 
‘‘(8) G
UIDANCE DOCUMENTS .— 
‘‘(A) I N GENERAL .—The Secretary may, after oppor-

tunity for public comment, issue guidance in accordance, except as provided in subparagraph (B)(i), with section 701(h) of the Federal Food, Drug, and Cosmetic Act with respect to the licensure of a biological product under this subsection. Any such guidance may be general or specific. 
‘‘(B) P
‘‘(i) I N GENERAL .—The Secretary shall provide the 
public an opportunity to comment on any proposed guidance issued under subparagraph (A) before issuing final guidance. 
‘‘(ii) I

‘‘(ii) I
NPUT REGARDING MOST VALUABLE GUID -
ANCE .—The Secretary shall establish a process through 
which the public may provide the Secretary with input regarding priorities for issuing guidance. ‘‘(C) N
O REQUIREMENT FOR APPLICATION CONSIDER -
ATION .—The issuance (or non-issuance) of guidance under 
subparagraph (A) shall not preclude the review of, or action on, an application submitted under this subsection. 
‘‘(D) R
EQUIREMENT FOR PRODUCT CLASS -SPECIFIC GUID -

ANCE .—If the Secretary issues product class-specific guid-
ance under subparagraph (A), such guidance shall include a description of— 
‘‘(i) the criteria that the Secretary will use to deter-
mine whether a biological product is highly similar to a reference product in such product class; and 
‘‘(ii) the criteria, if available, that the Secretary

will use to determine whether a biological product meets the standards described in paragraph (4). ‘‘(E) C
ERTAIN PRODUCT CLASSES .— 
‘‘(i) G UIDANCE .—The Secretary may indicate in a 
guidance document that the science and experience, as of the date of such guidance, with respect to a product or product class (not including any recom-binant protein) does not allow approval of an applica-tion for a license as provided under this subsection for such product or product class. 
‘‘(ii) M

‘‘(ii) M
ODIFICATION OR REVERSAL .—The Secretary 
may issue a subsequent guidance document under subparagraph (A) to modify or reverse a guidance docu-ment under clause (i). 
‘‘(iii) N
O EFFECT ON ABILITY TO DENY LICENSE .— 
Clause (i) shall not be construed to require the Sec-retary to approve a product with respect to which the Secretary has not indicated in a guidance document that the science and experience, as described in clause (i), does not allow approval of such an application.

‘‘(l) P
ATENTS .— 
‘‘(1) C ONFIDENTIAL ACCESS TO SUBSECTION (k) APPLICA -
TION .— Criteria. 
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124 STAT. 809 PUBLIC LAW 111–148—MAR. 23, 2010 
‘‘(A) A PPLICATION OF PARAGRAPH .—Unless otherwise 
agreed to by a person that submits an application under subsection (k) (referred to in this subsection as the ‘sub-section (k) applicant’) and the sponsor of the application for the reference product (referred to in this subsection as the ‘reference product sponsor’), the provisions of this paragraph shall apply to the exchange of information described in this subsection. 
‘‘(B) I

‘‘(B) I
‘‘(i) P ROVISION OF CONFIDENTIAL INFORMATION .—

When a subsection (k) applicant submits an application under subsection (k), such applicant shall provide to the persons described in clause (ii), subject to the terms of this paragraph, confidential access to the informa-tion required to be produced pursuant to paragraph (2) and any other information that the subsection (k) applicant determines, in its sole discretion, to be appro-priate (referred to in this subsection as the ‘confidential information’). 
‘‘(ii) R

‘‘(ii) R
ECIPIENTS OF INFORMATION .—The persons 
described in this clause are the following: 
‘‘(I) O UTSIDE COUNSEL .—One or more attorneys 
designated by the reference product sponsor who are employees of an entity other than the reference product sponsor (referred to in this paragraph as the ‘outside counsel’), provided that such attorneys do not engage, formally or informally, in patent prosecution relevant or related to the reference product. 
‘‘(II) I
N-HOUSE COUNSEL .—One attorney that

‘‘(II) I
N-HOUSE COUNSEL .—One attorney that 
represents the reference product sponsor who is an employee of the reference product sponsor, pro-vided that such attorney does not engage, formally or informally, in patent prosecution relevant or related to the reference product. ‘‘(iii) P
ATENT OWNER ACCESS .—A representative of

the owner of a patent exclusively licensed to a reference product sponsor with respect to the reference product and who has retained a right to assert the patent or participate in litigation concerning the patent may be provided the confidential information, provided that the representative informs the reference product sponsor and the subsection (k) applicant of his or her agreement to be subject to the confidentiality provi-sions set forth in this paragraph, including those under clause (ii).

IMITATION ON DISCLOSURE .—No person that 
receives confidential information pursuant to subparagraph (B) shall disclose any confidential information to any other person or entity, including the reference product sponsor employees, outside scientific consultants, or other outside counsel retained by the reference product sponsor, without the prior written consent of the subsection (k) applicant, which shall not be unreasonably withheld. 
‘‘(D) U
SE OF CONFIDENTIAL INFORMATION .—Confidential

SE OF CONFIDENTIAL INFORMATION .—Confidential 
information shall be used for the sole and exclusive purpose of determining, with respect to each patent assigned to 
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124 STAT. 810 PUBLIC LAW 111–148—MAR. 23, 2010 
or exclusively licensed by the reference product sponsor, 
whether a claim of patent infringement could reasonably be asserted if the subsection (k) applicant engaged in the manufacture, use, offering for sale, sale, or importation into the United States of the biological product that is the subject of the application under subsection (k). 
‘‘(E) O
WNERSHIP OF CONFIDENTIAL INFORMATION .—The

WNERSHIP OF CONFIDENTIAL INFORMATION .—The 
confidential information disclosed under this paragraph is, and shall remain, the property of the subsection (k) applicant. By providing the confidential information pursu-ant to this paragraph, the subsection (k) applicant does not provide the reference product sponsor or the outside counsel any interest in or license to use the confidential information, for purposes other than those specified in subparagraph (D). 
‘‘(F) E

that the reference product sponsor files a patent infringe-ment suit, the use of confidential information shall continue to be governed by the terms of this paragraph until such time as a court enters a protective order regarding the information. Upon entry of such order, the subsection (k) applicant may redesignate confidential information in accordance with the terms of that order. No confidential information shall be included in any publicly-available com-plaint or other pleading. In the

com-plaint or other pleading. In the event that the reference product sponsor does not file an infringement action by the date specified in paragraph (6), the reference product sponsor shall return or destroy all confidential information received under this paragraph, provided that if the ref-erence product sponsor opts to destroy such information, it will confirm destruction in writing to the subsection (k) applicant.

‘‘(G) R
graph shall be construed— 
‘‘(i) as an admission by the subsection (k) applicant 
regarding the validity, enforceability, or infringement of any patent; or 
‘‘(ii) as an agreement or admission by the sub-
section (k) applicant with respect to the competency, relevance, or materiality of any confidential informa-tion. ‘‘(H) E
FFECT OF VIOLATION .—The disclosure of any con-

fidential information in violation of this paragraph shall be deemed to cause the subsection (k) applicant to suffer irreparable harm for which there is no adequate legal remedy and the court shall consider immediate injunctive relief to be an appropriate and necessary remedy for any violation or threatened violation of this paragraph. ‘‘(2) S
UBSECTION (k) APPLICATION INFORMATION .—Not later

than 20 days after the Secretary notifies the subsection (k) applicant that the application has been accepted for review, the subsection (k) applicant— 
‘‘(A) shall provide to the reference product sponsor 
a copy of the application submitted to the Secretary under subsection (k), and such other information that describes the process or processes used to manufacture the biological product that is the subject of such application; and Deadline. Notification.

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124 STAT. 811 PUBLIC LAW 111–148—MAR. 23, 2010 
‘‘(B) may provide to the reference product sponsor addi-
tional information requested by or on behalf of the reference product sponsor. ‘‘(3) L
IST AND DESCRIPTION OF PATENTS .— 
‘‘(A) L IST BY REFERENCE PRODUCT SPONSOR .—Not later 
than 60 days after the receipt of the application and information under paragraph (2), the reference product sponsor shall provide to the subsection (k) applicant—

sponsor believes a claim of patent infringement could reasonably be asserted by the reference product sponsor, or by a patent owner that has granted an exclusive license to the reference product sponsor with respect to the reference product, if a person not licensed by the reference product sponsor engaged in the making, using, offering to sell, selling, or importing into the United States of the biological product that is the subject of the subsection (k) application; and

‘‘(ii) an identification of the patents on such list 
that the reference product sponsor would be prepared to license to the subsection (k) applicant. ‘‘(B) L
IST AND DESCRIPTION BY SUBSECTION (k) 
APPLICANT .—Not later than 60 days after receipt of the 
list under subparagraph (A), the subsection (k) applicant— 
‘‘(i) may provide to the reference product sponsor

a list of patents to which the subsection (k) applicant believes a claim of patent infringement could reason-ably be asserted by the reference product sponsor if a person not licensed by the reference product sponsor engaged in the making, using, offering to sell, selling, or importing into the United States of the biological product that is the subject of the subsection (k) applica-tion; 
‘‘(ii) shall provide to the reference product sponsor,

with respect to each patent listed by the reference product sponsor under subparagraph (A) or listed by the subsection (k) applicant under clause (i)— 
‘‘(I) a detailed statement that describes, on 
a claim by claim basis, the factual and legal basis of the opinion of the subsection (k) applicant that such patent is invalid, unenforceable, or will not be infringed by the commercial marketing of the biological product that is the subject of the sub-section (k) application; or

‘‘(II) a statement that the subsection (k) 
applicant does not intend to begin commercial mar-keting of the biological product before the date that such patent expires; and ‘‘(iii) shall provide to the reference product sponsor 
a response regarding each patent identified by the reference product sponsor under subparagraph (A)(ii). ‘‘(C) D
ESCRIPTION BY REFERENCE PRODUCT SPONSOR .—

ESCRIPTION BY REFERENCE PRODUCT SPONSOR .— 
Not later than 60 days after receipt of the list and state-ment under subparagraph (B), the reference product sponsor shall provide to the subsection (k) applicant a detailed statement that describes, with respect to each patent described in subparagraph (B)(ii)(I), on a claim by Deadlines.

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124 STAT. 812 PUBLIC LAW 111–148—MAR. 23, 2010 
claim basis, the factual and legal basis of the opinion 
of the reference product sponsor that such patent will be infringed by the commercial marketing of the biological product that is the subject of the subsection (k) application and a response to the statement concerning validity and enforceability provided under subparagraph (B)(ii)(I). ‘‘(4) P
ATENT RESOLUTION NEGOTIATIONS .— 
‘‘(A) I N GENERAL .—After receipt by the subsection (k)

applicant of the statement under paragraph (3)(C), the reference product sponsor and the subsection (k) applicant shall engage in good faith negotiations to agree on which, if any, patents listed under paragraph (3) by the subsection (k) applicant or the reference product sponsor shall be the subject of an action for patent infringement under paragraph (6). 
‘‘(B) F
AILURE TO REACH AGREEMENT .—If, within 15 days

AILURE TO REACH AGREEMENT .—If, within 15 days 
of beginning negotiations under subparagraph (A), the sub-section (k) applicant and the reference product sponsor fail to agree on a final and complete list of which, if any, patents listed under paragraph (3) by the subsection (k) applicant or the reference product sponsor shall be the subject of an action for patent infringement under paragraph (6), the provisions of paragraph (5) shall apply to the parties. ‘‘(5) P

ATENT RESOLUTION IF NO AGREEMENT .— 
‘‘(A) N UMBER OF PATENTS .—The subsection (k) 
applicant shall notify the reference product sponsor of the number of patents that such applicant will provide to the reference product sponsor under subparagraph (B)(i)(I). 
‘‘(B) E
XCHANGE OF PATENT LISTS .— 
‘‘(i) I N GENERAL .—On a date agreed to by the sub-

section (k) applicant and the reference product sponsor, but in no case later than 5 days after the subsection (k) applicant notifies the reference product sponsor under subparagraph (A), the subsection (k) applicant and the reference product sponsor shall simultaneously exchange— 
‘‘(I) the list of patents that the subsection (k) 
applicant believes should be the subject of an action for patent infringement under paragraph (6); and 
‘‘(II) the list of patents, in accordance with

‘‘(II) the list of patents, in accordance with 
clause (ii), that the reference product sponsor believes should be the subject of an action for patent infringement under paragraph (6). ‘‘(ii) N
UMBER OF PATENTS LISTED BY REFERENCE  
PRODUCT SPONSOR .— 
the number of patents listed by the reference product sponsor under clause (i)(II) may not exceed the number of patents listed by the subsection (k) applicant under clause (i)(I). 
‘‘(II) E

‘‘(II) E
XCEPTION .—If a subsection (k) applicant 
does not list any patent under clause (i)(I), the reference product sponsor may list 1 patent under clause (i)(II). 
‘‘(6) I
MMEDIATE PATENT INFRINGEMENT ACTION .— Deadlines. Deadline. Notification. Time period. 
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124 STAT. 813 PUBLIC LAW 111–148—MAR. 23, 2010 
‘‘(A) A CTION IF AGREEMENT ON PATENT LIST .—If the 
subsection (k) applicant and the reference product sponsor agree on patents as described in paragraph (4), not later than 30 days after such agreement, the reference product sponsor shall bring an action for patent infringement with respect to each such patent. 
‘‘(B) A
CTION IF NO AGREEMENT ON PATENT LIST .—If

CTION IF NO AGREEMENT ON PATENT LIST .—If 
the provisions of paragraph (5) apply to the parties as described in paragraph (4)(B), not later than 30 days after the exchange of lists under paragraph (5)(B), the reference product sponsor shall bring an action for patent infringe-ment with respect to each patent that is included on such lists. 
‘‘(C) N
OTIFICATION AND PUBLICATION OF COMPLAINT .— 
‘‘(i) N OTIFICATION TO SECRETARY .—Not later than

30 days after a complaint is served to a subsection (k) applicant in an action for patent infringement described under this paragraph, the subsection (k) applicant shall provide the Secretary with notice and a copy of such complaint. 
‘‘(ii) P
UBLICATION BY SECRETARY .—The Secretary 
shall publish in the Federal Register notice of a com-plaint received under clause (i). 
‘‘(7) N
EWLY ISSUED OR LICENSED PATENTS .—In the case 
of a patent that—

of a patent that— 
‘‘(A) is issued to, or exclusively licensed by, the ref-
erence product sponsor after the date that the reference product sponsor provided the list to the subsection (k) applicant under paragraph (3)(A); and 
‘‘(B) the reference product sponsor reasonably believes

that, due to the issuance of such patent, a claim of patent infringement could reasonably be asserted by the reference product sponsor if a person not licensed by the reference product sponsor engaged in the making, using, offering to sell, selling, or importing into the United States of the biological product that is the subject of the subsection (k) application,

not later than 30 days after such issuance or licensing, the reference product sponsor shall provide to the subsection (k) applicant a supplement to the list provided by the reference product sponsor under paragraph (3)(A) that includes such patent, not later than 30 days after such supplement is pro-vided, the subsection (k) applicant shall provide a statement to the reference product sponsor in accordance with paragraph (3)(B), and such patent shall be subject to paragraph (8). 
‘‘(8) N

‘‘(8) N
OTICE OF COMMERCIAL MARKETING AND PRELIMINARY  
INJUNCTION .— 
‘‘(A) N OTICE OF COMMERCIAL MARKETING .—The sub-
section (k) applicant shall provide notice to the reference product sponsor not later than 180 days before the date of the first commercial marketing of the biological product licensed under subsection (k). 
‘‘(B) P
RELIMINARY INJUNCTION .—After receiving the

RELIMINARY INJUNCTION .—After receiving the 
notice under subparagraph (A) and before such date of the first commercial marketing of such biological product, the reference product sponsor may seek a preliminary injunction prohibiting the subsection (k) applicant from Deadline. Deadlines. Federal Register, 
publication. Notice. 
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124 STAT. 814 PUBLIC LAW 111–148—MAR. 23, 2010 
engaging in the commercial manufacture or sale of such 
biological product until the court decides the issue of patent validity, enforcement, and infringement with respect to any patent that is— 
‘‘(i) included in the list provided by the reference 
product sponsor under paragraph (3)(A) or in the list provided by the subsection (k) applicant under para-graph (3)(B); and 
‘‘(ii) not included, as applicable, on—

‘‘(ii) not included, as applicable, on— 
‘‘(I) the list of patents described in paragraph 
(4); or 
‘‘(II) the lists of patents described in paragraph 
(5)(B). 
‘‘(C) R
EASONABLE COOPERATION .—If the reference 
product sponsor has sought a preliminary injunction under subparagraph (B), the reference product sponsor and the subsection (k) applicant shall reasonably cooperate to expe-dite such further discovery as is needed in connection with the preliminary injunction motion. ‘‘(9) L

IMITATION ON DECLARATORY JUDGMENT ACTION .— 
‘‘(A) S UBSECTION (k) APPLICATION PROVIDED .—If a sub-

section (k) applicant provides the application and informa-tion required under paragraph (2)(A), neither the reference product sponsor nor the subsection (k) applicant may, prior to the date notice is received under paragraph (8)(A), bring any action under section 2201 of title 28, United States Code, for a declaration of infringement, validity, or enforce-ability of any patent that is described in clauses (i) and (ii) of paragraph (8)(B). 
‘‘(B) S
UBSEQUENT FAILURE TO ACT BY SUBSECTION (k)

UBSEQUENT FAILURE TO ACT BY SUBSECTION (k) 
APPLICANT .—If a subsection (k) applicant fails to complete

an action required of the subsection (k) applicant under paragraph (3)(B)(ii), paragraph (5), paragraph (6)(C)(i), paragraph (7), or paragraph (8)(A), the reference product sponsor, but not the subsection (k) applicant, may bring an action under section 2201 of title 28, United States Code, for a declaration of infringement, validity, or enforce-ability of any patent included in the list described in para-graph (3)(A), including as provided under paragraph (7). 
‘‘(C) S

‘‘(C) S
UBSECTION (k) APPLICATION NOT PROVIDED .—If 
a subsection (k) applicant fails to provide the application and information required under paragraph (2)(A), the ref-erence product sponsor, but not the subsection (k) applicant, may bring an action under section 2201 of title 28, United States Code, for a declaration of infringement, validity, or enforceability of any patent that claims the 
biological product or a use of the biological product.’’. 
(b) D

(b) D
EFINITIONS .—Section 351(i) of the Public Health Service 
Act (42 U.S.C. 262(i)) is amended— 
(1) by striking ‘‘In this section, the term ‘biological product’ 
means’’ and inserting the following: ‘‘In this section: 
‘‘(1) The term ‘biological product’ means’’; (2) in paragraph (1), as so designated, by inserting ‘‘protein 
(except any chemically synthesized polypeptide),’’ after ‘‘aller-genic product,’’; and 
(3) by adding at the end the following:

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124 STAT. 815 PUBLIC LAW 111–148—MAR. 23, 2010 
‘‘(2) The term ‘biosimilar’ or ‘biosimilarity’, in reference 
to a biological product that is the subject of an application under subsection (k), means— 
‘‘(A) that the biological product is highly similar to 
the reference product notwithstanding minor differences in clinically inactive components; and 
‘‘(B) there are no clinically meaningful differences

between the biological product and the reference product in terms of the safety, purity, and potency of the product. ‘‘(3) The term ‘interchangeable’ or ‘interchangeability’, in 
reference to a biological product that is shown to meet the standards described in subsection (k)(4), means that the biological product may be substituted for the reference product without the intervention of the health care provider who pre-scribed the reference product.

‘‘(4) The term ‘reference product’ means the single biological 
product licensed under subsection (a) against which a biological product is evaluated in an application submitted under sub-section (k).’’. (c) C
ONFORMING AMENDMENTS RELATING TO PATENTS .— 
(1) P ATENTS .—Section 271(e) of title 35, United States Code, 
end; 
(ii) in subparagraph (B), by adding ‘‘or’’ at the 
end; and

end; and 
(iii) by inserting after subparagraph (B) the fol-
lowing: 
‘‘(C)(i) with respect to a patent that is identified in the 
list of patents described in section 351(l)(3) of the Public Health Service Act (including as provided under section 351(l)(7) of such Act), an application seeking approval of a biological product, or 
‘‘(ii) if the applicant for the application fails to provide

the application and information required under section 351(l)(2)(A) of such Act, an application seeking approval of a biological product for a patent that could be identified pursu-ant to section 351(l)(3)(A)(i) of such Act,’’; and 
(iv) in the matter following subparagraph (C) (as 
added by clause (iii)), by striking ‘‘or veterinary biological product’’ and inserting ‘‘, veterinary biological product, or biological product’’; (B) in paragraph (4)— 
(i) in subparagraph (B), by—

(i) in subparagraph (B), by— 
(I) striking ‘‘or veterinary biological product’’ 
and inserting ‘‘, veterinary biological product, or biological product’’; and 
(II) striking ‘‘and’’ at the end; 
(ii) in subparagraph (C), by— 
(II) striking the period and inserting ‘‘, and’’; 
(iii) by inserting after subparagraph (C) the fol-
lowing:

lowing: 
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124 STAT. 816 PUBLIC LAW 111–148—MAR. 23, 2010 
‘‘(D) the court shall order a permanent injunction prohib-

iting any infringement of the patent by the biological product involved in the infringement until a date which is not earlier than the date of the expiration of the patent that has been infringed under paragraph (2)(C), provided the patent is the subject of a final court decision, as defined in section 351(k)(6) of the Public Health Service Act, in an action for infringement of the patent under section 351(l)(6) of such Act, and the biological product has not yet been approved because of

product has not yet been approved because of section 351(k)(7) of such Act.’’; and

(iv) in the matter following subparagraph (D) (as 
added by clause (iii)), by striking ‘‘and (C)’’ and inserting ‘‘(C), and (D)’’; and (C) by adding at the end the following: 
‘‘(6)(A) Subparagraph (B) applies, in lieu of paragraph (4), in 
the case of a patent— 
‘‘(i) that is identified, as applicable, in the list of patents

described in section 351(l)(4) of the Public Health Service Act or the lists of patents described in section 351(l)(5)(B) of such Act with respect to a biological product; and 
‘‘(ii) for which an action for infringement of the patent 
with respect to the biological product— 
‘‘(I) was brought after the expiration of the 30-day 
period described in subparagraph (A) or (B), as applicable, of section 351(l)(6) of such Act; or 
‘‘(II) was brought before the expiration of the 30-day

period described in subclause (I), but which was dismissed without prejudice or was not prosecuted to judgment in good faith. 
‘‘(B) In an action for infringement of a patent described in 
subparagraph (A), the sole and exclusive remedy that may be granted by a court, upon a finding that the making, using, offering to sell, selling, or importation into the United States of the biological product that is the subject of the action infringed the patent, shall be a reasonable royalty.

‘‘(C) The owner of a patent that should have been included 
in the list described in section 351(l)(3)(A) of the Public Health Service Act, including as provided under section 351(l)(7) of such Act for a biological product, but was not timely included in such list, may not bring an action under this section for infringement of the patent with respect to the biological product.’’. 
(2) C
ONFORMING AMENDMENT UNDER TITLE 28.—Section

ONFORMING AMENDMENT UNDER TITLE 28.—Section 
2201(b) of title 28, United States Code, is amended by inserting before the period the following: ‘‘, or section 351 of the Public Health Service Act’’. (d) C
ONFORMING AMENDMENTS UNDER THE FEDERAL FOOD, 
DRUG, AND COSMETIC ACT.— 
(1) C ONTENT AND REVIEW OF APPLICATIONS .—Section

505(b)(5)(B) of the Federal Food, Drug, and Cosmetic Act (21 U.S.C. 355(b)(5)(B)) is amended by inserting before the period at the end of the first sentence the following: ‘‘or, with respect to an applicant for approval of a biological product under section 351(k) of the Public Health Service Act, any necessary clinical study or studies’’. 
(2) N
EW ACTIVE INGREDIENT .—Section 505B of the Federal

Food, Drug, and Cosmetic Act (21 U.S.C. 355c) is amended by adding at the end the following: Applicability. Courts. 
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124 STAT. 817 PUBLIC LAW 111–148—MAR. 23, 2010 
‘‘(n) N EWACTIVE INGREDIENT .— 
‘‘(1) N ON-INTERCHANGEABLE BIOSIMILAR BIOLOGICAL  
PRODUCT .—A biological product that is biosimilar to a reference 
product under section 351 of the Public Health Service Act, and that the Secretary has not determined to meet the stand-ards described in subsection (k)(4) of such section for inter-changeability with the reference product, shall be considered to have a new active ingredient under this section.

‘‘(2) I
NTERCHANGEABLE BIOSIMILAR BIOLOGICAL PRODUCT .— 
A biological product that is interchangeable with a reference product under section 351 of the Public Health Service Act shall not be considered to have a new active ingredient under this section.’’. (e) P
RODUCTS PREVIOUSLY APPROVED UNDER SECTION 505.— 
(1) R EQUIREMENT TO FOLLOW SECTION 351.—Except as pro-

vided in paragraph (2), an application for a biological product shall be submitted under section 351 of the Public Health Service Act (42 U.S.C. 262) (as amended by this Act). 
(2) E
XCEPTION .—An application for a biological product may 
be submitted under section 505 of the Federal Food, Drug, and Cosmetic Act (21 U.S.C. 355) if— 
(A) such biological product is in a product class for

which a biological product in such product class is the subject of an application approved under such section 505 not later than the date of enactment of this Act; and 
(B) such application— 
(i) has been submitted to the Secretary of Health 
and Human Services (referred to in this subtitle as the ‘‘Secretary’’) before the date of enactment of this Act; or 
(ii) is submitted to the Secretary not later than 
the date that is 10 years after the date of enactment of this Act. 
(3) L

(3) L
IMITATION .—Notwithstanding paragraph (2), an 
application for a biological product may not be submitted under section 505 of the Federal Food, Drug, and Cosmetic Act (21 U.S.C. 355) if there is another biological product approved under subsection (a) of section 351 of the Public Health Service Act that could be a reference product with respect to such application (within the meaning of such section 351) if such application were submitted under subsection (k) of such section 351. 
(4) D

(4) D
EEMED APPROVED UNDER SECTION 351.—An approved 
application for a biological product under section 505 of the Federal Food, Drug, and Cosmetic Act (21 U.S.C. 355) shall be deemed to be a license for the biological product under such section 351 on the date that is 10 years after the date of enactment of this Act. 
(5) D
EFINITIONS .—For purposes of this subsection, the term

‘‘biological product’’ has the meaning given such term under section 351 of the Public Health Service Act (42 U.S.C. 262) (as amended by this Act). (f) F
OLLOW -ONBIOLOGICS USERFEES.— 
(1) D EVELOPMENT OF USER FEES FOR BIOSIMILAR BIOLOGICAL  
PRODUCTS .— 
(A) I N GENERAL .—Beginning not later than October 
1, 2010, the Secretary shall develop recommendations to Deadline. Recommenda- tions. Effective date. Deadlines. 42 USC 262 note.

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124 STAT. 818 PUBLIC LAW 111–148—MAR. 23, 2010 
present to Congress with respect to the goals, and plans 
for meeting the goals, for the process for the review of biosimilar biological product applications submitted under section 351(k) of the Public Health Service Act (as added by this Act) for the first 5 fiscal years after fiscal year 2012. In developing such recommendations, the Secretary shall consult with— 
(i) the Committee on Health, Education, Labor, 
and Pensions of the Senate;

and Pensions of the Senate; 
(ii) the Committee on Energy and Commerce of 
the House of Representatives; 
(iii) scientific and academic experts; (iv) health care professionals; (v) representatives of patient and consumer 
advocacy groups; and 
(vi) the regulated industry. 
(B) P
UBLIC REVIEW OF RECOMMENDATIONS .—After nego-
tiations with the regulated industry, the Secretary shall— 
(i) present the recommendations developed under

(i) present the recommendations developed under 
subparagraph (A) to the Congressional committees specified in such subparagraph; 
(ii) publish such recommendations in the Federal 
Register; 
(iii) provide for a period of 30 days for the public 
to provide written comments on such recommendations; 
(iv) hold a meeting at which the public may present 
its views on such recommendations; and 
(v) after consideration of such public views and

(v) after consideration of such public views and 
comments, revise such recommendations as necessary. (C) T
RANSMITTAL OF RECOMMENDATIONS .—Not later 
than January 15, 2012, the Secretary shall transmit to Congress the revised recommendations under subpara-graph (B), a summary of the views and comments received under such subparagraph, and any changes made to the recommendations in response to such views and comments. (2) E
STABLISHMENT OF USER FEE PROGRAM .—It is the sense

of the Senate that, based on the recommendations transmitted to Congress by the Secretary pursuant to paragraph (1)(C), Congress should authorize a program, effective on October 1, 2012, for the collection of user fees relating to the submission of biosimilar biological product applications under section 351(k) of the Public Health Service Act (as added by this Act). 
(3) T
RANSITIONAL PROVISIONS FOR USER FEES FOR BIO -
SIMILAR BIOLOGICAL PRODUCTS .—

SIMILAR BIOLOGICAL PRODUCTS .— 
(A) A PPLICATION OF THE PRESCRIPTION DRUG USER FEE  
PROVISIONS .—Section 735(1)(B) of the Federal Food, Drug, 
and Cosmetic Act (21 U.S.C. 379g(1)(B)) is amended by striking ‘‘section 351’’ and inserting ‘‘subsection (a) or (k) of section 351’’. 
(B) E
VALUATION OF COSTS OF REVIEWING BIOSIMILAR  
BIOLOGICAL PRODUCT APPLICATIONS .—During the period

beginning on the date of enactment of this Act and ending on October 1, 2010, the Secretary shall collect and evaluate data regarding the costs of reviewing applications for biological products submitted under section 351(k) of the Time period. 42 USC 262 note. Effective date. Deadline. Time period. Federal Register, 
publication. Consultation.

publication. Consultation. 
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124 STAT. 819 PUBLIC LAW 111–148—MAR. 23, 2010 
Public Health Service Act (as added by this Act) during 
such period. 
(C) A UDIT .— 
(i) I N GENERAL .—On the date that is 2 years after

first receiving a user fee applicable to an application for a biological product under section 351(k) of the Public Health Service Act (as added by this Act), and on a biennial basis thereafter until October 1, 2013, the Secretary shall perform an audit of the costs of reviewing such applications under such section 351(k). Such an audit shall compare— 
(I) the costs of reviewing such applications 
under such section 351(k) to the amount of the user fee applicable to such applications; and

(II)(aa) such ratio determined under subclause 
(I); to 
(bb) the ratio of the costs of reviewing applica-
tions for biological products under section 351(a) of such Act (as amended by this Act) to the amount of the user fee applicable to such applications under such section 351(a). (ii) A
LTERATION OF USER FEE .—If the audit per-

formed under clause (i) indicates that the ratios com-pared under subclause (II) of such clause differ by more than 5 percent, then the Secretary shall alter the user fee applicable to applications submitted under such section 351(k) to more appropriately account for the costs of reviewing such applications. 
(iii) A
CCOUNTING STANDARDS .—The Secretary shall

CCOUNTING STANDARDS .—The Secretary shall 
perform an audit under clause (i) in conformance with the accounting principles, standards, and requirements prescribed by the Comptroller General of the United States under section 3511 of title 31, United State Code, to ensure the validity of any potential variability. 
(4) A

ized to be appropriated to carry out this subsection such sums as may be necessary for each of fiscal years 2010 through 2012. (g) P
EDIATRIC STUDIES OF BIOLOGICAL PRODUCTS .— 
(1) I N GENERAL .—Section 351 of the Public Health Service 
Act (42 U.S.C. 262) is amended by adding at the end the following: ‘‘(m) P
EDIATRIC STUDIES .— 
‘‘(1) A PPLICATION OF CERTAIN PROVISIONS .—The provisions

of subsections (a), (d), (e), (f), (i), (j), (k), (l), (p), and (q) of section 505A of the Federal Food, Drug, and Cosmetic Act shall apply with respect to the extension of a period under paragraphs (2) and (3) to the same extent and in the same manner as such provisions apply with respect to the extension of a period under subsection (b) or (c) of section 505A of the Federal Food, Drug, and Cosmetic Act. 
‘‘(2) M
ARKET EXCLUSIVITY FOR NEW BIOLOGICAL PROD -

UCTS .—If, prior to approval of an application that is submitted 
under subsection (a), the Secretary determines that information relating to the use of a new biological product in the pediatric population may produce health benefits in that population, the Secretary makes a written request for pediatric studies Determination. Time period.

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124 STAT. 820 PUBLIC LAW 111–148—MAR. 23, 2010 
(which shall include a timeframe for completing such studies), 
the applicant agrees to the request, such studies are completed using appropriate formulations for each age group for which the study is requested within any such timeframe, and the reports thereof are submitted and accepted in accordance with section 505A(d)(3) of the Federal Food, Drug, and Cosmetic Act— 
‘‘(A) the periods for such biological product referred

to in subsection (k)(7) are deemed to be 4 years and 6 months rather than 4 years and 12 years and 6 months rather than 12 years; and 
‘‘(B) if the biological product is designated under section 
526 for a rare disease or condition, the period for such biological product referred to in section 527(a) is deemed to be 7 years and 6 months rather than 7 years. ‘‘(3) M
ARKET EXCLUSIVITY FOR ALREADY -MARKETED  
BIOLOGICAL PRODUCTS .—If the Secretary determines that

information relating to the use of a licensed biological product in the pediatric population may produce health benefits in that population and makes a written request to the holder of an approved application under subsection (a) for pediatric studies (which shall include a timeframe for completing such studies), the holder agrees to the request, such studies are completed using appropriate formulations for each age group for which the study is requested within any such timeframe, and the

is requested within any such timeframe, and the reports thereof are submitted and accepted in accord-ance with section 505A(d)(3) of the Federal Food, Drug, and Cosmetic Act—

‘‘(A) the periods for such biological product referred 
526 for a rare disease or condition, the period for such biological product referred to in section 527(a) is deemed to be 7 years and 6 months rather than 7 years. ‘‘(4) E
XCEPTION .—The Secretary shall not extend a period

referred to in paragraph (2)(A), (2)(B), (3)(A), or (3)(B) if the determination under section 505A(d)(3) is made later than 9 
months prior to the expiration of such period.’’. 
(2) S
TUDIES REGARDING PEDIATRIC RESEARCH .— 
(A) P ROGRAM FOR PEDIATRIC STUDY OF DRUGS .—Sub-
section (a)(1) of section 409I of the Public Health Service Act (42 U.S.C. 284m) is amended by inserting ‘‘, biological products,’’ after ‘‘including drugs’’. 
(B) I
NSTITUTE OF MEDICINE STUDY .—Section 505A(p)

NSTITUTE OF MEDICINE STUDY .—Section 505A(p) 
of the Federal Food, Drug, and Cosmetic Act (21 U.S.C. 355b(p)) is amended by striking paragraphs (4) and (5) and inserting the following: ‘‘(4) review and assess the number and importance of

biological products for children that are being tested as a result of the amendments made by the Biologics Price Competition and Innovation Act of 2009 and the importance for children, health care providers, parents, and others of labeling changes made as a result of such testing; 21 USC 355a. Determination. 
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124 STAT. 821 PUBLIC LAW 111–148—MAR. 23, 2010 
‘‘(5) review and assess the number, importance, and 
prioritization of any biological products that are not being tested for pediatric use; and 
‘‘(6) offer recommendations for ensuring pediatric testing 
of biological products, including consideration of any incentives, such as those provided under this section or section 351(m) of the Public Health Service Act.’’. (h) O
RPHAN PRODUCTS .—If a reference product, as defined in

section 351 of the Public Health Service Act (42 U.S.C. 262) (as amended by this Act) has been designated under section 526 of the Federal Food, Drug, and Cosmetic Act (21 U.S.C. 360bb) for a rare disease or condition, a biological product seeking approval for such disease or condition under subsection (k) of such section 351 as biosimilar to, or interchangeable with, such reference product may be licensed by the Secretary only after the expiration for such reference product of the later of—

(1) the 7-year period described in section 527(a) of the 
Federal Food, Drug, and Cosmetic Act (21 U.S.C. 360cc(a)); and 
(2) the 12-year period described in subsection (k)(7) of 
such section 351. 
SEC. 7003. SAVINGS. 
(a) D ETERMINATION .—The Secretary of the Treasury, in con-
sultation with the Secretary of Health and Human Services, shall for each fiscal year determine the amount of savings to the Federal Government as a result of the enactment of this subtitle. 
(b) U

(b) U
SE.—Notwithstanding any other provision of this subtitle 
(or an amendment made by this subtitle), the savings to the Federal Government generated as a result of the enactment of this subtitle shall be used for deficit reduction. 
Subtitle B—More Affordable Medicines for 
Children and Underserved Communities 
SEC. 7101. EXPANDED PARTICIPATION IN 340B PROGRAM. 
(a) E XPANSION OF COVERED ENTITIES RECEIVING DISCOUNTED  
PRICES .—Section 340B(a)(4) of the Public Health Service Act (42

U.S.C. 256b(a)(4)) is amended by adding at the end the following: 
‘‘(M) A children’s hospital excluded from the Medicare

prospective payment system pursuant to section 1886(d)(1)(B)(iii) of the Social Security Act, or a free- standing cancer hospital excluded from the Medicare prospective payment system pursuant to section 1886(d)(1)(B)(v) of the Social Security Act, that would meet the requirements of subparagraph (L), including the dis-proportionate share adjustment percentage requirement under clause (ii) of such subparagraph, if the hospital were a subsection (d) hospital as defined by section 1886(d)(1)(B)

(d) hospital as defined by section 1886(d)(1)(B) of the Social Security Act.

‘‘(N) An entity that is a critical access hospital (as 
determined under section 1820(c)(2) of the Social Security Act), and that meets the requirements of subparagraph (L)(i). 
‘‘(O) An entity that is a rural referral center, as defined 
by section 1886(d)(5)(C)(i) of the Social Security Act, or 42 USC 262 note. Time periods. 
42 USC 262 note.

42 USC 262 note. 
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124 STAT. 822 PUBLIC LAW 111–148—MAR. 23, 2010 
a sole community hospital, as defined by section 
1886(d)(5)(C)(iii) of such Act, and that both meets the requirements of subparagraph (L)(i) and has a dispropor-tionate share adjustment percentage equal to or greater than 8 percent.’’. 
(b) E
XTENSION OF DISCOUNT TO INPATIENT DRUGS .—Section 
340B of the Public Health Service Act (42 U.S.C. 256b) is amended— 
(1) in paragraphs (2), (5), (7), and (9) of subsection (a),

by striking ‘‘outpatient’’ each place it appears; and 
(2) in subsection (b)— 
(A) by striking ‘‘O THER DEFINITION ’’ and all that follows 
through ‘‘In this section’’ and inserting the following: ‘‘O
THER DEFINITIONS .— 
‘‘(1) I N GENERAL .—In this section’’; and 
‘‘(2) C OVERED DRUG .—In this section, the term ‘covered 
drug’— 
‘‘(A) means a covered outpatient drug (as defined in 
section 1927(k)(2) of the Social Security Act); and

‘‘(B) includes, notwithstanding paragraph (3)(A) of sec-
tion 1927(k) of such Act, a drug used in connection with an inpatient or outpatient service provided by a hospital described in subparagraph (L), (M), (N), or (O) of subsection (a)(4) that is enrolled to participate in the drug discount program under this section.’’. 
(c) P
ROHIBITION ON GROUP PURCHASING ARRANGEMENTS .—Sec-
tion 340B(a) of the Public Health Service Act (42 U.S.C. 256b(a)) is amended— 
(1) in paragraph (4)(L)—

(1) in paragraph (4)(L)— 
(A) in clause (i), by adding ‘‘and’’ at the end; (B) in clause (ii), by striking ‘‘; and’’ and inserting 
(C) by striking clause (iii); and 
(2) in paragraph (5), as amended by subsection (b)— 
(A) by redesignating subparagraphs (C) and (D) as 
subparagraphs (D) and (E); respectively; and 
(B) by inserting after subparagraph (B), the following: ‘‘(C) P
ROHIBITION ON GROUP PURCHASING ARRANGE -
MENTS .— 
‘‘(i) I N GENERAL .—A hospital described in subpara-

graph (L), (M), (N), or (O) of paragraph (4) shall not obtain covered outpatient drugs through a group pur-chasing organization or other group purchasing arrangement, except as permitted or provided for pursuant to clauses (ii) or (iii). 
‘‘(ii) I
NPATIENT DRUGS .—Clause (i) shall not apply 
to drugs purchased for inpatient use. 
‘‘(iii) E XCEPTIONS .—The Secretary shall establish 
reasonable exceptions to clause (i)— 
‘‘(I) with respect to a covered outpatient drug

‘‘(I) with respect to a covered outpatient drug 
that is unavailable to be purchased through the program under this section due to a drug shortage problem, manufacturer noncompliance, or any other circumstance beyond the hospital’s control; 
‘‘(II) to facilitate generic substitution when a 
generic covered outpatient drug is available at a lower price; or

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124 STAT. 823 PUBLIC LAW 111–148—MAR. 23, 2010 
‘‘(III) to reduce in other ways the administra-
tive burdens of managing both inventories of drugs subject to this section and inventories of drugs that are not subject to this section, so long as the exceptions do not create a duplicate discount problem in violation of subparagraph (A) or a diversion problem in violation of subparagraph (B). ‘‘(iv) P
URCHASING ARRANGEMENTS FOR INPATIENT  
DRUGS .—The Secretary shall ensure that a hospital

described in subparagraph (L), (M), (N), or (O) of sub-section (a)(4) that is enrolled to participate in the drug discount program under this section shall have mul-tiple options for purchasing covered drugs for inpatients, including by utilizing a group purchasing organization or other group purchasing arrangement, establishing and utilizing its own group purchasing program, purchasing directly from a manufacturer, and any other purchasing arrangements that the Secretary determines is

arrangements that the Secretary determines is appropriate to ensure access to drug discount pricing under this section for inpatient drugs taking into account the particular needs of small and rural hospitals.’’.

(d) M
EDICAID CREDITS ON INPATIENT DRUGS .—Section 340B 
of the Public Health Service Act (42 U.S.C. 256b) is amended by striking subsection (c) and inserting the following: 
‘‘(c) M
EDICAID CREDIT .—Not later than 90 days after the date 
of filing of the hospital’s most recently filed Medicare cost report, the hospital shall issue a credit as determined by the Secretary to the State Medicaid program for inpatient covered drugs provided to Medicaid recipients.’’. 
(e) E
FFECTIVE DATES .—

(e) E
and section 7102 shall take effect on January 1, 2010, and 
shall apply to drugs purchased on or after January 1, 2010. 
(2) E FFECTIVENESS .—The amendments made by this section

and section 7102 shall be effective and shall be taken into account in determining whether a manufacturer is deemed to meet the requirements of section 340B(a) of the Public Health Service Act (42 U.S.C. 256b(a)), notwithstanding any other provision of law. 
SEC. 7102. IMPROVEMENTS TO 340B PROGRAM INTEGRITY. 
(a) I NTEGRITY IMPROVEMENTS .—Subsection (d) of section 340B 
of the Public Health Service Act (42 U.S.C. 256b) is amended to read as follows: 
‘‘(d) I
MPROVEMENTS IN PROGRAM INTEGRITY .—

‘‘(d) I
MPROVEMENTS IN PROGRAM INTEGRITY .— 
‘‘(1) M ANUFACTURER COMPLIANCE .— 
‘‘(A) I N GENERAL .—From amounts appropriated under 
paragraph (4), the Secretary shall provide for improve-ments in compliance by manufacturers with the require-ments of this section in order to prevent overcharges and other violations of the discounted pricing requirements specified in this section. 
‘‘(B) I
MPROVEMENTS .—The improvements described in

MPROVEMENTS .—The improvements described in 
subparagraph (A) shall include the following: 42 USC 256b. Deadline. 
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124 STAT. 824 PUBLIC LAW 111–148—MAR. 23, 2010 
‘‘(i) The development of a system to enable the 
Secretary to verify the accuracy of ceiling prices cal-culated by manufacturers under subsection (a)(1) and charged to covered entities, which shall include the following: 
‘‘(I) Developing and publishing through an 
appropriate policy or regulatory issuance, precisely defined standards and methodology for the calcula-tion of ceiling prices under such subsection.

‘‘(II) Comparing regularly the ceiling prices 
calculated by the Secretary with the quarterly pricing data that is reported by manufacturers to the Secretary. 
‘‘(III) Performing spot checks of sales trans-
actions by covered entities. 
‘‘(IV) Inquiring into the cause of any pricing

‘‘(IV) Inquiring into the cause of any pricing 
discrepancies that may be identified and either taking, or requiring manufacturers to take, such corrective action as is appropriate in response to such price discrepancies. ‘‘(ii) The establishment of procedures for manufac-
turers to issue refunds to covered entities in the event that there is an overcharge by the manufacturers, including the following: 
‘‘(I) Providing the Secretary with an expla-

nation of why and how the overcharge occurred, how the refunds will be calculated, and to whom the refunds will be issued. 
‘‘(II) Oversight by the Secretary to ensure that

‘‘(II) Oversight by the Secretary to ensure that 
the refunds are issued accurately and within a reasonable period of time, both in routine instances of retroactive adjustment to relevant pricing data and exceptional circumstances such as erroneous or intentional overcharging for covered drugs. ‘‘(iii) The provision of access through the Internet

website of the Department of Health and Human Serv-ices to the applicable ceiling prices for covered drugs as calculated and verified by the Secretary in accord-ance with this section, in a manner (such as through the use of password protection) that limits such access to covered entities and adequately assures security and protection of privileged pricing data from unauthorized re-disclosure. 
‘‘(iv) The development of a mechanism by which— 
‘‘(I) rebates and other discounts provided by

‘‘(I) rebates and other discounts provided by 
manufacturers to other purchasers subsequent to 
the sale of covered drugs to covered entities are reported to the Secretary; and 
‘‘(II) appropriate credits and refunds are issued 
to covered entities if such discounts or rebates have the effect of lowering the applicable ceiling price for the relevant quarter for the drugs involved. ‘‘(v) Selective auditing of manufacturers and whole-

salers to ensure the integrity of the drug discount program under this section. Procedures. 
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124 STAT. 825 PUBLIC LAW 111–148—MAR. 23, 2010 
‘‘(vi) The imposition of sanctions in the form of 
civil monetary penalties, which— 
‘‘(I) shall be assessed according to standards 
established in regulations to be promulgated by the Secretary not later than 180 days after the date of enactment of the Patient Protection and Affordable Care Act; 
‘‘(II) shall not exceed $5,000 for each instance 
of overcharging a covered entity that may have occurred; and

‘‘(III) shall apply to any manufacturer with 
an agreement under this section that knowingly and intentionally charges a covered entity a price for purchase of a drug that exceeds the maximum applicable price under subsection (a)(1). 
‘‘(2) C
OVERED ENTITY COMPLIANCE .— 
‘‘(A) I N GENERAL .—From amounts appropriated under

paragraph (4), the Secretary shall provide for improve-ments in compliance by covered entities with the require-ments of this section in order to prevent diversion and violations of the duplicate discount provision and other requirements specified under subsection (a)(5). 
‘‘(B) I
subparagraph (A) shall include the following: 
‘‘(i) The development of procedures to enable and

require covered entities to regularly update (at least annually) the information on the Internet website of the Department of Health and Human Services relating to this section. 
‘‘(ii) The development of a system for the Secretary 
to verify the accuracy of information regarding covered entities that is listed on the website described in clause (i). 
‘‘(iii) The development of more detailed guidance

describing methodologies and options available to cov-ered entities for billing covered drugs to State Medicaid agencies in a manner that avoids duplicate discounts pursuant to subsection (a)(5)(A). 
‘‘(iv) The establishment of a single, universal, and

standardized identification system by which each cov-ered entity site can be identified by manufacturers, distributors, covered entities, and the Secretary for purposes of facilitating the ordering, purchasing, and delivery of covered drugs under this section, including the processing of chargebacks for such drugs. 
‘‘(v) The imposition of sanctions, in appropriate

cases as determined by the Secretary, additional to those to which covered entities are subject under sub-section (a)(5)(E), through one or more of the following actions: 
‘‘(I) Where a covered entity knowingly and

‘‘(I) Where a covered entity knowingly and 
intentionally violates subsection (a)(5)(B), the cov-ered entity shall be required to pay a monetary penalty to a manufacturer or manufacturers in the form of interest on sums for which the covered entity is found liable under subsection (a)(5)(E), such interest to be compounded monthly and equal 
Sanctions. Determination. Guidance. Procedures. Applicability.

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124 STAT. 826 PUBLIC LAW 111–148—MAR. 23, 2010 
to the current short term interest rate as deter-
mined by the Federal Reserve for the time period for which the covered entity is liable. 
‘‘(II) Where the Secretary determines a viola-

tion of subsection (a)(5)(B) was systematic and egregious as well as knowing and intentional, removing the covered entity from the drug discount program under this section and disqualifying the entity from re-entry into such program for a reasonable period of time to be determined by the Secretary. 
‘‘(III) Referring matters to appropriate Federal

‘‘(III) Referring matters to appropriate Federal 
authorities within the Food and Drug Administra-tion, the Office of Inspector General of Department of Health and Human Services, or other Federal agencies for consideration of appropriate action under other Federal statutes, such as the Prescrip-tion Drug Marketing Act (21 U.S.C. 353). 
‘‘(3) A
DMINISTRATIVE DISPUTE RESOLUTION PROCESS .— 
‘‘(A) I N GENERAL .—Not later than 180 days after the

date of enactment of the Patient Protection and Affordable Care Act, the Secretary shall promulgate regulations to establish and implement an administrative process for the resolution of claims by covered entities that they have been overcharged for drugs purchased under this section, and claims by manufacturers, after the conduct of audits as authorized by subsection (a)(5)(D), of violations of sub-sections (a)(5)(A) or (a)(5)(B), including appropriate proce-dures for the provision of remedies

proce-dures for the provision of remedies and enforcement of determinations made pursuant to such process through mechanisms and sanctions described in paragraphs (1)(B) and (2)(B).

‘‘(B) D
EADLINES AND PROCEDURES .—Regulations 
promulgated by the Secretary under subparagraph (A) shall— 
‘‘(i) designate or establish a decision-making offi-

cial or decision-making body within the Department of Health and Human Services to be responsible for reviewing and finally resolving claims by covered enti-ties that they have been charged prices for covered drugs in excess of the ceiling price described in sub-section (a)(1), and claims by manufacturers that viola-tions of subsection (a)(5)(A) or (a)(5)(B) have occurred; 
‘‘(ii) establish such deadlines and procedures as

may be necessary to ensure that claims shall be resolved fairly, efficiently, and expeditiously; 
‘‘(iii) establish procedures by which a covered

‘‘(iii) establish procedures by which a covered 
entity may discover and obtain such information and documents from manufacturers and third parties as may be relevant to demonstrate the merits of a claim that charges for a manufacturer’s product have exceeded the applicable ceiling price under this section, and may submit such documents and information to the administrative official or body responsible for adju-dicating such claim; 
‘‘(iv) require that a manufacturer conduct an audit

of a covered entity pursuant to subsection (a)(5)(D) 
Audits. Deadline. 
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124 STAT. 827 PUBLIC LAW 111–148—MAR. 23, 2010 
as a prerequisite to initiating administrative dispute 
resolution proceedings against a covered entity; 
‘‘(v) permit the official or body designated under

clause (i), at the request of a manufacturer or manufac-turers, to consolidate claims brought by more than one manufacturer against the same covered entity where, in the judgment of such official or body, consoli-dation is appropriate and consistent with the goals of fairness and economy of resources; and 
‘‘(vi) include provisions and procedures to permit

multiple covered entities to jointly assert claims of overcharges by the same manufacturer for the same drug or drugs in one administrative proceeding, and permit such claims to be asserted on behalf of covered entities by associations or organizations representing the interests of such covered entities and of which the covered entities are members. ‘‘(C) F
INALITY OF ADMINISTRATIVE RESOLUTION .—The

INALITY OF ADMINISTRATIVE RESOLUTION .—The 
administrative resolution of a claim or claims under the regulations promulgated under subparagraph (A) shall be a final agency decision and shall be binding upon the parties involved, unless invalidated by an order of a court of competent jurisdiction. ‘‘(4) A

authorized to be appropriated to carry out this subsection, such sums as may be necessary for fiscal year 2010 and each succeeding fiscal year.’’. (b) C
ONFORMING AMENDMENTS .—Section 340B(a) of the Public 
Health Service Act (42 U.S.C. 256b(a)) is amended— 
(1) in subsection (a)(1), by adding at the end the following:

‘‘Each such agreement shall require that the manufacturer furnish the Secretary with reports, on a quarterly basis, of the price for each covered drug subject to the agreement that,

according to the manufacturer, represents the maximum price that covered entities may permissibly be required to pay for the drug (referred to in this section as the ‘ceiling price’), and shall require that the manufacturer offer each covered entity covered drugs for purchase at or below the applicable ceiling price if such drug is made available to any other pur-chaser at any price.’’; and 
(2) in the first sentence of subsection (a)(5)(E), as redesig-

nated by section 7101(c), by inserting ‘‘after audit as described in subparagraph (D) and’’ after ‘‘finds,’’. 
SEC. 7103. GAO STUDY TO MAKE RECOMMENDATIONS ON IMPROVING 
THE 340B PROGRAM. 
(a) R EPORT .—Not later than 18 months after the date of enact-

ment of this Act, the Comptroller General of the United States shall submit to Congress a report that examines whether those individuals served by the covered entities under the program under section 340B of the Public Health Service Act (42 U.S.C. 256b) (referred to in this section as the ‘‘340B program’’) are receiving optimal health care services. 
(b) R
ECOMMENDATIONS .—The report under subsection (a) shall 
include recommendations on the following: Contracts. 
Reports. Deadlines.

Reports. Deadlines. 
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124 STAT. 828 PUBLIC LAW 111–148—MAR. 23, 2010 
(1) Whether the 340B program should be expanded since 
it is anticipated that the 47,000,000 individuals who are unin-sured as of the date of enactment of this Act will have health care coverage once this Act is implemented. 
(2) Whether mandatory sales of certain products by the 
340B program could hinder patients access to those therapies through any provider. 
(3) Whether income from the 340B program is being used

by the covered entities under the program to further the pro-gram objectives. 
SEC. 8001. SHORT TITLE OF TITLE. 
This title may be cited as the ‘‘Community Living Assistance 
Services and Supports Act’’ or the ‘‘CLASS Act’’. 
SEC. 8002. ESTABLISHMENT OF NATIONAL VOLUNTARY INSURANCE 
PROGRAM FOR PURCHASING COMMUNITY LIVING ASSISTANCE SERVICES AND SUPPORT. 
(a) E STABLISHMENT OF CLASS P ROGRAM .— 
(1) I N GENERAL .—The Public Health Service Act (42 U.S.C.

201 et seq.), as amended by section 4302(a), is amended by adding at the end the following: 
‘‘TITLE XXXII—COMMUNITY LIVING 
ASSISTANCE SERVICES AND SUPPORTS 
‘‘SEC. 3201. PURPOSE. 
‘‘The purpose of this title is to establish a national voluntary 
insurance program for purchasing community living assistance serv-ices and supports in order to— 
‘‘(1) provide individuals with functional limitations with

tools that will allow them to maintain their personal and finan-cial independence and live in the community through a new financing strategy for community living assistance services and supports; 
‘‘(2) establish an infrastructure that will help address the 
Nation’s community living assistance services and supports needs; 
‘‘(3) alleviate burdens on family caregivers; and ‘‘(4) address institutional bias by providing a financing

mechanism that supports personal choice and independence to live in the community. 
‘‘SEC. 3202. DEFINITIONS. 
‘‘In this title: 
‘‘(1) A CTIVE ENROLLEE .—The term ‘active enrollee’ means 
an individual who is enrolled in the CLASS program in accord-ance with section 3204 and who has paid any premiums due to maintain such enrollment. 
‘‘(2) A
CTIVELY EMPLOYED .—The term ‘actively employed’ 
means an individual who— 
‘‘(A) is reporting for work at the individual’s usual

place of employment or at another location to which the 42 USC 300 ll–1. 42 USC 300 ll. Community 
Living Assistance Services and Supports Act. 42 USC 201 note. 
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124 STAT. 829 PUBLIC LAW 111–148—MAR. 23, 2010 
individual is required to travel because of the individual’s 
employment (or in the case of an individual who is a member of the uniformed services, is on active duty and is physically able to perform the duties of the individual’s position); and 
‘‘(B) is able to perform all the usual and customary 
duties of the individual’s employment on the individual’s regular work schedule. ‘‘(3) A
CTIVITIES OF DAILY LIVING .—The term ‘activities of

daily living’ means each of the following activities specified in section 7702B(c)(2)(B) of the Internal Revenue Code of 1986: 
‘‘(A) Eating. ‘‘(B) Toileting. ‘‘(C) Transferring. ‘‘(D) Bathing. ‘‘(E) Dressing. ‘‘(F) Continence. 
‘‘(4) CLASS 
PROGRAM .—The term ‘CLASS program’ means 
the program established under this title. 
‘‘(5) E LIGIBILITY ASSESSMENT SYSTEM .—The term ‘Eligibility

Assessment System’ means the entity established by the Sec-retary under section 3205(a)(2) to make functional eligibility determinations for the CLASS program. 
‘‘(6) E
LIGIBLE BENEFICIARY .— 
‘‘(A) I N GENERAL .—The term ‘eligible beneficiary’ means 
any individual who is an active enrollee in the CLASS program and, as of the date described in subparagraph (B)— 
‘‘(i) has paid premiums for enrollment in such pro-
gram for at least 60 months;

gram for at least 60 months; 
‘‘(ii) has earned, with respect to at least 3 calendar 
years that occur during the first 60 months for which the individual has paid premiums for enrollment in the program, at least an amount equal to the amount of wages and self-employment income which an indi-vidual must have in order to be credited with a quarter of coverage under section 213(d) of the Social Security Act for the year; and 
‘‘(iii) has paid premiums for enrollment in such

‘‘(iii) has paid premiums for enrollment in such 
program for at least 24 consecutive months, if a lapse in premium payments of more than 3 months has occurred during the period that begins on the date of the individual’s enrollment and ends on the date of such determination. ‘‘(B) D
ATE DESCRIBED .—For purposes of subparagraph

ATE DESCRIBED .—For purposes of subparagraph 
(A), the date described in this subparagraph is the date on which the individual is determined to have a functional limitation described in section 3203(a)(1)(C) that is expected to last for a continuous period of more than 90 days. 
‘‘(C) R
EGULATIONS .—The Secretary shall promulgate

EGULATIONS .—The Secretary shall promulgate 
regulations specifying exceptions to the minimum earnings requirements under subparagraph (A)(ii) for purposes of being considered an eligible beneficiary for certain popu-lations. ‘‘(7) H
OSPITAL ; NURSING FACILITY ; INTERMEDIATE CARE  
FACILITY FOR THE MENTALLY RETARDED ; INSTITUTION FOR

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124 STAT. 830 PUBLIC LAW 111–148—MAR. 23, 2010 
MENTAL DISEASES .—The terms ‘hospital’, ‘nursing facility’, 
‘intermediate care facility for the mentally retarded’, and ‘institution for mental diseases’ have the meanings given such terms for purposes of Medicaid. 
‘‘(8) CLASS 
INDEPENDENCE ADVISORY COUNCIL .—The term 
‘CLASS Independence Advisory Council’ or ‘Council’ means the Advisory Council established under section 3207 to advise the Secretary. 
‘‘(9) CLASS

‘‘(9) CLASS 
INDEPENDENCE BENEFIT PLAN .—The term 
‘CLASS Independence Benefit Plan’ means the benefit plan developed and designated by the Secretary in accordance with section 3203. 
‘‘(10) CLASS 
INDEPENDENCE FUND .—The term ‘CLASS 
Independence Fund’ or ‘Fund’ means the fund established under section 3206. 
‘‘(11) M
EDICAID .—The term ‘Medicaid’ means the program 
established under title XIX of the Social Security Act (42 U.S.C. 1396 et seq.). 
‘‘(12) P

‘‘(12) P
OVERTY LINE .—The term ‘poverty line’ has the 
‘‘(13) P
ROTECTION AND ADVOCACY SYSTEM .—The term 
‘Protection and Advocacy System’ means the system for each State established under section 143 of the Developmental Disabilities Assistance and Bill of Rights Act of 2000 (42 U.S.C. 15043). 
‘‘SEC. 3203. CLASS INDEPENDENCE BENEFIT PLAN. 
‘‘(a) P ROCESS FOR DEVELOPMENT .—

‘‘(a) P ROCESS FOR DEVELOPMENT .— 
‘‘(1) I N GENERAL .—The Secretary, in consultation with

appropriate actuaries and other experts, shall develop at least 3 actuarially sound benefit plans as alternatives for consider-ation for designation by the Secretary as the CLASS Independ-ence Benefit Plan under which eligible beneficiaries shall receive benefits under this title. Each of the plan alternatives developed shall be designed to provide eligible beneficiaries with the benefits described in section 3205 consistent with the following requirements: 
‘‘(A) P
REMIUMS .—

‘‘(A) P
REMIUMS .— 
‘‘(i) I N GENERAL .—Beginning with the first year 
of the CLASS program, and for each year thereafter, subject to clauses (ii) and (iii), the Secretary shall establish all premiums to be paid by enrollees for the year based on an actuarial analysis of the 75-year costs of the program that ensures solvency throughout such 75-year period. 
‘‘(ii) N
OMINAL PREMIUM FOR POOREST INDIVIDUALS  
AND FULL -TIME STUDENTS .— 
‘‘(I) I N GENERAL .—The monthly premium for

‘‘(I) I N GENERAL .—The monthly premium for 
enrollment in the CLASS program shall not exceed the applicable dollar amount per month deter-mined under subclause (II) for— 
‘‘(aa) any individual whose income does 
not exceed the poverty line; and 
‘‘(bb) any individual who has not attained 
age 22, and is actively employed during any 42 USC 300 ll–2.

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124 STAT. 831 PUBLIC LAW 111–148—MAR. 23, 2010 
period in which the individual is a full-time 
student (as determined by the Secretary). ‘‘(II) A
PPLICABLE DOLLAR AMOUNT .—The 
applicable dollar amount described in this sub-clause is the amount equal to $5, increased by the percentage increase in the consumer price index for all urban consumers (U.S. city average) for each year occurring after 2009 and before such year. ‘‘(iii) C
LASS INDEPENDENCE FUND RESERVES .—At

such time as the CLASS program has been in operation for 10 years, the Secretary shall establish all premiums to be paid by enrollees for the year based on an actu-arial analysis that accumulated reserves in the CLASS Independence Fund would not decrease in that year. At such time as the Secretary determines the CLASS program demonstrates a sustained ability to finance expected yearly expenses with expected yearly pre-miums and interest credited to the CLASS Independ-ence Fund, the Secretary

to the CLASS Independ-ence Fund, the Secretary may decrease the required amount of CLASS Independence Fund reserves. ‘‘(B) V

ESTING PERIOD .—A 5-year vesting period for eligi-
bility for benefits. 
‘‘(C) B ENEFIT TRIGGERS .—A benefit trigger for provision 
of benefits that requires a determination that an individual has a functional limitation, as certified by a licensed health care practitioner, described in any of the following clauses that is expected to last for a continuous period of more than 90 days: 
‘‘(i) The individual is determined to be unable to

perform at least the minimum number (which may be 2 or 3) of activities of daily living as are required under the plan for the provision of benefits without substantial assistance (as defined by the Secretary) from another individual. 
‘‘(ii) The individual requires substantial super-
vision to protect the individual from threats to health and safety due to substantial cognitive impairment. 
‘‘(iii) The individual has a level of functional limita-

tion similar (as determined under regulations pre-scribed by the Secretary) to the level of functional limitation described in clause (i) or (ii). ‘‘(D) C
ASH BENEFIT .—Payment of a cash benefit that 
satisfies the following requirements: 
‘‘(i) M INIMUM REQUIRED AMOUNT .—The benefit 
amount provides an eligible beneficiary with not less than an average of $50 per day (as determined based on the reasonably expected distribution of beneficiaries receiving benefits at various benefit levels).

‘‘(ii) A
MOUNT SCALED TO FUNCTIONAL ABILITY .— 
The benefit amount is varied based on a scale of func-tional ability, with not less than 2, and not more than 6, benefit level amounts. 
‘‘(iii) D
AILY OR WEEKLY .—The benefit is paid on 
a daily or weekly basis. 
‘‘(iv) N O LIFETIME OR AGGREGATE LIMIT .—The ben-
efit is not subject to any lifetime or aggregate limit. Regulations. Determination.

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124 STAT. 832 PUBLIC LAW 111–148—MAR. 23, 2010 
‘‘(E) C OORDINATION WITH SUPPLEMENTAL COVERAGE  
OBTAINED THROUGH THE EXCHANGE .—The benefits allow 
for coordination with any supplemental coverage purchased through an Exchange established under section 1311 of the Patient Protection and Affordable Care Act. ‘‘(2) R
EVIEW AND RECOMMENDATION BY THE CLASS  
INDEPENDENCE ADVISORY COUNCIL .—The CLASS Independence 
Advisory Council shall— 
‘‘(A) evaluate the alternative benefit plans developed

under paragraph (1); and 
‘‘(B) recommend for designation as the CLASS 
Independence Benefit Plan for offering to the public the plan that the Council determines best balances price and benefits to meet enrollees’ needs in an actuarially sound manner, while optimizing the probability of the long-term sustainability of the CLASS program. ‘‘(3) D
ESIGNATION BY THE SECRETARY .—Not later than

ESIGNATION BY THE SECRETARY .—Not later than 
October 1, 2012, the Secretary, taking into consideration the recommendation of the CLASS Independence Advisory Council under paragraph (2)(B), shall designate a benefit plan as the CLASS Independence Benefit Plan. The Secretary shall publish such designation, along with details of the plan and the reasons for the selection by the Secretary, in a final rule that allows for a period of public comment. ‘‘(b) A
DDITIONAL PREMIUM REQUIREMENTS .—

DDITIONAL PREMIUM REQUIREMENTS .— 
‘‘(1) A DJUSTMENT OF PREMIUMS .— 
graphs (B), (C), (D), and (E), the amount of the monthly premium determined for an individual upon such individ-ual’s enrollment in the CLASS program shall remain the same for as long as the individual is an active enrollee in the program. 
‘‘(B) R
ECALCULATED PREMIUM IF REQUIRED FOR PRO -
GRAM SOLVENCY .— 
‘‘(i) I N GENERAL .—Subject to clause (ii), if the Sec-

retary determines, based on the most recent report of the Board of Trustees of the CLASS Independence Fund, the advice of the CLASS Independence Advisory Council, and the annual report of the Inspector General of the Department of Health and Human Services, and waste, fraud, and abuse, or such other information as the Secretary determines appropriate, that the monthly premiums and income to the CLASS Independence Fund for a year are projected to be insufficient with respect to the 20-year

to be insufficient with respect to the 20-year period that begins with that year, the Secretary shall adjust the

monthly premiums for individuals enrolled in the CLASS program as necessary (but maintaining a nominal premium for enrollees whose income is below the poverty line or who are full-time students actively employed). 
‘‘(ii) E
XEMPTION FROM INCREASE .—Any increase in 
a monthly premium imposed as result of a determina-tion described in clause (i) shall not apply with respect to the monthly premium of any active enrollee who— 
‘‘(I) has attained age 65; Determination. Publication.

Regulations. Public information. Deadline. 
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124 STAT. 833 PUBLIC LAW 111–148—MAR. 23, 2010 
‘‘(II) has paid premiums for enrollment in the 
program for at least 20 years; and 
‘‘(III) is not actively employed. 
‘‘(C) R ECALCULATED PREMIUM IF REENROLLMENT AFTER  
MORE THAN A 3 -MONTH LAPSE .— 
‘‘(i) I N GENERAL .—The reenrollment of an indi-

vidual after a 90-day period during which the indi-vidual failed to pay the monthly premium required to maintain the individual’s enrollment in the CLASS program shall be treated as an initial enrollment for purposes of age-adjusting the premium for enrollment in the program. 
‘‘(ii) C
REDIT FOR PRIOR MONTHS IF REENROLLED  
WITHIN 5 YEARS .—An individual who reenrolls in the

CLASS program after such a 90-day period and before the end of the 5-year period that begins with the first month for which the individual failed to pay the monthly premium required to maintain the individual’s enrollment in the program shall be— 
‘‘(I) credited with any months of paid pre-
miums that accrued prior to the individual’s lapse in enrollment; and 
‘‘(II) notwithstanding the total amount of any

‘‘(II) notwithstanding the total amount of any 
such credited months, required to satisfy section 3202(6)(A)(ii) before being eligible to receive bene-fits. 
‘‘(D) N
O LONGER STATUS AS A FULL -TIME STUDENT .—

An individual subject to a nominal premium on the basis of being described in subsection (a)(1)(A)(ii)(I)(bb) who ceases to be described in that subsection, beginning with the first month following the month in which the individual ceases to be so described, shall be subject to the same monthly premium as the monthly premium that applies to an individual of the same age who first enrolls in the program under the most similar circumstances as the indi-vidual (such as the first year of

as the indi-vidual (such as the first year of eligibility for enrollment in the program or in a subsequent year).

‘‘(E) P
ENALTY FOR REENOLLMENT AFTER 5 -YEAR LAPSE .— 
In the case of an individual who reenrolls in the CLASS program after the end of the 5-year period described in subparagraph (C)(ii), the monthly premium required for the individual shall be the age-adjusted premium that would be applicable to an initially enrolling individual who is the same age as the reenrolling individual, increased by the greater of— 
‘‘(i) an amount that the Secretary determines is

‘‘(i) an amount that the Secretary determines is 
actuarially sound for each month that occurs during the period that begins with the first month for which the individual failed to pay the monthly premium required to maintain the individual’s enrollment in the CLASS program and ends with the month pre-ceding the month in which the reenollment is effective; or 
‘‘(ii) 1 percent of the applicable age-adjusted pre-
mium for each such month occurring in such period. 
‘‘(2) A

‘‘(2) A
DMINISTRATIVE EXPENSES .—In determining the 
monthly premiums for the CLASS program the Secretary may 
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124 STAT. 834 PUBLIC LAW 111–148—MAR. 23, 2010 
factor in costs for administering the program, not to exceed 
for any year in which the program is in effect under this title, an amount equal to 3 percent of all premiums paid during the year. 
‘‘(3) N
O UNDERWRITING REQUIREMENTS .—No underwriting 
(other than on the basis of age in accordance with subpara-graphs (D) and (E) of paragraph (1)) shall be used to— 
‘‘(A) determine the monthly premium for enrollment 
in the CLASS program; or

in the CLASS program; or 
‘‘(B) prevent an individual from enrolling in the pro-
gram. 
‘‘(c) S
ELF-ATTESTATION AND VERIFICATION OF INCOME .—The Sec-
retary shall establish procedures to— 
‘‘(1) permit an individual who is eligible for the nominal 
premium required under subsection (a)(1)(A)(ii), as part of their automatic enrollment in the CLASS program, to self-attest that their income does not exceed the poverty line or that their status as a full-time student who is actively employed;

‘‘(2) verify, using procedures similar to the procedures used 
by the Commissioner of Social Security under section 1631(e)(1)(B)(ii) of the Social Security Act and consistent with the requirements applicable to the conveyance of data and information under section 1942 of such Act, the validity of such self-attestation; and 
‘‘(3) require an individual to confirm, on at least an annual 
basis, that their income does not exceed the poverty line or that they continue to maintain such status.

‘‘SEC. 3204. ENROLLMENT AND DISENROLLMENT REQUIREMENTS. 
‘‘(a) A UTOMATIC ENROLLMENT .— 
‘‘(1) I N GENERAL .—Subject to paragraph (2), the Secretary,

in coordination with the Secretary of the Treasury, shall estab-lish procedures under which each individual described in sub-section (c) may be automatically enrolled in the CLASS program by an employer of such individual in the same manner as an employer may elect to automatically enroll employees in a plan under section 401(k), 403(b), or 457 of the Internal Revenue Code of 1986. 
‘‘(2) A
LTERNATIVE ENROLLMENT PROCEDURES .—The proce-

dures established under paragraph (1) shall provide for an alternative enrollment process for an individual described in subsection (c) in the case of such an individual— 
‘‘(A) who is self-employed; ‘‘(B) who has more than 1 employer; or ‘‘(C) whose employer does not elect to participate in 
the automatic enrollment process established by the Sec-retary. ‘‘(3) A
‘‘(A) I N GENERAL .—The Secretary and the Secretary

of the Treasury shall, by regulation, establish procedures to ensure that an individual is not automatically enrolled in the CLASS program by more than 1 employer. 
‘‘(B) F
ORM.—Enrollment in the CLASS program shall 
be made in such manner as the Secretary may prescribe in order to ensure ease of administration. 
‘‘(b) E
LECTION TO OPT-OUT.—An individual described in sub-
section (c) may elect to waive enrollment in the CLASS program Regulations. Procedures. 42 USC 300 ll–3. Procedures.

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124 STAT. 835 PUBLIC LAW 111–148—MAR. 23, 2010 
at any time in such form and manner as the Secretary and the 
Secretary of the Treasury shall prescribe. 
‘‘(c) I NDIVIDUAL DESCRIBED .—For purposes of enrolling in the 
CLASS program, an individual described in this paragraph is an individual— 
‘‘(1) who has attained age 18; ‘‘(2) who— 
‘‘(A) receives wages on which there is imposed a tax 
under section 3201(a) of the Internal Revenue Code of 1986; or

‘‘(B) derives self-employment income on which there 
is imposed a tax under section 1401(a) of the Internal Revenue Code of 1986; ‘‘(3) who is actively employed; and ‘‘(4) who is not— 
‘‘(A) a patient in a hospital or nursing facility, an 
intermediate care facility for the mentally retarded, or an institution for mental diseases and receiving medical assistance under Medicaid; or 
‘‘(B) confined in a jail, prison, other penal institution

or correctional facility, or by court order pursuant to convic-tion of a criminal offense or in connection with a verdict or finding described in section 202(x)(1)(A)(ii) of the Social Security Act (42 U.S.C. 402(x)(1)(A)(ii)). 
‘‘(d) R
ULE OF CONSTRUCTION .—Nothing in this title shall be 
construed as requiring an active enrollee to continue to satisfy subparagraph (B) or (C) of subsection (c)(1) in order to maintain enrollment in the CLASS program. 
‘‘(e) P
AYMENT .—

‘‘(e) P
AYMENT .— 
‘‘(1) P AYROLL DEDUCTION .—An amount equal to the monthly 
premium for the enrollment in the CLASS program of an indi-vidual shall be deducted from the wages or self-employment income of such individual in accordance with such procedures as the Secretary, in coordination with the Secretary of the Treasury, shall establish for employers who elect to deduct and withhold such premiums on behalf of enrolled employees. 
‘‘(2) A
LTERNATIVE PAYMENT MECHANISM .—The Secretary,

LTERNATIVE PAYMENT MECHANISM .—The Secretary, 
in coordination with the Secretary of the Treasury, shall estab-lish alternative procedures for the payment of monthly pre-miums by an individual enrolled in the CLASS program— 
‘‘(A) who does not have an employer who elects to 
deduct and withhold premiums in accordance with subpara-graph (A); or 
‘‘(B) who does not earn wages or derive self-employ-
ment income. 
‘‘(f) T
RANSFER OF PREMIUMS COLLECTED .—

‘‘(f) T
RANSFER OF PREMIUMS COLLECTED .— 
‘‘(1) I N GENERAL .—During each calendar year the Secretary 
of the Treasury shall deposit into the CLASS Independence Fund a total amount equal, in the aggregate, to 100 percent of the premiums collected during that year. 
‘‘(2) T
RANSFERS BASED ON ESTIMATES .—The amount depos-

ited pursuant to paragraph (1) shall be transferred in at least monthly payments to the CLASS Independence Fund on the basis of estimates by the Secretary and certified to the Sec-retary of the Treasury of the amounts collected in accordance with subparagraphs (A) and (B) of paragraph (5). Proper adjust-ments shall be made in amounts subsequently transferred to

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124 STAT. 836 PUBLIC LAW 111–148—MAR. 23, 2010 
the Fund to the extent prior estimates were in excess of, or 
were less than, actual amounts collected. ‘‘(g) O
THER ENROLLMENT AND DISENROLLMENT OPPORTUNI -
TIES.—The Secretary, in coordination with the Secretary of the 
Treasury, shall establish procedures under which— 
‘‘(1) an individual who, in the year of the individual’s

initial eligibility to enroll in the CLASS program, has elected to waive enrollment in the program, is eligible to elect to enroll in the program, in such form and manner as the Secre-taries shall establish, only during an open enrollment period established by the Secretaries that is specific to the individual and that may not occur more frequently than biennially after the date on which the individual first elected to waive enroll-ment in the program; and

‘‘(2) an individual shall only be permitted to disenroll from 
the program (other than for nonpayment of premiums) during an annual disenrollment period established by the Secretaries and in such form and manner as the Secretaries shall establish. 
‘‘SEC. 3205. BENEFITS. 
‘‘(a) D ETERMINATION OF ELIGIBILITY .— 
‘‘(1) A PPLICATION FOR RECEIPT OF BENEFITS .—The Secretary

shall establish procedures under which an active enrollee shall apply for receipt of benefits under the CLASS Independence Benefit Plan. 
‘‘(2) E
LIGIBILITY ASSESSMENTS .— 
‘‘(A) I N GENERAL .—Not later than January 1, 2012, 
the Secretary shall— 
‘‘(i) establish an Eligibility Assessment System

‘‘(i) establish an Eligibility Assessment System 
(other than a service with which the Commissioner of Social Security has entered into an agreement, with respect to any State, to make disability determinations for purposes of title II or XVI of the Social Security Act) to provide for eligibility assessments of active enrollees who apply for receipt of benefits; 
‘‘(ii) enter into an agreement with the Protection

and Advocacy System for each State to provide advocacy services in accordance with subsection (d); and 
‘‘(iii) enter into an agreement with public and pri-
vate entities to provide advice and assistance coun-seling in accordance with subsection (e). ‘‘(B) R

regulations to develop an expedited nationally equitable eligibility determination process, as certified by a licensed health care practitioner, an appeals process, and a redeter-mination process, as certified by a licensed health care practitioner, including whether an active enrollee is eligible for a cash benefit under the program and if so, the amount of the cash benefit (in accordance the sliding scale estab-lished under the plan). 
‘‘(C) P

‘‘(C) P
RESUMPTIVE ELIGIBILITY FOR CERTAIN INSTITU -
TIONALIZED ENROLLEES PLANNING TO DISCHARGE .—An 
active enrollee shall be deemed presumptively eligible if the enrollee— 
‘‘(i) has applied for, and attests is eligible for, 
the maximum cash benefit available under the sliding Deadline. Contracts. 42 USC 300 ll–4. Procedures.

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124 STAT. 837 PUBLIC LAW 111–148—MAR. 23, 2010 
scale established under the CLASS Independence Ben-
efit Plan; 
‘‘(ii) is a patient in a hospital (but only if the 
hospitalization is for long-term care), nursing facility, intermediate care facility for the mentally retarded, or an institution for mental diseases; and 
‘‘(iii) is in the process of, or about to begin the

process of, planning to discharge from the hospital, facility, or institution, or within 60 days from the date of discharge from the hospital, facility, or institution. ‘‘(D) A
PPEALS .—The Secretary shall establish proce-
dures under which an applicant for benefits under the CLASS Independence Benefit Plan shall be guaranteed the right to appeal an adverse determination. 
‘‘(b) B
ENEFITS .—An eligible beneficiary shall receive the fol-

lowing benefits under the CLASS Independence Benefit Plan: 
‘‘(1) C ASH BENEFIT .—A cash benefit established by the Sec-
retary in accordance with the requirements of section 3203(a)(1)(D) that— 
‘‘(A) the first year in which beneficiaries receive the 
benefits under the plan, is not less than the average dollar amount specified in clause (i) of such section; and 
‘‘(B) for any subsequent year, is not less than the

average per day dollar limit applicable under this subpara-graph for the preceding year, increased by the percentage increase in the consumer price index for all urban con-sumers (U.S. city average) over the previous year. ‘‘(2) A
DVOCACY SERVICES .—Advocacy services in accordance 
with subsection (d). 
‘‘(3) A DVICE AND ASSISTANCE COUNSELING .—Advice and 
assistance counseling in accordance with subsection (e). 
‘‘(4) A DMINISTRATIVE EXPENSES .—Advocacy services and

advise and assistance counseling services under paragraphs (2) and (3) of this subsection shall be included as administrative expenses under section 3203(b)(3). ‘‘(c) P
AYMENT OF BENEFITS .— 
‘‘(1) L IFE INDEPENDENCE ACCOUNT .— 

dures for administering the provision of benefits to eligible beneficiaries under the CLASS Independence Benefit Plan, including the payment of the cash benefit for the bene-ficiary into a Life Independence Account established by the Secretary on behalf of each eligible beneficiary. 
‘‘(B) U
SE OF CASH BENEFITS .—Cash benefits paid into

a Life Independence Account of an eligible beneficiary shall be used to purchase nonmedical services and supports that the beneficiary needs to maintain his or her independence at home or in another residential setting of their choice in the community, including (but not limited to) home modifications, assistive technology, accessible transpor-tation, homemaker services, respite care, personal assist-ance services, home care aides, and nursing support. Nothing in the preceding sentence shall

support. Nothing in the preceding sentence shall prevent an eligible beneficiary from using cash benefits paid into a Life Independence Account for obtaining assistance with deci-sion making concerning medical care, including the right to accept or refuse medical or surgical treatment and the Procedures. Procedures. Deadline.

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124 STAT. 838 PUBLIC LAW 111–148—MAR. 23, 2010 
right to formulate advance directives or other written 
instructions recognized under State law, such as a living will or durable power of attorney for health care, in the case that an injury or illness causes the individual to be unable to make health care decisions. 
‘‘(C) E
LECTRONIC MANAGEMENT OF FUNDS .—The Sec-
retary shall establish procedures for— 
‘‘(i) crediting an account established on behalf of

a beneficiary with the beneficiary’s cash daily benefit; 
‘‘(ii) allowing the beneficiary to access such account 
through debit cards; and 
‘‘(iii) accounting for withdrawals by the beneficiary 
from such account. ‘‘(D) P
RIMARY PAYOR RULES FOR BENEFICIARIES WHO  
ARE ENROLLED IN MEDICAID .—In the case of an eligible 
beneficiary who is enrolled in Medicaid, the following pay-ment rules shall apply: 
‘‘(i) I
NSTITUTIONALIZED BENEFICIARY .—If the bene-

ficiary is a patient in a hospital, nursing facility, inter-mediate care facility for the mentally retarded, or an institution for mental diseases, the beneficiary shall retain an amount equal to 5 percent of the beneficiary’s daily or weekly cash benefit (as applicable) (which shall be in addition to the amount of the beneficiary’s personal needs allowance provided under Medicaid), and the remainder of such benefit shall be applied toward the facility’s cost of providing the beneficiary’s

facility’s cost of providing the beneficiary’s care, and Medicaid shall provide secondary coverage for such care.

‘‘(ii) B
ENEFICIARIES RECEIVING HOME AND COMMU -
NITY-BASED SERVICES .— 
‘‘(I) 50 PERCENT OF BENEFIT RETAINED BY BENE -
FICIARY .—Subject to subclause (II), if a beneficiary

is receiving medical assistance under Medicaid for home and community based services, the bene-ficiary shall retain an amount equal to 50 percent of the beneficiary’s daily or weekly cash benefit (as applicable), and the remainder of the daily or weekly cash benefit shall be applied toward the cost to the State of providing such assistance (and shall not be used to claim Federal matching funds under Medicaid), and Medicaid shall provide secondary coverage for the remainder of any costs incurred

coverage for the remainder of any costs incurred in providing such assistance.

State shall be paid the remainder of a beneficiary’s daily or weekly cash benefit under subclause (I) only if the State home and community-based waiver under section 1115 of the Social Security Act (42 U.S.C. 1315) or subsection (c) or (d) of section 1915 of such Act (42 U.S.C. 1396n), or the State plan amendment under subsection (i) of such section does not include a waiver of the requirements of section 1902(a)(1) of the Social Security Act (relating to statewideness) or of sec-tion

Act (relating to statewideness) or of sec-tion 1902(a)(10)(B) of such Act (relating to com-parability) and the State offers at a minimum Procedures.

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124 STAT. 839 PUBLIC LAW 111–148—MAR. 23, 2010 
case management services, personal care services, 
habilitation services, and respite care under such a waiver or State plan amendment. 
‘‘(III) D
EFINITION OF HOME AND COMMUNITY - 
BASED SERVICES .—In this clause, the term ‘home

BASED SERVICES .—In this clause, the term ‘home 
and community-based services’ means any services which may be offered under a home and commu-nity-based waiver authorized for a State under section 1115 of the Social Security Act (42 U.S.C. 1315) or subsection (c) or (d) of section 1915 of such Act (42 U.S.C. 1396n) or under a State plan amendment under subsection (i) of such section. ‘‘(iii) B
ENEFICIARIES ENROLLED IN PROGRAMS OF  
ALL-INCLUSIVE CARE FOR THE ELDERLY (PACE) .—

ALL-INCLUSIVE CARE FOR THE ELDERLY (PACE) .— 
‘‘(I) I N GENERAL .—Subject to subclause (II),

if a beneficiary is receiving medical assistance under Medicaid for PACE program services under section 1934 of the Social Security Act (42 U.S.C. 1396u–4), the beneficiary shall retain an amount equal to 50 percent of the beneficiary’s daily or weekly cash benefit (as applicable), and the remainder of the daily or weekly cash benefit shall be applied toward the cost to the State of providing such assistance (and shall not be used to claim Federal matching funds under Medicaid), and Medicaid

matching funds under Medicaid), and Medicaid shall provide secondary coverage for the remainder of any costs incurred in providing such assistance.

‘‘(II) I
NSTITUTIONALIZED RECIPIENTS OF PACE  
PROGRAM SERVICES .—If a beneficiary receiving 
assistance under Medicaid for PACE program serv-ices is a patient in a hospital, nursing facility, intermediate care facility for the mentally retarded, or an institution for mental diseases, the beneficiary shall be treated as in institutional-ized beneficiary under clause (i). 
‘‘(2) A
UTHORIZED REPRESENTATIVES .— 

dures to allow access to a beneficiary’s cash benefits by an authorized representative of the eligible beneficiary on whose behalf such benefits are paid. 
‘‘(B) Q
UALITY ASSURANCE AND PROTECTION AGAINST  
FRAUD AND ABUSE .—The procedures established under 
subparagraph (A) shall ensure that authorized representa-tives of eligible beneficiaries comply with standards of con-duct established by the Secretary, including standards

requiring that such representatives provide quality services on behalf of such beneficiaries, do not have conflicts of interest, and do not misuse benefits paid on behalf of such beneficiaries or otherwise engage in fraud or abuse. ‘‘(3) C
OMMENCEMENT OF BENEFITS .—Benefits shall be paid 
to, or on behalf of, an eligible beneficiary beginning with the first month in which an application for such benefits is approved. 
‘‘(4) R
OLLOVER OPTION FOR LUMP -SUM PAYMENT .—An

OLLOVER OPTION FOR LUMP -SUM PAYMENT .—An 
eligible beneficiary may elect to— Procedures. 
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124 STAT. 840 PUBLIC LAW 111–148—MAR. 23, 2010 
‘‘(A) defer payment of their daily or weekly benefit 
and to rollover any such deferred benefits from month- to-month, but not from year-to-year; and 
‘‘(B) receive a lump-sum payment of such deferred 
benefits in an amount that may not exceed the lesser of— 
‘‘(i) the total amount of the accrued deferred bene-
fits; or 
‘‘(ii) the applicable annual benefit. 
‘‘(5) P
ERIOD FOR DETERMINATION OF ANNUAL BENEFITS .—

ERIOD FOR DETERMINATION OF ANNUAL BENEFITS .— 
‘‘(A) I N GENERAL .—The applicable period for deter-
mining with respect to an eligible beneficiary the applicable annual benefit and the amount of any accrued deferred benefits is the 12-month period that commences with the first month in which the beneficiary began to receive such benefits, and each 12-month period thereafter. 
‘‘(B) I
NCLUSION OF INCREASED BENEFITS .—The Sec-

‘‘(B) I
retary shall establish procedures under which cash benefits paid to an eligible beneficiary that increase or decrease as a result of a change in the functional status of the beneficiary before the end of a 12-month benefit period shall be included in the determination of the applicable annual benefit paid to the eligible beneficiary. 
‘‘(C) R
ECOUPMENT OF UNPAID , ACCRUED BENEFITS .— 
‘‘(i) I N GENERAL .—The Secretary, in coordination

with the Secretary of the Treasury, shall recoup any accrued benefits in the event of— 
‘‘(I) the death of a beneficiary; or ‘‘(II) the failure of a beneficiary to elect under 
paragraph (4)(B) to receive such benefits as a lump-sum payment before the end of the 12-month period in which such benefits accrued. ‘‘(ii) P
AYMENT INTO CLASS INDEPENDENCE FUND .—

AYMENT INTO CLASS INDEPENDENCE FUND .— 
Any benefits recouped in accordance with clause (i) shall be paid into the CLASS Independence Fund and used in accordance with section 3206. 
‘‘(6) R
EQUIREMENT TO RECERTIFY ELIGIBILITY FOR RECEIPT  
OF BENEFITS .—An eligible beneficiary shall periodically, as 
determined by the Secretary— 
‘‘(A) recertify by submission of medical evidence the 
beneficiary’s continued eligibility for receipt of benefits; and

‘‘(B) submit records of expenditures attributable to the 
aggregate cash benefit received by the beneficiary during the preceding year. ‘‘(7) S
UPPLEMENT , NOT SUPPLANT OTHER HEALTH CARE BENE -
FITS.—Subject to the Medicaid payment rules under paragraph

(1)(D), benefits received by an eligible beneficiary shall supple-ment, but not supplant, other health care benefits for which the beneficiary is eligible under Medicaid or any other Federally funded program that provides health care benefits or assistance. ‘‘(d) A
DVOCACY SERVICES .—An agreement entered into under 
subsection (a)(2)(A)(ii) shall require the Protection and Advocacy System for the State to— 
‘‘(1) assign, as needed, an advocacy counselor to each

eligible beneficiary that is covered by such agreement and who shall provide an eligible beneficiary with— Contracts. 
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124 STAT. 841 PUBLIC LAW 111–148—MAR. 23, 2010 
‘‘(A) information regarding how to access the appeals 
process established for the program; 
‘‘(B) assistance with respect to the annual recertifi-
cation and notification required under subsection (c)(6); and 
‘‘(C) such other assistance with obtaining services as 
the Secretary, by regulation, shall require; and ‘‘(2) ensure that the System and such counselors comply 
with the requirements of subsection (h). ‘‘(e) A

DVICE AND ASSISTANCE COUNSELING .—An agreement 
entered into under subsection (a)(2)(A)(iii) shall require the entity to assign, as requested by an eligible beneficiary that is covered by such agreement, an advice and assistance counselor who shall provide an eligible beneficiary with information regarding— 
‘‘(1) accessing and coordinating long-term services and sup-
ports in the most integrated setting;

ports in the most integrated setting; 
‘‘(2) possible eligibility for other benefits and services; ‘‘(3) development of a service and support plan; ‘‘(4) information about programs established under the 
Assistive Technology Act of 1998 and the services offered under such programs; 
‘‘(5) available assistance with decision making concerning

medical care, including the right to accept or refuse medical or surgical treatment and the right to formulate advance direc-tives or other written instructions recognized under State law, such as a living will or durable power of attorney for health care, in the case that an injury or illness causes the individual to be unable to make health care decisions; and 
‘‘(6) such other services as the Secretary, by regulation, 
may require. ‘‘(f) N

OEFFECT ON ELIGIBILITY FOR OTHER BENEFITS .—Benefits

paid to an eligible beneficiary under the CLASS program shall be disregarded for purposes of determining or continuing the bene-ficiary’s eligibility for receipt of benefits under any other Federal, State, or locally funded assistance program, including benefits paid under titles II, XVI, XVIII, XIX, or XXI of the Social Security Act (42 U.S.C. 401 et seq., 1381 et seq., 1395 et seq., 1396 et seq., 1397aa et seq.), under the laws administered by the Secretary of Veterans Affairs, under

by the Secretary of Veterans Affairs, under low-income housing assistance programs,

or under the supplemental nutrition assistance program established under the Food and Nutrition Act of 2008 (7 U.S.C. 2011 et seq.). 
‘‘(g) R
construed as prohibiting benefits paid under the CLASS Independ-ence Benefit Plan from being used to compensate a family caregiver for providing community living assistance services and supports to an eligible beneficiary. 
‘‘(h) P
ROTECTION AGAINST CONFLICT OF INTERESTS .—The Sec-

retary shall establish procedures to ensure that the Eligibility Assessment System, the Protection and Advocacy System for a State, advocacy counselors for eligible beneficiaries, and any other entities that provide services to active enrollees and eligible bene-ficiaries under the CLASS program comply with the following: 
‘‘(1) If the entity provides counseling or planning services,

such services are provided in a manner that fosters the best interests of the active enrollee or beneficiary. Procedures. Contracts. Regulations. 
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124 STAT. 842 PUBLIC LAW 111–148—MAR. 23, 2010 
‘‘(2) The entity has established operating procedures that 
are designed to avoid or minimize conflicts of interest between the entity and an active enrollee or beneficiary. 
‘‘(3) The entity provides information about all services and 
options available to the active enrollee or beneficiary, to the best of its knowledge, including services available through other entities or providers. 
‘‘(4) The entity assists the active enrollee or beneficiary

to access desired services, regardless of the provider. 
‘‘(5) The entity reports the number of active enrollees and 
beneficiaries provided with assistance by age, disability, and whether such enrollees and beneficiaries received services from the entity or another entity. 
‘‘(6) If the entity provides counseling or planning services, 
the entity ensures that an active enrollee or beneficiary is informed of any financial interest that the entity has in a service provider.

‘‘(7) The entity provides an active enrollee or beneficiary 
with a list of available service providers that can meet the needs of the active enrollee or beneficiary. 
‘‘SEC. 3206. CLASS INDEPENDENCE FUND. 
‘‘(a) E STABLISHMENT OF CLASS I NDEPENDENCE FUND.—There

is established in the Treasury of the United States a trust fund to be known as the ‘CLASS Independence Fund’. The Secretary of the Treasury shall serve as Managing Trustee of such Fund. The Fund shall consist of all amounts derived from payments into the Fund under sections 3204(f) and 3205(c)(5)(C)(ii), and remaining after investment of such amounts under subsection (b), including additional amounts derived as income from such investments. The amounts held in the Fund are appropriated and

The amounts held in the Fund are appropriated and shall remain avail-able without fiscal year limitation—

‘‘(1) to be held for investment on behalf of individuals 
enrolled in the CLASS program; 
‘‘(2) to pay the administrative expenses related to the Fund 
and to investment under subsection (b); and 
‘‘(3) to pay cash benefits to eligible beneficiaries under 
the CLASS Independence Benefit Plan. ‘‘(b) I
NVESTMENT OF FUND BALANCE .—The Secretary of the

NVESTMENT OF FUND BALANCE .—The Secretary of the 
Treasury shall invest and manage the CLASS Independence Fund in the same manner, and to the same extent, as the Federal Supple-mentary Medical Insurance Trust Fund may be invested and man-aged under subsections (c), (d), and (e) of section 1841(d) of the Social Security Act (42 U.S.C. 1395t). 
‘‘(c) B
OARD OF TRUSTEES .— 
‘‘(1) I N GENERAL .—With respect to the CLASS Independence

Fund, there is hereby created a body to be known as the Board of Trustees of the CLASS Independence Fund (herein-after in this section referred to as the ‘Board of Trustees’) composed of the Secretary of the Treasury, the Secretary of Labor, and the Secretary of Health and Human Services, all ex officio, and of two members of the public (both of whom may not be from the same political party), who shall be nomi-nated by the President for a term of 4 years and subject to confirmation by the

of 4 years and subject to confirmation by the Senate. A member of the Board of Trustees serving as a member of the public and nominated and confirmed to fill a vacancy occurring during a term shall Establishment. 42 USC 300 ll–5.

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124 STAT. 843 PUBLIC LAW 111–148—MAR. 23, 2010 
be nominated and confirmed only for the remainder of such

term. An individual nominated and confirmed as a member of the public may serve in such position after the expiration of such member’s term until the earlier of the time at which the member’s successor takes office or the time at which a report of the Board is first issued under paragraph (2) after the expiration of the member’s term. The Secretary of the Treasury shall be the Managing Trustee of the Board of Trustees. The Board of Trustees shall meet not less frequently than once each calendar

meet not less frequently than once each calendar year. A person serving on the Board of Trustees shall not be considered to be a fiduciary and shall not be personally liable for actions taken in such capacity with respect to the Trust Fund.

‘‘(2) D
UTIES .— 
‘‘(A) I N GENERAL .—It shall be the duty of the Board 
of Trustees to do the following: 
‘‘(i) Hold the CLASS Independence Fund. ‘‘(ii) Report to the Congress not later than the 
first day of April of each year on the operation and status of the CLASS Independence Fund during the preceding fiscal year and on its expected operation and status during the current fiscal year and the next 2 fiscal years. 
‘‘(iii) Report immediately to the Congress whenever

the Board is of the opinion that the amount of the CLASS Independence Fund is not actuarially sound in regards to the projection under section 3203(b)(1)(B)(i). 
‘‘(iv) Review the general policies followed in man-
aging the CLASS Independence Fund, and recommend changes in such policies, including necessary changes in the provisions of law which govern the way in which the CLASS Independence Fund is to be managed. ‘‘(B) R
EPORT .—The report provided for in subparagraph 
(A)(ii) shall—

(A)(ii) shall— 
‘‘(i) include— 
‘‘(I) a statement of the assets of, and the 
disbursements made from, the CLASS Independ-ence Fund during the preceding fiscal year; 
‘‘(II) an estimate of the expected income to, 
and disbursements to be made from, the CLASS Independence Fund during the current fiscal year and each of the next 2 fiscal years; 
‘‘(III) a statement of the actuarial status of 
the CLASS Independence Fund for the current fiscal year, each of the next 2 fiscal years, and

as projected over the 75-year period beginning with the current fiscal year; and 
‘‘(IV) an actuarial opinion by the Chief Actuary 
of the Centers for Medicare & Medicaid Services certifying that the techniques and methodologies used are generally accepted within the actuarial profession and that the assumptions and cost esti-mates used are reasonable; and ‘‘(ii) be printed as a House document of the session 
of the Congress to which the report is made. 
Publication. Reports. Reports.

Publication. Reports. Reports. 
Deadline. 
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124 STAT. 844 PUBLIC LAW 111–148—MAR. 23, 2010 
‘‘(C) R ECOMMENDATIONS .—If the Board of Trustees

determines that enrollment trends and expected future ben-efit claims on the CLASS Independence Fund are not actuarially sound in regards to the projection under section 3203(b)(1)(B)(i) and are unlikely to be resolved with reason-able premium increases or through other means, the Board of Trustees shall include in the report provided for in subparagraph (A)(ii) recommendations for such legislative action as the Board of Trustees determine to be appro-priate, including whether to adjust monthly

appro-priate, including whether to adjust monthly premiums or impose a temporary moratorium on new enrollments.

‘‘SEC. 3207. CLASS INDEPENDENCE ADVISORY COUNCIL. 
‘‘(a) E STABLISHMENT .—There is hereby created an Advisory 
Committee to be known as the ‘CLASS Independence Advisory Council’. 
‘‘(b) M
‘‘(1) I N GENERAL .—The CLASS Independence Advisory 
Council shall be composed of not more than 15 individuals, not otherwise in the employ of the United States— 
‘‘(A) who shall be appointed by the President without 
regard to the civil service laws and regulations; and

individuals who participate or are likely to participate in the CLASS program, and shall include representatives of older and younger workers, individuals with disabilities, family caregivers of individuals who require services and supports to maintain their independence at home or in another residential setting of their choice in the community, individuals with expertise in long-term care or disability insurance, actuarial science, economics, and other relevant disciplines, as determined by

and other relevant disciplines, as determined by the Secretary. ‘‘(2) T

ERMS .— 
‘‘(A) I N GENERAL .—The members of the CLASS 
Independence Advisory Council shall serve overlapping terms of 3 years (unless appointed to fill a vacancy occur-ring prior to the expiration of a term, in which case the individual shall serve for the remainder of the term). 
‘‘(B) L
IMITATION .—A member shall not be eligible to 
serve for more than 2 consecutive terms. ‘‘(3) C
HAIR .—The President shall, from time to time, appoint

one of the members of the CLASS Independence Advisory Council to serve as the Chair. ‘‘(c) D
UTIES .—The CLASS Independence Advisory Council shall 
advise the Secretary on matters of general policy in the administra-tion of the CLASS program established under this title and in the formulation of regulations under this title including with respect to— 
‘‘(1) the development of the CLASS Independence Benefit 
Plan under section 3203; 
‘‘(2) the determination of monthly premiums under such

plan; and 
‘‘(3) the financial solvency of the program. 
‘‘(d) A
PPLICATION OF FACA.—The Federal Advisory Committee 
Act (5 U.S.C. App.), other than section 14 of that Act, shall apply to the CLASS Independence Advisory Council. 
‘‘(e) A
UTHORIZATION OF APPROPRIATIONS .— President. Appointment. Appointment. 
President. 42 USC 300 ll–6. Determination.

President. 42 USC 300 ll–6. Determination. 
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124 STAT. 845 PUBLIC LAW 111–148—MAR. 23, 2010 
‘‘(1) I N GENERAL .—There are authorized to be appropriated 
to the CLASS Independence Advisory Council to carry out its duties under this section, such sums as may be necessary for fiscal year 2011 and for each fiscal year thereafter. 
‘‘(2) A
VAILABILITY .—Any sums appropriated under the 
authorization contained in this section shall remain available, without fiscal year limitation, until expended.

‘‘SEC. 3208. SOLVENCY AND FISCAL INDEPENDENCE; REGULATIONS; 
ANNUAL REPORT. 
‘‘(a) S OLVENCY .—The Secretary shall regularly consult with the

Board of Trustees of the CLASS Independence Fund and the CLASS Independence Advisory Council, for purposes of ensuring that enrollees premiums are adequate to ensure the financial solvency of the CLASS program, both with respect to fiscal years occurring in the near-term and fiscal years occurring over 20- and 75-year periods, taking into account the projections required for such periods under subsections (a)(1)(A)(i) and (b)(1)(B)(i) of section 3202. 
‘‘(b) N

‘‘(b) N
OTAXPAYER FUNDS USEDTOPAYBENEFITS .—No taxpayer 
funds shall be used for payment of benefits under a CLASS Inde-pendent Benefit Plan. For purposes of this subsection, the term ‘taxpayer funds’ means any Federal funds from a source other than premiums deposited by CLASS program participants in the CLASS Independence Fund and any associated interest earnings. 
‘‘(c) R
EGULATIONS .—The Secretary shall promulgate such regu-

lations as are necessary to carry out the CLASS program in accord-ance with this title. Such regulations shall include provisions to prevent fraud and abuse under the program. 
‘‘(d) A
NNUAL REPORT .—Beginning January 1, 2014, the Sec-
retary shall submit an annual report to Congress on the CLASS program. Each report shall include the following: 
‘‘(1) The total number of enrollees in the program. ‘‘(2) The total number of eligible beneficiaries during the 
fiscal year.

fiscal year. 
‘‘(3) The total amount of cash benefits provided during 
the fiscal year. 
‘‘(4) A description of instances of fraud or abuse identified 
during the fiscal year. 
‘‘(5) Recommendations for such administrative or legislative 
action as the Secretary determines is necessary to improve the program, ensure the solvency of the program, or to prevent the occurrence of fraud or abuse. 
‘‘SEC. 3209. INSPECTOR GENERAL’S REPORT. 
‘‘The Inspector General of the Department of Health and

Human Services shall submit an annual report to the Secretary and Congress relating to the overall progress of the CLASS program and of the existence of waste, fraud, and abuse in the CLASS program. Each such report shall include findings in the following areas: 
‘‘(1) The eligibility determination process. ‘‘(2) The provision of cash benefits. ‘‘(3) Quality assurance and protection against waste, fraud, 
and abuse.

and abuse. 
‘‘(4) Recouping of unpaid and accrued benefits. 42 USC 300 ll–8. Effective date. Definitions. Consultation. 42 USC 300 ll–7. 
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124 STAT. 846 PUBLIC LAW 111–148—MAR. 23, 2010 
‘‘SEC. 3210. TAX TREATMENT OF PROGRAM. 
‘‘The CLASS program shall be treated for purposes of the 
Internal Revenue Code of 1986 in the same manner as a qualified long-term care insurance contract for qualified long-term care serv-ices.’’. 
(2) C
ONFORMING AMENDMENTS TO MEDICAID .—Section 
1902(a) of the Social Security Act (42 U.S.C. 1396a(a)), as amended by section 6505, is amended by inserting after para-graph (80) the following:

‘‘(81) provide that the State will comply with such regula-
tions regarding the application of primary and secondary payor rules with respect to individuals who are eligible for medical assistance under this title and are eligible beneficiaries under the CLASS program established under title XXXII of the Public Health Service Act as the Secretary shall establish; and’’. (b) A
SSURANCE OF ADEQUATE INFRASTRUCTURE FOR THE PROVI -
SION OF PERSONAL CARE ATTENDANT WORKERS .—Section 1902(a)

of the Social Security Act (42 U.S.C. 1396a(a)), as amended by subsection (a)(2), is amended by inserting after paragraph (81) the following: 
‘‘(82) provide that, not later than 2 years after the date 
of enactment of the Community Living Assistance Services and Supports Act, each State shall— 
‘‘(A) assess the extent to which entities such as pro-

viders of home care, home health services, home and community service providers, public authorities created to provide personal care services to individuals eligible for medical assistance under the State plan, and nonprofit organizations, are serving or have the capacity to serve as fiscal agents for, employers of, and providers of employ-ment-related benefits for, personal care attendant workers who provide personal care services to individuals receiving benefits under the CLASS program

receiving benefits under the CLASS program established under title XXXII of the Public Health Service Act, including in rural and underserved areas;

‘‘(B) designate or create such entities to serve as fiscal 
agents for, employers of, and providers of employment- related benefits for, such workers to ensure an adequate supply of the workers for individuals receiving benefits under the CLASS program, including in rural and under-served areas; and 
‘‘(C) ensure that the designation or creation of such

entities will not negatively alter or impede existing pro-grams, models, methods, or administration of service delivery that provide for consumer controlled or self- directed home and community services and further ensure that such entities will not impede the ability of individuals to direct and control their home and community services, including the ability to select, manage, dismiss, co-employ, or employ such workers or inhibit such individuals from relying on family members for the

from relying on family members for the provision of personal care services.’’.

(c) P
ERSONAL CARE ATTENDANTS WORKFORCE ADVISORY  
PANEL .— 
(1) E STABLISHMENT .—Not later than 90 days after the date 
of enactment of this Act, the Secretary of Health and Human Services shall establish a Personal Care Attendants Workforce Deadline. 42 USC 300 ll 
note. Designation. Deadline. Regulations. 42 USC 300 ll–9. 
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124 STAT. 847 PUBLIC LAW 111–148—MAR. 23, 2010 
Advisory Panel for the purpose of examining and advising 
the Secretary and Congress on workforce issues related to personal care attendant workers, including with respect to the adequacy of the number of such workers, the salaries, wages, and benefits of such workers, and access to the services provided by such workers. 
(2) M
EMBERSHIP .—In appointing members to the Personal

Care Attendants Workforce Advisory Panel, the Secretary shall ensure that such members include the following: 
(A) Individuals with disabilities of all ages. (B) Senior individuals. (C) Representatives of individuals with disabilities. (D) Representatives of senior individuals. (E) Representatives of workforce and labor organiza-
tions. 
(F) Representatives of home and community-based 
service providers. 
(G) Representatives of assisted living providers. 
(d) I

(d) I
NCLUSION OF INFORMATION ON SUPPLEMENTAL COVERAGE  
IN THE NATIONAL CLEARINGHOUSE FOR LONG-TERM CARE INFORMA -
TION ; E XTENSION OF FUNDING .—Section 6021(d) of the Deficit 
Reduction Act of 2005 (42 U.S.C. 1396p note) is amended— 
(1) in paragraph (2)(A)— 
‘‘(iv) include information regarding the CLASS pro-

gram established under title XXXII of the Public Health Service Act and coverage available for purchase through a Exchange established under section 1311 of the Patient Protection and Affordable Care Act that is supplemental coverage to the benefits provided under a CLASS Independence Benefit Plan under that program, and information regarding how benefits pro-vided under a CLASS Independence Benefit Plan differ from disability insurance benefits.’’; and

(2) in paragraph (3), by striking ‘‘2010’’ and inserting 
‘‘2015’’. (e) E
(a), (b), and (d) take effect on January 1, 2011. 
(f) R ULE OF CONSTRUCTION .—Nothing in this title or the amend-
ments made by this title are intended to replace or displace public or private disability insurance benefits, including such benefits that are for income replacement. 
Subtitle A—Revenue Offset Provisions

SEC. 9001. EXCISE TAX ON HIGH COST EMPLOYER-SPONSORED HEALTH 
COVERAGE. 
of 1986, as amended by section 1513, is amended by adding at the end the following: 42 USC 300 ll 
note. 42 USC 300 ll 
note. 
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124 STAT. 848 PUBLIC LAW 111–148—MAR. 23, 2010 
‘‘SEC. 4980I. EXCISE TAX ON HIGH COST EMPLOYER-SPONSORED 
‘‘(a) I MPOSITION OF TAX.—If— 
‘‘(1) an employee is covered under any applicable employer- 
sponsored coverage of an employer at any time during a taxable period, and 
‘‘(2) there is any excess benefit with respect to the coverage, 
there is hereby imposed a tax equal to 40 percent of the excess benefit. 
‘‘(b) E
XCESS BENEFIT .—For purposes of this section—

XCESS BENEFIT .—For purposes of this section— 
‘‘(1) I N GENERAL .—The term ‘excess benefit’ means, with 
respect to any applicable employer-sponsored coverage made available by an employer to an employee during any taxable period, the sum of the excess amounts determined under para-graph (2) for months during the taxable period. 
‘‘(2) M
ONTHLY EXCESS AMOUNT .—The excess amount deter-
mined under this paragraph for any month is the excess (if any) of—

‘‘(A) the aggregate cost of the applicable employer- 
sponsored coverage of the employee for the month, over 
‘‘(B) an amount equal to 
1⁄12of the annual limitation 
under paragraph (3) for the calendar year in which the month occurs. ‘‘(3) A
NNUAL LIMITATION .—For purposes of this subsection— 
‘‘(A) I N GENERAL .—The annual limitation under this 
paragraph for any calendar year is the dollar limit deter-
mined under subparagraph (C) for the calendar year.

‘‘(B) A PPLICABLE ANNUAL LIMITATION .—The annual 
limitation which applies for any month shall be determined on the basis of the type of coverage (as determined under subsection (f)(1)) provided to the employee by the employer as of the beginning of the month. 
‘‘(C) A
PPLICABLE DOLLAR LIMIT .—Except as provided 
in subparagraph (D)— 
‘‘(i) 2013.—In the case of 2013, the dollar limit 
under this subparagraph is— 
‘‘(I) in the case of an employee with self-only 
coverage, $8,500, and

coverage, $8,500, and 
‘‘(II) in the case of an employee with coverage 
other than self-only coverage, $23,000. ‘‘(ii) E
XCEPTION FOR CERTAIN INDIVIDUALS .—In the 
case of an individual who is a qualified retiree or who participates in a plan sponsored by an employer the majority of whose employees are engaged in a high-risk profession or employed to repair or install electrical or telecommunications lines— 
‘‘(I) the dollar amount in clause (i)(I) (deter-

mined after the application of subparagraph (D)) shall be increased by $1,350, and 
‘‘(II) the dollar amount in clause (i)(II) (deter-
mined after the application of subparagraph (D)) shall be increased by $3,000. ‘‘(iii) S
UBSEQUENT YEARS .—In the case of any cal-
endar year after 2013, each of the dollar amounts under clauses (i) and (ii) shall be increased to the amount equal to such amount as in effect for the Definition. 26 USC 4980I.

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124 STAT. 849 PUBLIC LAW 111–148—MAR. 23, 2010 
calendar year preceding such year, increased by an 
amount equal to the product of— 
‘‘(I) such amount as so in effect, multiplied 
by 
‘‘(II) the cost-of-living adjustment determined 
under section 1(f)(3) for such year (determined by substituting the calendar year that is 2 years before such year for ‘1992’ in subparagraph (B) thereof), increased by 1 percentage point.

If any amount determined under this clause is not a multiple of $50, such amount shall be rounded to the nearest multiple of $50. ‘‘(D) T
RANSITION RULE FOR STATES WITH HIGHEST COV -
ERAGE COSTS .— 
‘‘(i) I N GENERAL .—If an employee is a resident

‘‘(i) I N GENERAL .—If an employee is a resident 
of a high cost State on the first day of any month beginning in 2013, 2014, or 2015, the annual limitation under this paragraph for such month with respect to such employee shall be an amount equal to the applicable percentage of the annual limitation (deter-mined without regard to this subparagraph or subpara-graph (C)(ii)). 
‘‘(ii) A
PPLICABLE PERCENTAGE .—The applicable

‘‘(ii) A
PPLICABLE PERCENTAGE .—The applicable 
percentage is 120 percent for 2013, 110 percent for 2014, and 105 percent for 2015. 
‘‘(iii) H
IGH COST STATE .—The term ‘high cost State’

IGH COST STATE .—The term ‘high cost State’ 
means each of the 17 States which the Secretary of Health and Human Services, in consultation with the Secretary, estimates had the highest average cost during 2012 for employer-sponsored coverage under health plans. The Secretary’s estimate shall be made on the basis of aggregate premiums paid in the State for such health plans, determined using the most recent data available as of August 31, 2012. 
‘‘(c) L
IABILITY TOPAYTAX.—

‘‘(c) L
IABILITY TOPAYTAX.— 
‘‘(1) I N GENERAL .—Each coverage provider shall pay the 
tax imposed by subsection (a) on its applicable share of the excess benefit with respect to an employee for any taxable period. 
‘‘(2) C
OVERAGE PROVIDER .—For purposes of this subsection, 
the term ‘coverage provider’ means each of the following: 
‘‘(A) H EALTH INSURANCE COVERAGE .—If the applicable

employer-sponsored coverage consists of coverage under a group health plan which provides health insurance cov-erage, the health insurance issuer. 
‘‘(B) HSA 
AND MSA CONTRIBUTIONS .—If the applicable 
employer-sponsored coverage consists of coverage under an arrangement under which the employer makes contribu-tions described in subsection (b) or (d) of section 106, the employer. 
‘‘(C) O
THER COVERAGE .—In the case of any other

‘‘(C) O
THER COVERAGE .—In the case of any other 
applicable employer-sponsored coverage, the person that administers the plan benefits. ‘‘(3) A
PPLICABLE SHARE .—For purposes of this subsection, 
a coverage provider’s applicable share of an excess benefit for any taxable period is the amount which bears the same ratio to the amount of such excess benefit as— Definitions. Definition.

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124 STAT. 850 PUBLIC LAW 111–148—MAR. 23, 2010 
‘‘(A) the cost of the applicable employer-sponsored cov-
erage provided by the provider to the employee during such period, bears to 
‘‘(B) the aggregate cost of all applicable employer-spon-
sored coverage provided to the employee by all coverage providers during such period. ‘‘(4) R
ESPONSIBILITY TO CALCULATE TAX AND APPLICABLE  
SHARES .— 
‘‘(A) I N GENERAL .—Each employer shall— 
‘‘(i) calculate for each taxable period the amount

of the excess benefit subject to the tax imposed by subsection (a) and the applicable share of such excess benefit for each coverage provider, and 
‘‘(ii) notify, at such time and in such manner as 
the Secretary may prescribe, the Secretary and each coverage provider of the amount so determined for the provider. ‘‘(B) S
PECIAL RULE FOR MULTIEMPLOYER PLANS .—In the

PECIAL RULE FOR MULTIEMPLOYER PLANS .—In the 
case of applicable employer-sponsored coverage made avail-able to employees through a multiemployer plan (as defined in section 414(f)), the plan sponsor shall make the calcula-tions, and provide the notice, required under subparagraph (A). 
‘‘(d) A
PPLICABLE EMPLOYER -SPONSORED COVERAGE ; COST.—For 
‘‘(1) A PPLICABLE EMPLOYER -SPONSORED COVERAGE .— 
‘‘(A) I N GENERAL .—The term ‘applicable employer-spon-

sored coverage’ means, with respect to any employee, cov-erage under any group health plan made available to the employee by an employer which is excludable from the employee’s gross income under section 106, or would be so excludable if it were employer-provided coverage (within the meaning of such section 106). 
‘‘(B) E
XCEPTIONS .—The term ‘applicable employer-spon-
sored coverage’ shall not include— 
‘‘(i) any coverage (whether through insurance or

‘‘(i) any coverage (whether through insurance or 
otherwise) described in section 9832(c)(1)(A) or for long- term care, or 
‘‘(ii) any coverage described in section 9832(c)(3) 
the payment for which is not excludable from gross income and for which a deduction under section 162(l) is not allowable. ‘‘(C) C
OVERAGE INCLUDES EMPLOYEE PAID PORTION .— 
Coverage shall be treated as applicable employer-sponsored coverage without regard to whether the employer or employee pays for the coverage.

‘‘(D) S
ELF-EMPLOYED INDIVIDUAL .—In the case of an 
individual who is an employee within the meaning of sec-tion 401(c)(1), coverage under any group health plan pro-viding health insurance coverage shall be treated as applicable employer-sponsored coverage if a deduction is allowable under section 162(l) with respect to all or any portion of the cost of the coverage. 
‘‘(E) G
OVERNMENTAL PLANS INCLUDED .—Applicable

‘‘(E) G
OVERNMENTAL PLANS INCLUDED .—Applicable 
employer-sponsored coverage shall include coverage under any group health plan established and maintained pri-marily for its civilian employees by the Government of Definitions. Notification. 
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124 STAT. 851 PUBLIC LAW 111–148—MAR. 23, 2010 
the United States, by the government of any State or 
political subdivision thereof, or by any agency or instrumen-tality of any such government. ‘‘(2) D
ETERMINATION OF COST .— 
‘‘(A) I N GENERAL .—The cost of applicable employer-

sponsored coverage shall be determined under rules similar to the rules of section 4980B(f)(4), except that in deter-mining such cost, any portion of the cost of such coverage which is attributable to the tax imposed under this section shall not be taken into account and the amount of such cost shall be calculated separately for self-only coverage and other coverage. In the case of applicable employer- sponsored coverage which provides coverage to retired employees, the plan may elect to treat

to retired employees, the plan may elect to treat a retired employee who has not attained the age of 65 and a retired employee who has attained the age of 65 as similarly situated bene-ficiaries.

‘‘(B) H
EALTH FSAS .—In the case of applicable employer- 
sponsored coverage consisting of coverage under a flexible spending arrangement (as defined in section 106(c)(2)), the cost of the coverage shall be equal to the sum of— 
‘‘(i) the amount of employer contributions under 
any salary reduction election under the arrangement, plus 
‘‘(ii) the amount determined under subparagraph

‘‘(ii) the amount determined under subparagraph 
(A) with respect to any reimbursement under the arrangement in excess of the contributions described in clause (i). ‘‘(C) A
RCHER MSAS AND HSAS .—In the case of applicable 
employer-sponsored coverage consisting of coverage under an arrangement under which the employer makes contribu-tions described in subsection (b) or (d) of section 106, the cost of the coverage shall be equal to the amount of employer contributions under the arrangement.

‘‘(D) A
LLOCATION ON A MONTHLY BASIS .—If cost is deter-
mined on other than a monthly basis, the cost shall be allocated to months in a taxable period on such basis as the Secretary may prescribe. 
‘‘(e) P
ENALTY FOR FAILURE TOPROPERLY CALCULATE EXCESS  
BENEFIT .— 
‘‘(1) I N GENERAL .—If, for any taxable period, the tax

imposed by subsection (a) exceeds the tax determined under such subsection with respect to the total excess benefit cal-culated by the employer or plan sponsor under subsection (c)(4)— 
‘‘(A) each coverage provider shall pay the tax on its 
applicable share (determined in the same manner as under subsection (c)(4)) of the excess, but no penalty shall be imposed on the provider with respect to such amount, and 
‘‘(B) the employer or plan sponsor shall, in addition

to any tax imposed by subsection (a), pay a penalty in an amount equal to such excess, plus interest at the under-payment rate determined under section 6621 for the period beginning on the due date for the payment of tax imposed by subsection (a) to which the excess relates and ending on the date of payment of the penalty. 
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124 STAT. 852 PUBLIC LAW 111–148—MAR. 23, 2010 
‘‘(2) L IMITATIONS ON PENALTY .— 
‘‘(A) P ENALTY NOT TO APPLY WHERE FAILURE NOT  
DISCOVERED EXERCISING REASONABLE DILIGENCE .—No pen-
alty shall be imposed by paragraph (1)(B) on any failure to properly calculate the excess benefit during any period for which it is established to the satisfaction of the Sec-retary that the employer or plan sponsor neither knew, nor exercising reasonable diligence would have known, that such failure existed.

‘‘(B) P
ENALTY NOT TO APPLY TO FAILURES CORRECTED  
WITHIN 30 DAYS .—No penalty shall be imposed by paragraph 
(1)(B) on any such failure if— 
‘‘(i) such failure was due to reasonable cause and 
not to willful neglect, and 
‘‘(ii) such failure is corrected during the 30-day 
period beginning on the 1st date that the employer knew, or exercising reasonable diligence would have known, that such failure existed. ‘‘(C) W
AIVER BY SECRETARY .—In the case of any such

AIVER BY SECRETARY .—In the case of any such 
failure which is due to reasonable cause and not to willful neglect, the Secretary may waive part or all of the penalty imposed by paragraph (1), to the extent that the payment of such penalty would be excessive or otherwise inequitable relative to the failure involved. 
‘‘(f) O
THER DEFINITIONS AND SPECIAL RULES .—For purposes 
‘‘(1) C OVERAGE DETERMINATIONS .— 

(B), an employee shall be treated as having self-only cov-erage with respect to any applicable employer-sponsored coverage of an employer. 
‘‘(B) M
INIMUM ESSENTIAL COVERAGE .—An employee

shall be treated as having coverage other than self-only coverage only if the employee is enrolled in coverage other than self-only coverage in a group health plan which pro-vides minimum essential coverage (as defined in section 5000A(f)) to the employee and at least one other beneficiary, and the benefits provided under such minimum essential coverage do not vary based on whether any individual covered under such coverage is the employee or another beneficiary. ‘‘(2) Q

UALIFIED RETIREE .—The term ‘qualified retiree’ 
means any individual who— 
‘‘(A) is receiving coverage by reason of being a retiree, ‘‘(B) has attained age 55, and ‘‘(C) is not entitled to benefits or eligible for enrollment 
under the Medicare program under title XVIII of the Social Security Act. ‘‘(3) E
MPLOYEES ENGAGED IN HIGH -RISK PROFESSION .—The

term ‘employees engaged in a high-risk profession’ means law enforcement officers (as such term is defined in section 1204 of the Omnibus Crime Control and Safe Streets Act of 1968), employees in fire protection activities (as such term is defined in section 3(y) of the Fair Labor Standards Act of 1938), individ-uals who provide out-of-hospital emergency medical care (including emergency medical technicians, paramedics, and first-responders), and individuals engaged in the construction,

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124 STAT. 853 PUBLIC LAW 111–148—MAR. 23, 2010 
mining, agriculture (not including food processing), forestry, 
and fishing industries. Such term includes an employee who is retired from a high-risk profession described in the preceding sentence, if such employee satisfied the requirements of such sentence for a period of not less than 20 years during the employee’s employment. 
‘‘(4) G
ROUP HEALTH PLAN .—The term ‘group health plan’ 
has the meaning given such term by section 5000(b)(1).

‘‘(5) H EALTH INSURANCE COVERAGE ; HEALTH INSURANCE  
ISSUER .— 
‘‘(A) H EALTH INSURANCE COVERAGE .—The term ‘health 
insurance coverage’ has the meaning given such term by section 9832(b)(1) (applied without regard to subparagraph (B) thereof, except as provided by the Secretary in regula-tions). 
‘‘(B) H
EALTH INSURANCE ISSUER .—The term ‘health 
insurance issuer’ has the meaning given such term by section 9832(b)(2). ‘‘(6) P
ERSON THAT ADMINISTERS THE PLAN BENEFITS .—The

ERSON THAT ADMINISTERS THE PLAN BENEFITS .—The 
term ‘person that administers the plan benefits’ shall include the plan sponsor if the plan sponsor administers benefits under the plan. 
‘‘(7) P
LAN SPONSOR .—The term ‘plan sponsor’ has the 
meaning given such term in section 3(16)(B) of the Employee Retirement Income Security Act of 1974. 
‘‘(8) T
AXABLE PERIOD .—The term ‘taxable period’ means

AXABLE PERIOD .—The term ‘taxable period’ means 
the calendar year or such shorter period as the Secretary may prescribe. The Secretary may have different taxable periods for employers of varying sizes. 
‘‘(9) A
GGREGATION RULES .—All employers treated as a 
single employer under subsection (b), (c), (m), or (o) of section 414 shall be treated as a single employer. 
‘‘(10) D
ENIAL OF DEDUCTION .—For denial of a deduction 
for the tax imposed by this section, see section 275(a)(6). ‘‘(g) R

tions as may be necessary to carry out this section.’’. 
43 of such Code, as amended by section 1513, is amended by adding at the end the following new item: 
‘‘Sec. 4980I. Excise tax on high cost employer-sponsored health coverage.’’. 
shall apply to taxable years beginning after December 31, 2012.

SEC. 9002. INCLUSION OF COST OF EMPLOYER-SPONSORED HEALTH 
COVERAGE ON W–2. 
(a) I NGENERAL .—Section 6051(a) of the Internal Revenue Code 
of 1986 (relating to receipts for employees) is amended by striking ‘‘and’’ at the end of paragraph (12), by striking the period at the end of paragraph (13) and inserting ‘‘, and’’, and by adding after paragraph (13) the following new paragraph: 
‘‘(14) the aggregate cost (determined under rules similar

to the rules of section 4980B(f)(4)) of applicable employer-spon-sored coverage (as defined in section 4980I(d)(1)), except that this paragraph shall not apply to— 
‘‘(A) coverage to which paragraphs (11) and (12) apply, 
or 26 USC 6051. 26 USC 4980I 
note. 
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124 STAT. 854 PUBLIC LAW 111–148—MAR. 23, 2010 
‘‘(B) the amount of any salary reduction contributions 
to a flexible spending arrangement (within the meaning of section 125).’’. 
(b) E
shall apply to taxable years beginning after December 31, 2010. 
SEC. 9003. DISTRIBUTIONS FOR MEDICINE QUALIFIED ONLY IF FOR 
PRESCRIBED DRUG OR INSULIN. 
(a) HSA S.—Subparagraph (A) of section 223(d)(2) of the Internal

Revenue Code of 1986 is amended by adding at the end the fol-lowing: ‘‘Such term shall include an amount paid for medicine or a drug only if such medicine or drug is a prescribed drug (determined without regard to whether such drug is available with-out a prescription) or is insulin.’’. 
(b) A
RCHER MSA S.—Subparagraph (A) of section 220(d)(2) of

the Internal Revenue Code of 1986 is amended by adding at the end the following: ‘‘Such term shall include an amount paid for medicine or a drug only if such medicine or drug is a prescribed drug (determined without regard to whether such drug is available 
without a prescription) or is insulin.’’. 
(c) H
EALTH FLEXIBLE SPENDING ARRANGEMENTS AND HEALTH  
REIMBURSEMENT ARRANGEMENTS .—Section 106 of the Internal Rev-
enue Code of 1986 is amended by adding at the end the following new subsection:

‘‘(f) R
EIMBURSEMENTS FOR MEDICINE RESTRICTED TO PRE-
SCRIBED DRUGS AND INSULIN .—For purposes of this section and 
section 105, reimbursement for expenses incurred for a medicine or a drug shall be treated as a reimbursement for medical expenses only if such medicine or drug is a prescribed drug (determined without regard to whether such drug is available without a prescrip-tion) or is insulin.’’. 
(d) E
(1) D ISTRIBUTIONS FROM SAVINGS ACCOUNTS .—The amend-

ments made by subsections (a) and (b) shall apply to amounts paid with respect to taxable years beginning after December 31, 2010. 
(2) R
EIMBURSEMENTS .—The amendment made by sub-
section (c) shall apply to expenses incurred with respect to taxable years beginning after December 31, 2010. 
SEC. 9004. INCREASE IN ADDITIONAL TAX ON DISTRIBUTIONS FROM 
HSAS AND ARCHER MSAS NOT USED FOR QUALIFIED MEDICAL EXPENSES. 
(a) HSA S.—Section 223(f)(4)(A) of the Internal Revenue Code

of 1986 is amended by striking ‘‘10 percent’’ and inserting ‘‘20 percent’’. 
(b) A
RCHER MSA S.—Section 220(f)(4)(A) of the Internal Revenue 
Code of 1986 is amended by striking ‘‘15 percent’’ and inserting ‘‘20 percent’’. 
(c) E
shall apply to distributions made after December 31, 2010. 
SEC. 9005. LIMITATION ON HEALTH FLEXIBLE SPENDING ARRANGE-
MENTS UNDER CAFETERIA PLANS. 
(a) I NGENERAL .—Section 125 of the Internal Revenue Code

of 1986 is amended— 
(1) by redesignating subsections (i) and (j) as subsections 
(j) and (k), respectively, and 26 USC 125. 26 USC 220 note. 26 USC 106 note. 26 USC 220 note. 26 USC 106. 26 USC 220. 26 USC 223. 26 USC 6051 
note. 
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124 STAT. 855 PUBLIC LAW 111–148—MAR. 23, 2010 
(2) by inserting after subsection (h) the following new sub-
section: ‘‘(i) L
IMITATION ON HEALTH FLEXIBLE SPENDING ARRANGE -
MENTS .—For purposes of this section, if a benefit is provided under

a cafeteria plan through employer contributions to a health flexible spending arrangement, such benefit shall not be treated as a quali-fied benefit unless the cafeteria plan provides that an employee may not elect for any taxable year to have salary reduction contribu-tions in excess of $2,500 made to such arrangement.’’. 
(b) E
shall apply to taxable years beginning after December 31, 2010.

SEC. 9006. EXPANSION OF INFORMATION REPORTING REQUIREMENTS. 
(a) I NGENERAL .—Section 6041 of the Internal Revenue Code 
of 1986 is amended by adding at the end the following new sub-sections: 
‘‘(h) A
PPLICATION TO CORPORATIONS .—Notwithstanding any 
regulation prescribed by the Secretary before the date of the enact-ment of this subsection, for purposes of this section the term ‘person’ includes any corporation that is not an organization exempt from tax under section 501(a). 
‘‘(i) R

‘‘(i) R
EGULATIONS .—The Secretary may prescribe such regula-
tions and other guidance as may be appropriate or necessary to carry out the purposes of this section, including rules to prevent duplicative reporting of transactions.’’. 
(b) P
AYMENTS FOR PROPERTY AND OTHER GROSS PROCEEDS .— 
Subsection (a) of section 6041 of the Internal Revenue Code of 1986 is amended— 
(1) by inserting ‘‘amounts in consideration for property,’’ 
after ‘‘wages,’’,

after ‘‘wages,’’, 
(2) by inserting ‘‘gross proceeds,’’ after ‘‘emoluments, or 
other’’, and 
(3) by inserting ‘‘gross proceeds,’’ after ‘‘setting forth the 
amount of such’’. (c) E
shall apply to payments made after December 31, 2011. 
SEC. 9007. ADDITIONAL REQUIREMENTS FOR CHARITABLE HOSPITALS. 
(a) R EQUIREMENTS TOQUALIFY AS SECTION 501( C)(3) C HARI -
TABLE HOSPITAL ORGANIZATION .—Section 501 of the Internal Rev-

enue Code of 1986 (relating to exemption from tax on corporations, certain trusts, etc.) is amended by redesignating subsection (r) as subsection (s) and by inserting after subsection (q) the following new subsection: 
‘‘(r) A
DDITIONAL REQUIREMENTS FOR CERTAIN HOSPITALS .— 
‘‘(1) I N GENERAL .—A hospital organization to which this 
subsection applies shall not be treated as described in sub-section (c)(3) unless the organization— 
‘‘(A) meets the community health needs assessment

requirements described in paragraph (3), 
‘‘(B) meets the financial assistance policy requirements 
described in paragraph (4), 
‘‘(C) meets the requirements on charges described in 
paragraph (5), and 
‘‘(D) meets the billing and collection requirement 
described in paragraph (6). ‘‘(2) H
OSPITAL ORGANIZATIONS TO WHICH SUBSECTION  
APPLIES .— Applicability. 26 USC 501. 26 USC 6041. 26 USC 125 note.

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124 STAT. 856 PUBLIC LAW 111–148—MAR. 23, 2010 
‘‘(A) I N GENERAL .—This subsection shall apply to— 
‘‘(i) an organization which operates a facility which 
is required by a State to be licensed, registered, or similarly recognized as a hospital, and 
‘‘(ii) any other organization which the Secretary

determines has the provision of hospital care as its principal function or purpose constituting the basis for its exemption under subsection (c)(3) (determined without regard to this subsection). ‘‘(B) O
RGANIZATIONS WITH MORE THAN 1 HOSPITAL  
FACILITY .—If a hospital organization operates more than 
1 hospital facility— 
‘‘(i) the organization shall meet the requirements 
of this subsection separately with respect to each such facility, and 
‘‘(ii) the organization shall not be treated as

‘‘(ii) the organization shall not be treated as 
described in subsection (c)(3) with respect to any such facility for which such requirements are not separately met. 
‘‘(3) C
OMMUNITY HEALTH NEEDS ASSESSMENTS .— 
‘‘(A) I N GENERAL .—An organization meets the require-
ments of this paragraph with respect to any taxable year only if the organization— 
‘‘(i) has conducted a community health needs

‘‘(i) has conducted a community health needs 
assessment which meets the requirements of subpara-graph (B) in such taxable year or in either of the 2 taxable years immediately preceding such taxable year, and 
‘‘(ii) has adopted an implementation strategy to 
meet the community health needs identified through such assessment. ‘‘(B) C
OMMUNITY HEALTH NEEDS ASSESSMENT .—A 
community health needs assessment meets the require-ments of this paragraph if such community health needs assessment—

‘‘(i) takes into account input from persons who 
represent the broad interests of the community served by the hospital facility, including those with special knowledge of or expertise in public health, and 
‘‘(ii) is made widely available to the public. 
‘‘(4) F
INANCIAL ASSISTANCE POLICY .—An organization meets 
the requirements of this paragraph if the organization estab-lishes the following policies: 
‘‘(A) F
INANCIAL ASSISTANCE POLICY .—A written finan-

cial assistance policy which includes— 
‘‘(i) eligibility criteria for financial assistance, and 
whether such assistance includes free or discounted care, 
‘‘(ii) the basis for calculating amounts charged to 
patients, 
‘‘(iii) the method for applying for financial assist-
ance, 
‘‘(iv) in the case of an organization which does

‘‘(iv) in the case of an organization which does 
not have a separate billing and collections policy, the actions the organization may take in the event of non- payment, including collections action and reporting to credit agencies, and Public information. 
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124 STAT. 857 PUBLIC LAW 111–148—MAR. 23, 2010 
‘‘(v) measures to widely publicize the policy within 
the community to be served by the organization. ‘‘(B) P
OLICY RELATING TO EMERGENCY MEDICAL CARE .—

OLICY RELATING TO EMERGENCY MEDICAL CARE .— 
A written policy requiring the organization to provide, with-out discrimination, care for emergency medical conditions (within the meaning of section 1867 of the Social Security Act (42 U.S.C. 1395dd)) to individuals regardless of their eligibility under the financial assistance policy described in subparagraph (A). ‘‘(5) L
IMITATION ON CHARGES .—An organization meets the 
requirements of this paragraph if the organization—

‘‘(A) limits amounts charged for emergency or other 
medically necessary care provided to individuals eligible for assistance under the financial assistance policy described in paragraph (4)(A) to not more than the lowest amounts charged to individuals who have insurance cov-ering such care, and 
‘‘(B) prohibits the use of gross charges. 
‘‘(6) B
ILLING AND COLLECTION REQUIREMENTS .—An

‘‘(6) B
ILLING AND COLLECTION REQUIREMENTS .—An 
organization meets the requirement of this paragraph only if the organization does not engage in extraordinary collection actions before the organization has made reasonable efforts to determine whether the individual is eligible for assistance under the financial assistance policy described in paragraph (4)(A). 
‘‘(7) R
EGULATORY AUTHORITY .—The Secretary shall issue

EGULATORY AUTHORITY .—The Secretary shall issue 
such regulations and guidance as may be necessary to carry out the provisions of this subsection, including guidance relating to what constitutes reasonable efforts to determine the eligi-bility of a patient under a financial assistance policy for pur-poses of paragraph (6).’’. (b) E
XCISE TAX FOR FAILURES TOMEET HOSPITAL EXEMPTION  
REQUIREMENTS .— 
(1) I N GENERAL .—Subchapter D of chapter 42 of the

Internal Revenue Code of 1986 (relating to failure by certain charitable organizations to meet certain qualification require-ments) is amended by adding at the end the following new section: 
‘‘SEC. 4959. TAXES ON FAILURES BY HOSPITAL ORGANIZATIONS. 
‘‘If a hospital organization to which section 501(r) applies fails 
to meet the requirement of section 501(r)(3) for any taxable year, there is imposed on the organization a tax equal to $50,000.’’. 
(2) C

(2) C
ONFORMING AMENDMENT .—The table of sections for 
subchapter D of chapter 42 of such Code is amended by adding at the end the following new item: 
‘‘Sec. 4959. Taxes on failures by hospital organizations.’’. 
(c) M ANDATORY REVIEW OF TAXEXEMPTION FOR HOSPITALS .—

The Secretary of the Treasury or the Secretary’s delegate shall review at least once every 3 years the community benefit activities of each hospital organization to which section 501(r) of the Internal Revenue Code of 1986 (as added by this section) applies. 
(d) A
DDITIONAL REPORTING REQUIREMENTS .— 
(1) C OMMUNITY HEALTH NEEDS ASSESSMENTS AND AUDITED  
FINANCIAL STATEMENTS .—Section 6033(b) of the Internal Rev-

enue Code of 1986 (relating to certain organizations described in section 501(c)(3)) is amended by striking ‘‘and’’ at the end 26 USC 6033. Deadline. 26 USC 501 note. 26 USC 4959. Regulations. 
Guidelines. 
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124 STAT. 858 PUBLIC LAW 111–148—MAR. 23, 2010 
of paragraph (14), by redesignating paragraph (15) as para-
graph (16), and by inserting after paragraph (14) the following new paragraph: 
‘‘(15) in the case of an organization to which the require-
ments of section 501(r) apply for the taxable year— 
‘‘(A) a description of how the organization is addressing

the needs identified in each community health needs assessment conducted under section 501(r)(3) and a descrip-tion of any such needs that are not being addressed together with the reasons why such needs are not being addressed, and 
‘‘(B) the audited financial statements of such organiza-
tion (or, in the case of an organization the financial state-ments of which are included in a consolidated financial statement with other organizations, such consolidated financial statement).’’. (2) T

AXES .—Section 6033(b)(10) of such Code is amended 
by striking ‘‘and’’ at the end of subparagraph (B), by inserting ‘‘and’’ at the end of subparagraph (C), and by adding at the end the following new subparagraph: 
‘‘(D) section 4959 (relating to taxes on failures by hos-
pital organizations),’’. 
(e) R
EPORTS .— 
(1) R EPORT ON LEVELS OF CHARITY CARE .—The Secretary

of the Treasury, in consultation with the Secretary of Health and Human Services, shall submit to the Committees on Ways and Means, Education and Labor, and Energy and Commerce of the House of Representatives and to the Committees on Finance and Health, Education, Labor, and Pensions of the Senate an annual report on the following: 
(A) Information with respect to private tax-exempt, 
taxable, and government-owned hospitals regarding—

(i) levels of charity care provided, (ii) bad debt expenses, (iii) unreimbursed costs for services provided with 
respect to means-tested government programs, and 
(iv) unreimbursed costs for services provided with 
respect to non-means tested government programs. (B) Information with respect to private tax-exempt hos-
pitals regarding costs incurred for community benefit activi-ties. (2) R
EPORT ON TRENDS .— 
(A) S TUDY .—The Secretary of the Treasury, in consulta-

tion with the Secretary of Health and Human Services, shall conduct a study on trends in the information required to be reported under paragraph (1). 
(B) R
EPORT .—Not later than 5 years after the date

EPORT .—Not later than 5 years after the date 
of the enactment of this Act, the Secretary of the Treasury, in consultation with the Secretary of Health and Human Services, shall submit a report on the study conducted under subparagraph (A) to the Committees on Ways and Means, Education and Labor, and Energy and Commerce of the House of Representatives and to the Committees on Finance and Health, Education, Labor, and Pensions of the Senate. 
(f) E
FFECTIVE DATES .— Applicability.

(f) E
FFECTIVE DATES .— Applicability. 
26 USC 501 note. 26 USC 501 note. 
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124 STAT. 859 PUBLIC LAW 111–148—MAR. 23, 2010 
(1) I N GENERAL .—Except as provided in paragraphs (2) 
and (3), the amendments made by this section shall apply to taxable years beginning after the date of the enactment of this Act. 
(2) C
OMMUNITY HEALTH NEEDS ASSESSMENT .—The require-
ments of section 501(r)(3) of the Internal Revenue Code of 1986, as added by subsection (a), shall apply to taxable years beginning after the date which is 2 years after the date of the enactment of this Act.

(3) E
XCISE TAX .—The amendments made by subsection (b) 
shall apply to failures occurring after the date of the enactment of this Act. 
SEC. 9008. IMPOSITION OF ANNUAL FEE ON BRANDED PRESCRIPTION 
PHARMACEUTICAL MANUFACTURERS AND IMPORTERS. 
(a) I MPOSITION OF FEE.— 
(1) I N GENERAL .—Each covered entity engaged in the busi-

ness of manufacturing or importing branded prescription drugs shall pay to the Secretary of the Treasury not later than the annual payment date of each calendar year beginning after 2009 a fee in an amount determined under subsection (b). 
(2) A
NNUAL PAYMENT DATE .—For purposes of this section, 
the term ‘‘annual payment date’’ means with respect to any calendar year the date determined by the Secretary, but in no event later than September 30 of such calendar year. (b) D

ETERMINATION OF FEEAMOUNT .— 
(1) I N GENERAL .—With respect to each covered entity, the 
fee under this section for any calendar year shall be equal to an amount that bears the same ratio to $2,300,000,000 as— 
(A) the covered entity’s branded prescription drug sales 
taken into account during the preceding calendar year, bear to 
(B) the aggregate branded prescription drug sales of 
all covered entities taken into account during such pre-ceding calendar year. (2) S

ALES TAKEN INTO ACCOUNT .—For purposes of para-
graph (1), the branded prescription drug sales taken into account during any calendar year with respect to any covered entity shall be determined in accordance with the following table: 
With respect to a covered entity’s aggregate 
branded prescription drug sales during the 
calendar year that are: The percentage of 
such sales taken 
into account is: 
Not more than $5,000,000 ....................... 0 percent

More than $5,000,000 but not more than 
$125,000,000.10 percent 
More than $125,000,000 but not more 
than $225,000,000.40 percent 
More than $225,000,000 but not more 
than $400,000,000.75 percent 
More than $400,000,000 ........................... 100 percent. Definition. Deadlines. 26 USC 4001 
note prec. 
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124 STAT. 860 PUBLIC LAW 111–148—MAR. 23, 2010 
(3) S ECRETARIAL DETERMINATION .—The Secretary of the 
Treasury shall calculate the amount of each covered entity’s fee for any calendar year under paragraph (1). In calculating such amount, the Secretary of the Treasury shall determine such covered entity’s branded prescription drug sales on the basis of reports submitted under subsection (g) and through the use of any other source of information available to the Secretary of the Treasury. (c) T

RANSFER OF FEES TO MEDICARE PART B T RUST FUND.— 
There is hereby appropriated to the Federal Supplementary Medical Insurance Trust Fund established under section 1841 of the Social Security Act an amount equal to the fees received by the Secretary of the Treasury under subsection (a). 
(d) C
OVERED ENTITY .— 
(1) I N GENERAL .—For purposes of this section, the term 
‘‘covered entity’’ means any manufacturer or importer with gross receipts from branded prescription drug sales. 
(2) C

(2) C
ONTROLLED GROUPS .— 
(A) I N GENERAL .—For purposes of this subsection, all 
persons treated as a single employer under subsection (a) or (b) of section 52 of the Internal Revenue Code of 1986 or subsection (m) or (o) of section 414 of such Code shall be treated as a single covered entity. 
(B) I
NCLUSION OF FOREIGN CORPORATIONS .—For pur-

(B) I
poses of subparagraph (A), in applying subsections (a) and (b) of section 52 of such Code to this section, section 1563 of such Code shall be applied without regard to subsection (b)(2)(C) thereof. 
(e) B
RANDED PRESCRIPTION DRUG SALES .—For purposes of this 
section— 
(1) I N GENERAL .—The term ‘‘branded prescription drug

sales’’ means sales of branded prescription drugs to any speci-fied government program or pursuant to coverage under any such program. 
(2) B
RANDED PRESCRIPTION DRUGS .— 
(A) I N GENERAL .—The term ‘‘branded prescription 
drug’’ means— 
(i) any prescription drug the application for which 
was submitted under section 505(b) of the Federal Food, Drug, and Cosmetic Act (21 U.S.C. 355(b)), or 
(ii) any biological product the license for which

was submitted under section 351(a) of the Public Health Service Act (42 U.S.C. 262(a)). (B) P
RESCRIPTION DRUG .—For purposes of subpara-
graph (A)(i), the term ‘‘prescription drug’’ means any drug which is subject to section 503(b) of the Federal Food, Drug, and Cosmetic Act (21 U.S.C. 353(b)). (3) E
XCLUSION OF ORPHAN DRUG SALES .—The term ‘‘branded

prescription drug sales’’ shall not include sales of any drug or biological product with respect to which a credit was allowed for any taxable year under section 45C of the Internal Revenue Code of 1986. The preceding sentence shall not apply with respect to any such drug or biological product after the date on which such drug or biological product is approved by the Food and Drug Administration for marketing for any indication other than the treatment of the rare disease or condition with

treatment of the rare disease or condition with respect to which such credit was allowed. Definitions. Applicability. Definition.

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124 STAT. 861 PUBLIC LAW 111–148—MAR. 23, 2010 
(4) S PECIFIED GOVERNMENT PROGRAM .—The term ‘‘specified 
government program’’ means— 
(A) the Medicare Part D program under part D of 
title XVIII of the Social Security Act, 
(B) the Medicare Part B program under part B of 
(C) the Medicaid program under title XIX of the Social 
Security Act, 
(D) any program under which branded prescription 
drugs are procured by the Department of Veterans Affairs,

(E) any program under which branded prescription 
drugs are procured by the Department of Defense, or 
(F) the TRICARE retail pharmacy program under sec-
tion 1074g of title 10, United States Code. 
(f) T AXTREATMENT OF FEES.—The fees imposed by this sec-
tion— 
(1) for purposes of subtitle F of the Internal Revenue Code 
of 1986, shall be treated as excise taxes with respect to which only civil actions for refund under procedures of such subtitle shall apply, and

(2) for purposes of section 275 of such Code, shall be consid-
ered to be a tax described in section 275(a)(6). (g) R
EPORTING REQUIREMENT .—Not later than the date deter-

mined by the Secretary of the Treasury following the end of any calendar year, the Secretary of Health and Human Services, the Secretary of Veterans Affairs, and the Secretary of Defense shall report to the Secretary of the Treasury, in such manner as the Secretary of the Treasury prescribes, the total branded prescription drug sales for each covered entity with respect to each specified government program under such Secretary’s jurisdiction using the following methodology: 
(1) M

(1) M
EDICARE PART D PROGRAM .—The Secretary of Health 
and Human Services shall report, for each covered entity and for each branded prescription drug of the covered entity covered by the Medicare Part D program, the product of— 
(A) the per-unit ingredient cost, as reported to the

Secretary of Health and Human Services by prescription drug plans and Medicare Advantage prescription drug plans, minus any per-unit rebate, discount, or other price concession provided by the covered entity, as reported to the Secretary of Health and Human Services by the prescription drug plans and Medicare Advantage prescrip-tion drug plans, and 
(B) the number of units of the branded prescription 
drug paid for under the Medicare Part D program. (2) M

EDICARE PART B PROGRAM .—The Secretary of Health 
and Human Services shall report, for each covered entity and for each branded prescription drug of the covered entity covered by the Medicare Part B program under section 1862(a) of the Social Security Act, the product of— 
(A) the per-unit average sales price (as defined in

section 1847A(c) of the Social Security Act) or the per- unit Part B payment rate for a separately paid branded prescription drug without a reported average sales price, and 
drug paid for under the Medicare Part B program. Applicability. 
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124 STAT. 862 PUBLIC LAW 111–148—MAR. 23, 2010 
The Centers for Medicare and Medicaid Services shall establish 
a process for determining the units and the allocated price for purposes of this section for those branded prescription drugs that are not separately payable or for which National Drug Codes are not reported. 
(3) M
EDICAID PROGRAM .—The Secretary of Health and

EDICAID PROGRAM .—The Secretary of Health and 
Human Services shall report, for each covered entity and for each branded prescription drug of the covered entity covered under the Medicaid program, the product of— 
(A) the per-unit ingredient cost paid to pharmacies 
by States for the branded prescription drug dispensed to Medicaid beneficiaries, minus any per-unit rebate paid by the covered entity under section 1927 of the Social Security Act and any State supplemental rebate, and

drug paid for under the Medicaid program. (4) D
EPARTMENT OF VETERANS AFFAIRS PROGRAMS .—The 
Secretary of Veterans Affairs shall report, for each covered entity and for each branded prescription drug of the covered entity the total amount paid for each such branded prescription drug procured by the Department of Veterans Affairs for its beneficiaries. 
(5) D
EPARTMENT OF DEFENSE PROGRAMS AND TRICARE .—

EPARTMENT OF DEFENSE PROGRAMS AND TRICARE .— 
The Secretary of Defense shall report, for each covered entity and for each branded prescription drug of the covered entity, the sum of— 
(A) the total amount paid for each such branded 
prescription drug procured by the Department of Defense for its beneficiaries, and 
(B) for each such branded prescription drug dispensed 
under the TRICARE retail pharmacy program, the product of— 
(i) the per-unit ingredient cost, minus any per-

(i) the per-unit ingredient cost, minus any per- 
unit rebate paid by the covered entity, and 
(ii) the number of units of the branded prescription 
drug dispensed under such program. 
(h) S
ECRETARY .—For purposes of this section, the term ‘‘Sec-
retary’’ includes the Secretary’s delegate. 
(i) G UIDANCE .—The Secretary of the Treasury shall publish 
guidance necessary to carry out the purposes of this section. 
(j) A PPLICATION OF SECTION .—This section shall apply to any

branded prescription drug sales after December 31, 2008. 
(k) C ONFORMING AMENDMENT .—Section 1841(a) of the Social 
Security Act is amended by inserting ‘‘or section 9008(c) of the Patient Protection and Affordable Care Act of 2009’’ after ‘‘this part’’. 
SEC. 9009. IMPOSITION OF ANNUAL FEE ON MEDICAL DEVICE MANU-
FACTURERS AND IMPORTERS. 

ness of manufacturing or importing medical devices shall pay to the Secretary not later than the annual payment date of each calendar year beginning after 2009 a fee in an amount determined under subsection (b). 
(2) A
the term ‘‘annual payment date’’ means with respect to any Deadlines. 26 USC 4001 
note prec. Definitions. 42 USC 1395t. Publication. Process.

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124 STAT. 863 PUBLIC LAW 111–148—MAR. 23, 2010 
calendar year the date determined by the Secretary, but in 
no event later than September 30 of such calendar year. (b) D
fee under this section for any calendar year shall be equal to an amount that bears the same ratio to $2,000,000,000 as— 
(A) the covered entity’s gross receipts from medical

device sales taken into account during the preceding cal-endar year, bear to 
(B) the aggregate gross receipts of all covered entities 
from medical device sales taken into account during such preceding calendar year. (2) G
ROSS RECEIPTS FROM SALES TAKEN INTO ACCOUNT .— 
For purposes of paragraph (1), the gross receipts from medical device sales taken into account during any calendar year with respect to any covered entity shall be determined in accordance with the following table:

gross receipts from medical device sales dur-
ing the calendar year that are: The percentage of 
gross receipts taken 
Not more than $5,000,000 ....................... 0 percent 
$25,000,000.50 percent 
More than $25,000,000 ............................. 100 percent. 
(3) S
ECRETARIAL DETERMINATION .—The Secretary shall cal-

culate the amount of each covered entity’s fee for any calendar year under paragraph (1). In calculating such amount, the Secretary shall determine such covered entity’s gross receipts from medical device sales on the basis of reports submitted by the covered entity under subsection (f) and through the use of any other source of information available to the Sec-retary. (c) C
(1) I N GENERAL .—For purposes of this section, the term

‘‘covered entity’’ means any manufacturer or importer with gross receipts from medical device sales. 
(2) C
(B) I

(B) I
(d) M
EDICAL DEVICE SALES .—For purposes of this section— 
(1) I N GENERAL .—The term ‘‘medical device sales’’ means 
sales for use in the United States of any medical device, other than the sales of a medical device that—

(A) has been classified in class II under section 513 
of the Federal Food, Drug, and Cosmetic Act (21 U.S.C. Applicability. 
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124 STAT. 864 PUBLIC LAW 111–148—MAR. 23, 2010 
360c) and is primarily sold to consumers at retail for not 
more than $100 per unit, or 
(B) has been classified in class I under such section. 
(2) U NITED STATES .—For purposes of paragraph (1), the 
term ‘‘United States’’ means the several States, the District of Columbia, the Commonwealth of Puerto Rico, and the posses-sions of the United States. 
(3) M
EDICAL DEVICE .—For purposes of paragraph (1), the

term ‘‘medical device’’ means any device (as defined in section 201(h) of the Federal Food, Drug, and Cosmetic Act (21 U.S.C. 321(h))) intended for humans. (e) T
AXTREATMENT OF FEES.—The fees imposed by this sec-
tion— 
of 1986, shall be treated as excise taxes with respect to which only civil actions for refund under procedures of such subtitle shall apply, and 

ered to be a tax described in section 275(a)(6). (f) R
EPORTING REQUIREMENT .— 
(1) I N GENERAL .—Not later than the date determined by 
the Secretary following the end of any calendar year, each covered entity shall report to the Secretary, in such manner as the Secretary prescribes, the gross receipts from medical device sales of such covered entity during such calendar year. 
(2) P
ENALTY FOR FAILURE TO REPORT .— 
(A) I N GENERAL .—In the case of any failure to make

a report containing the information required by paragraph (1) on the date prescribed therefor (determined with regard to any extension of time for filing), unless it is shown that such failure is due to reasonable cause, there shall be paid by the covered entity failing to file such report, an amount equal to— 
(i) $10,000, plus (ii) the lesser of— 
(I) an amount equal to $1,000, multiplied by 
the number of days during which such failure con-tinues, or

(II) the amount of the fee imposed by this 
section for which such report was required. 
(B) T
REATMENT OF PENALTY .—The penalty imposed 
under subparagraph (A)— 
(i) shall be treated as a penalty for purposes of 
subtitle F of the Internal Revenue Code of 1986, 
(ii) shall be paid on notice and demand by the 
Secretary and in the same manner as tax under such 
Code, and 
(iii) with respect to which only civil actions for 
refund under procedures of such subtitle F shall apply.

(g) S ECRETARY .—For purposes of this section, the term ‘‘Sec-
retary’’ means the Secretary of the Treasury or the Secretary’s delegate. 
(h) G
UIDANCE .—The Secretary shall publish guidance necessary 
to carry out the purposes of this section, including identification of medical devices described in subsection (d)(1)(A) and with respect to the treatment of gross receipts from sales of medical devices Publication. Applicability. Notice.

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124 STAT. 865 PUBLIC LAW 111–148—MAR. 23, 2010 
to another covered entity or to another entity by reason of the 
application of subsection (c)(2). 
(i) A PPLICATION OF SECTION .—This section shall apply to any 
medical device sales after December 31, 2008. 
SEC. 9010. IMPOSITION OF ANNUAL FEE ON HEALTH INSURANCE PRO-
VIDERS. 

ness of providing health insurance shall pay to the Secretary not later than the annual payment date of each calendar year beginning after 2009 a fee in an amount determined under subsection (b). 
(2) A
ETERMINATION OF FEEAMOUNT .—

fee under this section for any calendar year shall be equal to an amount that bears the same ratio to $6,700,000,000 as— 
(A) the sum of— 
(i) the covered entity’s net premiums written with 
respect to health insurance for any United States health risk that are taken into account during the preceding calendar year, plus 
(ii) 200 percent of the covered entity’s third party

administration agreement fees that are taken into account during the preceding calendar year, bears to (B) the sum of— 
(i) the aggregate net premiums written with 
respect to such health insurance of all covered entities that are taken into account during such preceding cal-endar year, plus 
(ii) 200 percent of the aggregate third party 
administration agreement fees of all covered entities that are taken into account during such preceding cal-endar year. 
(2) A

(2) A
MOUNTS TAKEN INTO ACCOUNT .—For purposes of para-
graph (1)— 
(A) N ET PREMIUMS WRITTEN .—The net premiums writ-
ten with respect to health insurance for any United States health risk that are taken into account during any calendar year with respect to any covered entity shall be determined in accordance with the following table: 
With respect to a covered entity’s net pre-
miums written during the calendar year that 
are: The percentage of 
net premiums writ-
ten that are taken

ten that are taken 
Not more than $25,000,000 ..................... 0 percent 
More than $25,000,000 but not more 
than $50,000,000.50 percent 
More than $50,000,000 ............................. 100 percent. Definition. Deadline. 26 USC 4001 
note prec. 
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124 STAT. 866 PUBLIC LAW 111–148—MAR. 23, 2010 
(B) T HIRD PARTY ADMINISTRATION AGREEMENT FEES .— 
The third party administration agreement fees that are taken into account during any calendar year with respect to any covered entity shall be determined in accordance with the following table: 
With respect to a covered entity’s third party 
administration agreement fees during the 
third party admin-
istration agreement 
fees that are taken

fees that are taken 
$10,000,000.50 percent 
More than $10,000,000 ............................. 100 percent. 
(3) S

culate the amount of each covered entity’s fee for any calendar year under paragraph (1). In calculating such amount, the Secretary shall determine such covered entity’s net premiums written with respect to any United States health risk and third party administration agreement fees on the basis of reports submitted by the covered entity under subsection (g) and through the use of any other source of information available to the Secretary. (c) C
OVERED ENTITY .—

‘‘covered entity’’ means any entity which provides health insur-ance for any United States health risk. 
(2) E
XCLUSION .—Such term does not include— 
(A) any employer to the extent that such employer 
self-insures its employees’ health risks, or 
(B) any governmental entity (except to the extent such 
an entity provides health insurance coverage through the community health insurance option under section 1323). (3) C

persons treated as a single employer under subsection (a) or (b) of section 52 of the Internal Revenue Code of 1986 or subsection (m) or (o) of section 414 of such Code shall be treated as a single covered entity (or employer for pur-poses of paragraph (2)). 
(B) I

(B) I
(d) U
NITED STATES HEALTH RISK.—For purposes of this section, 
the term ‘‘United States health risk’’ means the health risk of any individual who is— 
(1) a United States citizen, (2) a resident of the United States (within the meaning

of section 7701(b)(1)(A) of the Internal Revenue Code of 1986), or 
(3) located in the United States, with respect to the period 
such individual is so located. Definition. Applicability. Definition. 
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124 STAT. 867 PUBLIC LAW 111–148—MAR. 23, 2010 
(e) T HIRD PARTY ADMINISTRATION AGREEMENT FEES.—For pur-
poses of this section, the term ‘‘third party administration agree-ment fees’’ means, with respect to any covered entity, amounts received from an employer which are in excess of payments made by such covered entity for health benefits under an arrangement under which such employer self-insures the United States health risk of its employees. 
(f) T

(f) T
tion— 
(2) for purposes of section 275 of such Code shall be consid-
(1) I N GENERAL .—Not later than the date determined by

the Secretary following the end of any calendar year, each covered entity shall report to the Secretary, in such manner as the Secretary prescribes, the covered entity’s net premiums written with respect to health insurance for any United States health risk and third party administration agreement fees for such calendar year. 
(2) P

(B) T
Secretary and in the same manner as tax under such Code, and 
refund under procedures of such subtitle F shall apply. 
(h) A

(h) A
DDITIONAL DEFINITIONS .—For purposes of this section— 
(1) S ECRETARY .—The term ‘‘Secretary’’ means the Secretary 
of the Treasury or the Secretary’s delegate. 
(2) U NITED STATES .—The term ‘‘United States’’ means the 
several States, the District of Columbia, the Commonwealth of Puerto Rico, and the possessions of the United States. 
(3) H
EALTH INSURANCE .—The term ‘‘health insurance’’ shall 
not include insurance for long-term care or disability. (i) G

to carry out the purposes of this section. Publication. Notice. Applicability. Definition. 
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124 STAT. 868 PUBLIC LAW 111–148—MAR. 23, 2010 
(j) A PPLICATION OF SECTION .—This section shall apply to any 
net premiums written after December 31, 2008, with respect to health insurance for any United States health risk, and any third party administration agreement fees received after such date. 
SEC. 9011. STUDY AND REPORT OF EFFECT ON VETERANS HEALTH 
CARE. 
(a) I NGENERAL .—The Secretary of Veterans Affairs shall con-

duct a study on the effect (if any) of the provisions of sections 9008, 9009, and 9010 on— 
(1) the cost of medical care provided to veterans, and (2) veterans’ access to medical devices and branded 
prescription drugs. (b) R
EPORT .—The Secretary of Veterans Affairs shall report 
the results of the study under subsection (a) to the Committee on Ways and Means of the House of Representatives and to the Committee on Finance of the Senate not later than December 31, 2012.

SEC. 9012. ELIMINATION OF DEDUCTION FOR EXPENSES ALLOCABLE 
TO MEDICARE PART D SUBSIDY. 
(a) I NGENERAL .—Section 139A of the Internal Revenue Code 
of 1986 is amended by striking the second sentence. 
(b) E FFECTIVE DATE.—The amendment made by this section 
SEC. 9013. MODIFICATION OF ITEMIZED DEDUCTION FOR MEDICAL 
EXPENSES. 
(a) I NGENERAL .—Subsection (a) of section 213 of the Internal

Revenue Code of 1986 is amended by striking ‘‘7.5 percent’’ and inserting ‘‘10 percent’’. 
(b) T
EMPORARY WAIVER OF INCREASE FOR CERTAIN SENIORS .— 
Section 213 of the Internal Revenue Code of 1986 is amended by adding at the end the following new subsection: 
‘‘(f) S
PECIAL RULE FOR 2013, 2014, 2015, AND 2016.—In the

case of any taxable year beginning after December 31, 2012, and ending before January 1, 2017, subsection (a) shall be applied with respect to a taxpayer by substituting ‘7.5 percent’ for ‘10 percent’ if such taxpayer or such taxpayer’s spouse has attained age 65 before the close of such taxable year.’’. 
(c) C
ONFORMING AMENDMENT .—Section 56(b)(1)(B) of the

ONFORMING AMENDMENT .—Section 56(b)(1)(B) of the 
Internal Revenue Code of 1986 is amended by striking ‘‘by sub-stituting ‘10 percent’ for ‘7.5 percent’ ’’ and inserting ‘‘without regard to subsection (f) of such section’’. 
(d) E
shall apply to taxable years beginning after December 31, 2012. 
SEC. 9014. LIMITATION ON EXCESSIVE REMUNERATION PAID BY CER-
TAIN HEALTH INSURANCE PROVIDERS.

TAIN HEALTH INSURANCE PROVIDERS. 
(a) I NGENERAL .—Section 162(m) of the Internal Revenue Code 
of 1986 is amended by adding at the end the following new subpara-graph: 
‘‘(6) S
PECIAL RULE FOR APPLICATION TO CERTAIN HEALTH  
INSURANCE PROVIDERS .— 
‘‘(A) I N GENERAL .—No deduction shall be allowed under 
this chapter— Definitions. 26 USC 162. 26 USC 56 note. 26 USC 56. Time period. 
Applicability. 26 USC 213. 26 USC 139A 
note. 26 USC 139A.

note. 26 USC 139A. 
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124 STAT. 869 PUBLIC LAW 111–148—MAR. 23, 2010 
‘‘(i) in the case of applicable individual remunera-
tion which is for any disqualified taxable year begin-ning after December 31, 2012, and which is attrib-utable to services performed by an applicable indi-vidual during such taxable year, to the extent that the amount of such remuneration exceeds $500,000, or 
‘‘(ii) in the case of deferred deduction remuneration

for any taxable year beginning after December 31, 2012, which is attributable to services performed by an applicable individual during any disqualified tax-able year beginning after December 31, 2009, to the extent that the amount of such remuneration exceeds $500,000 reduced (but not below zero) by the sum of— 
‘‘(I) the applicable individual remuneration for 
such disqualified taxable year, plus 
‘‘(II) the portion of the deferred deduction

‘‘(II) the portion of the deferred deduction 
remuneration for such services which was taken into account under this clause in a preceding tax-able year (or which would have been taken into account under this clause in a preceding taxable year if this clause were applied by substituting ‘December 31, 2009’ for ‘December 31, 2012’ in the matter preceding subclause (I)). 
‘‘(B) D
ISQUALIFIED TAXABLE YEAR .—For purposes of this

ISQUALIFIED TAXABLE YEAR .—For purposes of this 
paragraph, the term ‘disqualified taxable year’ means, with respect to any employer, any taxable year for which such employer is a covered health insurance provider. 
‘‘(C) C
OVERED HEALTH INSURANCE PROVIDER .—For pur-
poses of this paragraph— 
‘‘(i) I N GENERAL .—The term ‘covered health insur-
ance provider’ means— 
‘‘(I) with respect to taxable years beginning

‘‘(I) with respect to taxable years beginning 
after December 31, 2009, and before January 1, 2013, any employer which is a health insurance issuer (as defined in section 9832(b)(2)) and which receives premiums from providing health insur-ance coverage (as defined in section 9832(b)(1)), and 
‘‘(II) with respect to taxable years beginning

‘‘(II) with respect to taxable years beginning 
after December 31, 2012, any employer which is a health insurance issuer (as defined in section 9832(b)(2)) and with respect to which not less than 25 percent of the gross premiums received from providing health insurance coverage (as defined 
in section 9832(b)(1)) is from minimum essential coverage (as defined in section 5000A(f)). ‘‘(ii) A
GGREGATION RULES .—Two or more persons

GGREGATION RULES .—Two or more persons 
who are treated as a single employer under subsection (b), (c), (m), or (o) of section 414 shall be treated as a single employer, except that in applying section 1563(a) for purposes of any such subsection, para-graphs (2) and (3) thereof shall be disregarded. ‘‘(D) A
PPLICABLE INDIVIDUAL REMUNERATION .—For pur-
poses of this paragraph, the term ‘applicable individual

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124 STAT. 870 PUBLIC LAW 111–148—MAR. 23, 2010 
remuneration’ means, with respect to any applicable indi-

vidual for any disqualified taxable year, the aggregate amount allowable as a deduction under this chapter for such taxable year (determined without regard to this sub-section) for remuneration (as defined in paragraph (4) with-out regard to subparagraphs (B), (C), and (D) thereof) for services performed by such individual (whether or not during the taxable year). Such term shall not include any deferred deduction remuneration with respect to services performed during the disqualified taxable

‘‘(E) D
EFERRED DEDUCTION REMUNERATION .—For pur-
poses of this paragraph, the term ‘deferred deduction remu-neration’ means remuneration which would be applicable individual remuneration for services performed in a dis-qualified taxable year but for the fact that the deduction under this chapter (determined without regard to this para-graph) for such remuneration is allowable in a subsequent taxable year. 
‘‘(F) A
PPLICABLE INDIVIDUAL .—For purposes of this

PPLICABLE INDIVIDUAL .—For purposes of this 
paragraph, the term ‘applicable individual’ means, with respect to any covered health insurance provider for any disqualified taxable year, any individual— 
‘‘(i) who is an officer, director, or employee in such 
taxable year, or 
‘‘(ii) who provides services for or on behalf of such 
covered health insurance provider during such taxable year. ‘‘(G) C
OORDINATION .—Rules similar to the rules of sub-

paragraphs (F) and (G) of paragraph (4) shall apply for purposes of this paragraph. 
‘‘(H) R
EGULATORY AUTHORITY .—The Secretary may pre-
scribe such guidance, rules, or regulations as are necessary to carry out the purposes of this paragraph.’’. 
(b) E
shall apply to taxable years beginning after December 31, 2009, with respect to services performed after such date.

SEC. 9015. ADDITIONAL HOSPITAL INSURANCE TAX ON HIGH-INCOME 
TAXPAYERS. 
(a) FICA.— 
(1) I N GENERAL .—Section 3101(b) of the Internal Revenue 
Code of 1986 is amended— 
(A) by striking ‘‘In addition’’ and inserting the fol-
N GENERAL .—In addition’’, 
(B) by striking ‘‘the following percentages of the’’ and 
inserting ‘‘1.45 percent of the’’, 
(C) by striking ‘‘(as defined in section 3121(b))—’’ and 
all that follows and inserting ‘‘(as defined in section 3121(b)).’’, and

(D) by adding at the end the following new paragraph: 
‘‘(2) A
DDITIONAL TAX .—In addition to the tax imposed by 
paragraph (1) and the preceding subsection, there is hereby imposed on every taxpayer (other than a corporation, estate, or trust) a tax equal to 0.5 percent of wages which are received with respect to employment (as defined in section 3121(b)) 26 USC 3101. 26 USC 162 note.

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124 STAT. 871 PUBLIC LAW 111–148—MAR. 23, 2010 
during any taxable year beginning after December 31, 2012, 
and which are in excess of— 
‘‘(A) in the case of a joint return, $250,000, and ‘‘(B) in any other case, $200,000.’’. 
(2) C
OLLECTION OF TAX .—Section 3102 of the Internal Rev-
enue Code of 1986 is amended by adding at the end the fol-lowing new subsection: ‘‘(f) S
PECIAL RULES FOR ADDITIONAL TAX.— 
‘‘(1) I N GENERAL .—In the case of any tax imposed by section

3101(b)(2), subsection (a) shall only apply to the extent to which the taxpayer receives wages from the employer in excess of $200,000, and the employer may disregard the amount of wages received by such taxpayer’s spouse. 
‘‘(2) C
OLLECTION OF AMOUNTS NOT WITHHELD .—To the 
extent that the amount of any tax imposed by section 3101(b)(2) is not collected by the employer, such tax shall be paid by the employee. 
‘‘(3) T
AX PAID BY RECIPIENT .—If an employer, in violation

of this chapter, fails to deduct and withhold the tax imposed by section 3101(b)(2) and thereafter the tax is paid by the employee, the tax so required to be deducted and withheld shall not be collected from the employer, but this paragraph shall in no case relieve the employer from liability for any penalties or additions to tax otherwise applicable in respect of such failure to deduct and withhold.’’. (b) SECA.— 
(1) I
N GENERAL .—Section 1401(b) of the Internal Revenue

N GENERAL .—In addition’’, and 
‘‘(2) A DDITIONAL TAX .— 
‘‘(A) I N GENERAL .—In addition to the tax imposed by

paragraph (1) and the preceding subsection, there is hereby imposed on every taxpayer (other than a corporation, estate, or trust) for each taxable year beginning after December 31, 2012, a tax equal to 0.5 percent of the self- employment income for such taxable year which is in excess of— 
‘‘(i) in the case of a joint return, $250,000, and ‘‘(ii) in any other case, $200,000. 
‘‘(B) C
OORDINATION WITH FICA .—The amounts under

OORDINATION WITH FICA .—The amounts under 
clauses (i) and (ii) of subparagraph (A) shall be reduced (but not below zero) by the amount of wages taken into account in determining the tax imposed under section 
3121(b)(2) with respect to the taxpayer.’’. (2) N
O DEDUCTION FOR ADDITIONAL TAX .— 
(A) I N GENERAL .—Section 164(f) of such Code is 
amended by inserting ‘‘(other than the taxes imposed by section 1401(b)(2))’’ after ‘‘section 1401)’’. 
(B) D

(B) D
EDUCTION FOR NET EARNINGS FROM SELF -EMPLOY -
MENT .—Subparagraph (B) of section 1402(a)(12) is amended 
by inserting ‘‘(determined without regard to the rate imposed under paragraph (2) of section 1401(b))’’ after ‘‘for such year’’. 26 USC 1402. 26 USC 1401. 26 USC 3102. 
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124 STAT. 872 PUBLIC LAW 111–148—MAR. 23, 2010 
shall apply with respect to remuneration received, and taxable years beginning, after December 31, 2012. 
SEC. 9016. MODIFICATION OF SECTION 833 TREATMENT OF CERTAIN 
HEALTH ORGANIZATIONS. 
(a) I NGENERAL .—Subsection (c) of section 833 of the Internal 
‘‘(5) N
ONAPPLICATION OF SECTION IN CASE OF LOW MEDICAL

ONAPPLICATION OF SECTION IN CASE OF LOW MEDICAL  
LOSS RATIO .—Notwithstanding the preceding paragraphs, this 
section shall not apply to any organization unless such organization’s percentage of total premium revenue expended on reimbursement for clinical services provided to enrollees under its policies during such taxable year (as reported under section 2718 of the Public Health Service Act) is not less than 85 percent.’’. (b) E

shall apply to taxable years beginning after December 31, 2009. 
SEC. 9017. EXCISE TAX ON ELECTIVE COSMETIC MEDICAL PROCE-
DURES. 
(a) I NGENERAL .—Subtitle D of the Internal Revenue Code 
of 1986, as amended by this Act, is amended by adding at the end the following new chapter: 
‘‘CHAPTER 49—ELECTIVE COSMETIC MEDICAL 
PROCEDURES 
‘‘Sec. 5000B. Imposition of tax on elective cosmetic medical procedures. 
‘‘SEC. 5000B. IMPOSITION OF TAX ON ELECTIVE COSMETIC MEDICAL 
PROCEDURES.

PROCEDURES. 
‘‘(a) I NGENERAL .—There is hereby imposed on any cosmetic 
surgery and medical procedure a tax equal to 5 percent of the amount paid for such procedure (determined without regard to this section), whether paid by insurance or otherwise. 
‘‘(b) C
OSMETIC SURGERY AND MEDICAL PROCEDURE .—For pur-
poses of this section, the term ‘cosmetic surgery and medical proce-dure’ means any cosmetic surgery (as defined in section 213(d)(9)(B)) or other similar procedure which—

‘‘(1) is performed by a licensed medical professional, and ‘‘(2) is not necessary to ameliorate a deformity arising 
from, or directly related to, a congenital abnormality, a personal injury resulting from an accident or trauma, or disfiguring disease. ‘‘(c) P
AYMENT OF TAX.— 
‘‘(1) I N GENERAL .—The tax imposed by this section shall 
be paid by the individual on whom the procedure is performed. 
‘‘(2) C OLLECTION .—Every person receiving a payment for

procedures on which a tax is imposed under subsection (a) shall collect the amount of the tax from the individual on whom the procedure is performed and remit such tax quarterly to the Secretary at such time and in such manner as provided by the Secretary. 
‘‘(3) S
ECONDARY LIABILITY .—Where any tax imposed by sub-

section (a) is not paid at the time payments for cosmetic surgery and medical procedures are made, then to the extent that 26 USC 5000B. 26 USC 853 note. 26 USC 833. 26 USC 164 note. 
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124 STAT. 873 PUBLIC LAW 111–148—MAR. 23, 2010 
such tax is not collected, such tax shall be paid by the person 
who performs the procedure.’’. (b) C
D of the Internal Revenue Code of 1986, as amended by this Act, is amended by inserting after the item relating to chapter 48 the following new item: 
‘‘CHAPTER 49—E LECTIVE COSMETIC MEDICAL PROCEDURES ’’. 
(c) E FFECTIVE DATE.—The amendments made by this section

shall apply to procedures performed on or after January 1, 2010. 
SEC. 9021. EXCLUSION OF HEALTH BENEFITS PROVIDED BY INDIAN 
TRIBAL GOVERNMENTS. 
(a) I NGENERAL .—Part III of subchapter B of chapter 1 of 
the Internal Revenue Code of 1986 is amended by inserting after section 139C the following new section: 
‘‘SEC. 139D. INDIAN HEALTH CARE BENEFITS. 
‘‘(a) G ENERAL RULE.—Except as otherwise provided in this sec-

tion, gross income does not include the value of any qualified Indian health care benefit. 
‘‘(b) Q
UALIFIED INDIAN HEALTH CARE BENEFIT .—For purposes 
of this section, the term ‘qualified Indian health care benefit’ means— 
‘‘(1) any health service or benefit provided or purchased, 
directly or indirectly, by the Indian Health Service through a grant to or a contract or compact with an Indian tribe or tribal organization, or through a third-party program funded by the Indian Health Service,

‘‘(2) medical care provided or purchased by, or amounts 
to reimburse for such medical care provided by, an Indian tribe or tribal organization for, or to, a member of an Indian tribe, including a spouse or dependent of such a member, 
‘‘(3) coverage under accident or health insurance (or an

arrangement having the effect of accident or health insurance), or an accident or health plan, provided by an Indian tribe or tribal organization for medical care to a member of an Indian tribe, include a spouse or dependent of such a member, and 
‘‘(4) any other medical care provided by an Indian tribe

or tribal organization that supplements, replaces, or substitutes for a program or service relating to medical care provided by the Federal government to Indian tribes or members of such a tribe. ‘‘(c) D
EFINITIONS .—For purposes of this section— 
‘‘(1) I NDIAN TRIBE .—The term ‘Indian tribe’ has the meaning 
given such term by section 45A(c)(6). 
‘‘(2) T RIBAL ORGANIZATION .—The term ‘tribal organization’

has the meaning given such term by section 4(l) of the Indian Self-Determination and Education Assistance Act. 
‘‘(3) M
EDICAL CARE .—The term ‘medical care’ has the same 
meaning as when used in section 213. 
‘‘(4) A CCIDENT OR HEALTH INSURANCE ; ACCIDENT OR HEALTH  
PLAN .—The terms ‘accident or health insurance’ and ‘accident Definition. 26 USC 139D. 26 USC 5000B 
note.

note. 
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124 STAT. 874 PUBLIC LAW 111–148—MAR. 23, 2010 
or health plan’ have the same meaning as when used in section 
105. 
‘‘(5) D EPENDENT .—The term ‘dependent’ has the meaning 
given such term by section 152, determined without regard to subsections (b)(1), (b)(2), and (d)(1)(B) thereof. ‘‘(d) D
ENIAL OF DOUBLE BENEFIT .—Subsection (a) shall not

apply to the amount of any qualified Indian health care benefit which is not includible in gross income of the beneficiary of such benefit under any other provision of this chapter, or to the amount of any such benefit for which a deduction is allowed to such bene-ficiary under any other provision of this chapter.’’. 
(b) C
LERICAL AMENDMENT .—The table of sections for part III

of subchapter B of chapter 1 of the Internal Revenue Code of 1986 is amended by inserting after the item relating to section 139C the following new item: 
‘‘Sec. 139D. Indian health care benefits.’’. 
shall apply to benefits and coverage provided after the date of the enactment of this Act. 
(d) N
OINFERENCE .—Nothing in the amendments made by this

section shall be construed to create an inference with respect to the exclusion from gross income of— 
(1) benefits provided by an Indian tribe or tribal organiza-
tion that are not within the scope of this section, and 
(2) benefits provided prior to the date of the enactment 
of this Act. 
SEC. 9022. ESTABLISHMENT OF SIMPLE CAFETERIA PLANS FOR SMALL 
BUSINESSES. 

of 1986 (relating to cafeteria plans), as amended by this Act, is amended by redesignating subsections (j) and (k) as subsections (k) and (l), respectively, and by inserting after subsection (i) the following new subsection: 
‘‘(j) S
IMPLE CAFETERIA PLANS FOR SMALL BUSINESSES .— 
‘‘(1) I N GENERAL .—An eligible employer maintaining a

simple cafeteria plan with respect to which the requirements of this subsection are met for any year shall be treated as meeting any applicable nondiscrimination requirement during such year. 
‘‘(2) S
IMPLE CAFETERIA PLAN .—For purposes of this sub-
section, the term ‘simple cafeteria plan’ means a cafeteria plan— 
‘‘(A) which is established and maintained by an eligible 
employer, and 
‘‘(B) with respect to which the contribution require-

ments of paragraph (3), and the eligibility and participation requirements of paragraph (4), are met. ‘‘(3) C
ONTRIBUTION REQUIREMENTS .— 
‘‘(A) I N GENERAL .—The requirements of this paragraph 
are met if, under the plan the employer is required, without regard to whether a qualified employee makes any salary reduction contribution, to make a contribution to provide qualified benefits under the plan on behalf of each qualified employee in an amount equal to—

‘‘(i) a uniform percentage (not less than 2 percent) 
of the employee’s compensation for the plan year, or 26 USC 125. 26 USC 139D 
note. 26 USC 139D 
note. 
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124 STAT. 875 PUBLIC LAW 111–148—MAR. 23, 2010 
‘‘(ii) an amount which is not less than the lesser 
of— 
‘‘(I) 6 percent of the employee’s compensation 
for the plan year, or 
‘‘(II) twice the amount of the salary reduction 
contributions of each qualified employee. 
‘‘(B) M ATCHING CONTRIBUTIONS ON BEHALF OF HIGHLY  
COMPENSATED AND KEY EMPLOYEES .—The requirements of

subparagraph (A)(ii) shall not be treated as met if, under the plan, the rate of contributions with respect to any salary reduction contribution of a highly compensated or key employee at any rate of contribution is greater than that with respect to an employee who is not a highly compensated or key employee. 
‘‘(C) A
DDITIONAL CONTRIBUTIONS .—Subject to subpara-

graph (B), nothing in this paragraph shall be treated as prohibiting an employer from making contributions to pro-vide qualified benefits under the plan in addition to con-tributions required under subparagraph (A). 
‘‘(D) D
EFINITIONS .—For purposes of this paragraph— 
‘‘(i) S ALARY REDUCTION CONTRIBUTION .—The term

‘‘(i) S ALARY REDUCTION CONTRIBUTION .—The term 
‘salary reduction contribution’ means, with respect to a cafeteria plan, any amount which is contributed to the plan at the election of the employee and which is not includible in gross income by reason of this section. 
‘‘(ii) Q
UALIFIED EMPLOYEE .—The term ‘qualified 
employee’ means, with respect to a cafeteria plan, any employee who is not a highly compensated or key employee and who is eligible to participate in the plan. 
‘‘(iii) H

‘‘(iii) H
IGHLY COMPENSATED EMPLOYEE .—The term 
‘highly compensated employee’ has the meaning given such term by section 414(q). 
‘‘(iv) K
EY EMPLOYEE .—The term ‘key employee’ has 
the meaning given such term by section 416(i). 
‘‘(4) M INIMUM ELIGIBILITY AND PARTICIPATION REQUIRE -
MENTS .— 
shall be treated as met with respect to any year if, under the plan— 
‘‘(i) all employees who had at least 1,000 hours

‘‘(i) all employees who had at least 1,000 hours 
of service for the preceding plan year are eligible to participate, and 
‘‘(ii) each employee eligible to participate in the 
plan may, subject to terms and conditions applicable to all participants, elect any benefit available under the plan. ‘‘(B) C
ERTAIN EMPLOYEES MAY BE EXCLUDED .—For pur-
poses of subparagraph (A)(i), an employer may elect to exclude under the plan employees— 
‘‘(i) who have not attained the age of 21 before

‘‘(i) who have not attained the age of 21 before 
the close of a plan year, 
‘‘(ii) who have less than 1 year of service with 
the employer as of any day during the plan year, 
‘‘(iii) who are covered under an agreement which 
the Secretary of Labor finds to be a collective bar-gaining agreement if there is evidence that the benefits

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124 STAT. 876 PUBLIC LAW 111–148—MAR. 23, 2010 
covered under the cafeteria plan were the subject of 
good faith bargaining between employee representa-tives and the employer, or 
‘‘(iv) who are described in section 410(b)(3)(C) 
(relating to nonresident aliens working outside the United States). 
A plan may provide a shorter period of service or younger age for purposes of clause (i) or (ii). ‘‘(5) E
LIGIBLE EMPLOYER .—For purposes of this subsection—

‘‘(A) I N GENERAL .—The term ‘eligible employer’ means, 
with respect to any year, any employer if such employer employed an average of 100 or fewer employees on business days during either of the 2 preceding years. For purposes of this subparagraph, a year may only be taken into account if the employer was in existence throughout the year. 
‘‘(B) E
MPLOYERS NOT IN EXISTENCE DURING PRECEDING  
YEAR .—If an employer was not in existence throughout

the preceding year, the determination under subparagraph (A) shall be based on the average number of employees that it is reasonably expected such employer will employ on business days in the current year. 
‘‘(C) G
ROWING EMPLOYERS RETAIN TREATMENT AS SMALL  
EMPLOYER .— 
‘‘(i) I N GENERAL .—If— 
‘‘(I) an employer was an eligible employer for 
any year (a ‘qualified year’), and 
‘‘(II) such employer establishes a simple cafe-
teria plan for its employees for such year,

teria plan for its employees for such year, 
then, notwithstanding the fact the employer fails to meet the requirements of subparagraph (A) for any subsequent year, such employer shall be treated as an eligible employer for such subsequent year with respect to employees (whether or not employees during a qualified year) of any trade or business which was covered by the plan during any qualified year. 
‘‘(ii) E
XCEPTION .—This subparagraph shall cease

XCEPTION .—This subparagraph shall cease 
to apply if the employer employs an average of 200 or more employees on business days during any year preceding any such subsequent year. ‘‘(D) S
PECIAL RULES .— 
‘‘(i) P REDECESSORS .—Any reference in this para-
graph to an employer shall include a reference to any predecessor of such employer. 
‘‘(ii) A
GGREGATION RULES .—All persons treated as

GGREGATION RULES .—All persons treated as 
a single employer under subsection (a) or (b) of section 52, or subsection (n) or (o) of section 414, shall be 
treated as one person. 
‘‘(6) A
PPLICABLE NONDISCRIMINATION REQUIREMENT .—For 
purposes of this subsection, the term ‘applicable nondiscrimina-tion requirement’ means any requirement under subsection (b) of this section, section 79(d), section 105(h), or paragraph (2), (3), (4), or (8) of section 129(d). 
‘‘(7) C

‘‘(7) C
OMPENSATION .—The term ‘compensation’ has the 
meaning given such term by section 414(s).’’. (b) E
shall apply to years beginning after December 31, 2010. 26 USC 125 note. 
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124 STAT. 877 PUBLIC LAW 111–148—MAR. 23, 2010 
SEC. 9023. QUALIFYING THERAPEUTIC DISCOVERY PROJECT CREDIT. 
(a) I NGENERAL .—Subpart E of part IV of subchapter A of 
chapter 1 of the Internal Revenue Code of 1986 is amended by inserting after section 48C the following new section: 
‘‘SEC. 48D. QUALIFYING THERAPEUTIC DISCOVERY PROJECT CREDIT. 
‘‘(a) I NGENERAL .—For purposes of section 46, the qualifying

therapeutic discovery project credit for any taxable year is an amount equal to 50 percent of the qualified investment for such taxable year with respect to any qualifying therapeutic discovery project of an eligible taxpayer. 
‘‘(b) Q
UALIFIED INVESTMENT .— 
‘‘(1) I N GENERAL .—For purposes of subsection (a), the quali-

fied investment for any taxable year is the aggregate amount of the costs paid or incurred in such taxable year for expenses necessary for and directly related to the conduct of a qualifying therapeutic discovery project. 
‘‘(2) L
IMITATION .—The amount which is treated as qualified 
investment for all taxable years with respect to any qualifying therapeutic discovery project shall not exceed the amount cer-tified by the Secretary as eligible for the credit under this section. 
‘‘(3) E

‘‘(3) E
XCLUSIONS .—The qualified investment for any taxable 
year with respect to any qualifying therapeutic discovery project shall not take into account any cost— 
‘‘(A) for remuneration for an employee described in 
section 162(m)(3), 
‘‘(B) for interest expenses, ‘‘(C) for facility maintenance expenses, ‘‘(D) which is identified as a service cost under section 
1.263A–1(e)(4) of title 26, Code of Federal Regulations, or 
‘‘(E) for any other expense as determined by the Sec-

retary as appropriate to carry out the purposes of this section. ‘‘(4) C
ERTAIN PROGRESS EXPENDITURE RULES MADE  
APPLICABLE .—In the case of costs described in paragraph (1) 
that are paid for property of a character subject to an allowance for depreciation, rules similar to the rules of subsections (c)(4) and (d) of section 46 (as in effect on the day before the date of the enactment of the Revenue Reconciliation Act of 1990) shall apply for purposes of this section. 
‘‘(5) A

‘‘(5) A
PPLICATION OF SUBSECTION .—An investment shall be 
considered a qualified investment under this subsection only if such investment is made in a taxable year beginning in 2009 or 2010. ‘‘(c) D
EFINITIONS .— 
‘‘(1) Q UALIFYING THERAPEUTIC DISCOVERY PROJECT .—The 
term ‘qualifying therapeutic discovery project’ means a project which is designed— 
‘‘(A) to treat or prevent diseases or conditions by con-

ducting pre-clinical activities, clinical trials, and clinical studies, or carrying out research protocols, for the purpose of securing approval of a product under section 505(b) of the Federal Food, Drug, and Cosmetic Act or section 351(a) of the Public Health Service Act, 26 USC 48D. 
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124 STAT. 878 PUBLIC LAW 111–148—MAR. 23, 2010 
‘‘(B) to diagnose diseases or conditions or to determine 
molecular factors related to diseases or conditions by devel-oping molecular diagnostics to guide therapeutic decisions, or 
‘‘(C) to develop a product, process, or technology to 
further the delivery or administration of therapeutics. ‘‘(2) E
LIGIBLE TAXPAYER .— 
‘‘(A) I N GENERAL .—The term ‘eligible taxpayer’ means

a taxpayer which employs not more than 250 employees in all businesses of the taxpayer at the time of the submis-sion of the application under subsection (d)(2). 
‘‘(B) A
GGREGATION RULES .—All persons treated as a 
single employer under subsection (a) or (b) of section 52, or subsection (m) or (o) of section 414, shall be so treated for purposes of this paragraph. ‘‘(3) F
ACILITY MAINTENANCE EXPENSES .—The term ‘facility

maintenance expenses’ means costs paid or incurred to main-tain a facility, including— 
‘‘(A) mortgage or rent payments, ‘‘(B) insurance payments, ‘‘(C) utility and maintenance costs, and ‘‘(D) costs of employment of maintenance personnel. 
‘‘(d) Q
UALIFYING THERAPEUTIC DISCOVERY PROJECT PROGRAM .— 
‘‘(A) I N GENERAL .—Not later than 60 days after the

date of the enactment of this section, the Secretary, in consultation with the Secretary of Health and Human Serv-ices, shall establish a qualifying therapeutic discovery project program to consider and award certifications for qualified investments eligible for credits under this section to qualifying therapeutic discovery project sponsors. 
‘‘(B) L
IMITATION .—The total amount of credits that may

IMITATION .—The total amount of credits that may 
be allocated under the program shall not exceed $1,000,000,000 for the 2-year period beginning with 2009. ‘‘(2) C
‘‘(A) A PPLICATION PERIOD .—Each applicant for certifi-
cation under this paragraph shall submit an application containing such information as the Secretary may require during the period beginning on the date the Secretary establishes the program under paragraph (1). 
‘‘(B) T
IME FOR REVIEW OF APPLICATIONS .—The Sec-

‘‘(B) T
retary shall take action to approve or deny any application under subparagraph (A) within 30 days of the submission of such application. 
‘‘(C) M
ULTI-YEAR APPLICATIONS .—An application for 
certification under subparagraph (A) may include a request for an allocation of credits for more than 1 of the years described in paragraph (1)(B). ‘‘(3) S
ELECTION CRITERIA .—In determining the qualifying

therapeutic discovery projects with respect to which qualified investments may be certified under this section, the Secretary— 
‘‘(A) shall take into consideration only those projects 
that show reasonable potential— 
‘‘(i) to result in new therapies— 
‘‘(I) to treat areas of unmet medical need, or ‘‘(II) to prevent, detect, or treat chronic or 
acute diseases and conditions, Deadline.

acute diseases and conditions, Deadline. 
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124 STAT. 879 PUBLIC LAW 111–148—MAR. 23, 2010 
‘‘(ii) to reduce long-term health care costs in the 
United States, or 
‘‘(iii) to significantly advance the goal of curing 
cancer within the 30-year period beginning on the date the Secretary establishes the program under paragraph (1), and ‘‘(B) shall take into consideration which projects have 
the greatest potential— 
‘‘(i) to create and sustain (directly or indirectly) 
high quality, high-paying jobs in the United States, and

‘‘(ii) to advance United States competitiveness in 
the fields of life, biological, and medical sciences. 
‘‘(4) D
ISCLOSURE OF ALLOCATIONS .—The Secretary shall, 
upon making a certification under this subsection, publicly disclose the identity of the applicant and the amount of the credit with respect to such applicant. ‘‘(e) S
‘‘(1) B ASIS ADJUSTMENT .—For purposes of this subtitle, if

a credit is allowed under this section for an expenditure related to property of a character subject to an allowance for deprecia-tion, the basis of such property shall be reduced by the amount of such credit. 
‘‘(2) D
ENIAL OF DOUBLE BENEFIT .— 
‘‘(A) B ONUS DEPRECIATION .—A credit shall not be 
allowed under this section for any investment for which bonus depreciation is allowed under section 168(k), 1400L(b)(1), or 1400N(d)(1). 
‘‘(B) D
EDUCTIONS .—No deduction under this subtitle

shall be allowed for the portion of the expenses otherwise allowable as a deduction taken into account in determining the credit under this section for the taxable year which is equal to the amount of the credit determined for such taxable year under subsection (a) attributable to such por-tion. This subparagraph shall not apply to expenses related to property of a character subject to an allowance for depre-ciation the basis of which is reduced under paragraph (1), or which are described in

‘‘(C) C
REDIT FOR RESEARCH ACTIVITIES .— 
(ii), any expenses taken into account under this section for a taxable year shall not be taken into account for purposes of determining the credit allowable under section 41 or 45C for such taxable year. 
‘‘(ii) E
XPENSES INCLUDED IN DETERMINING BASE  
PERIOD RESEARCH EXPENSES .—Any expenses for any

PERIOD RESEARCH EXPENSES .—Any expenses for any 
taxable year which are qualified research expenses (within the meaning of section 41(b)) shall be taken into account in determining base period research expenses for purposes of applying section 41 to subse-quent taxable years. 
‘‘(f) C
OORDINATION WITHDEPARTMENT OF TREASURY GRANTS .— 
In the case of any investment with respect to which the Secretary makes a grant under section 9023(e) of the Patient Protection and Affordable Care Act of 2009—

‘‘(1) D
ENIAL OF CREDIT .—No credit shall be determined 
under this section with respect to such investment for the Certification. Public information. 
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124 STAT. 880 PUBLIC LAW 111–148—MAR. 23, 2010 
taxable year in which such grant is made or any subsequent 
taxable year. 
‘‘(2) R ECAPTURE OF CREDITS FOR PROGRESS EXPENDITURES  
MADE BEFORE GRANT .—If a credit was determined under this 
section with respect to such investment for any taxable year ending before such grant is made— 
‘‘(A) the tax imposed under subtitle A on the taxpayer

for the taxable year in which such grant is made shall be increased by so much of such credit as was allowed under section 38, 
‘‘(B) the general business carryforwards under section 
39 shall be adjusted so as to recapture the portion of such credit which was not so allowed, and 
‘‘(C) the amount of such grant shall be determined 
without regard to any reduction in the basis of any property of a character subject to an allowance for depreciation by reason of such credit. ‘‘(3) T

REATMENT OF GRANTS .—Any such grant shall not 
be includible in the gross income of the taxpayer.’’. (b) I
NCLUSION AS PART OF INVESTMENT CREDIT .—Section 46 
of the Internal Revenue Code of 1986 is amended— 
(1) by adding a comma at the end of paragraph (2), (2) by striking the period at the end of paragraph (5) 
and inserting ‘‘, and’’, and 
(3) by adding at the end the following new paragraph: ‘‘(6) the qualifying therapeutic discovery project credit.’’. 
(c) C

(c) C
(1) Section 49(a)(1)(C) of the Internal Revenue Code of 
1986 is amended— 
(A) by striking ‘‘and’’ at the end of clause (iv), (B) by striking the period at the end of clause (v) 
‘‘(vi) the basis of any property to which paragraph 
(1) of section 48D(e) applies which is part of a quali-fying therapeutic discovery project under such section 48D.’’.

(2) Section 280C of such Code is amended by adding at 
the end the following new subsection: ‘‘(g) Q
UALIFYING THERAPEUTIC DISCOVERY PROJECT CREDIT .— 
‘‘(1) I N GENERAL .—No deduction shall be allowed for that 
portion of the qualified investment (as defined in section 48D(b)) otherwise allowable as a deduction for the taxable year which— 
‘‘(A) would be qualified research expenses (as defined

in section 41(b)), basic research expenses (as defined in section 41(e)(2)), or qualified clinical testing expenses (as defined in section 45C(b)) if the credit under section 41 or section 45C were allowed with respect to such expenses for such taxable year, and 
‘‘(B) is equal to the amount of the credit determined 
for such taxable year under section 48D(a), reduced by— 
‘‘(i) the amount disallowed as a deduction by reason 
of section 48D(e)(2)(B), and

of section 48D(e)(2)(B), and 
‘‘(ii) the amount of any basis reduction under sec-
tion 48D(e)(1). 
‘‘(2) S
IMILAR RULE WHERE TAXPAYER CAPITALIZES RATHER  
THAN DEDUCTS EXPENSES .—In the case of expenses described 26 USC 280C. 26 USC 49. 26 USC 46. 
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124 STAT. 881 PUBLIC LAW 111–148—MAR. 23, 2010 
in paragraph (1)(A) taken into account in determining the credit 
under section 48D for the taxable year, if— 
‘‘(A) the amount of the portion of the credit determined 
under such section with respect to such expenses, exceeds 
‘‘(B) the amount allowable as a deduction for such 
taxable year for such expenses (determined without regard to paragraph (1)),

the amount chargeable to capital account for the taxable year for such expenses shall be reduced by the amount of such excess. 
‘‘(3) C
ONTROLLED GROUPS .—Paragraph (3) of subsection (b) 
shall apply for purposes of this subsection.’’. (d) C
E of part IV of subchapter A of chapter 1 of the Internal Revenue Code of 1986 is amended by inserting after the item relating to section 48C the following new item:

‘‘Sec. 48D. Qualifying therapeutic discovery project credit.’’. 
(e) G RANTS FOR QUALIFIED INVESTMENTS IN THERAPEUTIC DIS-
COVERY PROJECTS IN LIEU OF TAXCREDITS .— 
(1) I N GENERAL .—Upon application, the Secretary of the

Treasury shall, subject to the requirements of this subsection, provide a grant to each person who makes a qualified invest-ment in a qualifying therapeutic discovery project in the amount of 50 percent of such investment. No grant shall be made under this subsection with respect to any investment unless such investment is made during a taxable year beginning in 2009 or 2010. 
(2) A
(A) I N GENERAL .—At the stated election of the

(A) I N GENERAL .—At the stated election of the 
applicant, an application for certification under section 48D(d)(2) of the Internal Revenue Code of 1986 for a credit under such section for the taxable year of the applicant which begins in 2009 shall be considered to be an applica-tion for a grant under paragraph (1) for such taxable year. 
(B) T
AXABLE YEARS BEGINNING IN 2010 .—An application 
for a grant under paragraph (1) for a taxable year beginning in 2010 shall be submitted—

(i) not earlier than the day after the last day 
of such taxable year, and 
(ii) not later than the due date (including exten-
sions) for filing the return of tax for such taxable year. (C) I
NFORMATION TO BE SUBMITTED .—An application

NFORMATION TO BE SUBMITTED .—An application 
for a grant under paragraph (1) shall include such informa-tion and be in such form as the Secretary may require to state the amount of the credit allowable (but for the receipt of a grant under this subsection) under section 48D for the taxable year for the qualified investment with respect to which such application is made. (3) T
IME FOR PAYMENT OF GRANT .— 

make payment of the amount of any grant under paragraph (1) during the 30-day period beginning on the later of— 
(i) the date of the application for such grant, or (ii) the date the qualified investment for which 
the grant is being made is made. 26 USC 48D note. Applicability. 
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124 STAT. 882 PUBLIC LAW 111–148—MAR. 23, 2010 
(B) R EGULATIONS .—In the case of investments of an 
ongoing nature, the Secretary shall issue regulations to determine the date on which a qualified investment shall be deemed to have been made for purposes of this para-graph. (4) Q
UALIFIED INVESTMENT .—For purposes of this sub-

section, the term ‘‘qualified investment’’ means a qualified investment that is certified under section 48D(d) of the Internal Revenue Code of 1986 for purposes of the credit under such section 48D. 
(5) A
PPLICATION OF CERTAIN RULES .— 
(A) I N GENERAL .—In making grants under this sub-

section, the Secretary of the Treasury shall apply rules similar to the rules of section 50 of the Internal Revenue Code of 1986. In applying such rules, any increase in tax under chapter 1 of such Code by reason of an invest-ment ceasing to be a qualified investment shall be imposed on the person to whom the grant was made. 
(B) S
(i) R ECAPTURE OF EXCESSIVE GRANT AMOUNTS .—

(i) R ECAPTURE OF EXCESSIVE GRANT AMOUNTS .— 
If the amount of a grant made under this subsection exceeds the amount allowable as a grant under this subsection, such excess shall be recaptured under subparagraph (A) as if the investment to which such excess portion of the grant relates had ceased to be a qualified investment immediately after such grant was made. 
(ii) G
RANT INFORMATION NOT TREATED AS RETURN  
INFORMATION .—In no event shall the amount of a grant

made under paragraph (1), the identity of the person to whom such grant was made, or a description of the investment with respect to which such grant was made be treated as return information for purposes of section 6103 of the Internal Revenue Code of 1986. 
(6) E
XCEPTION FOR CERTAIN NON -TAXPAYERS .—The Sec-
retary of the Treasury shall not make any grant under this subsection to— 
(A) any Federal, State, or local government (or any

political subdivision, agency, or instrumentality thereof), 
(B) any organization described in section 501(c) of the 
Internal Revenue Code of 1986 and exempt from tax under section 501(a) of such Code, 
(C) any entity referred to in paragraph (4) of section 
54(j) of such Code, or 
(D) any partnership or other pass-thru entity any 
partner (or other holder of an equity or profits interest) of which is described in subparagraph (A), (B) or (C).

In the case of a partnership or other pass-thru entity described in subparagraph (D), partners and other holders of any equity or profits interest shall provide to such partnership or entity such information as the Secretary of the Treasury may require to carry out the purposes of this paragraph. 
(7) S
ECRETARY .—Any reference in this subsection to the 
Secretary of the Treasury shall be treated as including the Secretary’s delegate. 
(8) O
THER TERMS .—Any term used in this subsection which

is also used in section 48D of the Internal Revenue Code Definition. 
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124 STAT. 883 PUBLIC LAW 111–148—MAR. 23, 2010 
of 1986 shall have the same meaning for purposes of this 
subsection as when used in such section. 
(9) D ENIAL OF DOUBLE BENEFIT .—No credit shall be allowed 
under section 46(6) of the Internal Revenue Code of 1986 by reason of section 48D of such Code for any investment for which a grant is awarded under this subsection. 
(10) A
PPROPRIATIONS .—There is hereby appropriated to the

Secretary of the Treasury such sums as may be necessary to carry out this subsection. 
(11) T
ERMINATION .—The Secretary of the Treasury shall 
not make any grant to any person under this subsection unless the application of such person for such grant is received before January 1, 2013. 
(12) P
ROTECTING MIDDLE CLASS FAMILIES FROM TAX  
INCREASES .—It is the sense of the Senate that the Senate

should reject any procedural maneuver that would raise taxes on middle class families, such as a motion to commit the pending legislation to the Committee on Finance, which is designed to kill legislation that provides tax cuts for American workers and families, including the affordability tax credit and the small business tax credit. (f) E
FFECTIVE DATE.—The amendments made by subsections

(a) through (d) of this section shall apply to amounts paid or incurred after December 31, 2008, in taxable years beginning after such date. 
TITLE X—STRENGTHENING QUALITY, 
AFFORDABLE HEALTH CARE FOR ALL AMERICANS 
SEC. 10101. AMENDMENTS TO SUBTITLE A. 
(a) Section 2711 of the Public Health Service Act, as added 
by section 1001(5) of this Act, is amended to read as follows: 
‘‘(a) P ROHIBITION .—

‘‘(a) P ROHIBITION .— 
‘‘(1) I N GENERAL .—A group health plan and a health insur-
ance issuer offering group or individual health insurance cov-erage may not establish— 
‘‘(A) lifetime limits on the dollar value of benefits for 
any participant or beneficiary; or 
‘‘(B) except as provided in paragraph (2), annual limits 
on the dollar value of benefits for any participant or bene-ficiary. ‘‘(2) A
NNUAL LIMITS PRIOR TO 2014 .—With respect to plan

years beginning prior to January 1, 2014, a group health plan and a health insurance issuer offering group or individual health insurance coverage may only establish a restricted annual limit on the dollar value of benefits for any participant or beneficiary with respect to the scope of benefits that are essential health benefits under section 1302(b) of the Patient 42 USC 300gg–11. 26 USC 46 note.

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124 STAT. 884 PUBLIC LAW 111–148—MAR. 23, 2010 
Protection and Affordable Care Act, as determined by the Sec-
retary. In defining the term ‘restricted annual limit’ for pur-poses of the preceding sentence, the Secretary shall ensure that access to needed services is made available with a minimal impact on premiums. ‘‘(b) P

strued to prevent a group health plan or health insurance coverage from placing annual or lifetime per beneficiary limits on specific covered benefits that are not essential health benefits under section 1302(b) of the Patient Protection and Affordable Care Act, to the extent that such limits are otherwise permitted under Federal or State law.’’. 
(b) Section 2715(a) of the Public Health Service Act, as added

by section 1001(5) of this Act, is amended by striking ‘‘and providing to enrollees’’ and inserting ‘‘and providing to applicants, enrollees, and policyholders or certificate holders’’. 
(c) Subpart II of part A of title XXVII of the Public Health 
Service Act, as added by section 1001(5), is amended by inserting after section 2715, the following: 
‘‘SEC. 2715A. PROVISION OF ADDITIONAL INFORMATION. 

group or individual health insurance coverage shall comply with the provisions of section 1311(e)(3) of the Patient Protection and Affordable Care Act, except that a plan or coverage that is not offered through an Exchange shall only be required to submit the information required to the Secretary and the State insurance commissioner, and make such information available to the public.’’. 
(d) Section 2716 of the Public Health Service Act, as added

‘‘SEC. 2716. PROHIBITION ON DISCRIMINATION IN FAVOR OF HIGHLY 
COMPENSATED INDIVIDUALS. 
‘‘(a) I NGENERAL .—A group health plan (other than a self- 
insured plan) shall satisfy the requirements of section 105(h)(2) of the Internal Revenue Code of 1986 (relating to prohibition on discrimination in favor of highly compensated individuals). 
‘‘(b) R
ULES AND DEFINITIONS .—For purposes of this section—

‘‘(1) C ERTAIN RULES TO APPLY .—Rules similar to the rules 
contained in paragraphs (3), (4), and (8) of section 105(h) of such Code shall apply. 
‘‘(2) H
IGHLY COMPENSATED INDIVIDUAL .—The term ‘highly 
compensated individual’ has the meaning given such term by section 105(h)(5) of such Code.’’. (e) Section 2717 of the Public Health Service Act, as added 
by section 1001(5) of this Act, is amended— 
(1) by redesignating subsections (c) and (d) as subsections 
(d) and (e), respectively; and

(d) and (e), respectively; and 
(2) by inserting after subsection (b), the following: 
‘‘(c) P
ROTECTION OF SECOND AMENDMENT GUNRIGHTS .— 
‘‘(1) W ELLNESS AND PREVENTION PROGRAMS .—A wellness 
and health promotion activity implemented under subsection (a)(1)(D) may not require the disclosure or collection of any information relating to— 
‘‘(A) the presence or storage of a lawfully-possessed 
firearm or ammunition in the residence or on the property of an individual; or 42 USC 300gg–17. 42 USC

300gg–16. Public 
information. 42 USC 300gg–15a. 42 USC 
300gg–15. 
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124 STAT. 885 PUBLIC LAW 111–148—MAR. 23, 2010 
‘‘(B) the lawful use, possession, or storage of a firearm 
or ammunition by an individual. ‘‘(2) L
IMITATION ON DATA COLLECTION .—None of the 
authorities provided to the Secretary under the Patient Protec-tion and Affordable Care Act or an amendment made by that Act shall be construed to authorize or may be used for the collection of any information relating to— 
‘‘(A) the lawful ownership or possession of a firearm 
or ammunition;

or ammunition; 
‘‘(B) the lawful use of a firearm or ammunition; or ‘‘(C) the lawful storage of a firearm or ammunition. 
‘‘(3) L
IMITATION ON DATABASES OR DATA BANKS .—None of 
the authorities provided to the Secretary under the Patient Protection and Affordable Care Act or an amendment made by that Act shall be construed to authorize or may be used to maintain records of individual ownership or possession of a firearm or ammunition. 
‘‘(4) L
IMITATION ON DETERMINATION OF PREMIUM RATES OR

IMITATION ON DETERMINATION OF PREMIUM RATES OR  
ELIGIBILITY FOR HEALTH INSURANCE .—A premium rate may not 
be increased, health insurance coverage may not be denied, and a discount, rebate, or reward offered for participation in a wellness program may not be reduced or withheld under any health benefit plan issued pursuant to or in accordance with the Patient Protection and Affordable Care Act or an amendment made by that Act on the basis of, or on reliance upon—

or ammunition; or 
‘‘(B) the lawful use or storage of a firearm or ammuni-
tion. ‘‘(5) L
IMITATION ON DATA COLLECTION REQUIREMENTS FOR  
INDIVIDUALS .—No individual shall be required to disclose any 
information under any data collection activity authorized under 
the Patient Protection and Affordable Care Act or an amend-ment made by that Act relating to— 
or ammunition; or

or ammunition.’’. 
(f) Section 2718 of the Public Health Service Act, as added 
by section 1001(5), is amended to read as follows: 
‘‘(a) C LEAR ACCOUNTING FOR COSTS .—A health insurance issuer

offering group or individual health insurance coverage (including a grandfathered health plan) shall, with respect to each plan year, submit to the Secretary a report concerning the ratio of the incurred loss (or incurred claims) plus the loss adjustment expense (or change in contract reserves) to earned premiums. Such report shall include the percentage of total premium revenue, after accounting for collec-tions or receipts for risk adjustment and risk corridors and pay-ments of reinsurance,

and risk corridors and pay-ments of reinsurance, that such coverage expends—

‘‘(2) for activities that improve health care quality; and 42 USC 
300gg–18. Reports. 
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124 STAT. 886 PUBLIC LAW 111–148—MAR. 23, 2010 
‘‘(3) on all other non-claims costs, including an explanation 
of the nature of such costs, and excluding Federal and State taxes and licensing or regulatory fees. 
‘‘(b) E
PREMIUM PAYMENTS .—

MENTS .— 
‘‘(A) R EQUIREMENT .—Beginning not later than January

1, 2011, a health insurance issuer offering group or indi-vidual health insurance coverage (including a grand-fathered health plan) shall, with respect to each plan year, provide an annual rebate to each enrollee under such cov-erage, on a pro rata basis, if the ratio of the amount of premium revenue expended by the issuer on costs described in paragraphs (1) and (2) of subsection (a) to the total amount of premium revenue (excluding Federal and State taxes and licensing or regulatory fees and

State taxes and licensing or regulatory fees and after accounting for payments or receipts for risk adjustment, risk corridors, and reinsurance under sections 1341, 1342, and 1343 of the Patient Protection and Affordable Care Act) for the plan year (except as provided in subparagraph (B)(ii)), is less than—

‘‘(i) with respect to a health insurance issuer 
offering coverage in the large group market, 85 percent, or such higher percentage as a State may by regulation determine; or 
‘‘(ii) with respect to a health insurance issuer

‘‘(ii) with respect to a health insurance issuer 
offering coverage in the small group market or in the individual market, 80 percent, or such higher percent-age as a State may by regulation determine, except that the Secretary may adjust such percentage with respect to a State if the Secretary determines that the application of such 80 percent may destabilize the individual market in such State. ‘‘(B) R
EBATE AMOUNT .— 
‘‘(i) C ALCULATION OF AMOUNT .—The total amount

‘‘(i) C ALCULATION OF AMOUNT .—The total amount 
of an annual rebate required under this paragraph shall be in an amount equal to the product of— 
‘‘(I) the amount by which the percentage 
described in clause (i) or (ii) of subparagraph (A) exceeds the ratio described in such subparagraph; and 
‘‘(II) the total amount of premium revenue

‘‘(II) the total amount of premium revenue 
(excluding Federal and State taxes and licensing or regulatory fees and after accounting for pay-ments or receipts for risk adjustment, risk cor-ridors, and reinsurance under sections 1341, 1342, and 1343 of the Patient Protection and Affordable Care Act) for such plan year. ‘‘(ii) C
ALCULATION BASED ON AVERAGE RATIO .—

ALCULATION BASED ON AVERAGE RATIO .— 
Beginning on January 1, 2014, the determination made under subparagraph (A) for the year involved shall be based on the averages of the premiums expended on the costs described in such subparagraph and total Effective date. Deadline. Public 
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124 STAT. 887 PUBLIC LAW 111–148—MAR. 23, 2010 
premium revenue for each of the previous 3 years 
for the plan. 
‘‘(2) C ONSIDERATION IN SETTING PERCENTAGES .—In deter-
mining the percentages under paragraph (1), a State shall seek to ensure adequate participation by health insurance issuers, competition in the health insurance market in the State, and value for consumers so that premiums are used for clinical services and quality improvements. 
‘‘(3) E

‘‘(3) E
NFORCEMENT .—The Secretary shall promulgate regu-
lations for enforcing the provisions of this section and may provide for appropriate penalties. ‘‘(c) D
EFINITIONS .—Not later than December 31, 2010, and sub-

ject to the certification of the Secretary, the National Association of Insurance Commissioners shall establish uniform definitions of the activities reported under subsection (a) and standardized meth-odologies for calculating measures of such activities, including definitions of which activities, and in what regard such activities, constitute activities described in subsection (a)(2). Such methodolo-gies shall be designed to take into account the special circumstances of smaller plans,

the special circumstances of smaller plans, different types of plans, and newer plans.

‘‘(d) A
DJUSTMENTS .—The Secretary may adjust the rates 
described in subsection (b) if the Secretary determines appropriate on account of the volatility of the individual market due to the establishment of State Exchanges. 
‘‘(e) S
TANDARD HOSPITAL CHARGES .—Each hospital operating

within the United States shall for each year establish (and update) and make public (in accordance with guidelines developed by the Secretary) a list of the hospital’s standard charges for items and services provided by the hospital, including for diagnosis-related groups established under section 1886(d)(4) of the Social Security Act.’’. 
(g) Section 2719 of the Public Health Service Act, as added 
by section 1001(4) of this Act, is amended to read as follows: 
‘‘SEC. 2719. APPEALS PROCESS.

‘‘(a) I NTERNAL CLAIMS APPEALS .— 
ance issuer offering group or individual health insurance cov-erage shall implement an effective appeals process for appeals of coverage determinations and claims, under which the plan or issuer shall, at a minimum— 
‘‘(A) have in effect an internal claims appeal process; ‘‘(B) provide notice to enrollees, in a culturally and

linguistically appropriate manner, of available internal and external appeals processes, and the availability of any applicable office of health insurance consumer assistance or ombudsman established under section 2793 to assist such enrollees with the appeals processes; and 
‘‘(C) allow an enrollee to review their file, to present 
evidence and testimony as part of the appeals process, and to receive continued coverage pending the outcome of the appeals process. ‘‘(2) E

STABLISHED PROCESSES .—To comply with paragraph 
(1)— 
‘‘(A) a group health plan and a health insurance issuer 
offering group health coverage shall provide an internal claims and appeals process that initially incorporates the 42 USC 300gg–19. Deadline. 
Certification. Regulations. 
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124 STAT. 888 PUBLIC LAW 111–148—MAR. 23, 2010 
claims and appeals procedures (including urgent claims) 
set forth at section 2560.503–1 of title 29, Code of Federal Regulations, as published on November 21, 2000 (65 Fed. Reg. 70256), and shall update such process in accordance with any standards established by the Secretary of Labor for such plans and issuers; and 
‘‘(B) a health insurance issuer offering individual

health coverage, and any other issuer not subject to subparagraph (A), shall provide an internal claims and appeals process that initially incorporates the claims and appeals procedures set forth under applicable law (as in existence on the date of enactment of this section), and shall update such process in accordance with any standards established by the Secretary of Health and Human Services for such issuers. 
‘‘(b) E
XTERNAL REVIEW .—A group health plan and a health

insurance issuer offering group or individual health insurance cov-erage— 
‘‘(1) shall comply with the applicable State external review 
process for such plans and issuers that, at a minimum, includes the consumer protections set forth in the Uniform External Review Model Act promulgated by the National Association of Insurance Commissioners and is binding on such plans; or 
‘‘(2) shall implement an effective external review process

that meets minimum standards established by the Secretary through guidance and that is similar to the process described under paragraph (1)— 
‘‘(A) if the applicable State has not established an 
external review process that meets the requirements of paragraph (1); or 
‘‘(B) if the plan is a self-insured plan that is not subject 
to State insurance regulation (including a State law that establishes an external review process described in para-graph (1)). 
‘‘(c) S

‘‘(c) S
ECRETARY AUTHORITY .—The Secretary may deem the 
external review process of a group health plan or health insurance issuer, in operation as of the date of enactment of this section, to be in compliance with the applicable process established under subsection (b), as determined appropriate by the Secretary.’’. 
(h) Subpart II of part A of title XVIII of the Public Health 
Service Act, as added by section 1001(5) of this Act, is amended by inserting after section 2719 the following:

‘‘SEC. 2719A. PATIENT PROTECTIONS. 
‘‘(a) C HOICE OF HEALTH CAREPROFESSIONAL .—If a group health 
plan, or a health insurance issuer offering group or individual health insurance coverage, requires or provides for designation by a participant, beneficiary, or enrollee of a participating primary care provider, then the plan or issuer shall permit each participant, beneficiary, and enrollee to designate any participating primary care provider who is available to accept such individual. 
‘‘(b) C

‘‘(b) C
OVERAGE OF EMERGENCY SERVICES .— 
‘‘(1) I N GENERAL .—If a group health plan, or a health insur-
ance issuer offering group or individual health insurance issuer, provides or covers any benefits with respect to services in an emergency department of a hospital, the plan or issuer 42 USC 300gg–19a. 
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124 STAT. 889 PUBLIC LAW 111–148—MAR. 23, 2010 
shall cover emergency services (as defined in paragraph 
(2)(B))— 
‘‘(A) without the need for any prior authorization deter-
mination; 
‘‘(B) whether the health care provider furnishing such 
services is a participating provider with respect to such services; 
‘‘(C) in a manner so that, if such services are provided 
to a participant, beneficiary, or enrollee— 
‘‘(i) by a nonparticipating health care provider with

or without prior authorization; or 
‘‘(ii)(I) such services will be provided without

‘‘(ii)(I) such services will be provided without 
imposing any requirement under the plan for prior authorization of services or any limitation on coverage where the provider of services does not have a contrac-tual relationship with the plan for the providing of services that is more restrictive than the requirements or limitations that apply to emergency department services received from providers who do have such a contractual relationship with the plan; and

‘‘(II) if such services are provided out-of-network, 
the cost-sharing requirement (expressed as a copayment amount or coinsurance rate) is the same requirement that would apply if such services were provided in-network; ‘‘(D) without regard to any other term or condition

of such coverage (other than exclusion or coordination of benefits, or an affiliation or waiting period, permitted under section 2701 of this Act, section 701 of the Employee Retire-ment Income Security Act of 1974, or section 9801 of the Internal Revenue Code of 1986, and other than applicable cost-sharing). ‘‘(2) D
‘‘(A) E MERGENCY MEDICAL CONDITION .—The term

‘‘(A) E MERGENCY MEDICAL CONDITION .—The term 
‘emergency medical condition’ means a medical condition manifesting itself by acute symptoms of sufficient severity (including severe pain) such that a prudent layperson, who possesses an average knowledge of health and medicine, could reasonably expect the absence of immediate medical 
attention to result in a condition described in clause (i), (ii), or (iii) of section 1867(e)(1)(A) of the Social Security Act. 
‘‘(B) E

‘‘(B) E
MERGENCY SERVICES .—The term ‘emergency serv-
ices’ means, with respect to an emergency medical condi-tion— 
‘‘(i) a medical screening examination (as required 
under section 1867 of the Social Security Act) that is within the capability of the emergency department of a hospital, including ancillary services routinely available to the emergency department to evaluate such emergency medical condition, and 
‘‘(ii) within the capabilities of the staff and facili-

ties available at the hospital, such further medical examination and treatment as are required under sec-tion 1867 of such Act to stabilize the patient. 
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124 STAT. 890 PUBLIC LAW 111–148—MAR. 23, 2010 
‘‘(C) S TABILIZE .—The term ‘to stabilize’, with respect 
to an emergency medical condition (as defined in subpara-graph (A)), has the meaning give in section 1867(e)(3) of the Social Security Act (42 U.S.C. 1395dd(e)(3)). 
‘‘(c) A
CCESS TO PEDIATRIC CARE.— 
‘‘(1) P EDIATRIC CARE .—In the case of a person who has

a child who is a participant, beneficiary, or enrollee under a group health plan, or health insurance coverage offered by a health insurance issuer in the group or individual market, if the plan or issuer requires or provides for the designation of a participating primary care provider for the child, the plan or issuer shall permit such person to designate a physician (allopathic or osteopathic) who specializes in pediatrics as the child’s primary care provider if such provider participates in

care provider if such provider participates in the network of the plan or issuer.

‘‘(2) C
ONSTRUCTION .—Nothing in paragraph (1) shall be 
construed to waive any exclusions of coverage under the terms and conditions of the plan or health insurance coverage with respect to coverage of pediatric care. ‘‘(d) P
ATIENT ACCESS TO OBSTETRICAL AND GYNECOLOGICAL  
CARE.— 
‘‘(1) G ENERAL RIGHTS .— 
‘‘(A) D IRECT ACCESS .—A group health plan, or health

insurance issuer offering group or individual health insur-ance coverage, described in paragraph (2) may not require authorization or referral by the plan, issuer, or any person (including a primary care provider described in paragraph (2)(B)) in the case of a female participant, beneficiary, or enrollee who seeks coverage for obstetrical or gyneco-logical care provided by a participating health care profes-sional who specializes in obstetrics or gynecology. Such professional shall agree to

or gynecology. Such professional shall agree to otherwise adhere to such plan’s or issuer’s policies and procedures, including procedures regarding referrals and obtaining prior authorization and providing services pursuant to a treatment plan (if any) approved by the plan or issuer.

‘‘(B) O
BSTETRICAL AND GYNECOLOGICAL CARE .—A group 
health plan or health insurance issuer described in para-graph (2) shall treat the provision of obstetrical and gyneco-logical care, and the ordering of related obstetrical and gynecological items and services, pursuant to the direct access described under subparagraph (A), by a participating health care professional who specializes in obstetrics or gynecology as the authorization of the primary care pro-vider. ‘‘(2) A

PPLICATION OF PARAGRAPH .—A group health plan, 
or health insurance issuer offering group or individual health insurance coverage, described in this paragraph is a group health plan or coverage that— 
‘‘(A) provides coverage for obstetric or gynecologic care; 
and 
‘‘(B) requires the designation by a participant, bene-
ficiary, or enrollee of a participating primary care provider. ‘‘(3) C
construed to—

construed to— 
‘‘(A) waive any exclusions of coverage under the terms 
and conditions of the plan or health insurance coverage 
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124 STAT. 891 PUBLIC LAW 111–148—MAR. 23, 2010 
with respect to coverage of obstetrical or gynecological care; 
or 
‘‘(B) preclude the group health plan or health insurance 
issuer involved from requiring that the obstetrical or gynecological provider notify the primary care health care professional or the plan or issuer of treatment decisions.’’. 
(i) Section 2794 of the Public Health Service Act, as added 
by section 1003 of this Act, is amended— 
(1) in subsection (c)(1)—

(1) in subsection (c)(1)— 
(A) in subparagraph (A), by striking ‘‘and’’ at the end; (B) in subparagraph (B), by striking the period and 
inserting ‘‘; and’’; and 
(C) by adding at the end the following: ‘‘(C) in establishing centers (consistent with subsection

(d)) at academic or other nonprofit institutions to collect medical reimbursement information from health insurance issuers, to analyze and organize such information, and to make such information available to such issuers, health care providers, health researchers, health care policy mak-ers, and the general public.’’; and (2) by adding at the end the following: 
‘‘(d) M
EDICAL REIMBURSEMENT DATACENTERS .— 
‘‘(1) F UNCTIONS .—A center established under subsection 
(c)(1)(C) shall—

(c)(1)(C) shall— 
‘‘(A) develop fee schedules and other database tools 
that fairly and accurately reflect market rates for medical services and the geographic differences in those rates; 
‘‘(B) use the best available statistical methods and 
data processing technology to develop such fee schedules and other database tools; 
‘‘(C) regularly update such fee schedules and other 
database tools to reflect changes in charges for medical services;

‘‘(D) make health care cost information readily avail-
able to the public through an Internet website that allows consumers to understand the amounts that health care providers in their area charge for particular medical serv-ices; and 
‘‘(E) regularly publish information concerning the 
statistical methodologies used by the center to analyze health charge data and make such data available to researchers and policy makers. ‘‘(2) C
ONFLICTS OF INTEREST .—A center established under

subsection (c)(1)(C) shall adopt by-laws that ensures that the center (and all members of the governing board of the center) is independent and free from all conflicts of interest. Such by-laws shall ensure that the center is not controlled or influ-enced by, and does not have any corporate relation to, any individual or entity that may make or receive payments for health care services based on the center’s analysis of health care costs. 
‘‘(3) R

‘‘(3) R
shall be construed to permit a center established under sub-section (c)(1)(C) to compel health insurance issuers to provide data to the center.’’. By-laws. Publication. Public 
information. Web posting. 42 USC 
300gg–94. 
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124 STAT. 892 PUBLIC LAW 111–148—MAR. 23, 2010 
SEC. 10102. AMENDMENTS TO SUBTITLE B. 
(a) Section 1102(a)(2)(B) of this Act is amended— 
(1) in the matter preceding clause (i), by striking ‘‘group 
health benefits plan’’ and inserting ‘‘group benefits plan pro-viding health benefits’’; and 
(2) in clause (i)(I), by inserting ‘‘or any agency or instrumen-
tality of any of the foregoing’’ before the closed parenthetical. (b) Section 1103(a) of this Act is amended—

(1) in paragraph (1), by inserting ‘‘, or small business 
in,’’ after ‘‘residents of any’’; and 
(2) by striking paragraph (2) and inserting the following: ‘‘(2) C
website established under paragraph (1) shall, to the extent practicable, provide ways for residents of, and small businesses in, any State to receive information on at least the following coverage options: 
‘‘(A) Health insurance coverage offered by health insur-

‘‘(i) a single disease or condition; or ‘‘(ii) an unreasonably limited set of diseases or 
conditions (as determined by the Secretary). ‘‘(B) Medicaid coverage under title XIX of the Social 
‘‘(C) Coverage under title XXI of the Social Security 
Act. 
‘‘(D) A State health benefits high risk pool, to the 
extent that such high risk pool is offered in such State; and

‘‘(E) Coverage under a high risk pool under section 
1101. 
‘‘(F) Coverage within the small group market for small 
businesses and their employees, including reinsurance for early retirees under section 1102, tax credits available under section 45R of the Internal Revenue Code of 1986 (as added by section 1421), and other information specifi-cally for small businesses regarding affordable health care options.’’. 
SEC. 10103. AMENDMENTS TO SUBTITLE C.

SEC. 10103. AMENDMENTS TO SUBTITLE C. 
(a) Section 2701(a)(5) of the Public Health Service Act, as 
added by section 1201(4) of this Act, is amended by inserting ‘‘(other than self-insured group health plans offered in such market)’’ after ‘‘such market’’. 
(b) Section 2708 of the Public Health Service Act, as added 
by section 1201(4) of this Act, is amended by striking ‘‘or individual’’. 
(c) Subpart I of part A of title XXVII of the Public Health

Service Act, as added by section 1201(4) of this Act, is amended by inserting after section 2708, the following: 
‘‘SEC. 2709. COVERAGE FOR INDIVIDUALS PARTICIPATING IN 
APPROVED CLINICAL TRIALS. 
‘‘(a) C OVERAGE .— 
‘‘(1) I N GENERAL .—If a group health plan or a health insur-
ance issuer offering group or individual health insurance cov-erage provides coverage to a qualified individual, then such plan or issuer— 42 USC 300gg–8. 42 USC 300gg–7. 42 USC 300gg. 42 USC 18003. 42 USC 18002.

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124 STAT. 893 PUBLIC LAW 111–148—MAR. 23, 2010 
‘‘(A) may not deny the individual participation in the 
clinical trial referred to in subsection (b)(2); 
‘‘(B) subject to subsection (c), may not deny (or limit 
or impose additional conditions on) the coverage of routine patient costs for items and services furnished in connection with participation in the trial; and 
‘‘(C) may not discriminate against the individual on 
the basis of the individual’s participation in such trial. ‘‘(2) R

OUTINE PATIENT COSTS .— 
‘‘(A) I NCLUSION .—For purposes of paragraph (1)(B), 
subject to subparagraph (B), routine patient costs include all items and services consistent with the coverage provided in the plan (or coverage) that is typically covered for a qualified individual who is not enrolled in a clinical trial. 
‘‘(B) E
XCLUSION .—For purposes of paragraph (1)(B), 
routine patient costs does not include— 
‘‘(i) the investigational item, device, or service, 
itself;

itself; 
‘‘(ii) items and services that are provided solely 
to satisfy data collection and analysis needs and that are not used in the direct clinical management of the patient; or 
‘‘(iii) a service that is clearly inconsistent with 
widely accepted and established standards of care for a particular diagnosis. 
‘‘(3) U
SE OF IN -NETWORK PROVIDERS .—If one or more partici-

pating providers is participating in a clinical trial, nothing in paragraph (1) shall be construed as preventing a plan or issuer from requiring that a qualified individual participate in the trial through such a participating provider if the provider will accept the individual as a participant in the trial. 
‘‘(4) U
SE OF OUT -OF-NETWORK .—Notwithstanding paragraph

(3), paragraph (1) shall apply to a qualified individual partici-pating in an approved clinical trial that is conducted outside the State in which the qualified individual resides. ‘‘(b) Q
UALIFIED INDIVIDUAL DEFINED .—For purposes of sub-
section (a), the term ‘qualified individual’ means an individual who is a participant or beneficiary in a health plan or with coverage described in subsection (a)(1) and who meets the following condi-tions:

‘‘(1) The individual is eligible to participate in an approved 
clinical trial according to the trial protocol with respect to treatment of cancer or other life-threatening disease or condi-tion. 
‘‘(2) Either— 
‘‘(A) the referring health care professional is a partici-
pating health care provider and has concluded that the individual’s participation in such trial would be appropriate based upon the individual meeting the conditions described in paragraph (1); or

‘‘(B) the participant or beneficiary provides medical 
and scientific information establishing that the individual’s participation in such trial would be appropriate based upon the individual meeting the conditions described in para-graph (1). 
‘‘(c) L
IMITATIONS ON COVERAGE .—This section shall not be con-
strued to require a group health plan, or a health insurance issuer Applicability.

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124 STAT. 894 PUBLIC LAW 111–148—MAR. 23, 2010 
offering group or individual health insurance coverage, to provide 
benefits for routine patient care services provided outside of the plan’s (or coverage’s) health care provider network unless out-of- network benefits are otherwise provided under the plan (or cov-erage). 
‘‘(d) A
PPROVED CLINICAL TRIAL DEFINED .— 
‘‘(1) I N GENERAL .—In this section, the term ‘approved clin-

ical trial’ means a phase I, phase II, phase III, or phase IV clinical trial that is conducted in relation to the prevention, detection, or treatment of cancer or other life-threatening dis-ease or condition and is described in any of the following subparagraphs: 
‘‘(A) F
EDERALLY FUNDED TRIALS .—The study or inves-
tigation is approved or funded (which may include funding through in-kind contributions) by one or more of the fol-lowing:

‘‘(i) The National Institutes of Health. ‘‘(ii) The Centers for Disease Control and Preven-
tion. 
‘‘(iii) The Agency for Health Care Research and 
Quality. 
‘‘(iv) The Centers for Medicare & Medicaid Serv-
ices. 
‘‘(v) cooperative group or center of any of the enti-
ties described in clauses (i) through (iv) or the Depart-ment of Defense or the Department of Veterans Affairs. 
‘‘(vi) A qualified non-governmental research entity

identified in the guidelines issued by the National Institutes of Health for center support grants. 
‘‘(vii) Any of the following if the conditions 
described in paragraph (2) are met: 
‘‘(I) The Department of Veterans Affairs. ‘‘(II) The Department of Defense. ‘‘(III) The Department of Energy. 
‘‘(B) The study or investigation is conducted under 
an investigational new drug application reviewed by the Food and Drug Administration. 
‘‘(C) The study or investigation is a drug trial that

is exempt from having such an investigational new drug application. ‘‘(2) C
ONDITIONS FOR DEPARTMENTS .—The conditions 
described in this paragraph, for a study or investigation con-ducted by a Department, are that the study or investigation has been reviewed and approved through a system of peer review that the Secretary determines— 
‘‘(A) to be comparable to the system of peer review 
of studies and investigations used by the National Institutes of Health, and

‘‘(B) assures unbiased review of the highest scientific 
standards by qualified individuals who have no interest in the outcome of the review. 
‘‘(e) L
IFE-THREATENING CONDITION DEFINED .—In this section, 
the term ‘life-threatening condition’ means any disease or condition from which the likelihood of death is probable unless the course of the disease or condition is interrupted. 
‘‘(f) C

to limit a plan’s or issuer’s coverage with respect to clinical trials. Determination. 
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124 STAT. 895 PUBLIC LAW 111–148—MAR. 23, 2010 
‘‘(g) A PPLICATION TO FEHBP.—Notwithstanding any provision 
of chapter 89 of title 5, United States Code, this section shall apply to health plans offered under the program under such chapter. 
‘‘(h) P
REEMPTION .—Notwithstanding any other provision of this

Act, nothing in this section shall preempt State laws that require a clinical trials policy for State regulated health insurance plans that is in addition to the policy required under this section.’’. 
(d) Section 1251(a) of this Act is amended— 
(1) in paragraph (2), by striking ‘‘With’’ and inserting 
‘‘Except as provided in paragraph (3), with’’; and 
(2) by adding at the end the following: ‘‘(3) A
PPLICATION OF CERTAIN PROVISIONS .—The provisions

of sections 2715 and 2718 of the Public Health Service Act (as added by subtitle A) shall apply to grandfathered health plans for plan years beginning on or after the date of enactment of this Act.’’. (e) Section 1253 of this Act is amended insert before the period 
the following: ‘‘, except that— 
‘‘(1) section 1251 shall take effect on the date of enactment 
of this Act; and 
‘‘(2) the provisions of section 2704 of the Public Health

Service Act (as amended by section 1201), as they apply to enrollees who are under 19 years of age, shall become effective for plan years beginning on or after the date that is 6 months after the date of enactment of this Act.’’. (f) Subtitle C of title I of this Act is amended— 
(1) by redesignating section 1253 as section 1255; and (2) by inserting after section 1252, the following: 
‘‘SEC. 1253. ANNUAL REPORT ON SELF-INSURED PLANS.

Act, and annually thereafter, the Secretary of Labor shall prepare an aggregate annual report, using data collected from the Annual Return/Report of Employee Benefit Plan (Department of Labor Form 5500), that shall include general information on self-insured group health plans (including plan type, number of participants, benefits offered, funding arrangements, and benefit arrangements) as well as data from the financial filings of self-insured employers (including information on assets,

employers (including information on assets, liabilities, contributions, invest-ments, and expenses). The Secretary shall submit such reports to the appropriate committees of Congress.

‘‘SEC. 1254. STUDY OF LARGE GROUP MARKET. 
‘‘(a) I NGENERAL .—The Secretary of Health and Human Services 
shall conduct a study of the fully-insured and self-insured group health plan markets to— 
‘‘(1) compare the characteristics of employers (including 
industry, size, and other characteristics as determined appro-priate by the Secretary), health plan benefits, financial sol-
vency, capital reserve levels, and the risks of becoming insol-vent; and

‘‘(2) determine the extent to which new insurance market 
reforms are likely to cause adverse selection in the large group market or to encourage small and midsize employers to self- insure. ‘‘(b) C
OLLECTION OF INFORMATION .—In conducting the study 
under subsection (a), the Secretary, in coordination with the Sec-retary of Labor, shall collect information and analyze— 42 USC 18013. Effective date. 
42 USC 300gg note. 42 USC 18011.

42 USC 300gg note. 42 USC 18011. 
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124 STAT. 896 PUBLIC LAW 111–148—MAR. 23, 2010 
‘‘(1) the extent to which self-insured group health plans 
can offer less costly coverage and, if so, whether lower costs are due to more efficient plan administration and lower over-head or to the denial of claims and the offering very limited benefit packages; 
‘‘(2) claim denial rates, plan benefit fluctuations (to

evaluate the extent that plans scale back health benefits during economic downturns), and the impact of the limited recourse options on consumers; and 
‘‘(3) any potential conflict of interest as it relates to the 
health care needs of self-insured enrollees and self-insured employer’s financial contribution or profit margin, and the impact of such conflict on administration of the health plan. ‘‘(c) R
EPORT .—Not later than 1 year after the date of enactment

of this Act, the Secretary shall submit to the appropriate committees of Congress a report concerning the results of the study conducted under subsection (a).’’. 
SEC. 10104. AMENDMENTS TO SUBTITLE D. 
(a) Section 1301(a) of this Act is amended by striking paragraph 
(2) and inserting the following: 
‘‘(2) I NCLUSION OF CO –OP PLANS AND MULTI -STATE QUALI -
FIED HEALTH PLANS .—Any reference in this title to a qualified

health plan shall be deemed to include a qualified health plan offered through the CO–OP program under section 1322, and a multi-State plan under section 1334, unless specifically pro-vided for otherwise. 
‘‘(3) T
REATMENT OF QUALIFIED DIRECT PRIMARY CARE MED -
ICAL HOME PLANS .—The Secretary of Health and Human Serv-

ices shall permit a qualified health plan to provide coverage through a qualified direct primary care medical home plan that meets criteria established by the Secretary, so long as the qualified health plan meets all requirements that are other-wise applicable and the services covered by the medical home plan are coordinated with the entity offering the qualified health plan. 
‘‘(4) V
ARIATION BASED ON RATING AREA .—A qualified health

plan, including a multi-State qualified health plan, may as appropriate vary premiums by rating area (as defined in section 2701(a)(2) of the Public Health Service Act).’’. (b) Section 1302 of this Act is amended— 
(1) in subsection (d)(2)(B), by striking ‘‘may issue’’ and 
inserting ‘‘shall issue’’; and 
‘‘(g) P
AYMENTS TO FEDERALLY -QUALIFIED HEALTH CENTERS .—

If any item or service covered by a qualified health plan is provided by a Federally-qualified health center (as defined in section 1905(l)(2)(B) of the Social Security Act (42 U.S.C. 1396d(l)(2)(B)) to an enrollee of the plan, the offeror of the plan shall pay to the center for the item or service an amount that is not less than the amount of payment that would have been paid to the center under section 1902(bb) of such Act (42 U.S.C. 1396a(bb)) for such item or service.’’.

(c) Section 1303 of this Act is amended to read as follows: 
‘‘SEC. 1303. SPECIAL RULES. 
‘‘(a) S TATE OPT-OUT OF ABORTION COVERAGE .— 42 USC 18023. 42 USC 18022. Criteria. 42 USC 18021. 
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124 STAT. 897 PUBLIC LAW 111–148—MAR. 23, 2010 
‘‘(1) I N GENERAL .—A State may elect to prohibit abortion 
coverage in qualified health plans offered through an Exchange in such State if such State enacts a law to provide for such prohibition. 
‘‘(2) T
ERMINATION OF OPT OUT .—A State may repeal a law 
described in paragraph (1) and provide for the offering of such services through the Exchange. ‘‘(b) S
PECIAL RULES RELATING TO COVERAGE OF ABORTION SERV-
ICES.—

ICES.— 
‘‘(1) V OLUNTARY CHOICE OF COVERAGE OF ABORTION SERV -
ICES.— 
sion of this title (or any amendment made by this title)— 
‘‘(i) nothing in this title (or any amendment made 
by this title), shall be construed to require a qualified health plan to provide coverage of services described in subparagraph (B)(i) or (B)(ii) as part of its essential health benefits for any plan year; and

‘‘(ii) subject to subsection (a), the issuer of a quali-
fied health plan shall determine whether or not the plan provides coverage of services described in subpara-graph (B)(i) or (B)(ii) as part of such benefits for the plan year. ‘‘(B) A
‘‘(i) A BORTIONS FOR WHICH PUBLIC FUNDING IS  

‘‘(ii) A

abortions for which the expenditure of Federal funds appropriated for the Department of Health and Human Services is permitted, based on the law as in effect as of the date that is 6 months before the beginning of the plan year involved. 
‘‘(2) P
‘‘(A) I N GENERAL .—If a qualified health plan provides

coverage of services described in paragraph (1)(B)(i), the issuer of the plan shall not use any amount attributable to any of the following for purposes of paying for such services: 
‘‘(i) The credit under section 36B of the Internal 
Revenue Code of 1986 (and the amount (if any) of 
the advance payment of the credit under section 1412 of the Patient Protection and Affordable Care Act). 
‘‘(ii) Any cost-sharing reduction under section 1402

of the Patient Protection and Affordable Care Act (and the amount (if any) of the advance payment of the reduction under section 1412 of the Patient Protection and Affordable Care Act). ‘‘(B) E
STABLISHMENT OF ALLOCATION ACCOUNTS .—In 
the case of a plan to which subparagraph (A) applies, the issuer of the plan shall— 
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124 STAT. 898 PUBLIC LAW 111–148—MAR. 23, 2010 
‘‘(i) collect from each enrollee in the plan (without 
regard to the enrollee’s age, sex, or family status) a separate payment for each of the following: 
‘‘(I) an amount equal to the portion of the 
premium to be paid directly by the enrollee for coverage under the plan of services other than services described in paragraph (1)(B)(i) (after reduction for credits and cost-sharing reductions described in subparagraph (A)); and

‘‘(II) an amount equal to the actuarial value 
of the coverage of services described in paragraph (1)(B)(i), and ‘‘(ii) shall deposit all such separate payments into 
separate allocation accounts as provided in subpara-graph (C). 
In the case of an enrollee whose premium for coverage under the plan is paid through employee payroll deposit, the separate payments required under this subparagraph shall each be paid by a separate deposit. 
‘‘(C) S
EGREGATION OF FUNDS .—

‘‘(C) S
EGREGATION OF FUNDS .— 
‘‘(i) I N GENERAL .—The issuer of a plan to which 
subparagraph (A) applies shall establish allocation accounts described in clause (ii) for enrollees receiving amounts described in subparagraph (A). 
‘‘(ii) A
LLOCATION ACCOUNTS .—The issuer of a plan 
to which subparagraph (A) applies shall deposit— 
‘‘(I) all payments described in subparagraph

‘‘(I) all payments described in subparagraph 
(B)(i)(I) into a separate account that consists solely of such payments and that is used exclusively to pay for services other than services described in paragraph (1)(B)(i); and 
‘‘(II) all payments described in subparagraph 
(B)(i)(II) into a separate account that consists solely of such payments and that is used exclu-sively to pay for services described in paragraph (1)(B)(i). 
‘‘(D) A
CTUARIAL VALUE .—

‘‘(D) A
‘‘(i) I N GENERAL .—The issuer of a qualified health 
plan shall estimate the basic per enrollee, per month cost, determined on an average actuarial basis, for including coverage under the qualified health plan of the services described in paragraph (1)(B)(i). 
‘‘(ii) C
the issuer— 
‘‘(I) may take into account the impact on 
overall costs of the inclusion of such coverage,

overall costs of the inclusion of such coverage, 
but may not take into account any cost reduction estimated to result from such services, including prenatal care, delivery, or postnatal care; 
‘‘(II) shall estimate such costs as if such cov-
‘‘(III) may not estimate such a cost at less 
‘‘(E) E
NSURING COMPLIANCE WITH SEGREGATION  
REQUIREMENTS .—

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124 STAT. 899 PUBLIC LAW 111–148—MAR. 23, 2010 
‘‘(i) I N GENERAL .—Subject to clause (ii), State 
health insurance commissioners shall ensure that health plans comply with the segregation requirements in this subsection through the segregation of plan funds in accordance with applicable provisions of generally accepted accounting requirements, circulars on funds management of the Office of Management and Budget, and guidance on accounting of the Government Accountability Office. 
‘‘(ii) C

‘‘(ii) C
LARIFICATION .—Nothing in clause (i) shall 
prohibit the right of an individual or health plan to appeal such action in courts of competent jurisdiction. 
‘‘(3) R
ULES RELATING TO NOTICE .— 
‘‘(A) N OTICE .—A qualified health plan that provides 
for coverage of the services described in paragraph (1)(B)(i) shall provide a notice to enrollees, only as part of the summary of benefits and coverage explanation, at the time of enrollment, of such coverage. 
‘‘(B) R

‘‘(B) R
ULES RELATING TO PAYMENTS .—The notice 
described in subparagraph (A), any advertising used by the issuer with respect to the plan, any information pro-vided by the Exchange, and any other information specified by the Secretary shall provide information only with respect to the total amount of the combined payments for services described in paragraph (1)(B)(i) and other services covered by the plan. ‘‘(4) N
O DISCRIMINATION ON BASIS OF PROVISION OF ABOR -

TION .—No qualified health plan offered through an Exchange 
may discriminate against any individual health care provider or health care facility because of its unwillingness to provide, pay for, provide coverage of, or refer for abortions ‘‘(c) A
‘‘(1) N O PREEMPTION OF STATE LAWS REGARDING ABOR -
TION .—Nothing in this Act shall be construed to preempt or

otherwise have any effect on State laws regarding the prohibi-tion of (or requirement of) coverage, funding, or procedural requirements on abortions, including parental notification or consent for the performance of an abortion on a minor. 
‘‘(2) N
‘‘(A) I N GENERAL .—Nothing in this Act shall be con-

‘‘(i) conscience protection; ‘‘(ii) willingness or refusal to provide abortion; and ‘‘(iii) discrimination on the basis of the willingness 
‘‘(3) N
in this subsection shall alter the rights and obligations of employees and employers under title VII of the Civil Rights Act of 1964. ‘‘(d) A

this Act shall be construed to relieve any health care provider from providing emergency services as required by State or Federal law, including section 1867 of the Social Security Act (popularly known as ‘EMTALA’).’’. 
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124 STAT. 900 PUBLIC LAW 111–148—MAR. 23, 2010 
(d) Section 1304 of this Act is amended by adding at the 
end the following: 
‘‘(e) E DUCATED HEALTH CARECONSUMERS .—The term ‘educated 
health care consumer’ means an individual who is knowledgeable about the health care system, and has background or experience in making informed decisions regarding health, medical, and sci-entific matters.’’. 
(e) Section 1311(d) of this Act is amended—

(e) Section 1311(d) of this Act is amended— 
(1) in paragraph (3)(B), by striking clause (ii) and inserting 
‘‘(ii) S
TATE MUST ASSUME COST .—A State shall 
make payments— 
‘‘(I) to an individual enrolled in a qualified 
health plan offered in such State; or 
‘‘(II) on behalf of an individual described in 
subclause (I) directly to the qualified health plan in which such individual is enrolled; 
to defray the cost of any additional benefits described in clause (i).’’; and

(2) in paragraph (6)(A), by inserting ‘‘educated’’ before 
‘‘health care’’. (f) Section 1311(e) of this Act is amended— 
(1) in paragraph (2), by striking ‘‘may’’ in the second sen-
tence and inserting ‘‘shall’’; and 
(2) by adding at the end the following: ‘‘(3) T
RANSPARENCY IN COVERAGE .— 
‘‘(A) I N GENERAL .—The Exchange shall require health

plans seeking certification as qualified health plans to submit to the Exchange, the Secretary, the State insurance commissioner, and make available to the public, accurate and timely disclosure of the following information:

‘‘(i) Claims payment policies and practices. ‘‘(ii) Periodic financial disclosures. ‘‘(iii) Data on enrollment. ‘‘(iv) Data on disenrollment. ‘‘(v) Data on the number of claims that are denied. ‘‘(vi) Data on rating practices. ‘‘(vii) Information on cost-sharing and payments 
with respect to any out-of-network coverage. 
‘‘(viii) Information on enrollee and participant 
rights under this title. 
‘‘(ix) Other information as determined appropriate 
by the Secretary. ‘‘(B) U

SE OF PLAIN LANGUAGE .—The information

required to be submitted under subparagraph (A) shall be provided in plain language. The term ‘plain language’ means language that the intended audience, including individuals with limited English proficiency, can readily understand and use because that language is concise, well- organized, and follows other best practices of plain lan-guage writing. The Secretary and the Secretary of Labor shall jointly develop and issue guidance on best practices of plain language writing. 
‘‘(C) C

‘‘(C) C
OST SHARING TRANSPARENCY .—The Exchange 
shall require health plans seeking certification as qualified health plans to permit individuals to learn the amount of cost-sharing (including deductibles, copayments, and Guidance. Definition. Public 
information. 42 USC 18031. Definition. 42 USC 18024. 
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124 STAT. 901 PUBLIC LAW 111–148—MAR. 23, 2010 
coinsurance) under the individual’s plan or coverage that 
the individual would be responsible for paying with respect to the furnishing of a specific item or service by a partici-pating provider in a timely manner upon the request of the individual. At a minimum, such information shall be made available to such individual through an Internet website and such other means for individuals without access to the Internet. 
‘‘(D) G

‘‘(D) G
ROUP HEALTH PLANS .—The Secretary of Labor 
shall update and harmonize the Secretary’s rules con-cerning the accurate and timely disclosure to participants by group health plans of plan disclosure, plan terms and conditions, and periodic financial disclosure with the stand-ards established by the Secretary under subparagraph (A).’’. 
(g) Section 1311(g)(1) of this Act is amended— 
(1) in subparagraph (C), by striking ‘‘; and’’ and inserting 
a semicolon;

a semicolon; 
(2) in subparagraph (D), by striking the period and 
‘‘(E) the implementation of activities to reduce health 
and health care disparities, including through the use of language services, community outreach, and cultural com-petency trainings.’’. 
(h) Section 1311(i)(2)((B) of this Act is amended by striking

‘‘small business development centers’’ and inserting ‘‘resource part-ners of the Small Business Administration’’. 
(i) Section 1312 of this Act is amended— 
(1) in subsection (a)(1), by inserting ‘‘and for which such 
individual is eligible’’ before the period; 
(2) in subsection (e)— 
(A) in paragraph (1), by inserting ‘‘and employers’’ 
after ‘‘enroll individuals’’; and 
(B) by striking the flush sentence at the end; and 
(3) in subsection (f)(1)(A)(ii), by striking the parenthetical.

(j)(1) Subparagraph (B) of section 1313(a)(6) of this Act is 
hereby deemed null, void, and of no effect. 
(2) Section 3730(e) of title 31, United States Code, is amended 
by striking paragraph (4) and inserting the following: 
‘‘(4)(A) The court shall dismiss an action or claim under 
this section, unless opposed by the Government, if substantially the same allegations or transactions as alleged in the action or claim were publicly disclosed—

‘‘(i) in a Federal criminal, civil, or administrative 
hearing in which the Government or its agent is a party; 
‘‘(ii) in a congressional, Government Accountability 
Office, or other Federal report, hearing, audit, or investiga-tion; or 
‘‘(iii) from the news media, 
unless the action is brought by the Attorney General or the person bringing the action is an original source of the informa-tion. 
‘‘(B) For purposes of this paragraph, ‘‘original source’’

means an individual who either (i) prior to a public disclosure under subsection (e)(4)(a), has voluntarily disclosed to the 
Definition. Courts. 42 USC 18033 
note. 42 USC 18032. 42 USC 18031. Web posting. 
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124 STAT. 902 PUBLIC LAW 111–148—MAR. 23, 2010 
Government the information on which allegations or trans-
actions in a claim are based, or (2) who has knowledge that is independent of and materially adds to the publicly disclosed allegations or transactions, and who has voluntarily provided the information to the Government before filing an action under this section.’’. (k) Section 1313(b) of this Act is amended—

(1) in paragraph (3), by striking ‘‘and’’ at the end; (2) by redesignating paragraph (4) as paragraph (5); and (3) by inserting after paragraph (3) the following: ‘‘(4) a survey of the cost and affordability of health care

insurance provided under the Exchanges for owners and employees of small business concerns (as defined under section 3 of the Small Business Act (15 U.S.C. 632)), including data on enrollees in Exchanges and individuals purchasing health insurance coverage outside of Exchanges; and’’. (l) Section 1322(b) of this Act is amended— 
(1) by redesignating paragraph (3) as paragraph (4); and (2) by inserting after paragraph (2), the following: ‘‘(3) R
EPAYMENT OF LOANS AND GRANTS .—Not later than

July 1, 2013, and prior to awarding loans and grants under the CO–OP program, the Secretary shall promulgate regula-tions with respect to the repayment of such loans and grants in a manner that is consistent with State solvency regulations and other similar State laws that may apply. In promulgating such regulations, the Secretary shall provide that such loans shall be repaid within 5 years and such grants shall be repaid within 15 years, taking into consideration any appropriate State reserve

into consideration any appropriate State reserve requirements, solvency regulations, and requisite sur-plus note arrangements that must be constructed in a State to provide for such repayment prior to awarding such loans and grants.’’. (m) Part III of subtitle D of title I of this Act is amended

by striking section 1323. 
(n) Section 1324(a) of this Act is amended by striking ‘‘, a 
community health’’ and all that follows through ‘‘1333(b)’’ and inserting ‘‘, or a multi-State qualified health plan under section 1334’’. 
(o) Section 1331 of this Act is amended— 
(1) in subsection (d)(3)(A)(i), by striking ‘‘85’’ and inserting 
‘‘95’’; and 
(2) in subsection (e)(1)(B), by inserting before the semicolon

the following: ‘‘, or, in the case of an alien lawfully present in the United States, whose income is not greater than 133 percent of the poverty line for the size of the family involved but who is not eligible for the Medicaid program under title XIX of the Social Security Act by reason of such alien status’’. (p) Section 1333 of this Act is amended by striking subsection 
(b). 
(q) Part IV of subtitle D of title I of this Act is amended 
by adding at the end the following:

by adding at the end the following: 
‘‘SEC. 1334. MULTI-STATE PLANS. 
‘‘(a) O VERSIGHT BY THE OFFICE OF PERSONNEL MANAGEMENT .— 
‘‘(1) I N GENERAL .—The Director of the Office of Personnel 
Management (referred to in this section as the ‘Director’) shall enter into contracts with health insurance issuers (which may Contracts. 42 USC 18054. 42 USC 18053. 42 USC 18051. 42 USC 18044. 42 USC 18043. Deadlines. 
Regulations. 42 USC 18042. 42 USC 18033.

Regulations. 42 USC 18042. 42 USC 18033. 
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124 STAT. 903 PUBLIC LAW 111–148—MAR. 23, 2010 
include a group of health insurance issuers affiliated either 
by common ownership and control or by the common use of a nationally licensed service mark), without regard to section 5 of title 41, United States Code, or other statutes requiring competitive bidding, to offer at least 2 multi-State qualified health plans through each Exchange in each State. Such plans shall provide individual, or in the case of small employers, group coverage.

‘‘(2) T
ERMS .—Each contract entered into under paragraph 
(1) shall be for a uniform term of at least 1 year, but may be made automatically renewable from term to term in the absence of notice of termination by either party. In entering into such contracts, the Director shall ensure that health bene-fits coverage is provided in accordance with the types of cov-erage provided for under section 2701(a)(1)(A)(i) of the Public Health Service Act. 
‘‘(3) N

‘‘(3) N
ON-PROFIT ENTITIES .—In entering into contracts 
under paragraph (1), the Director shall ensure that at least one contract is entered into with a non-profit entity. 
‘‘(4) A
DMINISTRATION .—The Director shall implement this

subsection in a manner similar to the manner in which the Director implements the contracting provisions with respect to carriers under the Federal employees health benefit program under chapter 89 of title 5, United States Code, including (through negotiating with each multi-state plan)— 
‘‘(A) a medical loss ratio; ‘‘(B) a profit margin; ‘‘(C) the premiums to be charged; and ‘‘(D) such other terms and conditions of coverage as 
are in the interests of enrollees in such plans. ‘‘(5) A

UTHORITY TO PROTECT CONSUMERS .—The Director 
may prohibit the offering of any multi-State health plan that does not meet the terms and conditions defined by the Director with respect to the elements described in subparagraphs (A) through (D) of paragraph (4). 
‘‘(6) A
SSURED AVAILABILITY OF VARIED COVERAGE .—In

SSURED AVAILABILITY OF VARIED COVERAGE .—In 
entering into contracts under this subsection, the Director shall ensure that with respect to multi-State qualified health plans offered in an Exchange, there is at least one such plan that does not provide coverage of services described in section 1303(b)(1)(B)(i). 
‘‘(7) W
ITHDRAWAL .—Approval of a contract under this sub-

section may be withdrawn by the Director only after notice and opportunity for hearing to the issuer concerned without regard to subchapter II of chapter 5 and chapter 7 of title 5, United States Code. ‘‘(b) E
LIGIBILITY .—A health insurance issuer shall be eligible 
to enter into a contract under subsection (a)(1) if such issuer— 
‘‘(1) agrees to offer a multi-State qualified health plan 
that meets the requirements of subsection (c) in each Exchange in each State;

‘‘(2) is licensed in each State and is subject to all require-
ments of State law not inconsistent with this section, including the standards and requirements that a State imposes that do not prevent the application of a requirement of part A of title XXVII of the Public Health Service Act or a requirement of this title; 
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124 STAT. 904 PUBLIC LAW 111–148—MAR. 23, 2010 
‘‘(3) otherwise complies with the minimum standards pre-
scribed for carriers offering health benefits plans under section 8902(e) of title 5, United States Code, to the extent that such standards do not conflict with a provision of this title; and 
‘‘(4) meets such other requirements as determined appro-
priate by the Director, in consultation with the Secretary. ‘‘(c) R
EQUIREMENTS FOR MULTI-STATE QUALIFIED HEALTH  
PLAN.—

PLAN.— 
‘‘(1) I N GENERAL .—A multi-State qualified health plan 
meets the requirements of this subsection if, in the determina-tion of the Director— 
‘‘(A) the plan offers a benefits package that is uniform 
in each State and consists of the essential benefits described in section 1302; 
‘‘(B) the plan meets all requirements of this title with

respect to a qualified health plan, including requirements relating to the offering of the bronze, silver, and gold levels of coverage and catastrophic coverage in each State Exchange; 
‘‘(C) except as provided in paragraph (5), the issuer 
provides for determinations of premiums for coverage under the plan on the basis of the rating requirements of part A of title XXVII of the Public Health Service Act; and 
‘‘(D) the issuer offers the plan in all geographic regions,

and in all States that have adopted adjusted community rating before the date of enactment of this Act. ‘‘(2) S
TATES MAY OFFER ADDITIONAL BENEFITS .—Nothing in 
paragraph (1)(A) shall preclude a State from requiring that benefits in addition to the essential health benefits required under such paragraph be provided to enrollees of a multi- State qualified health plan offered in such State. 
‘‘(3) C
REDITS .— 
‘‘(A) I N GENERAL .—An individual enrolled in a multi-

State qualified health plan under this section shall be eligible for credits under section 36B of the Internal Rev-enue Code of 1986 and cost sharing assistance under sec-tion 1402 in the same manner as an individual who is enrolled in a qualified health plan. 
‘‘(B) N

by a State under paragraph (2) that benefits in addition to the essential health benefits required under paragraph (1)(A) be provided to enrollees of a multi-State qualified health plan shall not affect the amount of a premium tax credit provided under section 36B of the Internal Rev-enue Code of 1986 with respect to such plan. ‘‘(4) S
TATE MUST ASSUME COST .—A State shall make pay-
ments— 
‘‘(A) to an individual enrolled in a multi-State qualified

‘‘(B) on behalf of an individual described in subpara-
graph (A) directly to the multi-State qualified health plan in which such individual is enrolled; 
to defray the cost of any additional benefits described in para-graph (2). 
‘‘(5) A
PPLICATION OF CERTAIN STATE RATING REQUIRE -
MENTS .—With respect to a multi-State qualified health plan 
that is offered in a State with age rating requirements that

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124 STAT. 905 PUBLIC LAW 111–148—MAR. 23, 2010 
are lower than 3:1, the State may require that Exchanges 
operating in such State only permit the offering of such multi- State qualified health plans if such plans comply with the State’s more protective age rating requirements. ‘‘(d) P
LANS DEEMED TOBECERTIFIED .—A multi-State qualified 
health plan that is offered under a contract under subsection (a) shall be deemed to be certified by an Exchange for purposes of section 1311(d)(4)(A). 
‘‘(e) P

‘‘(e) P
HASE -IN.—Notwithstanding paragraphs (1) and (2) of sub-
section (b), the Director shall enter into a contract with a health insurance issuer for the offering of a multi-State qualified health plan under subsection (a) if— 
‘‘(1) with respect to the first year for which the issuer 
offers such plan, such issuer offers the plan in at least 60 percent of the States; 
‘‘(2) with respect to the second such year, such issuer 
offers the plan in at least 70 percent of the States;

‘‘(3) with respect to the third such year, such issuer offers 
the plan in at least 85 percent of the States; and 
‘‘(4) with respect to each subsequent year, such issuer 
offers the plan in all States. ‘‘(f) A
PPLICABILITY .—The requirements under chapter 89 of title

5, United States Code, applicable to health benefits plans under such chapter shall apply to multi-State qualified health plans pro-vided for under this section to the extent that such requirements do not conflict with a provision of this title. 
‘‘(g) C
ONTINUED SUPPORT FOR FEHBP.— 
‘‘(1) M AINTENANCE OF EFFORT .—Nothing in this section

shall be construed to permit the Director to allocate fewer financial or personnel resources to the functions of the Office of Personnel Management related to the administration of the Federal Employees Health Benefit Program under chapter 89 of title 5, United States Code. 
‘‘(2) S
EPARATE RISK POOL .—Enrollees in multi-State quali-

fied health plans under this section shall be treated as a separate risk pool apart from enrollees in the Federal Employees Health Benefit Program under chapter 89 of title 5, United States Code. 
‘‘(3) A
UTHORITY TO ESTABLISH SEPARATE ENTITIES .—The

UTHORITY TO ESTABLISH SEPARATE ENTITIES .—The 
Director may establish such separate units or offices within the Office of Personnel Management as the Director determines to be appropriate to ensure that the administration of multi- State qualified health plans under this section does not inter-fere with the effective administration of the Federal Employees Health Benefit Program under chapter 89 of title 5, United States Code. 
‘‘(4) E
FFECTIVE OVERSIGHT .—The Director may appoint such

additional personnel as may be necessary to enable the Director to carry out activities under this section. 
‘‘(5) A
SSURANCE OF SEPARATE PROGRAM .—In carrying out

SSURANCE OF SEPARATE PROGRAM .—In carrying out 
this section, the Director shall ensure that the program under this section is separate from the Federal Employees Health Benefit Program under chapter 89 of title 5, United States Code. Premiums paid for coverage under a multi-State qualified health plan under this section shall not be considered to be Federal funds for any purposes. Contracts.

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124 STAT. 906 PUBLIC LAW 111–148—MAR. 23, 2010 
‘‘(6) FEHBP PLANS NOT REQUIRED TO PARTICIPATE .— 
Nothing in this section shall require that a carrier offering coverage under the Federal Employees Health Benefit Program under chapter 89 of title 5, United States Code, also offer a multi-State qualified health plan under this section. ‘‘(h) A
DVISORY BOARD .—The Director shall establish an advisory

board to provide recommendations on the activities described in this section. A significant percentage of the members of such board shall be comprised of enrollees in a multi-State qualified health plan, or representatives of such enrollees. 
‘‘(i) A
to be appropriated, such sums as may be necessary to carry out this section.’’. 
(r) Section 1341 of this Act is amended— 
AND SMALL GROUP

AND SMALL GROUP  
MARKETS ’’ and inserting ‘‘ MARKET ’’; 
(2) in subsection (b)(2)(B), by striking ‘‘paragraph (1)(A)’’ 
and inserting ‘‘paragraph (1)(B)’’; and 
(3) in subsection (c)(1)(A), by striking ‘‘and small group 
markets’’ and inserting ‘‘market’’. 
SEC. 10105. AMENDMENTS TO SUBTITLE E. 
(a) Section 36B(b)(3)(A)(ii) of the Internal Revenue Code of 
1986, as added by section 1401(a) of this Act, is amended by striking ‘‘is in excess of’’ and inserting ‘‘equals or exceeds’’.

(b) Section 36B(c)(1)(A) of the Internal Revenue Code of 1986, 
as added by section 1401(a) of this Act, is amended by inserting ‘‘equals or’’ before ‘‘exceeds’’. 
(c) Section 36B(c)(2)(C)(iv) of the Internal Revenue Code of 
1986, as added by section 1401(a) of this Act, is amended by striking ‘‘subsection (b)(3)(A)(ii)’’ and inserting ‘‘subsection (b)(3)(A)(iii)’’. 
(d) Section 1401(d) of this Act is amended by adding at the 
end the following:

‘‘(3) Section 6211(b)(4)(A) of the Internal Revenue Code 
of 1986 is amended by inserting ‘36B,’ after ‘36A,’.’’. (e)(1) Subparagraph (B) of section 45R(d)(3) of the Internal 
Revenue Code of 1986, as added by section 1421(a) of this Act, is amended to read as follows: 
‘‘(B) D
(1)(B) and subsection (c)(2)— 
‘‘(i) 2010, 2011, 2012, AND 2013 .—The dollar amount

in effect under this paragraph for taxable years begin-ning in 2010, 2011, 2012, or 2013 is $25,000. 
‘‘(ii) S
year beginning in a calendar year after 2013, the dollar amount in effect under this paragraph shall be equal to $25,000, multiplied by the cost-of-living adjustment under section 1(f)(3) for the calendar year, determined by substituting ‘calendar year 2012’ for ‘calendar year 1992’ in subparagraph (B) thereof.’’.

(2) Subsection (g) of section 45R of the Internal Revenue Code 
of 1986, as added by section 1421(a) of this Act, is amended by striking ‘‘2011’’ both places it appears and inserting ‘‘2010, 2011’’. 
(3) Section 280C(h) of the Internal Revenue Code of 1986, 
as added by section 1421(d)(1) of this Act, is amended by striking ‘‘2011’’ and inserting ‘‘2010, 2011’’. 
26 USC 280C. 26 USC 45R. 26 USC 6211. 26 USC 36B. 42 USC 18061. Establishment.

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124 STAT. 907 PUBLIC LAW 111–148—MAR. 23, 2010 
(4) Section 1421(f) of this Act is amended by striking ‘‘2010’’ 
both places it appears and inserting ‘‘2009’’. 
(5) The amendments made by this subsection shall take effect 
as if included in the enactment of section 1421 of this Act. 
(f) Part I of subtitle E of title I of this Act is amended by 
adding at the end of subpart B, the following: 
‘‘SEC. 1416. STUDY OF GEOGRAPHIC VARIATION IN APPLICATION OF 
FPL.

examine the feasibility and implication of adjusting the application of the Federal poverty level under this subtitle (and the amend-ments made by this subtitle) for different geographic areas so as to reflect the variations in cost-of-living among different areas within the United States. If the Secretary determines that an adjustment is feasible, the study should include a methodology to make such an adjustment. Not later than January 1, 2013, the Secretary shall submit to Congress a report

the Secretary shall submit to Congress a report on such study and shall include such recommendations as the Secretary deter-mines appropriate.

‘‘(b) I
NCLUSION OF TERRITORIES .— 
study under subsection (a) covers the territories of the United States and that special attention is paid to the disparity that exists among poverty levels and the cost of living in such territories and to the impact of such disparity on efforts to expand health coverage and ensure health care. 
‘‘(2) T
ERRITORIES DEFINED .—In this subsection, the term

‘territories of the United States’ includes the Commonwealth of Puerto Rico, the United States Virgin Islands, Guam, the Northern Mariana Islands, and any other territory or possession of the United States.’’. 
SEC. 10106. AMENDMENTS TO SUBTITLE F. 
(a) Section 1501(a)(2) of this Act is amended to read as follows: 
‘‘(2) E FFECTS ON THE NATIONAL ECONOMY AND INTERSTATE  
following:

‘‘(A) The requirement regulates activity that is commer-
cial and economic in nature: economic and financial decisions about how and when health care is paid for, and when health insurance is purchased. In the absence of the requirement, some individuals would make an eco-nomic and financial decision to forego health insurance coverage and attempt to self-insure, which increases finan-cial risks to households and medical providers.

a significant part of the national economy. National health spending is projected to increase from $2,500,000,000,000, or 17.6 percent of the economy, in 2009 to $4,700,000,000,000 in 2019. Private health insurance spending is projected to be $854,000,000,000 in 2009, and pays for medical supplies, drugs, and equipment that are shipped in interstate commerce. Since most health insur-ance is sold by national or regional health insurance compa-nies, health insurance is sold in interstate commerce

health insurance is sold in interstate commerce and claims payments flow through interstate commerce. 42 USC 18091. Deadline.

Reports. Recommenda- tions. Determination. 26 USC 45R note. 26 USC 38 note. 
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124 STAT. 908 PUBLIC LAW 111–148—MAR. 23, 2010 
‘‘(C) The requirement, together with the other provi-
sions of this Act, will add millions of new consumers to the health insurance market, increasing the supply of, and demand for, health care services, and will increase the number and share of Americans who are insured. 
‘‘(D) The requirement achieves near-universal coverage

‘‘(E) The economy loses up to $207,000,000,000 a year

because of the poorer health and shorter lifespan of the uninsured. By significantly reducing the number of the uninsured, the requirement, together with the other provi-sions of this Act, will significantly reduce this economic cost. 
‘‘(F) The cost of providing uncompensated care to the

uninsured was $43,000,000,000 in 2008. To pay for this cost, health care providers pass on the cost to private insurers, which pass on the cost to families. This cost- shifting increases family premiums by on average over $1,000 a year. By significantly reducing the number of the uninsured, the requirement, together with the other provisions of this Act, will lower health insurance pre-miums. 
‘‘(G) 62 percent of all personal bankruptcies are caused

in part by medical expenses. By significantly increasing health insurance coverage, the requirement, together with the other provisions of this Act, will improve financial security for families. 
‘‘(H) Under the Employee Retirement Income Security

Act of 1974 (29 U.S.C. 1001 et seq.), the Public Health Service Act (42 U.S.C. 201 et seq.), and this Act, the Federal Government has a significant role in regulating health insurance. The requirement is an essential part of this larger regulation of economic activity, and the absence of the requirement would undercut Federal regulation of the health insurance market. 
‘‘(I) Under sections 2704 and 2705 of the Public Health

Service Act (as added by section 1201 of this Act), if there were no requirement, many individuals would wait to pur-chase health insurance until they needed care. By signifi-cantly increasing health insurance coverage, the require-ment, together with the other provisions of this Act, will

minimize this adverse selection and broaden the health insurance risk pool to include healthy individuals, which will lower health insurance premiums. The requirement is essential to creating effective health insurance markets in which improved health insurance products that are guaranteed issue and do not exclude coverage of pre- existing conditions can be sold. 
‘‘(J) Administrative costs for private health insurance,

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124 STAT. 909 PUBLIC LAW 111–148—MAR. 23, 2010 

erage and the size of purchasing pools, which will increase economies of scale, the requirement, together with the other provisions of this Act, will significantly reduce administra-tive costs and lower health insurance premiums. The requirement is essential to creating effective health insur-ance markets that do not require underwriting and elimi-nate its associated administrative costs.’’. 
(b)(1) Section 5000A(b)(1) of the Internal Revenue Code of 1986,

as added by section 1501(b) of this Act, is amended to read as follows: 
‘‘(1) I
N GENERAL .—If a taxpayer who is an applicable indi-
vidual, or an applicable individual for whom the taxpayer is liable under paragraph (3), fails to meet the requirement of subsection (a) for 1 or more months, then, except as provided in subsection (e), there is hereby imposed on the taxpayer a penalty with respect to such failures in the amount deter-mined under subsection (c).’’.

(2) Paragraphs (1) and (2) of section 5000A(c) of the 
Internal Revenue Code of 1986, as so added, are amended to read as follows: 
‘‘(1) I
N GENERAL .—The amount of the penalty imposed by 
this section on any taxpayer for any taxable year with respect to failures described in subsection (b)(1) shall be equal to the lesser of— 
‘‘(A) the sum of the monthly penalty amounts deter-
mined under paragraph (2) for months in the taxable year during which 1 or more such failures occurred, or

‘‘(B) an amount equal to the national average premium 
for qualified health plans which have a bronze level of coverage, provide coverage for the applicable family size involved, and are offered through Exchanges for plan years beginning in the calendar year with or within which the taxable year ends. ‘‘(2) M
ONTHLY PENALTY AMOUNTS .—For purposes of para-

graph (1)(A), the monthly penalty amount with respect to any taxpayer for any month during which any failure described in subsection (b)(1) occurred is an amount equal to 
1⁄12of 
the greater of the following amounts: 
‘‘(A) F LAT DOLLAR AMOUNT .—An amount equal to the 
lesser of— 
‘‘(i) the sum of the applicable dollar amounts for 
all individuals with respect to whom such failure occurred during such month, or

‘‘(ii) 300 percent of the applicable dollar amount 
(determined without regard to paragraph (3)(C)) for 
the calendar year with or within which the taxable year ends. ‘‘(B) P
ERCENTAGE OF INCOME .—An amount equal to 
the following percentage of the taxpayer’s household income for the taxable year: 
‘‘(i) 0.5 percent for taxable years beginning in 2014. ‘‘(ii) 1.0 percent for taxable years beginning in 
2015. 
‘‘(iii) 2.0 percent for taxable years beginning after 
2015.’’. 26 USC 5000A.

2015.’’. 26 USC 5000A. 
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124 STAT. 910 PUBLIC LAW 111–148—MAR. 23, 2010 
(3) Section 5000A(c)(3) of the Internal Revenue Code of 1986, 
as added by section 1501(b) of this Act, is amended by striking ‘‘$350’’ and inserting ‘‘$495’’. 
(c) Section 5000A(d)(2)(A) of the Internal Revenue Code of 
1986, as added by section 1501(b) of this Act, is amended to read as follows: 
‘‘(A) R
ELIGIOUS CONSCIENCE EXEMPTION .—Such term

ELIGIOUS CONSCIENCE EXEMPTION .—Such term 
shall not include any individual for any month if such individual has in effect an exemption under section 1311(d)(4)(H) of the Patient Protection and Affordable Care Act which certifies that such individual is— 
‘‘(i) a member of a recognized religious sect or 
division thereof which is described in section 1402(g)(1), and 
‘‘(ii) an adherent of established tenets or teachings 
of such sect or division as described in such section.’’.

(d) Section 5000A(e)(1)(C) of the Internal Revenue Code of 
‘‘(C) S
applicable individual is eligible for minimum essential cov-erage through an employer by reason of a relationship to an employee, the determination under subparagraph (A) shall be made by reference to required contribution of the employee.’’.

(e) Section 4980H(b) of the Internal Revenue Code of 1986, 
as added by section 1513(a) of this Act, is amended to read as follows: 
‘‘(b) L
ARGE EMPLOYERS WITHWAITING PERIODS EXCEEDING 60 
DAYS.— 

employer which requires an extended waiting period to enroll in any minimum essential coverage under an employer-spon-sored plan (as defined in section 5000A(f)(2)), there is hereby imposed on the employer an assessable payment of $600 for each full-time employee of the employer to whom the extended waiting period applies. 
‘‘(2) E
XTENDED WAITING PERIOD .—The term ‘extended

waiting period’ means any waiting period (as defined in section 2701(b)(4) of the Public Health Service Act) which exceeds 60 days.’’. (f)(1) Subparagraph (A) of section 4980H(d)(4) of the Internal 
Revenue Code of 1986, as added by section 1513(a) of this Act, is amended by inserting ‘‘, with respect to any month,’’ after ‘‘means’’. 
(2) Section 4980H(d)(2) of the Internal Revenue Code of 1986,

as added by section 1513(a) of this Act, is amended by adding at the end the following: 
‘‘(D) A
PPLICATION TO CONSTRUCTION INDUSTRY  
EMPLOYERS .—In the case of any employer the substantial 
annual gross receipts of which are attributable to the construction industry— 
‘‘(i) subparagraph (A) shall be applied by sub-

stituting ‘who employed an average of at least 5 full- time employees on business days during the preceding calendar year and whose annual payroll expenses Definition. 26 USC 4980H. 26 USC 5000A. 
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124 STAT. 911 PUBLIC LAW 111–148—MAR. 23, 2010 
exceed $250,000 for such preceding calendar year’ for 
‘who employed an average of at least 50 full-time employees on business days during the preceding cal-endar year’, and 
‘‘(ii) subparagraph (B) shall be applied by sub-
stituting ‘5’ for ‘50’.’’. 
(3) The amendment made by paragraph (2) shall apply to 
months beginning after December 31, 2013. 
(g) Section 6056(b) of the Internal Revenue Code of 1986, as

added by section 1514(a) of the Act, is amended by adding at the end the following new flush sentence: ‘‘The Secretary shall have the authority to review the accuracy of the information provided under this subsection, including the applicable large employer’s share under paragraph (2)(C)(iv).’’. 
SEC. 10107. AMENDMENTS TO SUBTITLE G. 
(a) Section 1562 of this Act is amended, in the amendment 
made by subsection (a)(2)(B)(iii), by striking ‘‘subpart 1’’ and inserting ‘‘subparts I and II’’; and

(b) Subtitle G of title I of this Act is amended— 
(1) by redesignating section 1562 (as amended) as section 
1563; and 
(2) by inserting after section 1561 the following: 
‘‘SEC. 1562. GAO STUDY REGARDING THE RATE OF DENIAL OF COV-
ERAGE AND ENROLLMENT BY HEALTH INSURANCE ISSUERS AND GROUP HEALTH PLANS. 
‘‘(a) I NGENERAL .—The Comptroller General of the United

States (referred to in this section as the ‘Comptroller General’) shall conduct a study of the incidence of denials of coverage for medical services and denials of applications to enroll in health insurance plans, as described in subsection (b), by group health plans and health insurance issuers. 
‘‘(b) D
ATA.— 
‘‘(1) I N GENERAL .—In conducting the study described in 
subsection (a), the Comptroller General shall consider samples of data concerning the following:

‘‘(A)(i) denials of coverage for medical services to a 
plan enrollees, by the types of services for which such coverage was denied; and 
‘‘(ii) the reasons such coverage was denied; and ‘‘(B)(i) incidents in which group health plans and health 
insurance issuers deny the application of an individual to enroll in a health insurance plan offered by such group health plan or issuer; and 
‘‘(ii) the reasons such applications are denied. 
‘‘(2) S
COPE OF DATA .—

‘‘(2) S
COPE OF DATA .— 
‘‘(A) F AVORABLY RESOLVED DISPUTES .—The data that 
the Comptroller General considers under paragraph (1) shall include data concerning denials of coverage for med-ical services and denials of applications for enrollment in a plan by a group health plan or health insurance issuer, where such group health plan or health insurance issuer later approves such coverage or application. 
‘‘(B) A
LL HEALTH PLANS .—The study under this section

LL HEALTH PLANS .—The study under this section 
shall consider data from varied group health plans and health insurance plans offered by health insurance issuers, 26 USC 9815; 29 USC 1185d; 42 USC 300gg–1— 300gg–3, 300gg–9, 300gg–11, 300gg–12, 300gg–21— 300gg–23, 300gg–25— 300gg–28, 300gg–62, 300gg–91, 18120. 42 USC 
300gg–21. 26 USC 6056. Applicability. 
26 USC 4980H note.

26 USC 4980H note. 
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124 STAT. 912 PUBLIC LAW 111–148—MAR. 23, 2010 
including qualified health plans and health plans that are 
not qualified health plans. 
‘‘(c) R EPORT .—Not later than one year after the date of enact-
ment of this Act, the Comptroller General shall submit to the Secretaries of Health and Human Services and Labor a report describing the results of the study conducted under this section. 
‘‘(d) P
UBLICATION OF REPORT .—The Secretaries of Health and

Human Services and Labor shall make the report described in subsection (c) available to the public on an Internet website. 
‘‘SEC. 1563. SMALL BUSINESS PROCUREMENT. 
‘‘Part 19 of the Federal Acquisition Regulation, section 15 of

the Small Business Act (15 U.S.C. 644), and any other applicable laws or regulations establishing procurement requirements relating to small business concerns (as defined in section 3 of the Small Business Act (15 U.S.C. 632)) may not be waived with respect to any contract awarded under any program or other authority under this Act or an amendment made by this Act.’’. 
SEC. 10108. FREE CHOICE VOUCHERS. 
(a) I NGENERAL .—An offering employer shall provide free choice

vouchers to each qualified employee of such employer. 
(b) O FFERING EMPLOYER .—For purposes of this section, the 
term ‘‘offering employer’’ means any employer who— 
(1) offers minimum essential coverage to its employees 
consisting of coverage through an eligible employer-sponsored plan; and 
(2) pays any portion of the costs of such plan. 
(c) Q
UALIFIED EMPLOYEE .—For purposes of this section— 
(1) I N GENERAL .—The term ‘‘qualified employee’’ means,

with respect to any plan year of an offering employer, any employee— 
(A) whose required contribution (as determined under 
section 5000A(e)(1)(B)) for minimum essential coverage through an eligible employer-sponsored plan— 
(i) exceeds 8 percent of such employee’s household 
income for the taxable year described in section 1412(b)(1)(B) which ends with or within in the plan year; and 
(ii) does not exceed 9.8 percent of such employee’s

household income for such taxable year; (B) whose household income for such taxable year is 
not greater than 400 percent of the poverty line for a family of the size involved; and 
(C) who does not participate in a health plan offered 
by the offering employer. (2) I
NDEXING .—In the case of any calendar year beginning 
after 2014, the Secretary shall adjust the 8 percent under paragraph (1)(A)(i) and 9.8 percent under paragraph (1)(A)(ii)

for the calendar year to reflect the rate of premium growth between the preceding calendar year and 2013 over the rate of income growth for such period. (d) F
REECHOICE VOUCHER .— 
(1) A MOUNT .— 
(A) I N GENERAL .—The amount of any free choice 
voucher provided under subsection (a) shall be equal to the monthly portion of the cost of the eligible employer- sponsored plan which would have been paid by the Definition. 42 USC 18101. 42 USC 18119. Public 

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124 STAT. 913 PUBLIC LAW 111–148—MAR. 23, 2010 
employer if the employee were covered under the plan 
with respect to which the employer pays the largest portion of the cost of the plan. Such amount shall be equal to the amount the employer would pay for an employee with self-only coverage unless such employee elects family cov-erage (in which case such amount shall be the amount the employer would pay for family coverage). 
(B) D
ETERMINATION OF COST .—The cost of any health

ETERMINATION OF COST .—The cost of any health 
plan shall be determined under the rules similar to the rules of section 2204 of the Public Health Service Act, except that such amount shall be adjusted for age and category of enrollment in accordance with regulations established by the Secretary. (2) U
SE OF VOUCHERS .—An Exchange shall credit the

SE OF VOUCHERS .—An Exchange shall credit the 
amount of any free choice voucher provided under subsection (a) to the monthly premium of any qualified health plan in the Exchange in which the qualified employee is enrolled and the offering employer shall pay any amounts so credited to the Exchange. 
(3) P
AYMENT OF EXCESS AMOUNTS .—If the amount of the

AYMENT OF EXCESS AMOUNTS .—If the amount of the 
free choice voucher exceeds the amount of the premium of the qualified health plan in which the qualified employee is enrolled for such month, such excess shall be paid to the employee. (e) O
THER DEFINITIONS .—Any term used in this section which 
is also used in section 5000A of the Internal Revenue Code of 1986 shall have the meaning given such term under such section 5000A. 
(f) E
XCLUSION FROM INCOME FOR EMPLOYEE .—

(f) E
XCLUSION FROM INCOME FOR EMPLOYEE .— 
(1) I N GENERAL .—Part III of subchapter B of chapter 1 
of the Internal Revenue Code of 1986 is amended by inserting after section 139C the following new section: 
‘‘SEC. 139D. FREE CHOICE VOUCHERS. 
‘‘Gross income shall not include the amount of any free choice

voucher provided by an employer under section 10108 of the Patient Protection and Affordable Care Act to the extent that the amount of such voucher does not exceed the amount paid for a qualified health plan (as defined in section 1301 of such Act) by the tax-
payer.’’. 
(2) C
LERICAL AMENDMENT .—The table of sections for part 
III of subchapter B of chapter 1 of such Code is amended by inserting after the item relating to section 139C the following new item:

‘‘Sec. 139D. Free choice vouchers.’’. 
(3) E FFECTIVE DATE .—The amendments made by this sub-
section shall apply to vouchers provided after December 31, 2013. (g) D
EDUCTION ALLOWED TO EMPLOYER .— 
(1) I N GENERAL .—Section 162(a) of the Internal Revenue

Code of 1986 is amended by adding at the end the following new sentence: ‘‘For purposes of paragraph (1), the amount of a free choice voucher provided under section 10108 of the Patient Protection and Affordable Care Act shall be treated as an amount for compensation for personal services actually rendered.’’. 26 USC 162. 26 USC 139D 
note. 26 USC 139D. Regulations.

note. 26 USC 139D. Regulations. 
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124 STAT. 914 PUBLIC LAW 111–148—MAR. 23, 2010 
section shall apply to vouchers provided after December 31, 2013. (h) V
OUCHER TAKEN INTO ACCOUNT IN DETERMINING PREMIUM  
CREDIT .— 
(1) I N GENERAL .—Subsection (c)(2) of section 36B of the 
Internal Revenue Code of 1986, as added by section 1401, is amended by adding at the end the following new subpara-graph: 
‘‘(D) E
XCEPTION FOR INDIVIDUAL RECEIVING FREE

‘‘(D) E
XCEPTION FOR INDIVIDUAL RECEIVING FREE  
CHOICE VOUCHERS .—The term ‘coverage month’ shall not 
include any month in which such individual has a free choice voucher provided under section 10108 of the Patient Protection and Affordable Care Act.’’. (2) E
FFECTIVE DATE .—The amendment made by this sub-
section shall apply to taxable years beginning after December 31, 2013. (i) C
OORDINATION WITHEMPLOYER RESPONSIBILITIES .— 
(1) S HARED RESPONSIBILITY PENALTY .—

(1) S HARED RESPONSIBILITY PENALTY .— 
(A) I N GENERAL .—Subsection (c) of section 4980H of 
the Internal Revenue Code of 1986, as added by section 1513, is amended by adding at the end the following new paragraph: ‘‘(3) S
PECIAL RULES FOR EMPLOYERS PROVIDING FREE CHOICE  
VOUCHERS .—No assessable payment shall be imposed under

paragraph (1) for any month with respect to any employee to whom the employer provides a free choice voucher under section 10108 of the Patient Protection and Affordable Care Act for such month.’’. 
(B) E
paragraph shall apply to months beginning after December 31, 2013. (2) N
OTIFICATION REQUIREMENT .—Section 18B(a)(3) of the 
Fair Labor Standards Act of 1938, as added by section 1512, is amended—

(A) by inserting ‘‘and the employer does not offer a 
free choice voucher’’ after ‘‘Exchange’’; and 
(B) by striking ‘‘will lose’’ and inserting ‘‘may lose’’. 
(j) E
MPLOYER REPORTING .— 
(1) I N GENERAL .—Subsection (a) of section 6056 of the 
Internal Revenue Code of 1986, as added by section 1514, is amended by inserting ‘‘and every offering employer’’ before ‘‘shall’’. 
(2) O
FFERING EMPLOYERS .—Subsection (f) of section 6056

of such Code, as added by section 1514, is amended to read as follows: ‘‘(f) D
‘‘(1) O FFERING EMPLOYER .— 
‘‘(A) I N GENERAL .—The term ‘offering employer’ means

any offering employer (as defined in section 10108(b) of the Patient Protection and Affordable Care Act) if the required contribution (within the meaning of section 5000A(e)(1)(B)(i)) of any employee exceeds 8 percent of the wages (as defined in section 3121(a)) paid to such employee by such employer. 
‘‘(B) I
NDEXING .—In the case of any calendar year begin-
ning after 2014, the 8 percent under subparagraph (A) 26 USC 6056. 29 USC 218b. 26 USC 4980H

note. 26 USC 4980H. 26 USC 36B note. 26 USC 36B. 26 USC 162 note. 
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124 STAT. 915 PUBLIC LAW 111–148—MAR. 23, 2010 
shall be adjusted for the calendar year to reflect the rate 
of premium growth between the preceding calendar year and 2013 over the rate of income growth for such period. ‘‘(2) O
which is also used in section 4980H shall have the meaning given such term by section 4980H.’’. 
(3) C
(A) The heading of section 6056 of such Code, as added

by section 1514, is amended by striking ‘‘ LARGE ’’ and 
inserting ‘‘ CERTAIN ’’. 
(B) Section 6056(b)(2)(C) of such Code is amended— 
(i) by inserting ‘‘in the case of an applicable large 
employer,’’ before ‘‘the length’’ in clause (i); 
(ii) by striking ‘‘and’’ at the end of clause (iii); (iii) by striking ‘‘applicable large employer’’ in 
clause (iv) and inserting ‘‘employer’’; 
(iv) by inserting ‘‘and’’ at the end of clause (iv); 
and 
(v) by inserting at the end the following new

(v) by inserting at the end the following new 
clause: 
‘‘(v) in the case of an offering employer, the option 
for which the employer pays the largest portion of the cost of the plan and the portion of the cost paid by the employer in each of the enrollment categories under such option,’’. (C) Section 6056(d)(2) of such Code is amended by 
inserting ‘‘or offering employer’’ after ‘‘applicable large employer’’. 
(D) Section 6056(e) of such Code is amended by

(D) Section 6056(e) of such Code is amended by 
(E) Section 6724(d)(1)(B)(xxv) of such Code, as added 
by section 1514, is amended by striking ‘‘large’’ and inserting ‘‘certain’’. 
(F) Section 6724(d)(2)(HH) of such Code, as added by 
section 1514, is amended by striking ‘‘large’’ and inserting ‘‘certain’’. 
(G) The table of sections for subpart D of part III

of subchapter A of chapter 1 of such Code, as amended by section 1514, is amended by striking ‘‘Large employers’’ in the item relating to section 6056 and inserting ‘‘Certain employers’’. (4) E
section shall apply to periods beginning after December 31, 2013. 
SEC. 10109. DEVELOPMENT OF STANDARDS FOR FINANCIAL AND 
ADMINISTRATIVE TRANSACTIONS. 
(a) A DDITIONAL TRANSACTION STANDARDS AND OPERATING  
RULES .—

RULES .— 
(1) D EVELOPMENT OF ADDITIONAL TRANSACTION STANDARDS  
AND OPERATING RULES .—Section 1173(a) of the Social Security 
Act (42 U.S.C. 1320d–2(a)), as amended by section 1104(b)(2), is amended— 
(A) in paragraph (1)(B), by inserting before the period 
the following: ‘‘, and subject to the requirements under paragraph (5)’’; and 26 USC 6056 note. 26 USC 6056.

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124 STAT. 916 PUBLIC LAW 111–148—MAR. 23, 2010 
‘‘(5) C ONSIDERATION OF STANDARDIZATION OF ACTIVITIES  
AND ITEMS .— 
‘‘(A) I N GENERAL .—For purposes of carrying out para-
graph (1)(B), the Secretary shall solicit, not later than January 1, 2012, and not less than every 3 years thereafter, input from entities described in subparagraph (B) on— 
‘‘(i) whether there could be greater uniformity in

financial and administrative activities and items, as determined appropriate by the Secretary; and 
‘‘(ii) whether such activities should be considered 
financial and administrative transactions (as described in paragraph (1)(B)) for which the adoption of stand-ards and operating rules would improve the operation of the health care system and reduce administrative costs. ‘‘(B) S
OLICITATION OF INPUT .—For purposes of subpara-
graph (A), the Secretary shall seek input from—

graph (A), the Secretary shall seek input from— 
Statistics, the Health Information Technology Policy Committee, and the Health Information Technology Standards Committee; and 
‘‘(ii) standard setting organizations and stake-
holders, as determined appropriate by the Secretary.’’. 
(b) A
CTIVITIES AND ITEMS FOR INITIAL CONSIDERATION .—For

purposes of section 1173(a)(5) of the Social Security Act, as added by subsection (a), the Secretary of Health and Human Services (in this section referred to as the ‘‘Secretary’’) shall, not later than January 1, 2012, seek input on activities and items relating to the following areas: 
(1) Whether the application process, including the use of 
a uniform application form, for enrollment of health care pro-viders by health plans could be made electronic and standard-ized.

(2) Whether standards and operating rules described in 
section 1173 of the Social Security Act should apply to the health care transactions of automobile insurance, worker’s com-pensation, and other programs or persons not described in section 1172(a) of such Act (42 U.S.C. 1320d–1(a)). 
(3) Whether standardized forms could apply to financial

audits required by health plans, Federal and State agencies (including State auditors, the Office of the Inspector General of the Department of Health and Human Services, and the Centers for Medicare & Medicaid Services), and other relevant entities as determined appropriate by the Secretary. 
(4) Whether there could be greater transparency and

consistency of methodologies and processes used to establish claim edits used by health plans (as described in section 1171(5) of the Social Security Act (42 U.S.C. 1320d(5))). 
(5) Whether health plans should be required to publish 
their timeliness of payment rules. (c) ICD C
ODING CROSSWALKS .— 
(1) ICD–9 TO ICD –10 CROSSWALK .—The Secretary shall task

the ICD–9–CM Coordination and Maintenance Committee to convene a meeting, not later than January 1, 2011, to receive input from appropriate stakeholders (including health plans, health care providers, and clinicians) regarding the crosswalk Meeting. Deadline. Deadline. Deadlines. 
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124 STAT. 917 PUBLIC LAW 111–148—MAR. 23, 2010 
between the Ninth and Tenth Revisions of the International 
Classification of Diseases (ICD–9 and ICD–10, respectively) that is posted on the website of the Centers for Medicare & Medicaid Services, and make recommendations about appro-priate revisions to such crosswalk. 
(2) R
EVISION OF CROSSWALK .—For purposes of the cross-

walk described in paragraph (1), the Secretary shall make appropriate revisions and post any such revised crosswalk on the website of the Centers for Medicare & Medicaid Services. 
(3) U
SE OF REVISED CROSSWALK .—For purposes of para-
graph (2), any revised crosswalk shall be treated as a code set for which a standard has been adopted by the Secretary for purposes of section 1173(c)(1)(B) of the Social Security Act (42 U.S.C. 1320d–2(c)(1)(B)).

of the International Classification of Diseases that are adopted by the Secretary as a standard code set under section 1173(c) of the Social Security Act (42 U.S.C. 1320d–2(c)), the Secretary shall, after consultation with the appropriate stakeholders, post on the website of the Centers for Medicare & Medicaid Services a crosswalk between the previous and subsequent version of the International Classification of Diseases not later than the date of implementation of such subsequent revision.

PART I—MEDICAID AND CHIP 
SEC. 10201. AMENDMENTS TO THE SOCIAL SECURITY ACT AND TITLE 
II OF THIS ACT. 
(a)(1) Section 1902(a)(10)(A)(i)(IX) of the Social Security Act 
(42 U.S.C. 1396a(a)(10)(A)(i)(IX)), as added by section 2004(a), is amended to read as follows: 
‘‘(IX) who— 
‘‘(aa) are under 26 years of age; ‘‘(bb) are not described in or enrolled

under any of subclauses (I) through (VII) of this clause or are described in any of such subclauses but have income that exceeds the level of income applicable under the State plan for eligibility to enroll for medical assistance under such subclause; 
‘‘(cc) were in foster care under the respon-
sibility of the State on the date of attaining 18 years of age or such higher age as the State has elected under section 475(8)(B)(iii); and 
‘‘(dd) were enrolled in the State plan

‘‘(dd) were enrolled in the State plan 
under this title or under a waiver of the plan while in such foster care;’’. 
(2) Section 1902(a)(10) of the Social Security Act (42 U.S.C.

1396a(a)(10), as amended by section 2001(a)(5)(A), is amended in the matter following subparagraph (G), by striking ‘‘and (XV)’’ and inserting ‘‘(XV)’’, and by inserting ‘‘and (XVI) if an individual is described in subclause (IX) of subparagraph (A)(i) and is also described in subclause (VIII) of that subparagraph, the medical Deadline.

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124 STAT. 918 PUBLIC LAW 111–148—MAR. 23, 2010 
assistance shall be made available to the individual through sub-
clause (IX) instead of through subclause (VIII)’’ before the semicolon. 
(3) Section 2004(d) of this Act is amended by striking ‘‘2019’’ 
and inserting ‘‘2014’’. 
(b) Section 1902(k)(2) of the Social Security Act (42 U.S.C. 
1396a(k)(2)), as added by section 2001(a)(4)(A), is amended by striking ‘‘January 1, 2011’’ and inserting ‘‘April 1, 2010’’.

(c) Section 1905 of the Social Security Act (42 U.S.C. 1396d), 
as amended by sections 2001(a)(3), 2001(a)(5)(C), 2006, and 4107(a)(2), is amended— 
(1) in subsection (a), in the matter preceding paragraph 
(1), by inserting in clause (xiv), ‘‘or 1902(a)(10)(A)(i)(IX)’’ before the comma; 
(2) in subsection (b), in the first sentence, by inserting 
‘‘, (z),’’ before ‘‘and (aa)’’; 
(3) in subsection (y)— 
(A) in paragraph (1)(B)(ii)(II), in the first sentence,

by inserting ‘‘includes inpatient hospital services,’’ after ‘‘100 percent of the poverty line, that’’; and 
(B) in paragraph (2)(A), by striking ‘‘on the date of 
enactment of the Patient Protection and Affordable Care Act’’ and inserting ‘‘as of December 1, 2009’’; (4) by inserting after subsection (y) the following: 
‘‘(z) E
QUITABLE SUPPORT FOR CERTAIN STATES .— 
‘‘(1)(A) During the period that begins on January 1, 2014,

and ends on September 30, 2019, notwithstanding subsection (b), the Federal medical assistance percentage otherwise deter-mined under subsection (b) with respect to a fiscal year occur-ring during that period shall be increased by 2.2 percentage points for any State described in subparagraph (B) for amounts expended for medical assistance for individuals who are not newly eligible (as defined in subsection (y)(2)) individuals described in subclause (VIII) of section 1902(a)(10)(A)(i).

‘‘(B) For purposes of subparagraph (A), a State described 
in this subparagraph is a State that— 
‘‘(i) is an expansion State described in subsection 
(y)(1)(B)(ii)(II); 
‘‘(ii) the Secretary determines will not receive any pay-
ments under this title on the basis of an increased Federal medical assistance percentage under subsection (y) for expenditures for medical assistance for newly eligible individuals (as so defined); and 
‘‘(iii) has not been approved by the Secretary to divert

a portion of the DSH allotment for a State to the costs of providing medical assistance or other health benefits coverage under a waiver that is in effect on July 2009. 
‘‘(2)(A) During the period that begins on January 1, 2014,

and ends on December 31, 2016, notwithstanding subsection (b), the Federal medical assistance percentage otherwise determined under subsection (b) with respect to all or any portion of a fiscal year occurring during that period shall be increased by .5 percentage point for a State described in subparagraph (B) for amounts expended for medical assistance under the State plan under this title or under a waiver of that plan during that period.

‘‘(B) For purposes of subparagraph (A), a State described in 
this subparagraph is a State that— 
Time period. Time period. 42 USC 1396a 
note. 
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124 STAT. 919 PUBLIC LAW 111–148—MAR. 23, 2010 
‘‘(i) is described in clauses (i) and (ii) of paragraph (1)(B); 
and 
‘‘(ii) is the State with the highest percentage of its popu-
lation insured during 2008, based on the Current Population Survey. ‘‘(3) Notwithstanding subsection (b) and paragraphs (1) and

(2) of this subsection, the Federal medical assistance percentage otherwise determined under subsection (b) with respect to all or any portion of a fiscal year that begins on or after January 1, 2017, for the State of Nebraska, with respect to amounts expended for newly eligible individuals described in subclause (VIII) of section 1902(a)(10)(A)(i), shall be determined as provided for under sub-section (y)(1)(A) (notwithstanding the period provided for in such paragraph).

‘‘(4) The increase in the Federal medical assistance percentage 
for a State under paragraphs (1), (2), or (3) shall apply only for purposes of this title and shall not apply with respect to— 
‘‘(A) disproportionate share hospital payments described 
in section 1923; 
‘‘(B) payments under title IV; ‘‘(C) payments under title XXI; and ‘‘(D) payments under this title that are based on the 
enhanced FMAP described in section 2105(b).’’; 
(5) in subsection (aa), is amended by striking ‘‘without

regard to this subsection and subsection (y)’’ and inserting ‘‘without regard to this subsection, subsection (y), subsection (z), and section 10202 of the Patient Protection and Affordable Care Act’’ each place it appears; 
(6) by adding after subsection (bb), the following: 
‘‘(cc) R
EQUIREMENT FOR CERTAIN STATES .—Notwithstanding

subsections (y), (z), and (aa), in the case of a State that requires political subdivisions within the State to contribute toward the non-Federal share of expenditures required under the State plan under section 1902(a)(2), the State shall not be eligible for an increase in its Federal medical assistance percentage under such subsections if it requires that political subdivisions pay a greater percentage of the non-Federal share of such expenditures, or a greater percentage of the non-Federal

or a greater percentage of the non-Federal share of payments under section 1923, than the respective percentages that would have been required by the State under the State plan under this title, State law, or both, as in effect on December 31, 2009, and without regard to any such increase. Voluntary contributions by a political subdivision to the non-Federal share of expenditures under the State plan under this title or to the non-Federal share of payments under section 1923, shall not be

of payments under section 1923, shall not be considered to be required contribu-tions for purposes of this subsection. The treatment of voluntary contributions, and the treatment of contributions required by a State under the State plan under this title, or State law, as provided by this subsection, shall also apply to the increases in the Federal medical assistance percentage under section 5001 of the American Recovery and Reinvestment Act of 2009.’’.

(d) Section 1108(g)(4)(B) of the Social Security Act (42 U.S.C. 
1308(g)(4)(B)), as added by section 2005(b), is amended by striking ‘‘income eligibility level in effect for that population under title XIX or under a waiver’’ and inserting ‘‘the highest income eligibility level in effect for parents under the commonwealth’s or territory’s State plan under title XIX or under a waiver of the plan’’. Applicability. Nebraska. 

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124 STAT. 920 PUBLIC LAW 111–148—MAR. 23, 2010 
(e)(1) Section 1923(f) of the Social Security Act (42 U.S.C. 
1396r–4(f)), as amended by section 2551, is amended— 
(A) in paragraph (6)— 
(i) by striking the paragraph heading and inserting 
the following: ‘‘A LLOTMENT ADJUSTMENTS ’’; and 
(ii) in subparagraph (B), by adding at the end the 
‘‘(iii) A LLOTMENT FOR 2D , 3RD, AND 4TH QUARTER  
OF FISCAL YEAR 2012 , FISCAL YEAR 2013 , AND SUCCEEDING

FISCAL YEARS .—Notwithstanding the table set forth in 
paragraph (2) or paragraph (7): 
‘‘(I) 2 D, 3RD, AND 4TH QUARTER OF FISCAL YEAR  
2012.—The DSH allotment for Hawaii for the 2d, 
3rd, and 4th quarters of fiscal year 2012 shall be $7,500,000. 
‘‘(II) T
REATMENT AS A LOW -DSH STATE FOR  
FISCAL YEAR 2013 AND SUCCEEDING FISCAL YEARS .—

FISCAL YEAR 2013 AND SUCCEEDING FISCAL YEARS .— 
With respect to fiscal year 2013, and each fiscal year thereafter, the DSH allotment for Hawaii shall be increased in the same manner as allot-ments for low DSH States are increased for such fiscal year under clause (iii) of paragraph (5)(B). 
‘‘(III) C
ERTAIN HOSPITAL PAYMENTS .—The Sec-

retary may not impose a limitation on the total amount of payments made to hospitals under the QUEST section 1115 Demonstration Project except to the extent that such limitation is necessary to ensure that a hospital does not receive payments in excess of the amounts described in subsection (g), or as necessary to ensure that such payments under the waiver and such payments pursuant to the allotment provided in this clause do not, in the aggregate in any year, exceed the amount that the

aggregate in any year, exceed the amount that the Secretary determines is equal to the Fed-eral medical assistance percentage component attributable to disproportionate share hospital pay-ment adjustments for such year that is reflected in the budget neutrality provision of the QUEST Demonstration Project.’’; and

(B) in paragraph (7)— 
(i) in subparagraph (A), in the matter preceding clause 
(i), by striking ‘‘subparagraph (E)’’ and inserting ‘‘subpara-graphs (E) and (G)’’; 
(ii) in subparagraph (B)— 
(I) in clause (i), by striking subclauses (I) and 
(II), and inserting the following: 

in paragraph (5)(B) and has spent not more than 99.90 percent of the DSH allotments for the State on average for the period of fiscal years 2004 through 2008, as of September 30, 2009, the applicable percentage is equal to 25 percent; 
‘‘(II) if the State is a low DSH State described 
in paragraph (5)(B) and has spent more than 99.90 percent of the DSH allotments for the State on average for the period of fiscal years 2004 through Hawaii.

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124 STAT. 921 PUBLIC LAW 111–148—MAR. 23, 2010 
2008, as of September 30, 2009, the applicable 
percentage is equal to 17.5 percent; 
‘‘(III) if the State is not a low DSH State 
described in paragraph (5)(B) and has spent not more than 99.90 percent of the DSH allotments for the State on average for the period of fiscal years 2004 through 2008, as of September 30, 2009, the applicable percentage is equal to 50 per-cent; and 
‘‘(IV) if the State is not a low DSH State

‘‘(IV) if the State is not a low DSH State 
described in paragraph (5)(B) and has spent more than 99.90 percent of the DSH allotments for the State on average for the period of fiscal years 2004 through 2008, as of September 30, 2009, the applicable percentage is equal to 35 percent.’’; (II) in clause (ii), by striking subclauses (I) and 

in paragraph (5)(B) and has spent not more than 99.90 percent of the DSH allotments for the State on average for the period of fiscal years 2004 through 2008, as of September 30, 2009, the applicable percentage is equal to the product of the percentage reduction in uncovered individuals for the fiscal year from the preceding fiscal year and 27.5 percent; 
‘‘(II) if the State is a low DSH State described

in paragraph (5)(B) and has spent more than 99.90 percent of the DSH allotments for the State on average for the period of fiscal years 2004 through 2008, as of September 30, 2009, the applicable percentage is equal to the product of the percent-age reduction in uncovered individuals for the fiscal year from the preceding fiscal year and 20 percent; 
‘‘(III) if the State is not a low DSH State

described in paragraph (5)(B) and has spent not more than 99.90 percent of the DSH allotments for the State on average for the period of fiscal years 2004 through 2008, as of September 30, 2009, the applicable percentage is equal to the product of the percentage reduction in uncovered individuals for the fiscal year from the preceding fiscal year and 55 percent; and 

described in paragraph (5)(B) and has spent more 
than 99.90 percent of the DSH allotments for the State on average for the period of fiscal years 2004 through 2008, as of September 30, 2009, the applicable percentage is equal to the product of the percentage reduction in uncovered individuals for the fiscal year from the preceding fiscal year and 40 percent.’’; (III) in subparagraph (E), by striking ‘‘35 percent’’ 
and inserting ‘‘50 percent’’; and

and inserting ‘‘50 percent’’; and 
(IV) by adding at the end the following: 
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124 STAT. 922 PUBLIC LAW 111–148—MAR. 23, 2010 
‘‘(G) N ONAPPLICATION .—The preceding provisions of 
this paragraph shall not apply to the DSH allotment deter-mined for the State of Hawaii for a fiscal year under paragraph (6).’’. 
(f) Section 2551 of this Act is amended by striking subsection 
(b). 
(g) Section 2105(d)(3)(B) of the Social Security Act (42 U.S.C.

1397ee(d)(3)(B)), as added by section 2101(b)(1), is amended by adding at the end the following: ‘‘For purposes of eligibility for premium assistance for the purchase of a qualified health plan under section 36B of the Internal Revenue Code of 1986 and reduced cost-sharing under section 1402 of the Patient Protection and Affordable Care Act, children described in the preceding sentence shall be deemed to be ineligible for coverage under the State child health plan.’’.

(h) Clause (i) of subparagraph (C) of section 513(b)(2) of the 
Social Security Act, as added by section 2953 of this Act, is amended to read as follows: 
‘‘(i) Healthy relationships, including marriage and 
family interactions.’’. 
(i) Section 1115 of the Social Security Act (42 U.S.C. 1315) 
is amended by inserting after subsection (c) the following: 
‘‘(d)(1) An application or renewal of any experimental, pilot,

or demonstration project undertaken under subsection (a) to pro-mote the objectives of title XIX or XXI in a State that would result in an impact on eligibility, enrollment, benefits, cost-sharing, or financing with respect to a State program under title XIX or XXI (in this subsection referred to as a ‘demonstration project’) shall be considered by the Secretary in accordance with the regula-tions required to be promulgated under paragraph (2).

‘‘(2) Not later than 180 days after the date of enactment of 
this subsection, the Secretary shall promulgate regulations relating to applications for, and renewals of, a demonstration project that provide for— 
‘‘(A) a process for public notice and comment at the State 
level, including public hearings, sufficient to ensure a meaning-ful level of public input; 
‘‘(B) requirements relating to— 
‘‘(i) the goals of the program to be implemented or 
renewed under the demonstration project;

renewed under the demonstration project; 
‘‘(ii) the expected State and Federal costs and coverage 
projections of the demonstration project; and 
‘‘(iii) the specific plans of the State to ensure that 
the demonstration project will be in compliance with title XIX or XXI; ‘‘(C) a process for providing public notice and comment 
after the application is received by the Secretary, that is suffi-cient to ensure a meaningful level of public input;

‘‘(D) a process for the submission to the Secretary of peri-
odic reports by the State concerning the implementation of the demonstration project; and 
‘‘(E) a process for the periodic evaluation by the Secretary 
of the demonstration project. ‘‘(3) The Secretary shall annually report to Congress concerning 
actions taken by the Secretary with respect to applications for demonstration projects under this section.’’. 
Deadline. 
Regulations. 42 USC 713. 42 USC 1396r–4 
note.

note. 
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124 STAT. 923 PUBLIC LAW 111–148—MAR. 23, 2010 
(j) Subtitle F of title III of this Act is amended by adding 
‘‘SEC. 3512. GAO STUDY AND REPORT ON CAUSES OF ACTION. 
‘‘(a) S TUDY .— 
‘‘(1) I N GENERAL .—The Comptroller General of the United

States shall conduct a study of whether the development, rec-ognition, or implementation of any guideline or other standards under a provision described in paragraph (2) would result in the establishment of a new cause of action or claim. 
‘‘(2) P
ROVISIONS DESCRIBED .—The provisions described in 
this paragraph include the following: 
‘‘(A) Section 2701 (adult health quality measures). ‘‘(B) Section 2702 (payment adjustments for health care 
acquired conditions).

acquired conditions). 
‘‘(C) Section 3001 (Hospital Value-Based Purchase Pro-
gram). 
‘‘(D) Section 3002 (improvements to the Physician 
Quality Reporting Initiative). 
‘‘(E) Section 3003 (improvements to the Physician Feed-
back Program). 
‘‘(F) Section 3007 (value based payment modifier under 
physician fee schedule). 
‘‘(G) Section 3008 (payment adjustment for conditions 
acquired in hospitals).

acquired in hospitals). 
‘‘(H) Section 3013 (quality measure development). ‘‘(I) Section 3014 (quality measurement). ‘‘(J) Section 3021 (Establishment of Center for Medi-
care and Medicaid Innovation). 
‘‘(K) Section 3025 (hospital readmission reduction pro-
gram). 
‘‘(L) Section 3501 (health care delivery system research, 
quality improvement). 
‘‘(M) Section 4003 (Task Force on Clinical and Preven-
tive Services). 
‘‘(N) Section 4301 (research to optimize deliver of public 
health services).

health services). 
‘‘(b) R
EPORT .—Not later than 2 years after the date of enact-
ment of this Act, the Comptroller General of the United States shall submit to the appropriate committees of Congress, a report containing the findings made by the Comptroller General under the study under subsection (a).’’. 
SEC. 10202. INCENTIVES FOR STATES TO OFFER HOME AND COMMU-
NITY-BASED SERVICES AS A LONG-TERM CARE ALTER-NATIVE TO NURSING HOMES. 
(a) S TATE BALANCING INCENTIVE PAYMENTS PROGRAM .—Not-

withstanding section 1905(b) of the Social Security Act (42 U.S.C. 1396d(b)), in the case of a balancing incentive payment State,

as defined in subsection (b), that meets the conditions described in subsection (c), during the balancing incentive period, the Federal medical assistance percentage determined for the State under sec-tion 1905(b) of such Act and, if applicable, increased under sub-section (z) or (aa) shall be increased by the applicable percentage points determined under subsection (d) with respect to eligible medical assistance expenditures described in subsection (e). 
(b) B

(b) B
ALANCING INCENTIVE PAYMENT STATE .—A balancing incen-
tive payment State is a State— 42 USC 1396d note. 
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124 STAT. 924 PUBLIC LAW 111–148—MAR. 23, 2010 
(1) in which less than 50 percent of the total expenditures 
for medical assistance under the State Medicaid program for a fiscal year for long-term services and supports (as defined by the Secretary under subsection (f))(1)) are for non-institution-ally-based long-term services and supports described in sub-section (f)(1)(B); 
(2) that submits an application and meets the conditions 
described in subsection (c); and

described in subsection (c); and 
(3) that is selected by the Secretary to participate in the 
State balancing incentive payment program established under this section. (c) C
ONDITIONS .—The conditions described in this subsection 
are the following: 
(1) A PPLICATION .—The State submits an application to the 
Secretary that includes, in addition to such other information as the Secretary shall require— 
(A) a proposed budget that details the State’s plan

to expand and diversify medical assistance for non-institu-tionally-based long-term services and supports described in subsection (f)(1)(B) under the State Medicaid program during the balancing incentive period and achieve the tar-get spending percentage applicable to the State under para-graph (2), including through structural changes to how the State furnishes such assistance, such as through the establishment of a ‘‘no wrong door—single entry point system’’, optional presumptive eligibility,

point system’’, optional presumptive eligibility, case management services, and the use of core standardized assessment instruments, and that includes a description of the new or expanded offerings of such services that the State will provide and the projected costs of such services; and

the provision of home and community-based services under its State Medicaid program through a State plan amend-ment under section 1915(i) of the Social Security Act, at the option of the State, an election to increase the income eligibility for such services from 150 percent of the poverty line to such higher percentage as the State may establish for such purpose, not to exceed 300 percent of the supple-mental security income benefit rate established by section 1611(b)(1) of the Social Security

by section 1611(b)(1) of the Social Security Act (42 U.S.C. 1382(b)(1)). (2) T

ARGET SPENDING PERCENTAGES .— 
(A) In the case of a balancing incentive payment State 
in which less than 25 percent of the total expenditures for long-term services and supports under the State Med-icaid program for fiscal year 2009 are for home and commu-nity-based services, the target spending percentage for the

State to achieve by not later than October 1, 2015, is that 25 percent of the total expenditures for long-term services and supports under the State Medicaid program are for home and community-based services. 
(B) In the case of any other balancing incentive pay-

ment State, the target spending percentage for the State to achieve by not later than October 1, 2015, is that 50 percent of the total expenditures for long-term services and supports under the State Medicaid program are for home and community-based services. Deadlines. 
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124 STAT. 925 PUBLIC LAW 111–148—MAR. 23, 2010 
(3) M AINTENANCE OF ELIGIBILITY REQUIREMENTS .—The 
State does not apply eligibility standards, methodologies, or procedures for determining eligibility for medical assistance for non-institutionally-based long-term services and supports described in subsection (f)(1)(B) under the State Medicaid pro-gram that are more restrictive than the eligibility standards, methodologies, or procedures in effect for such purposes on December 31, 2010. 
(4) U

(4) U
SE OF ADDITIONAL FUNDS .—The State agrees to use 
the additional Federal funds paid to the State as a result of this section only for purposes of providing new or expanded offerings of non-institutionally-based long-term services and supports described in subsection (f)(1)(B) under the State Med-icaid program. 
(5) S
TRUCTURAL CHANGES .—The State agrees to make, not

later than the end of the 6-month period that begins on the date the State submits an application under this section, the following changes: 
(A) ‘‘N
O WRONG DOOR —SINGLE ENTRY POINT SYSTEM ’’.—

Development of a statewide system to enable consumers to access all long-term services and supports through an agency, organization, coordinated network, or portal, in accordance with such standards as the State shall establish and that shall provide information regarding the avail-ability of such services, how to apply for such services, referral services for services and supports otherwise avail-able in the community, and determinations of financial and functional eligibility for such

of financial and functional eligibility for such services and supports, or assistance with assessment processes for financial and functional eligibility.

(B) C
ONFLICT -FREE CASE MANAGEMENT SERVICES .—Con-
flict-free case management services to develop a service plan, arrange for services and supports, support the bene-ficiary (and, if appropriate, the beneficiary’s caregivers) in directing the provision of services and supports for the beneficiary, and conduct ongoing monitoring to assure that services and supports are delivered to meet the bene-ficiary’s needs and achieve intended outcomes. 
(C) C
ORE STANDARDIZED ASSESSMENT INSTRUMENTS .—

(C) C
ORE STANDARDIZED ASSESSMENT INSTRUMENTS .— 
Development of core standardized assessment instruments for determining eligibility for non-institutionally-based long-term services and supports described in subsection (f)(1)(B), which shall be used in a uniform manner through-out the State, to determine a beneficiary’s needs for training, support services, medical care, transportation, and other services, and develop an individual service plan to 
address such needs. (6) D

ATA COLLECTION .—The State agrees to collect from 
providers of services and through such other means as the State determines appropriate the following data: 
(A) S
ERVICES DATA .—Services data from providers of

ERVICES DATA .—Services data from providers of 
non-institutionally-based long-term services and supports described in subsection (f)(1)(B) on a per-beneficiary basis and in accordance with such standardized coding proce-dures as the State shall establish in consultation with the Secretary. Procedures. Standards. Deadline. 
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124 STAT. 926 PUBLIC LAW 111–148—MAR. 23, 2010 
(B) Q UALITY DATA .—Quality data on a selected set 
of core quality measures agreed upon by the Secretary and the State that are linked to population-specific out-comes measures and accessible to providers. 
(C) O
UTCOMES MEASURES .—Outcomes measures data 
on a selected set of core population-specific outcomes meas-ures agreed upon by the Secretary and the State that are accessible to providers and include—

(i) measures of beneficiary and family caregiver 
experience with providers; 
(ii) measures of beneficiary and family caregiver 
satisfaction with services; and 
(iii) measures for achieving desired outcomes 
appropriate to a specific beneficiary, including employ-ment, participation in community life, health stability, and prevention of loss in function. 
(d) A
PPLICABLE PERCENTAGE POINTS INCREASE IN FMAP.—The 
applicable percentage points increase is—

applicable percentage points increase is— 
(1) in the case of a balancing incentive payment State 
subject to the target spending percentage described in sub-section (c)(2)(A), 5 percentage points; and 
(2) in the case of any other balancing incentive payment 
State, 2 percentage points. (e) E
LIGIBLE MEDICAL ASSISTANCE EXPENDITURES .— 
(1) I N GENERAL .—Subject to paragraph (2), medical assist-

ance described in this subsection is medical assistance for non- institutionally-based long-term services and supports described in subsection (f)(1)(B) that is provided by a balancing incentive payment State under its State Medicaid program during the balancing incentive payment period. 
(2) L
IMITATION ON PAYMENTS .—In no case may the aggre-

gate amount of payments made by the Secretary to balancing incentive payment States under this section during the bal-ancing incentive period exceed $3,000,000,000. (f) D
(1) L ONG-TERM SERVICES AND SUPPORTS DEFINED .—The 
term ‘‘long-term services and supports’’ has the meaning given that term by Secretary and may include any of the following (as defined for purposes of State Medicaid programs): 
(A) I

(A) I
NSTITUTIONALLY -BASED LONG -TERM SERVICES AND  
SUPPORTS .—Services provided in an institution, including 
(i) Nursing facility services. (ii) Services in an intermediate care facility for 
the mentally retarded described in subsection (a)(15) of section 1905 of such Act. (B) N
ON-INSTITUTIONALLY -BASED LONG -TERM SERVICES  
AND SUPPORTS .—Services not provided in an institution, 
including the following: 
(i) Home and community-based services provided

(i) Home and community-based services provided 
under subsection (c), (d), or (i) of section 1915 of such Act or under a waiver under section 1115 of such Act. 
(ii) Home health care services. (iii) Personal care services. 
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124 STAT. 927 PUBLIC LAW 111–148—MAR. 23, 2010 
(iv) Services described in subsection (a)(26) of sec-
tion 1905 of such Act (relating to PACE program serv-ices). 
(v) Self-directed personal assistance services 
described in section 1915(j) of such Act. 
(2) B
ALANCING INCENTIVE PERIOD .—The term ‘‘balancing 
incentive period’’ means the period that begins on October 1, 2011, and ends on September 30, 2015. 
(3) P
OVERTY LINE .—The term ‘‘poverty line’’ has the

OVERTY LINE .—The term ‘‘poverty line’’ has the 
(4) S
TATE MEDICAID PROGRAM .—The term ‘‘State Medicaid 
program’’ means the State program for medical assistance pro-vided under a State plan under title XIX of the Social Security Act and under any waiver approved with respect to such State plan. 
SEC. 10203. EXTENSION OF FUNDING FOR CHIP THROUGH FISCAL YEAR

2015 AND OTHER CHIP-RELATED PROVISIONS. 
(a) Section 1311(c)(1) of this Act is amended by striking ‘‘and’’ 
at the end of subparagraph (G), by striking the period at the end of subparagraph (H) and inserting ‘‘; and’’, and by adding at the end the following: 
‘‘(I) report to the Secretary at least annually and in

such manner as the Secretary shall require, pediatric quality reporting measures consistent with the pediatric quality reporting measures established under section 1139A of the Social Security Act.’’. 
(b) Effective as if included in the enactment of the Children’s 
Health Insurance Program Reauthorization Act of 2009 (Public Law 111–3): 
(1) Section 1906(e)(2) of the Social Security Act (42 U.S.C.

1396e(e)(2)) is amended by striking ‘‘means’’ and all that follows through the period and inserting ‘‘has the meaning given that term in section 2105(c)(3)(A).’’. 
(2)(A) Section 1906A(a) of the Social Security Act (42 U.S.C. 
1396e–1(a)), is amended by inserting before the period the following: ‘‘and the offering of such a subsidy is cost-effective, 
as defined for purposes of section 2105(c)(3)(A)’’. 
(B) This Act shall be applied without regard to subpara-

graph (A) of section 2003(a)(1) of this Act and that subpara-graph and the amendment made by that subparagraph are hereby deemed null, void, and of no effect. 
(3) Section 2105(c)(10) of the Social Security Act (42 U.S.C. 
1397ee(c)(10)) is amended— 
(A) in subparagraph (A), in the first sentence, by 
inserting before the period the following: ‘‘if the offering of such a subsidy is cost-effective, as defined for purposes of paragraph (3)(A)’’;

(B) by striking subparagraph (M); and (C) by redesignating subparagraph (N) as subpara-
graph (M). (4) Section 2105(c)(3)(A) of the Social Security Act (42 
U.S.C. 1397ee(c)(3)(A)) is amended— 
(A) in the matter preceding clause (i), by striking ‘‘to’’ 
and inserting ‘‘to—’’; and Applicability. 
42 USC 1396e–1 and note. Effective date. 
42 USC 1396e note. Reports. 
Deadline. 42 USC 18031.

Deadline. 42 USC 18031. 
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124 STAT. 928 PUBLIC LAW 111–148—MAR. 23, 2010 
(B) in clause (ii), by striking the period and inserting 
a semicolon. 
(c) Section 2105 of the Social Security Act (42 U.S.C. 1397ee), 
as amended by section 2101, is amended— 
(1) in subsection (b), in the second sentence, by striking 
‘‘2013’’ and inserting ‘‘2015’’; and 
(i) in the first sentence, by inserting ‘‘as a condition 
of receiving payments under section 1903(a),’’ after ‘‘2019,’’;

(ii) in clause (i), by striking ‘‘or’’ at the end; (iii) by redesignating clause (ii) as clause (iii); and (iv) by inserting after clause (i), the following: ‘‘(ii) after September 30, 2015, enrolling children 
eligible to be targeted low-income children under the State child health plan in a qualified health plan that has been certified by the Secretary under subparagraph (C); or’’; (B) in subparagraph (B), by striking ‘‘provided cov-

erage’’ and inserting ‘‘screened for eligibility for medical assistance under the State plan under title XIX or a waiver of that plan and, if found eligible, enrolled in such plan or a waiver. In the case of such children who, as a result of such screening, are determined to not be eligible for medical assistance under the State plan or a waiver under title XIX, the State shall establish procedures to ensure that the children are enrolled in a qualified health plan that has been certified by

qualified health plan that has been certified by the Secretary under subpara-graph (C) and is offered’’; and

(C) by adding at the end the following: ‘‘(C) C
ERTIFICATION OF COMPARABILITY OF PEDIATRIC  
COVERAGE OFFERED BY QUALIFIED HEALTH PLANS .—With

respect to each State, the Secretary, not later than April 1, 2015, shall review the benefits offered for children and the cost-sharing imposed with respect to such benefits by qualified health plans offered through an Exchange estab-lished by the State under section 1311 of the Patient Protec-tion and Affordable Care Act and shall certify those plans that offer benefits for children and impose cost-sharing with respect to such benefits that the Secretary determines are at least comparable to

Secretary determines are at least comparable to the benefits offered and cost- sharing protections provided under the State child health plan.’’.

(d)(1) Section 2104(a) of such Act (42 U.S.C. 1397dd(a)) is 
amended— 
(A) in paragraph (15), by striking ‘‘and’’ at the end; and (B) by striking paragraph (16) and inserting the following: ‘‘(16) for fiscal year 2013, $17,406,000,000; ‘‘(17) for fiscal year 2014, $19,147,000,000; and ‘‘(18) for fiscal year 2015, for purposes of making 2 semi- 
annual allotments— 
‘‘(A) $2,850,000,000 for the period beginning on October 
1, 2014, and ending on March 31, 2015, and

1, 2014, and ending on March 31, 2015, and 
‘‘(B) $2,850,000,000 for the period beginning on April 
1, 2015, and ending on September 30, 2015.’’. Deadline. 
Review. Determination. Procedures. 
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124 STAT. 929 PUBLIC LAW 111–148—MAR. 23, 2010 
(2)(A) Section 2104(m) of such Act (42 U.S.C. 1397dd(m)), as 
amended by section 2102(a)(1), is amended— 
(i) in the subsection heading, by striking ‘‘2013’’ and 
inserting ‘‘2015’’; 
(I) in the paragraph heading, by striking ‘‘ 2012’’ and 
inserting ‘‘ 2014’’; and 
(II) by adding at the end the following: ‘‘(B) F
ISCAL YEARS 2013 AND 2014 .—Subject to para-

graphs (4) and (6), from the amount made available under paragraphs (16) and (17) of subsection (a) for fiscal years 2013 and 2014, respectively, the Secretary shall compute a State allotment for each State (including the District of Columbia and each commonwealth and territory) for each such fiscal year as follows: 
‘‘(i) R
EBASING IN FISCAL YEAR 2013 .—For fiscal year

2013, the allotment of the State is equal to the Federal payments to the State that are attributable to (and countable towards) the total amount of allotments available under this section to the State in fiscal year 2012 (including payments made to the State under subsection (n) for fiscal year 2012 as well as amounts redistributed to the State in fiscal year 2012), multi-plied by the allotment increase factor under paragraph (5) for fiscal year 2013. 
‘‘(ii) G

‘‘(ii) G
ROWTH FACTOR UPDATE FOR FISCAL YEAR  
2014.—For fiscal year 2014, the allotment of the State 
is equal to the sum of— 
‘‘(I) the amount of the State allotment under 
clause (i) for fiscal year 2013; and 
‘‘(II) the amount of any payments made to 
the State under subsection (n) for fiscal year 2013, 
multiplied by the allotment increase factor under para-graph (5) for fiscal year 2014.’’; (iii) in paragraph (3)— 
(I) in the paragraph heading, by striking ‘‘
2013’’

2013’’ 
and inserting ‘‘ 2015’’; 
(II) in subparagraphs (A) and (B), by striking 
‘‘paragraph (16)’’ each place it appears and inserting ‘‘paragraph (18)’’; 
(III) in subparagraph (C)— 
(aa) by striking ‘‘2012’’ each place it appears 
and inserting ‘‘2014’’; and 
(bb) by striking ‘‘2013’’ and inserting ‘‘2015’’; 
and (IV) in subparagraph (D)— 
(aa) in clause (i)(I), by striking ‘‘subsection 
(a)(16)(A)’’ and inserting ‘‘subsection (a)(18)(A)’’; and

(bb) in clause (ii)(II), by striking ‘‘subsection 
(a)(16)(B)’’ and inserting ‘‘subsection (a)(18)(B)’’; 
(iv) in paragraph (4), by striking ‘‘2013’’ and inserting 
‘‘2015’’; 
(v) in paragraph (6)— 
(I) in subparagraph (A), by striking ‘‘2013’’ and 
inserting ‘‘2015’’; and Allotment. 
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124 STAT. 930 PUBLIC LAW 111–148—MAR. 23, 2010 
(II) in the flush language after and below subpara-
graph (B)(ii), by striking ‘‘or fiscal year 2012’’ and inserting ‘‘, fiscal year 2012, or fiscal year 2014’’; and (vi) in paragraph (8)— 
2013’’ 
and inserting ‘‘ 2015’’; and 
(II) by striking ‘‘2013’’ and inserting ‘‘2015’’. 
(B) Section 2104(n) of such Act (42 U.S.C. 1397dd(n)) is 
amended— 
(i) in paragraph (2)— 
(I) in subparagraph (A)(ii)—

(I) in subparagraph (A)(ii)— 
(aa) by striking ‘‘2012’’ and inserting ‘‘2014’’; and (bb) by striking ‘‘2013’’ and inserting ‘‘2015’’; 
(aa) by striking ‘‘2012’’ and inserting ‘‘2014’’; and (bb) by striking ‘‘2013’’ and inserting ‘‘2015’’; and 
(ii) in paragraph (3)(A), by striking ‘‘or a semi-annual allot-

ment period for fiscal year 2013’’ and inserting ‘‘fiscal year 2013, fiscal year 2014, or a semi-annual allotment period for fiscal year 2015’’. (C) Section 2105(g)(4) of such Act (42 U.S.C. 1397ee(g)(4)) is 
amended— 
(i) in the paragraph heading, by striking ‘‘
2013’’ and 
inserting ‘‘ 2015’’; and 
(ii) in subparagraph (A), by striking ‘‘2013’’ and inserting 
‘‘2015’’. (D) Section 2110(b) of such Act (42 U.S.C. 1397jj(b)) is 
amended—

amended— 
(i) in paragraph (2)(B), by inserting ‘‘except as provided 
in paragraph (6),’’ before ‘‘a child’’; and 
(ii) by adding at the end the following new paragraph: ‘‘(6) E
XCEPTIONS TO EXCLUSION OF CHILDREN OF EMPLOYEES  
OF A PUBLIC AGENCY IN THE STATE .— 
‘‘(A) I N GENERAL .—A child shall not be considered to 
be described in paragraph (2)(B) if— 
‘‘(i) the public agency that employs a member of 
the child’s family to which such paragraph applies satisfies subparagraph (B); or

‘‘(ii) subparagraph (C) applies to such child. 
‘‘(B) M
AINTENANCE OF EFFORT WITH RESPECT TO PER  
PERSON AGENCY CONTRIBUTION FOR FAMILY COVERAGE .— 
For purposes of subparagraph (A)(i), a public agency satis-fies this subparagraph if the amount of annual agency expenditures made on behalf of each employee enrolled in health coverage paid for by the agency that includes dependent coverage for the most recent State fiscal year

is not less than the amount of such expenditures made by the agency for the 1997 State fiscal year, increased by the percentage increase in the medical care expenditure category of the Consumer Price Index for All-Urban Con-sumers (all items: U.S. City Average) for such preceding fiscal year. 
‘‘(C) H
ARDSHIP EXCEPTION .—For purposes of subpara-

graph (A)(ii), this subparagraph applies to a child if the State determines, on a case-by-case basis, that the annual aggregate amount of premiums and cost-sharing imposed Applicability. Applicability. 
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124 STAT. 931 PUBLIC LAW 111–148—MAR. 23, 2010 
for coverage of the family of the child would exceed 5 
percent of such family’s income for the year involved.’’. 
(E) Section 2113 of such Act (42 U.S.C. 1397mm) is amended— 
(i) in subsection (a)(1), by striking ‘‘2013’’ and inserting 
‘‘2015’’; and 
(ii) in subsection (g), by striking ‘‘$100,000,000 for the

period of fiscal years 2009 through 2013’’ and inserting ‘‘$140,000,000 for the period of fiscal years 2009 through 2015’’. (F) Section 108 of Public Law 111–3 is amended by striking

‘‘$11,706,000,000’’ and all that follows through the second sentence and inserting ‘‘$15,361,000,000 to accompany the allotment made for the period beginning on October 1, 2014, and ending on March 31, 2015, under section 2104(a)(18)(A) of the Social Security Act (42 U.S.C. 1397dd(a)(18)(A)), to remain available until expended. Such amount shall be used to provide allotments to States under paragraph (3) of section 2104(m) of the Social Security Act (42 U.S.C. 1397dd(m)) for the first 6 months

Act (42 U.S.C. 1397dd(m)) for the first 6 months of fiscal year 2015 in the same manner as allotments are provided under subsection (a)(18)(A) of such section 2104 and subject to the same terms and conditions as apply to the allotments provided from such sub-section (a)(18)(A).’’.

PART II—SUPPORT FOR PREGNANT AND 
PARENTING TEENS AND WOMEN 
SEC. 10211. DEFINITIONS. 
In this part: 
(1) A CCOMPANIMENT .—The term ‘‘accompaniment’’ means 
assisting, representing, and accompanying a woman in seeking judicial relief for child support, child custody, restraining orders, and restitution for harm to persons and property, and 
in filing criminal charges, and may include the payment of court costs and reasonable attorney and witness fees associated therewith. 
(2) E

(2) E
LIGIBLE INSTITUTION OF HIGHER EDUCATION .—The term 
‘‘eligible institution of higher education’’ means an institution of higher education (as such term is defined in section 101 of the Higher Education Act of 1965 (20 U.S.C. 1001)) that has established and operates, or agrees to establish and operate upon the receipt of a grant under this part, a pregnant and parenting student services office. 
(3) C
OMMUNITY SERVICE CENTER .—The term ‘‘community

OMMUNITY SERVICE CENTER .—The term ‘‘community 
service center’’ means a non-profit organization that provides social services to residents of a specific geographical area via direct service or by contract with a local governmental agency. 
(4) H
IGH SCHOOL .—The term ‘‘high school’’ means any 
public or private school that operates grades 10 through 12, inclusive, grades 9 through 12, inclusive or grades 7 through 12, inclusive. 
(5) I
NTERVENTION SERVICES .—The term ‘‘intervention serv-

ices’’ means, with respect to domestic violence, sexual violence, sexual assault, or stalking, 24-hour telephone hotline services for police protection and referral to shelters. 
(6) S
of Health and Human Services. 42 USC 18201. Applicability. Time period. 
123 Stat. 25. 
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124 STAT. 932 PUBLIC LAW 111–148—MAR. 23, 2010 
(7) S TATE .—The term ‘‘State’’ includes the District of 
Columbia, any commonwealth, possession, or other territory of the United States, and any Indian tribe or reservation. 
(8) S
UPPORTIVE SOCIAL SERVICES .—The term ‘‘supportive 
social services’’ means transitional and permanent housing, vocational counseling, and individual and group counseling aimed at preventing domestic violence, sexual violence, sexual assault, or stalking. 
(9) V

(9) V
IOLENCE .—The term ‘‘violence’’ means actual violence 
and the risk or threat of violence. 
SEC. 10212. ESTABLISHMENT OF PREGNANCY ASSISTANCE FUND. 
(a) I NGENERAL .—The Secretary, in collaboration and coordina-
tion with the Secretary of Education (as appropriate), shall establish a Pregnancy Assistance Fund to be administered by the Secretary, for the purpose of awarding competitive grants to States to assist pregnant and parenting teens and women. 
(b) U

(b) U
SE OF FUND.—A State may apply for a grant under sub-
section (a) to carry out any activities provided for in section 10213. 
(c) A PPLICATIONS .—To be eligible to receive a grant under sub-

section (a), a State shall submit to the Secretary an application at such time, in such manner, and containing such information as the Secretary may require, including a description of the pur-poses for which the grant is being requested and the designation of a State agency for receipt and administration of funding received under this part. 
SEC. 10213. PERMISSIBLE USES OF FUND. 
(a) I NGENERAL .—A State shall use amounts received under

a grant under section 10212 for the purposes described in this section to assist pregnant and parenting teens and women. 
(b) I
NSTITUTIONS OF HIGHER EDUCATION .— 
(1) I N GENERAL .—A State may use amounts received under

a grant under section 10212 to make funding available to eligible institutions of higher education to enable the eligible institutions to establish, maintain, or operate pregnant and parenting student services. Such funding shall be used to supplement, not supplant, existing funding for such services. 
(2) A
PPLICATION .—An eligible institution of higher edu-

cation that desires to receive funding under this subsection shall submit an application to the designated State agency at such time, in such manner, and containing such information as the State agency may require. 
(3) M
ATCHING REQUIREMENT .—An eligible institution of

ATCHING REQUIREMENT .—An eligible institution of 
higher education that receives funding under this subsection shall contribute to the conduct of the pregnant and parenting student services office supported by the funding an amount from non-Federal funds equal to 25 percent of the amount of the funding provided. The non-Federal share may be in cash or in-kind, fairly evaluated, including services, facilities, supplies, or equipment. 
(4) U
SE OF FUNDS FOR ASSISTING PREGNANT AND PARENTING

COLLEGE STUDENTS .—An eligible institution of higher education 
that receives funding under this subsection shall use such funds to establish, maintain or operate pregnant and parenting student services and may use such funding for the following programs and activities: Grants. 42 USC 18203. Grants. 
42 USC 18202. 
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124 STAT. 933 PUBLIC LAW 111–148—MAR. 23, 2010 
(A) Conduct a needs assessment on campus and within 
the local community— 
(i) to assess pregnancy and parenting resources, 
located on the campus or within the local community, that are available to meet the needs described in subparagraph (B); and 
(ii) to set goals for— 
(I) improving such resources for pregnant, par-
enting, and prospective parenting students; and 
(II) improving access to such resources.

(II) improving access to such resources. 
(B) Annually assess the performance of the eligible 
institution in meeting the following needs of students enrolled in the eligible institution who are pregnant or are parents: 
(i) The inclusion of maternity coverage and the 
availability of riders for additional family members in student health care. 
(ii) Family housing. (iii) Child care. (iv) Flexible or alternative academic scheduling,

such as telecommuting programs, to enable pregnant or parenting students to continue their education or stay in school. 
(v) Education to improve parenting skills for moth-
ers and fathers and to strengthen marriages. 
(vi) Maternity and baby clothing, baby food 
(including formula), baby furniture, and similar items to assist parents and prospective parents in meeting the material needs of their children. 
(vii) Post-partum counseling. 
(C) Identify public and private service providers,

located on the campus of the eligible institution or within the local community, that are qualified to meet the needs described in subparagraph (B), and establishes programs with qualified providers to meet such needs. 
(D) Assist pregnant and parenting students, fathers 
or spouses in locating and obtaining services that meet the needs described in subparagraph (B). 
(E) If appropriate, provide referrals for prenatal care

and delivery, infant or foster care, or adoption, to a student who requests such information. An office shall make such referrals only to service providers that serve the following types of individuals: 
(i) Parents. (ii) Prospective parents awaiting adoption. (iii) Women who are pregnant and plan on par-
enting or placing the child for adoption. 
(iv) Parenting or prospective parenting couples. 
(5) R
(A) A NNUAL REPORT BY INSTITUTIONS .—

(A) A NNUAL REPORT BY INSTITUTIONS .— 
(i) I N GENERAL .—For each fiscal year that an 
eligible institution of higher education receives funds under this subsection, the eligible institution shall pre-pare and submit to the State, by the date determined by the State, a report that— 
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124 STAT. 934 PUBLIC LAW 111–148—MAR. 23, 2010 
(I) itemizes the pregnant and parenting stu-
dent services office’s expenditures for the fiscal year; 
(II) contains a review and evaluation of the 
performance of the office in fulfilling the require-ments of this section, using the specific perform-ance criteria or standards established under subparagraph (B)(i); and 
(III) describes the achievement of the office

(III) describes the achievement of the office 
in meeting the needs listed in paragraph (4)(B) of the students served by the eligible institution, and the frequency of use of the office by such students. (ii) P
ERFORMANCE CRITERIA .—Not later than 180 
days before the date the annual report described in clause (i) is submitted, the State— 
(I) shall identify the specific performance cri-
teria or standards that shall be used to prepare the report; and

(II) may establish the form or format of the 
report. 
(B) R
EPORT BY STATE .—The State shall annually pre-
pare and submit a report on the findings under this sub-section, including the number of eligible institutions of higher education that were awarded funds and the number of students served by each pregnant and parenting student services office receiving funds under this section, to the Secretary. 
(c) S
UPPORT FOR PREGNANT AND PARENTING TEENS .—A State

may use amounts received under a grant under section 10212 to make funding available to eligible high schools and community service centers to establish, maintain or operate pregnant and par-enting services in the same general manner and in accordance with all conditions and requirements described in subsection (b), except that paragraph (3) of such subsection shall not apply for purposes of this subsection. 
(d) I
MPROVING SERVICES FOR PREGNANT WOMEN WHOAREVIC-

TIMS OF DOMESTIC VIOLENCE , SEXUAL VIOLENCE , SEXUAL ASSAULT , 
AND STALKING .— 
(1) I N GENERAL .—A State may use amounts received under 
a grant under section 10212 to make funding available tp its State Attorney General to assist Statewide offices in pro-viding— 
(A) intervention services, accompaniment, and sup-
portive social services for eligible pregnant women who are victims of domestic violence, sexual violence, sexual

assault, or stalking. 
(B) technical assistance and training (as described in 
subsection (c)) relating to violence against eligible pregnant women to be made available to the following: 
(i) Federal, State, tribal, territorial, and local 
governments, law enforcement agencies, and courts. 
(ii) Professionals working in legal, social service, 
and health care settings. 
(iii) Nonprofit organizations. (iv) Faith-based organizations. Deadline.

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124 STAT. 935 PUBLIC LAW 111–148—MAR. 23, 2010 
(2) E LIGIBILITY .—To be eligible for a grant under paragraph 
(1), a State Attorney General shall submit an application to the designated State agency at such time, in such manner, and containing such information, as specified by the State. 
(3) T
ECHNICAL ASSISTANCE AND TRAINING DESCRIBED .—For 
purposes of paragraph (1)(B), technical assistance and training is— 
(A) the identification of eligible pregnant women

experiencing domestic violence, sexual violence, sexual assault, or stalking; 
(B) the assessment of the immediate and short-term 
safety of such a pregnant woman, the evaluation of the impact of the violence or stalking on the pregnant woman’s health, and the assistance of the pregnant woman in devel-oping a plan aimed at preventing further domestic violence, sexual violence, sexual assault, or stalking, as appropriate; 
(C) the maintenance of complete medical or forensic

records that include the documentation of any examination, treatment given, and referrals made, recording the location and nature of the pregnant woman’s injuries, and the establishment of mechanisms to ensure the privacy and confidentiality of those medical records; and 
(D) the identification and referral of the pregnant 
woman to appropriate public and private nonprofit entities that provide intervention services, accompaniment, and supportive social services. (4) E

LIGIBLE PREGNANT WOMAN .—In this subsection, the 
term ‘‘eligible pregnant woman’’ means any woman who is pregnant on the date on which such woman becomes a victim of domestic violence, sexual violence, sexual assault, or stalking or who was pregnant during the one-year period before such date. (e) P
UBLIC AWARENESS AND EDUCATION .—A State may use

amounts received under a grant under section 10212 to make funding available to increase public awareness and education con-cerning any services available to pregnant and parenting teens and women under this part, or any other resources available to pregnant and parenting women in keeping with the intent and purposes of this part. The State shall be responsible for setting guidelines or limits as to how much of funding may be utilized for public awareness and education in any funding award.

SEC. 10214. APPROPRIATIONS. 
There is authorized to be appropriated, and there are appro-
priated, $25,000,000 for each of fiscal years 2010 through 2019, to carry out this part. 
PART III—INDIAN HEALTH CARE 
SEC. 10221. INDIAN HEALTH CARE IMPROVEMENT. 
(a) I NGENERAL .—Except as provided in subsection (b), S. 1790

entitled ‘‘A bill to amend the Indian Health Care Improvement Act to revise and extend that Act, and for other purposes.’’, as reported by the Committee on Indian Affairs of the Senate in December 2009, is enacted into law. 
(b) A
MENDMENTS .— Incorporation by reference. 25 USC 1601 et seq . 42 USC 18204. Guidelines. Definition.

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124 STAT. 936 PUBLIC LAW 111–148—MAR. 23, 2010 
(1) Section 119 of the Indian Health Care Improvement 
Act (as amended by section 111 of the bill referred to in sub-section (a)) is amended— 
(A) in subsection (d)— 
(i) in paragraph (2), by striking ‘‘In establishing’’ 
and inserting ‘‘Subject to paragraphs (3) and (4), in establishing’’; and 
(ii) by adding at the end the following: 
‘‘(3) E
LECTION OF INDIAN TRIBE OR TRIBAL ORGANIZATION .— 
‘‘(A) I N GENERAL .—Subparagraph (B) of paragraph (2)

shall not apply in the case of an election made by an Indian tribe or tribal organization located in a State (other than Alaska) in which the use of dental health aide thera-pist services or midlevel dental health provider services is authorized under State law to supply such services in accordance with State law. 
‘‘(B) A
CTION BY SECRETARY .—On an election by an

CTION BY SECRETARY .—On an election by an 
Indian tribe or tribal organization under subparagraph (A), the Secretary, acting through the Service, shall facilitate implementation of the services elected. ‘‘(4) V
ACANCIES .—The Secretary shall not fill any vacancy 
for a certified dentist in a program operated by the Service with a dental health aide therapist.’’; and 
‘‘(e) E
FFECT OF SECTION .—Nothing in this section shall restrict

the ability of the Service, an Indian tribe, or a tribal organization to participate in any program or to provide any service authorized by any other Federal law.’’. 
(2) The Indian Health Care Improvement Act (as amended 
by section 134(b) of the bill referred to in subsection (a)) is amended by striking section 125 (relating to treatment of schol-arships for certain purposes). 
(3) Section 806 of the Indian Health Care Improvement 
Act (25 U.S.C. 1676) is amended—

Act (25 U.S.C. 1676) is amended— 
(A) by striking ‘‘Any limitation’’ and inserting the fol-
lowing: 
‘‘(a) HHS A
PPROPRIATIONS .—Any limitation’’; and 
‘‘(b) L IMITATIONS PURSUANT TO OTHER FEDERAL LAW.—Any 
limitation pursuant to other Federal laws on the use of Federal funds appropriated to the Service shall apply with respect to the performance or coverage of abortions.’’. 
(4) The bill referred to in subsection (a) is amended by

striking section 201. 
SEC. 10301. PLANS FOR A VALUE-BASED PURCHASING PROGRAM FOR 
AMBULATORY SURGICAL CENTERS. 
(a) I NGENERAL .—Section 3006 is amended by adding at the 
end the following new subsection: 
‘‘(f) A MBULATORY SURGICAL CENTERS .— 
‘‘(1) I N GENERAL .—The Secretary shall develop a plan to 
implement a value-based purchasing program for payments under the Medicare program under title XVIII of the Social 42 USC 1395 l,

1395qq. Applicability. 
Abortions. 25 USC 1616r. 25 USC 1616 l. 
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124 STAT. 937 PUBLIC LAW 111–148—MAR. 23, 2010 
Security Act for ambulatory surgical centers (as described in 
section 1833(i) of the Social Security Act (42 U.S.C. 1395l(i))). 
‘‘(2) D ETAILS .—In developing the plan under paragraph 
(1), the Secretary shall consider the following issues: 
‘‘(A) The ongoing development, selection, and modifica-

tion process for measures (including under section 1890 of the Social Security Act (42 U.S.C. 1395aaa) and section 1890A of such Act, as added by section 3014), to the extent feasible and practicable, of all dimensions of quality and efficiency in ambulatory surgical centers. 
‘‘(B) The reporting, collection, and validation of quality 
data. 
‘‘(C) The structure of value-based payment adjust-

ments, including the determination of thresholds or improvements in quality that would substantiate a pay-ment adjustment, the size of such payments, and the sources of funding for the value-based bonus payments. 
‘‘(D) Methods for the public disclosure of information 
on the performance of ambulatory surgical centers. 
‘‘(E) Any other issues determined appropriate by the 
Secretary. ‘‘(3) C

‘‘(A) consult with relevant affected parties; and ‘‘(B) consider experience with such demonstrations that 
the Secretary determines are relevant to the value-based purchasing program described in paragraph (1). ‘‘(4) R
EPORT TO CONGRESS .—Not later than January 1, 2011, 
the Secretary shall submit to Congress a report containing the plan developed under paragraph (1).’’. (b) T
ECHNICAL .—Section 3006(a)(2)(A) is amended by striking 
clauses (i) and (ii).

clauses (i) and (ii). 
SEC. 10302. REVISION TO NATIONAL STRATEGY FOR QUALITY 
IMPROVEMENT IN HEALTH CARE. 
Section 399HH(a)(2)(B)(iii) of the Public Health Service Act, 
as added by section 3011, is amended by inserting ‘‘(taking into consideration the limitations set forth in subsections (c) and (d) of section 1182 of the Social Security Act)’’ after ‘‘information’’. 
SEC. 10303. DEVELOPMENT OF OUTCOME MEASURES. 
(a) D EVELOPMENT .—Section 931 of the Public Health Service

Act, as added by section 3013(a), is amended by adding at the end the following new subsection: 
‘‘(f) D
EVELOPMENT OF OUTCOME MEASURES .— 
‘‘(1) I N GENERAL .—The Secretary shall develop, and periodi-
cally update (not less than every 3 years), provider-level out-come measures for hospitals and physicians, as well as other providers as determined appropriate by the Secretary. 
‘‘(2) C
ATEGORIES OF MEASURES .—The measures developed

ATEGORIES OF MEASURES .—The measures developed 
under this subsection shall include, to the extent determined appropriate by the Secretary— 
‘‘(A) outcome measurement for acute and chronic dis-
eases, including, to the extent feasible, the 5 most prevalent and resource-intensive acute and chronic medical condi-tions; and 
‘‘(B) outcome measurement for primary and preventa-
tive care, including, to the extent feasible, measurements Deadline. 42 USC 299b–31. 42 USC 280j.

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124 STAT. 938 PUBLIC LAW 111–148—MAR. 23, 2010 
that cover provision of such care for distinct patient popu-
lations (such as healthy children, chronically ill adults, or infirm elderly individuals). ‘‘(3) G
OALS .—In developing such measures, the Secretary 
shall seek to— 
‘‘(A) address issues regarding risk adjustment, account-
ability, and sample size; 
‘‘(B) include the full scope of services that comprise 
a cycle of care; and 
‘‘(C) include multiple dimensions. 
‘‘(4) T IMEFRAME .—

‘‘(4) T IMEFRAME .— 
‘‘(A) A CUTE AND CHRONIC DISEASES .—Not later than 
24 months after the date of enactment of this Act, the Secretary shall develop not less than 10 measures described in paragraph (2)(A). 
‘‘(B) P
RIMARY AND PREVENTIVE CARE .—Not later than 
36 months after the date of enactment of this Act, the Secretary shall develop not less than 10 measures described in paragraph (2)(B).’’. 
(b) H
OSPITAL -ACQUIRED CONDITIONS .—Section 1890A of the

Social Security Act, as amended by section 3013(b), is amended by adding at the end the following new subsection: 
‘‘(f) H
OSPITAL ACQUIRED CONDITIONS .—The Secretary shall, to 
the extent practicable, publicly report on measures for hospital- acquired conditions that are currently utilized by the Centers for Medicare & Medicaid Services for the adjustment of the amount 
of payment to hospitals based on rates of hospital-acquired infec-tions.’’. 
(c) C

(c) C
LINICAL PRACTICE GUIDELINES .—Section 304(b) of the Medi-
care Improvements for Patients and Providers Act of 2008 (Public Law 110–275) is amended by adding at the end the following new paragraph: 
‘‘(4) I
DENTIFICATION .— 
‘‘(A) I N GENERAL .—Following receipt of the report sub-

mitted under paragraph (2), and not less than every 3 years thereafter, the Secretary shall contract with the Institute to employ the results of the study performed under paragraph (1) and the best methods identified by the Institute for the purpose of identifying existing and new clinical practice guidelines that were developed using such best methods, including guidelines listed in the National Guideline Clearinghouse. 
‘‘(B) C
ONSULTATION .—In carrying out the identification

ONSULTATION .—In carrying out the identification 
process under subparagraph (A), the Secretary shall allow for consultation with professional societies, voluntary health care organizations, and expert panels.’’. 
SEC. 10304. SELECTION OF EFFICIENCY MEASURES. 
Sections 1890(b)(7) and 1890A of the Social Security Act, as 
added by section 3014, are amended by striking ‘‘quality’’ each place it appears and inserting ‘‘quality and efficiency’’. 
SEC. 10305. DATA COLLECTION; PUBLIC REPORTING.

SEC. 10305. DATA COLLECTION; PUBLIC REPORTING. 
Section 399II(a) of the Public Health Service Act, as added 
by section 3015, is amended to read as follows: 
‘‘(a) I NGENERAL .— 42 USC 280j–1. 42 USC 1395aaa, 
1395aaa–1. Deadline. 
Contracts. 42 USC 299 note. Public 
1395aaa–1. 
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124 STAT. 939 PUBLIC LAW 111–148—MAR. 23, 2010 
‘‘(1) E STABLISHMENT OF STRATEGIC FRAMEWORK .—The Sec-
retary shall establish and implement an overall strategic frame-work to carry out the public reporting of performance informa-tion, as described in section 399JJ. Such strategic framework may include methods and related timelines for implementing nationally consistent data collection, data aggregation, and analysis methods. 
‘‘(2) C
OLLECTION AND AGGREGATION OF DATA .—The Sec-

retary shall collect and aggregate consistent data on quality and resource use measures from information systems used to support health care delivery, and may award grants or contracts for this purpose. The Secretary shall align such collection and aggregation efforts with the requirements and assistance regarding the expansion of health information technology sys-tems, the interoperability of such technology systems, and related standards that are in effect on the date of enactment of the

are in effect on the date of enactment of the Patient Protection and Affordable Care Act.

‘‘(3) S
COPE .—The Secretary shall ensure that the data 
collection, data aggregation, and analysis systems described in paragraph (1) involve an increasingly broad range of patient populations, providers, and geographic areas over time.’’. 
SEC. 10306. IMPROVEMENTS UNDER THE CENTER FOR MEDICARE AND 
MEDICAID INNOVATION. 
Section 1115A of the Social Security Act, as added by section 
3021, is amended— 
(1) in subsection (a), by inserting at the end the following 
new paragraph:

‘‘(5) T ESTING WITHIN CERTAIN GEOGRAPHIC AREAS .—For pur-
poses of testing payment and service delivery models under this section, the Secretary may elect to limit testing of a model to certain geographic areas.’’; 
(2) in subsection (b)(2)— 
(i) in the second sentence, by striking ‘‘the pre-
ceding sentence may include’’ and inserting ‘‘this subparagraph may include, but are not limited to,’’; and 
(ii) by inserting after the first sentence the fol-

lowing new sentence: ‘‘The Secretary shall focus on models expected to reduce program costs under the applicable title while preserving or enhancing the quality of care received by individuals receiving bene-fits under such title.’’; (B) in subparagraph (B), by adding at the end the 
following new clauses: 
‘‘(xix) Utilizing, in particular in entities located

in medically underserved areas and facilities of the Indian Health Service (whether operated by such Service or by an Indian tribe or tribal organization (as those terms are defined in section 4 of the Indian Health Care Improvement Act)), telehealth services— 
‘‘(I) in treating behavioral health issues (such 
as post-traumatic stress disorder) and stroke; and 
‘‘(II) to improve the capacity of non-medical 
providers and non-specialized medical providers to 42 USC 1315a.

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124 STAT. 940 PUBLIC LAW 111–148—MAR. 23, 2010 
provide health services for patients with chronic 
complex conditions. ‘‘(xx) Utilizing a diverse network of providers of

services and suppliers to improve care coordination for applicable individuals described in subsection (a)(4)(A)(i) with 2 or more chronic conditions and a history of prior-year hospitalization through interven-tions developed under the Medicare Coordinated Care Demonstration Project under section 4016 of the Bal-anced Budget Act of 1997 (42 U.S.C. 1395b–1 note).’’; and (C) in subparagraph (C), by adding at the end the 
following new clause: 
‘‘(viii) Whether the model demonstrates effective

linkage with other public sector or private sector payers.’’; 
(3) in subsection (b)(4), by adding at the end the following 
‘‘(C) M
EASURE SELECTION .—To the extent feasible, the 
Secretary shall select measures under this paragraph that reflect national priorities for quality improvement and patient-centered care consistent with the measures described in 1890(b)(7)(B).’’; and (4) in subsection (c)— 
(A) in paragraph (1)(B), by striking ‘‘care and reduce

spending; and’’ and inserting ‘‘patient care without increasing spending;’’; 
(B) in paragraph (2), by striking ‘‘reduce program 
spending under applicable titles.’’ and inserting ‘‘reduce (or would not result in any increase in) net program spending under applicable titles; and’’; and 
‘‘(3) the Secretary determines that such expansion would 
not deny or limit the coverage or provision of benefits under the applicable title for applicable individuals.

In determining which models or demonstration projects to expand under the preceding sentence, the Secretary shall focus on models and demonstration projects that improve the quality of patient care and reduce spending.’’. 
SEC. 10307. IMPROVEMENTS TO THE MEDICARE SHARED SAVINGS PRO-
GRAM. 
Section 1899 of the Social Security Act, as added by section 
3022, is amended by adding at the end the following new sub-sections: 
‘‘(i) O
PTION TOUSEOTHER PAYMENT MODELS .—

‘‘(i) O
PTION TOUSEOTHER PAYMENT MODELS .— 
‘‘(1) I N GENERAL .—If the Secretary determines appropriate, 
the Secretary may use any of the payment models described in paragraph (2) or (3) for making payments under the program rather than the payment model described in subsection (d). 
‘‘(2) P
ARTIAL CAPITATION MODEL .— 
‘‘(A) I N GENERAL .—Subject to subparagraph (B), a

model described in this paragraph is a partial capitation model in which an ACO is at financial risk for some, but not all, of the items and services covered under parts A and B, such as at risk for some or all physicians’ services or all items and services under part B. The Secretary Determination. 42 USC 1395jjj. Determination.

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124 STAT. 941 PUBLIC LAW 111–148—MAR. 23, 2010 
may limit a partial capitation model to ACOs that are 
highly integrated systems of care and to ACOs capable of bearing risk, as determined to be appropriate by the Secretary. 
‘‘(B) N
O ADDITIONAL PROGRAM EXPENDITURES .—Pay-

‘‘(B) N
ments to an ACO for items and services under this title for beneficiaries for a year under the partial capitation model shall be established in a manner that does not result in spending more for such ACO for such beneficiaries than would otherwise be expended for such ACO for such beneficiaries for such year if the model were not imple-mented, as estimated by the Secretary. ‘‘(3) O
THER PAYMENT MODELS .—

THER PAYMENT MODELS .— 
‘‘(A) I N GENERAL .—Subject to subparagraph (B), a 
model described in this paragraph is any payment model that the Secretary determines will improve the quality and efficiency of items and services furnished under this title. 
‘‘(B) N
Subparagraph (B) of paragraph (2) shall apply to a payment model under subparagraph (A) in a similar manner as such subparagraph (B) applies to the payment model under paragraph (2). 
‘‘(j) I

‘‘(j) I
NVOLVEMENT IN PRIVATE PAYER AND OTHER THIRD PARTY  
ARRANGEMENTS .—The Secretary may give preference to ACOs who 
are participating in similar arrangements with other payers. 
‘‘(k) T REATMENT OF PHYSICIAN GROUP PRACTICE DEMONSTRA -
TION .—During the period beginning on the date of the enactment

of this section and ending on the date the program is established, the Secretary may enter into an agreement with an ACO under the demonstration under section 1866A, subject to rebasing and other modifications deemed appropriate by the Secretary.’’. 
SEC. 10308. REVISIONS TO NATIONAL PILOT PROGRAM ON PAYMENT 
BUNDLING. 
(a) I NGENERAL .—Section 1866D of the Social Security Act, 
as added by section 3023, is amended— 
(1) in paragraph (a)(2)(B), in the matter preceding clause

(i), by striking ‘‘8 conditions’’ and inserting ‘‘10 conditions’’; 
(2) by striking subsection (c)(1)(B) and inserting the fol-
lowing: 
‘‘(B) E XPANSION .—The Secretary may, at any point 
after January 1, 2016, expand the duration and scope of the pilot program, to the extent determined appropriate by the Secretary, if— 
‘‘(i) the Secretary determines that such expansion 
is expected to— 
‘‘(I) reduce spending under title XVIII of the

‘‘(I) reduce spending under title XVIII of the 
Social Security Act without reducing the quality of care; or 
‘‘(II) improve the quality of care and reduce 
spending; ‘‘(ii) the Chief Actuary of the Centers for Medicare 
& Medicaid Services certifies that such expansion would reduce program spending under such title XVIII; and 
Certification. Determinations. 42 USC 
1395cc–4. Time period. 
Contracts. Applicability. Determination. Estimate.

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124 STAT. 942 PUBLIC LAW 111–148—MAR. 23, 2010 
‘‘(iii) the Secretary determines that such expansion 
would not deny or limit the coverage or provision of benefits under this title for individuals.’’; and 
(3) by striking subsection (g) and inserting the following 
new subsection: ‘‘(g) A
PPLICATION OF PILOT PROGRAM TO CONTINUING CAREHOS-
PITALS .— 
‘‘(1) I N GENERAL .—In conducting the pilot program, the

Secretary shall apply the provisions of the program so as to separately pilot test the continuing care hospital model. 
‘‘(2) S
PECIAL RULES .—In pilot testing the continuing care 
hospital model under paragraph (1), the following rules shall apply: 
‘‘(A) Such model shall be tested without the limitation 
to the conditions selected under subsection (a)(2)(B). 
‘‘(B) Notwithstanding subsection (a)(2)(D), an episode 
of care shall be defined as the full period that a patient

stays in the continuing care hospital plus the first 30 days following discharge from such hospital. ‘‘(3) C
ONTINUING CARE HOSPITAL DEFINED .—In this sub-

section, the term ‘continuing care hospital’ means an entity that has demonstrated the ability to meet patient care and patient safety standards and that provides under common management the medical and rehabilitation services provided in inpatient rehabilitation hospitals and units (as defined in section 1886(d)(1)(B)(ii)), long term care hospitals (as defined in section 1886(d)(1)(B)(iv)(I)), and skilled nursing facilities (as defined in section 1819(a)) that are located in a hospital

section 1819(a)) that are located in a hospital described in section 1886(d).’’. (b) T

(1) Section 3023 is amended by striking ‘‘1886C’’ and 
inserting ‘‘1866C’’. 
(2) Title XVIII of the Social Security Act is amended by 
redesignating section 1866D, as added by section 3024, as sec-tion 1866E. 
SEC. 10309. REVISIONS TO HOSPITAL READMISSIONS REDUCTION PRO-
GRAM. 
Section 1886(q)(1) of the Social Security Act, as added by section

3025, in the matter preceding subparagraph (A), is amended by striking ‘‘the Secretary shall reduce the payments’’ and all that follows through ‘‘the product of’’ and inserting ‘‘the Secretary shall make payments (in addition to the payments described in paragraph (2)(A)(ii)) for such a discharge to such hospital under subsection (d) (or section 1814(b)(3), as the case may be) in an amount equal to the product of’’. 
SEC. 10310. REPEAL OF PHYSICIAN PAYMENT UPDATE.

SEC. 10310. REPEAL OF PHYSICIAN PAYMENT UPDATE. 
The provisions of, and the amendment made by, section 3101 
are repealed. 
SEC. 10311. REVISIONS TO EXTENSION OF AMBULANCE ADD-ONS. 
Security Act (42 U.S.C. 1395m(l)(13)(A)), as amended by section 3105(a), is further amended— 
(A) by striking ‘‘2007, for’’ and inserting ‘‘2007, and 
for’’; and 42 USC 1395w–4. 42 USC 1395ww. 42 USC

for’’; and 42 USC 1395w–4. 42 USC 1395ww. 42 USC 
1395cc–5. 42 USC 
1395cc–4. Definition. 
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124 STAT. 943 PUBLIC LAW 111–148—MAR. 23, 2010 
(B) by striking ‘‘2010, and for such services furnished 
on or after April 1, 2010, and before January 1, 2011’’ and inserting ‘‘2011’’; and (2) in each of clauses (i) and (ii)— 
(A) by striking ‘‘, and on or after April 1, 2010, and 
before January 1, 2011’’ each place it appears; and 
(B) by striking ‘‘January 1, 2010’’ and inserting 
‘‘January 1, 2011’’ each place it appears. 
(b) A
IRAMBULANCE .—Section 146(b)(1) of the Medicare

Improvements for Patients and Providers Act of 2008 (Public Law 110–275), as amended by section 3105(b), is further amended by striking ‘‘December 31, 2009, and during the period beginning on April 1, 2010, and ending on January 1, 2011’’ and inserting ‘‘December 31, 2010’’. 
(c) S
UPER RURAL AMBULANCE .—Section 1834(l)(12)(A) of the

Social Security Act (42 U.S.C. 1395m(l)(12)(A)), as amended by section 3105(c), is further amended by striking ‘‘2010, and on or after April 1, 2010, and before January 1, 2011’’ and inserting ‘‘2011’’. 
SEC. 10312. CERTAIN PAYMENT RULES FOR LONG-TERM CARE HOS-
PITAL SERVICES AND MORATORIUM ON THE ESTABLISH-MENT OF CERTAIN HOSPITALS AND FACILITIES. 
(a) C ERTAIN PAYMENT RULES .—Section 114(c) of the Medicare,

Medicaid, and SCHIP Extension Act of 2007 (42 U.S.C. 1395ww note), as amended by section 4302(a) of the American Recovery and Reinvestment Act (Public Law 111–5) and section 3106(a) of this Act, is further amended by striking ‘‘4-year period’’ each place it appears and inserting ‘‘5-year period’’. 
(b) M
ORATORIUM .—Section 114(d) of such Act (42 U.S.C.

1395ww note), as amended by section 3106(b) of this Act, in the matter preceding subparagraph (A), is amended by striking ‘‘4- year period’’ and inserting ‘‘5-year period’’. 
SEC. 10313. REVISIONS TO THE EXTENSION FOR THE RURAL COMMU-
NITY HOSPITAL DEMONSTRATION PROGRAM. 
(a) I NGENERAL .—Subsection (g) of section 410A of the Medicare

Prescription Drug, Improvement, and Modernization Act of 2003 (Public Law 108–173; 117 Stat. 2272), as added by section 3123(a) of this Act, is amended to read as follows: 
‘‘(g) F
IVE-YEAREXTENSION OF DEMONSTRATION PROGRAM .— 

this subsection, the Secretary shall conduct the demonstration program under this section for an additional 5-year period (in this section referred to as the ‘5-year extension period’) that begins on the date immediately following the last day of the initial 5-year period under subsection (a)(5). 
‘‘(2) E
standing subsection (a)(2), during the 5-year extension period,

the Secretary shall expand the number of States with low population densities determined by the Secretary under such subsection to 20. In determining which States to include in such expansion, the Secretary shall use the same criteria and data that the Secretary used to determine the States under such subsection for purposes of the initial 5-year period. 
‘‘(3) I
PATING IN THE DEMONSTRATION PROGRAM .—Notwithstanding

subsection (a)(4), during the 5-year extension period, not more Criteria. Determination. 42 USC 1395ww 
note. 
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124 STAT. 944 PUBLIC LAW 111–148—MAR. 23, 2010 
than 30 rural community hospitals may participate in the dem-
onstration program under this section. 
‘‘(4) H OSPITALS IN DEMONSTRATION PROGRAM ON DATE OF  
ENACTMENT .—In the case of a rural community hospital that 
is participating in the demonstration program under this sec-tion as of the last day of the initial 5-year period, the Sec-retary— 
‘‘(A) shall provide for the continued participation of

such rural community hospital in the demonstration pro-gram during the 5-year extension period unless the rural community hospital makes an election, in such form and manner as the Secretary may specify, to discontinue such participation; and 
‘‘(B) in calculating the amount of payment under sub-

section (b) to the rural community hospital for covered inpatient hospital services furnished by the hospital during such 5-year extension period, shall substitute, under para-graph (1)(A) of such subsection— 
‘‘(i) the reasonable costs of providing such services 
for discharges occurring in the first cost reporting period beginning on or after the first day of the 5- year extension period, for 
‘‘(ii) the reasonable costs of providing such services

for discharges occurring in the first cost reporting period beginning on or after the implementation of the demonstration program.’’. 
(b) C
ONFORMING AMENDMENTS .—Subsection (a)(5) of section 
410A of the Medicare Prescription Drug, Improvement, and Mod-ernization Act of 2003 (Public Law 108–173; 117 Stat. 2272), as amended by section 3123(b) of this Act, is amended by striking ‘‘1-year extension’’ and inserting ‘‘5-year extension’’. 
SEC. 10314. ADJUSTMENT TO LOW-VOLUME HOSPITAL PROVISION.

1395ww(d)(12), as amended by section 3125, is amended— 
(1) in subparagraph (C)(i), by striking ‘‘1,500 discharges’’ 
and inserting ‘‘1,600 discharges’’; and 
(2) in subparagraph (D), by striking ‘‘1,500 discharges’’ 
and inserting ‘‘1,600 discharges’’. 
SEC. 10315. REVISIONS TO HOME HEALTH CARE PROVISIONS. 
(a) R EBASING .—Section 1895(b)(3)(A)(iii) of the Social Security 
Act, as added by section 3131, is amended—

Act, as added by section 3131, is amended— 
(1) in the clause heading, by striking ‘‘ 2013’’ and inserting 
‘‘2014’’; 
(2) in subclause (I), by striking ‘‘2013’’ and inserting ‘‘2014’’; 
and 
(3) in subclause (II), by striking ‘‘2016’’ and inserting 
‘‘2017’’. (b) R
EVISION OF HOME HEALTH STUDY AND REPORT .—Section 
3131(d) is amended to read as follows: 
‘‘(d) S TUDY AND REPORT ON THE DEVELOPMENT OF HOME 
HEALTH PAYMENT REVISIONS IN ORDER TO ENSURE ACCESS TO CARE

AND PAYMENT FOR SEVERITY OF ILLNESS .— 
‘‘(1) I N GENERAL .—The Secretary of Health and Human 
Services (in this section referred to as the ‘Secretary’) shall conduct a study on home health agency costs involved with 42 USC 1395fff note. 42 USC 1395fff. 
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124 STAT. 945 PUBLIC LAW 111–148—MAR. 23, 2010 
providing ongoing access to care to low-income Medicare bene-
ficiaries or beneficiaries in medically underserved areas, and in treating beneficiaries with varying levels of severity of ill-ness. In conducting the study, the Secretary may analyze items such as the following: 
‘‘(A) Methods to potentially revise the home health

prospective payment system under section 1895 of the Social Security Act (42 U.S.C. 1395fff) to account for costs related to patient severity of illness or to improving bene-ficiary access to care, such as— 
‘‘(i) payment adjustments for services that may 
involve additional or fewer resources; 
‘‘(ii) changes to reflect resources involved with pro-
viding home health services to low-income Medicare beneficiaries or Medicare beneficiaries residing in medically underserved areas;

‘‘(iii) ways outlier payments might be revised to 
reflect costs of treating Medicare beneficiaries with high levels of severity of illness; and 
‘‘(iv) other issues determined appropriate by the 
Secretary. ‘‘(B) Operational issues involved with potential

implementation of potential revisions to the home health payment system, including impacts for both home health agencies and administrative and systems issues for the Centers for Medicare & Medicaid Services, and any possible payment vulnerabilities associated with implementing potential revisions. 
‘‘(C) Whether additional research might be needed. ‘‘(D) Other items determined appropriate by the Sec-
retary. ‘‘(2) C

graph (1), the Secretary may consider whether patient severity of illness and access to care could be measured by factors, such as— 
‘‘(A) population density and relative patient access to 
care; 
‘‘(B) variations in service costs for providing care to 
‘‘(C) the presence of severe or chronic diseases, which 
might be measured by multiple, discontinuous home health episodes;

‘‘(D) poverty status, such as evidenced by the receipt 
of Supplemental Security Income under title XVI of the Social Security Act; and 
‘‘(E) other factors determined appropriate by the Sec-
retary. ‘‘(3) R
EPORT .—Not later than March 1, 2014, the Secretary 
‘‘(4) C

‘‘(4) C
graph (1), the Secretary shall consult with appropriate stake-holders, such as groups representing home health agencies and groups representing Medicare beneficiaries. 
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124 STAT. 946 PUBLIC LAW 111–148—MAR. 23, 2010 
‘‘(5) M EDICARE DEMONSTRATION PROJECT BASED ON THE  
RESULTS OF THE STUDY .— 
‘‘(A) I N GENERAL .—Subject to subparagraph (D), taking

into account the results of the study conducted under para-graph (1), the Secretary may, as determined appropriate, provide for a demonstration project to test whether making payment adjustments for home health services under the Medicare program would substantially improve access to care for patients with high severity levels of illness or for low-income or underserved Medicare beneficiaries. 
‘‘(B) W
AIVING BUDGET NEUTRALITY .—The Secretary

‘‘(B) W
AIVING BUDGET NEUTRALITY .—The Secretary 
shall not reduce the standard prospective payment amount (or amounts) under section 1895 of the Social Security Act (42 U.S.C. 1395fff) applicable to home health services furnished during a period to offset any increase in pay-ments during such period resulting from the application of the payment adjustments under subparagraph (A). 
‘‘(C) N
O EFFECT ON SUBSEQUENT PERIODS .—A payment

O EFFECT ON SUBSEQUENT PERIODS .—A payment 
adjustment resulting from the application of subparagraph (A) for a period— 
‘‘(i) shall not apply to payments for home health 
services under title XVIII after such period; and 
‘‘(ii) shall not be taken into account in calculating 
the payment amounts applicable for such services after such period. ‘‘(D) D
URATION .—If the Secretary determines it appro-

priate to conduct the demonstration project under this sub-section, the Secretary shall conduct the project for a four year period beginning not later than January 1, 2015. 
‘‘(E) F
UNDING .—The Secretary shall provide for the

transfer from the Federal Hospital Insurance Trust Fund under section 1817 of the Social Security Act (42 U.S.C. 1395i) and the Federal Supplementary Medical Insurance Trust Fund established under section 1841 of such Act (42 U.S.C. 1395t), in such proportion as the Secretary determines appropriate, of $500,000,000 for the period of fiscal years 2015 through 2018. Such funds shall be made available for the study described in paragraph (1) and the design, implementation and evaluation of the

the design, implementation and evaluation of the dem-onstration described in this paragraph. Amounts available under this subparagraph shall be available until expended.

‘‘(F) E
VALUATION AND REPORT .—If the Secretary deter-
mines it appropriate to conduct the demonstration project under this subsection, the Secretary shall— 
‘‘(i) provide for an evaluation of the project; and ‘‘(ii) submit to Congress, by a date specified by 
the Secretary, a report on the project. ‘‘(G) A
DMINISTRATION .—Chapter 35 of title 44, United 
States Code, shall not apply with respect to this sub-section.’’. 
SEC. 10316. MEDICARE DSH.

SEC. 10316. MEDICARE DSH. 
Section 1886(r)(2)(B) of the Social Security Act, as added by 
section 3133, is amended— 
(A) in the matter preceding subclause (I), by striking 
‘‘(divided by 100)’’; 42 USC 1395ww. Determination. 
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124 STAT. 947 PUBLIC LAW 111–148—MAR. 23, 2010 
(B) in subclause (I), by striking ‘‘2012’’ and inserting 
‘‘2013’’; 
(C) in subclause (II), by striking the period at the 
end and inserting a comma; and 
(D) by adding at the end the following flush matter: ‘‘minus 1.5 percentage points.’’. 
(2) in clause (ii)— 
‘‘(divided by 100)’’; 
‘‘2013’’;

‘‘2013’’; 
(D) by adding at the end the following flush matter: ‘‘and, for each of 2018 and 2019, minus 1.5 percentage points.’’. 
SEC. 10317. REVISIONS TO EXTENSION OF SECTION 508 HOSPITAL 
PROVISIONS. 
Section 3137(a) is amended to read as follows: 
‘‘(a) E XTENSION .— 
‘‘(1) I N GENERAL .—Subsection (a) of section 106 of division

B of the Tax Relief and Health Care Act of 2006 (42 U.S.C. 1395 note), as amended by section 117 of the Medicare, Med-icaid, and SCHIP Extension Act of 2007 (Public Law 110– 173) and section 124 of the Medicare Improvements for Patients and Providers Act of 2008 (Public Law 110–275), is amended by striking ‘September 30, 2009’ and inserting ‘September 30, 2010’. 
‘‘(2) S
PECIAL RULE FOR FISCAL YEAR 2010 .— 
‘‘(A) I N GENERAL .—Subject to subparagraph (B), for

purposes of implementation of the amendment made by paragraph (1), including (notwithstanding paragraph (3) of section 117(a) of the Medicare, Medicaid and SCHIP Extension Act of 2007 (Public Law 110–173), as amended by section 124(b) of the Medicare Improvements for Patients and Providers Act of 2008 (Public Law 110–275)) for purposes of the implementation of paragraph (2) of such section 117(a), during fiscal year 2010, the Secretary of Health and Human Services (in this subsection referred

and Human Services (in this subsection referred to as the ‘Secretary’) shall use the hospital wage index that was promulgated by the Secretary in the Federal Register on August 27, 2009 (74 Fed. Reg. 43754), and any subsequent corrections.

‘‘(B) E
XCEPTION .—Beginning on April 1, 2010, in deter-
mining the wage index applicable to hospitals that qualify for wage index reclassification, the Secretary shall include the average hourly wage data of hospitals whose reclassi-fication was extended pursuant to the amendment made by paragraph (1) only if including such data results in a higher applicable reclassified wage index. ‘‘(3) A
DJUSTMENT FOR CERTAIN HOSPITALS IN FISCAL YEAR  
2010.—

2010.— 
‘‘(A) I N GENERAL .—In the case of a subsection (d) hos-
pital (as defined in subsection (d)(1)(B) of section 1886 of the Social Security Act (42 U.S.C. 1395ww)) with respect to which— Effective date. 42 USC 1395ww 
note. 
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124 STAT. 948 PUBLIC LAW 111–148—MAR. 23, 2010 
‘‘(i) a reclassification of its wage index for purposes 
of such section was extended pursuant to the amend-ment made by paragraph (1); and 
‘‘(ii) the wage index applicable for such hospital 
for the period beginning on October 1, 2009, and ending on March 31, 2010, was lower than for the period beginning on April 1, 2010, and ending on September 30, 2010, by reason of the application of paragraph (2)(B);

the Secretary shall pay such hospital an additional pay-ment that reflects the difference between the wage index for such periods. 
‘‘(B) T
IMEFRAME FOR PAYMENTS .—The Secretary shall 
make payments required under subparagraph by not later than December 31, 2010.’’. 
SEC. 10318. REVISIONS TO TRANSITIONAL EXTRA BENEFITS UNDER 
MEDICARE ADVANTAGE. 
Section 1853(p)(3)(A) of the Social Security Act, as added by 
section 3201(h), is amended by inserting ‘‘in 2009’’ before the period at the end.

SEC. 10319. REVISIONS TO MARKET BASKET ADJUSTMENTS. 
(a) I NPATIENT ACUTE HOSPITALS .—Section 1886(b)(3)(B)(xii) of 
the Social Security Act, as added by section 3401(a), is amended— 
(1) in subclause (I), by striking ‘‘and’’ at the end; (2) by redesignating subclause (II) as subclause (III); (3) by inserting after subclause (II) the following new sub-
clause: 
‘‘(II) for each of fiscal years 2012 and 2013, by 0.1 percent-
age point; and’’; and

age point; and’’; and 
(4) in subclause (III), as redesignated by paragraph (2), 
by striking ‘‘2012’’ and inserting ‘‘2014’’. (b) L
ONG-TERM CARE HOSPITALS .—Section 1886(m)(4) of the 
Social Security Act, as added by section 3401(c), is amended— 
(i) by striking ‘‘each of rate years 2010 and 2011’’ 
and inserting ‘‘rate year 2010’’; and 
(ii) by striking ‘‘and’’ at the end;

(ii) by striking ‘‘and’’ at the end; 
(B) by redesignating clause (ii) as clause (iv); (C) by inserting after clause (i) the following new 
clauses: 
‘‘(ii) for rate year 2011, 0.50 percentage point; ‘‘(iii) for each of the rate years beginning in 2012 
and 2013, 0.1 percentage point; and’’; and (D) in clause (iv), as redesignated by subparagraph 
(B), by striking ‘‘2012’’ and inserting ‘‘2014’’; and (2) in subparagraph (B), by striking ‘‘(A)(ii)’’ and inserting 
‘‘(A)(iv)’’. (c) I

NPATIENT REHABILITATION FACILITIES .—Section 
1886(j)(3)(D)(i) of the Social Security Act, as added by section 3401(d), is amended— 
clause: 42 USC 1395ww. 42 USC 
1395w–23. Time period.

1395w–23. Time period. 
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124 STAT. 949 PUBLIC LAW 111–148—MAR. 23, 2010 
‘‘(II) for each of fiscal years 2012 and 2013, 
0.1 percentage point; and’’; and 
by striking ‘‘2012’’ and inserting ‘‘2014’’. (d) H
OME HEALTH AGENCIES .—Section 1895(b)(3)(B)(vi)(II) of 
such Act, as added by section 3401(e), is amended by striking ‘‘and 2012’’ and inserting ‘‘, 2012, and 2013’’. 
(e) P
SYCHIATRIC HOSPITALS .—Section 1886(s)(3)(A) of the Social

Security Act, as added by section 3401(f), is amended— 
(1) in clause (i), by striking ‘‘and’’ at the end; (2) by redesignating clause (ii) as clause (iii); (3) by inserting after clause (ii) the following new clause: 
‘‘(ii) for each of the rate years beginning in 2012 
and 2013, 0.1 percentage point; and’’; and 
(4) in clause (iii), as redesignated by paragraph (2), by 
striking ‘‘2012’’ and inserting ‘‘2014’’. (f) H
OSPICE CARE.—Section 1814(i)(1)(C) of the Social Security

Act (42 U.S.C. 1395f(i)(1)(C)), as amended by section 3401(g), is amended— 
(1) in clause (iv)(II), by striking ‘‘0.5’’ and inserting ‘‘0.3’’; 
and 
(2) in clause (v), in the matter preceding subclause (I), 
by striking ‘‘0.5’’ and inserting ‘‘0.3’’. (g) O
UTPATIENT HOSPITALS .—Section 1833(t)(3)(G)(i) of the 
Social Security Act, as added by section 3401(i), is amended—

clause: 
‘‘(II) for each of 2012 and 2013, 0.1 percentage 
point; and’’; and 
by striking ‘‘2012’’ and inserting ‘‘2014’’. 
SEC. 10320. EXPANSION OF THE SCOPE OF, AND ADDITIONAL IMPROVE-
MENTS TO, THE INDEPENDENT MEDICARE ADVISORY BOARD.

(a) I NGENERAL .—Section 1899A of the Social Security Act, 
as added by section 3403, is amended— 
(A) in paragraph (1)(B), by adding at the end the 
following new sentence: ‘‘In any year (beginning with 2014) that the Board is not required to submit a proposal under this section, the Board shall submit to Congress an advisory report on matters related to the Medicare program.’’; 
(B) in paragraph (2)(A)— 
(i) in clause (iv), by inserting ‘‘or the full premium

subsidy under section 1860D–14(a)’’ before the period at the end of the last sentence; and 
(ii) by adding at the end the following new clause: ‘‘(vii) If the Chief Actuary of the Centers for Medi-
care & Medicaid Services has made a determination described in subsection (e)(3)(B)(i)(II) in the determina-tion year, the proposal shall be designed to help reduce the growth rate described in paragraph (8) while maintaining or enhancing beneficiary access to quality care under this title.’’;

Determination. Reports. 42 USC 1395kkk. 42 USC 1395 l. 42 USC 1395ww. 42 USC 1395fff. 
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124 STAT. 950 PUBLIC LAW 111–148—MAR. 23, 2010 
(C) in paragraph (2)(B)— 
(i) in clause (v), by striking ‘‘and’’ at the end; (ii) in clause (vi), by striking the period at the 
end and inserting ‘‘; and’’; and 
(iii) by adding at the end the following new clause: ‘‘(vii) take into account the data and findings con-

tained in the annual reports under subsection (n) in order to develop proposals that can most effectively promote the delivery of efficient, high quality care to Medicare beneficiaries.’’; (D) in paragraph (3)— 
(i) in the heading, by striking ‘‘T
RANSMISSION OF  
BOARD PROPOSAL TO PRESIDENT ’’ and inserting ‘‘S UBMIS -
SION OF BOARD PROPOSAL TO CONGRESS AND THE PRESI -
DENT ’’; 
(ii) in subparagraph (A)(i), by striking ‘‘transmit

a proposal under this section to the President’’ and insert ‘‘submit a proposal under this section to Con-gress and the President’’; and 
(iii) in subparagraph (A)(ii)— 
(I) in subclause (I), by inserting ‘‘or’’ at the 
end; 
(II) in subclause (II), by striking ‘‘; or’’ and 
inserting a period; and 
(III) by striking subclause (III); 
(E) in paragraph (4)— 
(i) by striking ‘‘the Board under paragraph (3)(A)(i) 
or’’; and 
(ii) by striking ‘‘immediately’’ and inserting ‘‘within

2 days’’; (F) in paragraph (5)— 
(i) by striking ‘‘to but’’ and inserting ‘‘but’’; and (ii) by inserting ‘‘Congress and’’ after ‘‘submit a 
proposal to’’; and (G) in paragraph (6)(B)(i), by striking ‘‘per unduplicated 
enrollee’’ and inserting ‘‘(calculated as the sum of per capita spending under each of parts A, B, and D)’’; (2) in subsection (d)— 
(i) by inserting ‘‘the Board or’’ after ‘‘a proposal 
is submitted by’’; and

is submitted by’’; and 
(ii) by inserting ‘‘subsection (c)(3)(A)(i) or’’ after 
‘‘the Senate under’’; and (B) in paragraph (2)(A), by inserting ‘‘the Board or’’ 
after ‘‘a proposal is submitted by’’; (3) in subsection (e)— 
(A) in paragraph (1), by inserting ‘‘the Board or’’ after 
‘‘a proposal submitted by’’; and 
(B) in paragraph (3)— 
(i) by striking ‘‘E
XCEPTION .—The Secretary shall

XCEPTION .—The Secretary shall 
not be required to implement the recommendations contained in a proposal submitted in a proposal year by’’ and inserting ‘‘E
‘‘(A) I N GENERAL .—The Secretary shall not implement 
the recommendations contained in a proposal submitted in a proposal year by the Board or’’; 
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124 STAT. 951 PUBLIC LAW 111–148—MAR. 23, 2010 
(ii) by redesignating subparagraphs (A) and (B) 
as clauses (i) and (ii), respectively, and indenting appropriately; and 
subparagraph: ‘‘(B) L
IMITED ADDITIONAL EXCEPTION .— 

retary shall not implement the recommendations con-tained in a proposal submitted by the Board or the President to Congress pursuant to this section in a proposal year (beginning with proposal year 2019) if— 
‘‘(I) the Board was required to submit a pro-
posal to Congress under this section in the year preceding the proposal year; and 
‘‘(II) the Chief Actuary of the Centers for Medi-

care & Medicaid Services makes a determination in the determination year that the growth rate described in subsection (c)(8) exceeds the growth rate described in subsection (c)(6)(A)(i). ‘‘(ii) L
IMITED ADDITIONAL EXCEPTION MAY NOT BE  
APPLIED IN TWO CONSECUTIVE YEARS .—This subpara-

graph shall not apply if the recommendations contained in a proposal submitted by the Board or the President to Congress pursuant to this section in the year pre-ceding the proposal year were not required to be imple-mented by reason of this subparagraph. 
‘‘(iii) N
O AFFECT ON REQUIREMENT TO SUBMIT PRO -
POSALS OR FOR CONGRESSIONAL CONSIDERATION OF PRO -
POSALS .—Clause (i) and (ii) shall not affect—

POSALS .—Clause (i) and (ii) shall not affect— 
‘‘(I) the requirement of the Board or the Presi-
dent to submit a proposal to Congress in a proposal year in accordance with the provisions of this sec-tion; or 
‘‘(II) Congressional consideration of a legisla-
tive proposal (described in subsection (c)(3)(B)(iv)) contained such a proposal in accordance with sub-section (d).’’; 
(4) in subsection (f)(3)(B)— 
(A) by striking ‘‘or advisory reports to Congress’’ and

inserting ‘‘, advisory reports, or advisory recommendations’’; and 
(B) by inserting ‘‘or produce the public report under 
subsection (n)’’ after ‘‘this section’’; and (5) by adding at the end the following new subsections: 
‘‘(n) A
NNUAL PUBLIC REPORT .— 
‘‘(1) I N GENERAL .—Not later than July 1, 2014, and

annually thereafter, the Board shall produce a public report containing standardized information on system-wide health care costs, patient access to care, utilization, and quality-of- care that allows for comparison by region, types of services, types of providers, and both private payers and the program under this title. 
‘‘(2) R
EQUIREMENTS .—Each report produced pursuant to 
paragraph (1) shall include information with respect to the following areas:

‘‘(A) The quality and costs of care for the population 
at the most local level determined practical by the Board Determination. 
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124 STAT. 952 PUBLIC LAW 111–148—MAR. 23, 2010 
(with quality and costs compared to national benchmarks 
and reflecting rates of change, taking into account quality measures described in section 1890(b)(7)(B)). 
‘‘(B) Beneficiary and consumer access to care, patient 
and caregiver experience of care, and the cost-sharing or out-of-pocket burden on patients. 
‘‘(C) Epidemiological shifts and demographic changes. ‘‘(D) The proliferation, effectiveness, and utilization of

health care technologies, including variation in provider practice patterns and costs. 
‘‘(E) Any other areas that the Board determines affect 
overall spending and quality of care in the private sector. 
‘‘(o) A
DVISORY RECOMMENDATIONS FOR NON-FEDERAL HEALTH  
CAREPROGRAMS .— 
‘‘(1) I N GENERAL .—Not later than January 15, 2015, and

at least once every two years thereafter, the Board shall submit to Congress and the President recommendations to slow the growth in national health expenditures (excluding expenditures under this title and in other Federal health care programs) while preserving or enhancing quality of care, such as rec-ommendations— 
‘‘(A) that the Secretary or other Federal agencies can 
implement administratively; 
‘‘(B) that may require legislation to be enacted by Con-
gress in order to be implemented;

gress in order to be implemented; 
‘‘(C) that may require legislation to be enacted by State 
or local governments in order to be implemented; 
‘‘(D) that private sector entities can voluntarily imple-
ment; and 
‘‘(E) with respect to other areas determined appropriate 
by the Board. ‘‘(2) C
OORDINATION .—In making recommendations under

OORDINATION .—In making recommendations under 
paragraph (1), the Board shall coordinate such recommenda-tions with recommendations contained in proposals and advisory reports produced by the Board under subsection (c). 
‘‘(3) A
VAILABLE TO PUBLIC .—The Board shall make rec-
ommendations submitted to Congress and the President under this subsection available to the public.’’. (b) N
AME CHANGE .—Any reference in the provisions of, or

amendments made by, section 3403 to the ‘‘Independent Medicare Advisory Board’’ shall be deemed to be a reference to the ‘‘Inde-pendent Payment Advisory Board’’. 
(c) R
by this section shall preclude the Independent Medicare Advisory Board, as established under section 1899A of the Social Security 
Act (as added by section 3403), from solely using data from public or private sources to carry out the amendments made by subsection (a)(4).

SEC. 10321. REVISION TO COMMUNITY HEALTH TEAMS. 
Section 3502(c)(2)(A) is amended by inserting ‘‘or other primary 
care providers’’ after ‘‘physicians’’. 
SEC. 10322. QUALITY REPORTING FOR PSYCHIATRIC HOSPITALS. 
(a) I NGENERAL .—Section 1886(s) of the Social Security Act, 
as added by section 3401(f), is amended by adding at the end the following new paragraph: 
‘‘(4) Q
UALITY REPORTING .— 42 USC 1395ww. 42 USC 256a–1. 42 USC 1395kkk 
note. 42 USC 1395kkk 
and note. Deadlines.

and note. Deadlines. 
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124 STAT. 953 PUBLIC LAW 111–148—MAR. 23, 2010 

paragraph (1), for rate year 2014 and each subsequent rate year, in the case of a psychiatric hospital or psy-chiatric unit that does not submit data to the Secretary in accordance with subparagraph (C) with respect to such a rate year, any annual update to a standard Federal rate for discharges for the hospital during the rate year, and after application of paragraph (2), shall be reduced by 2 percentage points. 
‘‘(ii) S

and each subsequent rate year, each psychiatric hospital and psychiatric unit shall submit to the Secretary data on quality measures specified under subparagraph (D). Such data shall be submitted in a form and manner, and at a time, specified by the Secretary for purposes of this subparagraph. 
‘‘(D) Q

the Secretary shall publish the measures selected under this subparagraph that will be applicable with 
respect to rate year 2014. ‘‘(E) P

Secretary shall establish procedures for making data sub-mitted under subparagraph (C) available to the public. Such procedures shall ensure that a psychiatric hospital and a psychiatric unit has the opportunity to review the data that is to be made public with respect to the hospital or unit prior to such data being made public. The Secretary shall report quality measures that relate to services fur-nished in inpatient settings in psychiatric hospitals and 
Reports. Procedures.

Reports. Procedures. 
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124 STAT. 954 PUBLIC LAW 111–148—MAR. 23, 2010 
psychiatric units on the Internet website of the Centers 
for Medicare & Medicaid Services.’’. 
(b) C ONFORMING AMENDMENT .—Section 1890(b)(7)(B)(i)(I) of the 
Social Security Act, as added by section 3014, is amended by inserting ‘‘1886(s)(4)(D),’’ after ‘‘1886(o)(2),’’. 
SEC. 10323. MEDICARE COVERAGE FOR INDIVIDUALS EXPOSED TO 
ENVIRONMENTAL HEALTH HAZARDS. 
(a) I NGENERAL .—Title XVIII of the Social Security Act (42

U.S.C. 1395 et seq.) is amended by inserting after section 1881 the following new section: 
‘‘SEC. 1881A. MEDICARE COVERAGE FOR INDIVIDUALS EXPOSED TO 
‘‘(a) D EEMING OF INDIVIDUALS AS ELIGIBLE FOR MEDICARE BENE-
FITS.— 
‘‘(1) I N GENERAL .—For purposes of eligibility for benefits

under this title, an individual determined under subsection (c) to be an environmental exposure affected individual described in subsection (e)(2) shall be deemed to meet the conditions specified in section 226(a). 
‘‘(2) D
ISCRETIONARY DEEMING .—For purposes of eligibility

for benefits under this title, the Secretary may deem an indi-vidual determined under subsection (c) to be an environmental exposure affected individual described in subsection (e)(3) to meet the conditions specified in section 226(a). 
‘‘(3) E
FFECTIVE DATE OF COVERAGE .—An Individual who 
is deemed eligible for benefits under this title under paragraph (1) or (2) shall be— 
‘‘(A) entitled to benefits under the program under Part 
A as of the date of such deeming; and

A as of the date of such deeming; and 
‘‘(B) eligible to enroll in the program under Part B 
beginning with the month in which such deeming occurs. 
‘‘(b) P
ILOT PROGRAM FOR CARE OF CERTAIN INDIVIDUALS  
RESIDING IN EMERGENCY DECLARATION AREAS .— 
‘‘(1) P ROGRAM ; PURPOSE .— 
‘‘(A) P RIMARY PILOT PROGRAM .—The Secretary shall

establish a pilot program in accordance with this subsection to provide innovative approaches to furnishing comprehen-sive, coordinated, and cost-effective care under this title to individuals described in paragraph (2)(A). 
‘‘(B) O
PTIONAL PILOT PROGRAMS .—The Secretary may

PTIONAL PILOT PROGRAMS .—The Secretary may 
establish a separate pilot program, in accordance with this subsection, with respect to each geographic area subject to an emergency declaration (other than the declaration of June 17, 2009), in order to furnish such comprehensive, coordinated and cost-effective care to individuals described in subparagraph (2)(B) who reside in each such area. ‘‘(2) I
NDIVIDUAL DESCRIBED .—For purposes of paragraph

NDIVIDUAL DESCRIBED .—For purposes of paragraph 
(1), an individual described in this paragraph is an individual who enrolls in part B, submits to the Secretary an application to participate in the applicable pilot program under this sub-section, and— 
‘‘(A) is an environmental exposure affected individual 
described in subsection (e)(2) who resides in or around the geographic area subject to an emergency declaration made as of June 17, 2009; or 42 USC 1395rr–1. 42 USC 1395aaa.

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124 STAT. 955 PUBLIC LAW 111–148—MAR. 23, 2010 
‘‘(B) is an environmental exposure affected individual 
described in subsection (e)(3) who— 
‘‘(i) is deemed under subsection (a)(2); and ‘‘(ii) meets such other criteria or conditions for 
participation in a pilot program under paragraph (1)(B) as the Secretary specifies. 
‘‘(3) F
LEXIBLE BENEFITS AND SERVICES .—A pilot program

LEXIBLE BENEFITS AND SERVICES .—A pilot program 
under this subsection may provide for the furnishing of benefits, items, or services not otherwise covered or authorized under this title, if the Secretary determines that furnishing such benefits, items, or services will further the purposes of such pilot program (as described in paragraph (1)). 
‘‘(4) I
NNOVATIVE REIMBURSEMENT METHODOLOGIES .—For 
purposes of the pilot program under this subsection, the Sec-retary—

‘‘(A) shall develop and implement appropriate meth-
odologies to reimburse providers for furnishing benefits, items, or services for which payment is not otherwise cov-ered or authorized under this title, if such benefits, items, or services are furnished pursuant to paragraph (3); and 
‘‘(B) may develop and implement innovative approaches 
to reimbursing providers for any benefits, items, or services furnished under this subsection. ‘‘(5) L
IMITATION .—Consistent with section 1862(b), no pay-

ment shall be made under the pilot program under this sub-section with respect to benefits, items, or services furnished to an environmental exposure affected individual (as defined in subsection (e)) to the extent that such individual is eligible to receive such benefits, items, or services through any other public or private benefits plan or legal agreement. 
‘‘(6) W
AIVER AUTHORITY .—The Secretary may waive such

AIVER AUTHORITY .—The Secretary may waive such 
provisions of this title and title XI as are necessary to carry out pilot programs under this subsection. 
‘‘(7) F
UNDING .—For purposes of carrying out pilot programs

under this subsection, the Secretary shall provide for the transfer, from the Federal Hospital Insurance Trust Fund under section 1817 and the Federal Supplementary Medical Insurance Trust Fund under section 1841, in such proportion as the Secretary determines appropriate, of such sums as the Sec-retary determines necessary, to the Centers for Medicare & Medicaid Services Program Management Account. 
‘‘(8) W
AIVER OF BUDGET NEUTRALITY .—The Secretary shall

AIVER OF BUDGET NEUTRALITY .—The Secretary shall 
not require that pilot programs under this subsection be budget neutral with respect to expenditures under this title. ‘‘(c) D
ETERMINATIONS .— 
‘‘(1) B Y THE COMMISSIONER OF SOCIAL SECURITY .—For pur-

poses of this section, the Commissioner of Social Security, in consultation with the Secretary, and using the cost allocation method prescribed in section 201(g), shall determine whether individuals are environmental exposure affected individuals. 
‘‘(2) B
Y THE SECRETARY .—The Secretary shall determine 
eligibility for pilot programs under subsection (b). ‘‘(d) E
MERGENCY DECLARATION DEFINED .—For purposes of this

section, the term ‘emergency declaration’ means a declaration of a public health emergency under section 104(a) of the Comprehen-sive Environmental Response, Compensation, and Liability Act of 1980. 
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124 STAT. 956 PUBLIC LAW 111–148—MAR. 23, 2010 
‘‘(e) E NVIRONMENTAL EXPOSURE AFFECTED INDIVIDUAL  
DEFINED .— 
‘‘(1) I N GENERAL .—For purposes of this section, the term 
‘environmental exposure affected individual’ means— 
‘‘(A) an individual described in paragraph (2); and ‘‘(B) an individual described in paragraph (3). 
‘‘(2) I
NDIVIDUAL DESCRIBED .— 
‘‘(A) I N GENERAL .—An individual described in this para-
graph is any individual who— 
‘‘(i) is diagnosed with 1 or more conditions

‘‘(i) is diagnosed with 1 or more conditions 
described in subparagraph (B); 
‘‘(ii) as demonstrated in such manner as the Sec-
retary determines appropriate, has been present for an aggregate total of 6 months in the geographic area subject to an emergency declaration specified in sub-section (b)(2)(A), during a period ending— 
‘‘(I) not less than 10 years prior to such diag-
nosis; and 
‘‘(II) prior to the implementation of all the

‘‘(II) prior to the implementation of all the 
remedial and removal actions specified in the Record of Decision for Operating Unit 4 and the Record of Decision for Operating Unit 7; ‘‘(iii) files an application for benefits under this 
title (or has an application filed on behalf of the indi-vidual), including pursuant to this section; and 
‘‘(iv) is determined under this section to meet the 
criteria in this subparagraph. ‘‘(B) C
ONDITIONS DESCRIBED .—For purposes of subpara-

graph (A), the following conditions are described in this subparagraph: 
‘‘(i) Asbestosis, pleural thickening, or pleural 
plaques as established by— 
‘‘(I) interpretation by a ‘B Reader’ qualified 
physician of a plain chest x-ray or interpretation of a computed tomographic radiograph of the chest by a qualified physician, as determined by the Secretary; or 
‘‘(II) such other diagnostic standards as the 
Secretary specifies,

Secretary specifies, 
except that this clause shall not apply to pleural thick-ening or pleural plaques unless there are symptoms or conditions requiring medical treatment as a result of these diagnoses. 
‘‘(ii) Mesothelioma, or malignancies of the lung, 
colon, rectum, larynx, stomach, esophagus, pharynx, or ovary, as established by— 
‘‘(I) pathologic examination of biopsy tissue; ‘‘(II) cytology from bronchioalveolar lavage; or ‘‘(III) such other diagnostic standards as the

Secretary specifies. ‘‘(iii) Any other diagnosis which the Secretary, in 
consultation with the Commissioner of Social Security, determines is an asbestos-related medical condition, as established by such diagnostic standards as the Secretary specifies. 
‘‘(3) O
THER INDIVIDUAL DESCRIBED .—An individual 
described in this paragraph is any individual who—

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124 STAT. 957 PUBLIC LAW 111–148—MAR. 23, 2010 
‘‘(A) is not an individual described in paragraph (2); 
‘‘(B) is diagnosed with a medical condition caused by 
the exposure of the individual to a public health hazard to which an emergency declaration applies, based on such medical conditions, diagnostic standards, and other criteria as the Secretary specifies; 
‘‘(C) as demonstrated in such manner as the Secretary

determines appropriate, has been present for an aggregate total of 6 months in the geographic area subject to the emergency declaration involved, during a period deter-mined appropriate by the Secretary; 
‘‘(D) files an application for benefits under this title 
(or has an application filed on behalf of the individual), including pursuant to this section; and 
‘‘(E) is determined under this section to meet the cri-
teria in this paragraph.’’. 
(b) P

(b) P
ROGRAM FOR EARLY DETECTION OF CERTAIN MEDICAL  
CONDITIONS RELATED TO ENVIRONMENTAL HEALTH HAZARDS .—Title 
XX of the Social Security Act (42 U.S.C. 1397 et seq.), as amended by section 5507, is amended by adding at the end the following: 
‘‘SEC. 2009. PROGRAM FOR EARLY DETECTION OF CERTAIN MEDICAL 
CONDITIONS RELATED TO ENVIRONMENTAL HEALTH HAZARDS. 
‘‘(a) P ROGRAM ESTABLISHMENT .—The Secretary shall establish

a program in accordance with this section to make competitive grants to eligible entities specified in subsection (b) for the purpose of— 
‘‘(1) screening at-risk individuals (as defined in subsection 
(c)(1)) for environmental health conditions (as defined in sub-section (c)(3)); and 
‘‘(2) developing and disseminating public information and 
education concerning— 
‘‘(A) the availability of screening under the program 
under this section; 
‘‘(B) the detection, prevention, and treatment of

environmental health conditions; and 
‘‘(C) the availability of Medicare benefits for certain 
individuals diagnosed with environmental health conditions under section 1881A. 
‘‘(b) E
‘‘(1) I N GENERAL .—For purposes of this section, an eligible 
entity is an entity described in paragraph (2) which submits an application to the Secretary in such form and manner, and containing such information and assurances, as the Sec-retary determines appropriate. 
‘‘(2) T

‘‘(2) T
YPES OF ELIGIBLE ENTITIES .—The entities described 
in this paragraph are the following: 
‘‘(A) A hospital or community health center. ‘‘(B) A Federally qualified health center. ‘‘(C) A facility of the Indian Health Service. ‘‘(D) A National Cancer Institute-designated cancer 
center. 
‘‘(E) An agency of any State or local government. ‘‘(F) A nonprofit organization. ‘‘(G) Any other entity the Secretary determines appro-
priate. 42 USC 1397h.

priate. 42 USC 1397h. 
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124 STAT. 958 PUBLIC LAW 111–148—MAR. 23, 2010 
‘‘(c) D EFINITIONS .—In this section: 
‘‘(1) A T-RISK INDIVIDUAL .—The term ‘at-risk individual’ 
‘‘(A)(i) as demonstrated in such manner as the Sec-
retary determines appropriate, has been present for an aggregate total of 6 months in the geographic area subject to an emergency declaration specified under paragraph (2), during a period ending— 
‘‘(I) not less than 10 years prior to the date of

such individual’s application under subparagraph (B); and 
‘‘(II) prior to the implementation of all the remedial 
and removal actions specified in the Record of Decision for Operating Unit 4 and the Record of Decision for Operating Unit 7; or ‘‘(ii) meets such other criteria as the Secretary deter-
mines appropriate considering the type of environmental health condition at issue; and 
‘‘(B) has submitted an application (or has an applica-

tion submitted on the individual’s behalf), to an eligible entity receiving a grant under this section, for screening under the program under this section. ‘‘(2) E
MERGENCY DECLARATION .—The term ‘emergency dec-
laration’ means a declaration of a public health emergency under section 104(a) of the Comprehensive Environmental Response, Compensation, and Liability Act of 1980. 
‘‘(3) E
NVIRONMENTAL HEALTH CONDITION .—The term 
‘environmental health condition’ means—

‘environmental health condition’ means— 
‘‘(A) asbestosis, pleural thickening, or pleural plaques, 
as established by— 
‘‘(i) interpretation by a ‘B Reader’ qualified physi-
cian of a plain chest x-ray or interpretation of a com-puted tomographic radiograph of the chest by a quali-fied physician, as determined by the Secretary; or 
‘‘(ii) such other diagnostic standards as the Sec-
retary specifies; ‘‘(B) mesothelioma, or malignancies of the lung, colon,

rectum, larynx, stomach, esophagus, pharynx, or ovary, as established by— 
‘‘(i) pathologic examination of biopsy tissue; ‘‘(ii) cytology from bronchioalveolar lavage; or ‘‘(iii) such other diagnostic standards as the Sec-
retary specifies; and ‘‘(C) any other medical condition which the Secretary

determines is caused by exposure to a hazardous substance or pollutant or contaminant at a Superfund site to which an emergency declaration applies, based on such criteria and as established by such diagnostic standards as the Secretary specifies. ‘‘(4) H
AZARDOUS SUBSTANCE ; POLLUTANT ; CONTAMINANT .—

AZARDOUS SUBSTANCE ; POLLUTANT ; CONTAMINANT .— 
The terms ‘hazardous substance’, ‘pollutant’, and ‘contaminant’ have the meanings given those terms in section 101 of the Comprehensive Environmental Response, Compensation, and Liability Act of 1980 (42 U.S.C. 9601). 
‘‘(5) S
UPERFUND SITE .—The term ‘Superfund site’ means 
a site included on the National Priorities List developed by the President in accordance with section 105(a)(8)(B) of the

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124 STAT. 959 PUBLIC LAW 111–148—MAR. 23, 2010 
Comprehensive Environmental Response, Compensation, and 
Liability Act of 1980 (42 U.S.C. 9605(a)(8)(B)). ‘‘(d) H
EALTH COVERAGE UNAFFECTED .—Nothing in this section 
shall be construed to affect any coverage obligation of a govern-mental or private health plan or program relating to an at-risk individual. 
‘‘(e) F
UNDING .— 
‘‘(1) I N GENERAL .—Out of any funds in the Treasury not

otherwise appropriated, there are appropriated to the Secretary, to carry out the program under this section— 
‘‘(A) $23,000,000 for the period of fiscal years 2010 
through 2014; and 
‘‘(B) $20,000,000 for each 5-fiscal year period there-
after. ‘‘(2) A
VAILABILITY .—Funds appropriated under paragraph 
(1) shall remain available until expended. ‘‘(f) N

the preceding sections of this title shall not apply to grants awarded under this section. 
‘‘(2) L
IMITATIONS ON USE OF GRANTS .—Section 2005(a) shall 
apply to a grant awarded under this section to the same extent and in the same manner as such section applies to payments to States under this title, except that paragraph (4) of such section shall not be construed to prohibit grantees from con-ducting screening for environmental health conditions as authorized under this section.’’.

SEC. 10324. PROTECTIONS FOR FRONTIER STATES. 
(a) F LOOR ON AREA WAGE INDEX FOR HOSPITALS IN FRONTIER  
STATES .— 
(1) I N GENERAL .—Section 1886(d)(3)(E) of the Social Secu-
rity Act (42 U.S.C. 1395ww(d)(3)(E)) is amended— 
(A) in clause (i), by striking ‘‘clause (ii)’’ and inserting 
‘‘clause (ii) or (iii)’’; and 
‘‘(iii) F LOOR ON AREA WAGE INDEX FOR HOSPITALS  
IN FRONTIER STATES .— 
‘‘(I) I N GENERAL .—Subject to subclause (IV),

‘‘(I) I N GENERAL .—Subject to subclause (IV), 
for discharges occurring on or after October 1, 2010, the area wage index applicable under this subparagraph to any hospital which is located in a frontier State (as defined in subclause (II)) may not be less than 1.00. 
‘‘(II) F
RONTIER STATE DEFINED .—In this clause, 
the term ‘frontier State’ means a State in which at least 50 percent of the counties in the State are frontier counties. 
‘‘(III) F
RONTIER COUNTY DEFINED .—In this

‘‘(III) F
RONTIER COUNTY DEFINED .—In this 
clause, the term ‘frontier county’ means a county in which the population per square mile is less than 6. 
‘‘(IV) L
IMITATION .—This clause shall not apply 
to any hospital located in a State that receives a non-labor related share adjustment under para-graph (5)(H).’’. 
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124 STAT. 960 PUBLIC LAW 111–148—MAR. 23, 2010 
(2) W AIVING BUDGET NEUTRALITY .—Section 1886(d)(3)(E) of 
the Social Security Act (42 U.S.C. 1395ww(d)(3)(E)), as amended by subsection (a), is amended in the third sentence by inserting ‘‘and the amendments made by section 10324(a)(1) of the Patient Protection and Affordable Care Act’’ after ‘‘2003’’. (b) F
LOOR ON AREA WAGE ADJUSTMENT FACTOR FOR HOSPITAL  
OUTPATIENT DEPARTMENT SERVICES IN FRONTIER STATES .—Section

1833(t) of the Social Security Act (42 U.S.C. 1395l(t)), as amended by section 3138, is amended— 
(1) in paragraph (2)(D), by striking ‘‘the Secretary’’ and 
inserting ‘‘subject to paragraph (19), the Secretary’’; and 
(2) by adding at the end the following new paragraph: ‘‘(19) F
LOOR ON AREA WAGE ADJUSTMENT FACTOR FOR HOS -
PITAL OUTPATIENT DEPARTMENT SERVICES IN FRONTIER STATES .— 
‘‘(A) I N GENERAL .—Subject to subparagraph (B), with

respect to covered OPD services furnished on or after January 1, 2011, the area wage adjustment factor applicable under the payment system established under this subsection to any hospital outpatient department which is located in a frontier State (as defined in section 1886(d)(3)(E)(iii)(II)) may not be less than 1.00. The pre-ceding sentence shall not be applied in a budget neutral manner. 
‘‘(B) L
IMITATION .—This paragraph shall not apply to

IMITATION .—This paragraph shall not apply to 
any hospital outpatient department located in a State that receives a non-labor related share adjustment under section 1886(d)(5)(H).’’. 
(c) F
LOOR FOR PRACTICE EXPENSE INDEX FOR PHYSICIANS ’ SERV-
ICES FURNISHED IN FRONTIER STATES .—Section 1848(e)(1) of the 
Social Security Act (42 U.S.C. 1395w–4(e)(1)), as amended by section 3102, is amended— 
(1) in subparagraph (A), by striking ‘‘and (H)’’ and inserting 
‘‘(H), and (I)’’; and

‘‘(H), and (I)’’; and 
‘‘(I) F
LOOR FOR PRACTICE EXPENSE INDEX FOR SERVICES  
FURNISHED IN FRONTIER STATES .— 
‘‘(i) I N GENERAL .—Subject to clause (ii), for pur-

poses of payment for services furnished in a frontier State (as defined in section 1886(d)(3)(E)(iii)(II)) on or after January 1, 2011, after calculating the practice expense index in subparagraph (A)(i), the Secretary shall increase any such index to 1.00 if such index would otherwise be less that 1.00. The preceding sen-tence shall not be applied in a budget neutral manner. 
‘‘(ii) L
IMITATION .—This subparagraph shall not

‘‘(ii) L
IMITATION .—This subparagraph shall not 
apply to services furnished in a State that receives a non-labor related share adjustment under section 1886(d)(5)(H).’’. 
SEC. 10325. REVISION TO SKILLED NURSING FACILITY PROSPECTIVE 
PAYMENT SYSTEM. 
(a) T EMPORARY DELAY OF RUG–IV.—Notwithstanding any other

provision of law, the Secretary of Health and Human Services shall not, prior to October 1, 2011, implement Version 4 of the Resource Utilization Groups (in this subsection refereed to as ‘‘RUG–IV’’) published in the Federal Register on August 11, 2009, entitled ‘‘Prospective Payment System and Consolidated Billing for Implementation dates.

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124 STAT. 961 PUBLIC LAW 111–148—MAR. 23, 2010 
Skilled Nursing Facilities for FY 2010; Minimum Data Set, Version

3.0 for Skilled Nursing Facilities and Medicaid Nursing Facilities’’ (74 Fed. Reg. 40288). Beginning on October 1, 2010, the Secretary of Health and Human Services shall implement the change specific to therapy furnished on a concurrent basis that is a component of RUG–IV and changes to the lookback period to ensure that only those services furnished after admission to a skilled nursing facility are used as factors in determining a case mix classification under the skilled nursing facility

classification under the skilled nursing facility prospective payment system under section 1888(e) of the Social Security Act (42 U.S.C. 1395yy(e)).

(b) C
ONSTRUCTION .—Nothing in this section shall be interpreted 
as delaying the implementation of Version 3.0 of the Minimum Data Sets (MDS 3.0) beyond the planned implementation date of October 1, 2010. 
SEC. 10326. PILOT TESTING PAY-FOR-PERFORMANCE PROGRAMS FOR 
CERTAIN MEDICARE PROVIDERS. 
(a) I NGENERAL .—Not later than January 1, 2016, the Secretary

of Health and Human Services (in this section referred to as the ‘‘Secretary’’) shall, for each provider described in subsection (b), conduct a separate pilot program under title XVIII of the Social Security Act to test the implementation of a value-based purchasing program for payments under such title for the provider. 
(b) P
ROVIDERS DESCRIBED .—The providers described in this 
paragraph are the following: 
(1) Psychiatric hospitals (as described in clause (i) of section

1886(d)(1)(B) of such Act (42 U.S.C. 1395ww(d)(1)(B))) and psy-chiatric units (as described in the matter following clause (v) of such section). 
(2) Long-term care hospitals (as described in clause (iv) 
of such section). 
(3) Rehabilitation hospitals (as described in clause (ii) of 
such section). 
(4) PPS-exempt cancer hospitals (as described in clause 
(v) of such section). 
(5) Hospice programs (as defined in section 1861(dd)(2) 
of such Act (42 U.S.C. 1395x(dd)(2))). (c) W

requirements of titles XI and XVIII of the Social Security Act as may be necessary solely for purposes of carrying out the pilot programs under this section. 
(d) N
OADDITIONAL PROGRAM EXPENDITURES .—Payments under

this section under the separate pilot program for value based pur-chasing (as described in subsection (a)) for each provider type described in paragraphs (1) through (5) of subsection (b) for applicable items and services under title XVIII of the Social Security Act for a year shall be established in a manner that does not result in spending more under each such value based purchasing program for such year than would otherwise be expended for such provider type for such year if the pilot

for such provider type for such year if the pilot program were not imple-mented, as estimated by the Secretary.

(e) E
XPANSION OF PILOT PROGRAM .—The Secretary may, at 
any point after January 1, 2018, expand the duration and scope of a pilot program conducted under this subsection, to the extent determined appropriate by the Secretary, if— 
(1) the Secretary determines that such expansion is 
expected to— Determinations. Deadline. 42 USC 1395b–1 
note.

note. 
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124 STAT. 962 PUBLIC LAW 111–148—MAR. 23, 2010 
(A) reduce spending under title XVIII of the Social 
Security Act without reducing the quality of care; or 
(B) improve the quality of care and reduce spending; 
(2) the Chief Actuary of the Centers for Medicare & Med-
icaid Services certifies that such expansion would reduce pro-gram spending under such title XVIII; and 
(3) the Secretary determines that such expansion would

not deny or limit the coverage or provision of benefits under such title XIII for Medicare beneficiaries. 
SEC. 10327. IMPROVEMENTS TO THE PHYSICIAN QUALITY REPORTING 
SYSTEM. 
(a) I NGENERAL .—Section 1848(m) of the Social Security Act 
(42 U.S.C. 1395w–4(m)) is amended by adding at the end the following new paragraph: 
‘‘(7) A
DDITIONAL INCENTIVE PAYMENT .— 
‘‘(A) I N GENERAL .—For 2011 through 2014, if an eligible

professional meets the requirements described in subpara-graph (B), the applicable quality percent for such year, as described in clauses (iii) and (iv) of paragraph (1)(B), shall be increased by 0.5 percentage points. 
‘‘(B) R
EQUIREMENTS DESCRIBED .—In order to qualify 
for the additional incentive payment described in subpara-graph (A), an eligible professional shall meet the following requirements: 
‘‘(i) The eligible professional shall— 
‘‘(I) satisfactorily submit data on quality meas-

ures for purposes of paragraph (1) for a year; and 
‘‘(II) have such data submitted on their behalf 
through a Maintenance of Certification Program (as defined in subparagraph (C)(i)) that meets— 
‘‘(aa) the criteria for a registry (as 
described in subsection (k)(4)); or 
‘‘(bb) an alternative form and manner 
determined appropriate by the Secretary. 
‘‘(ii) The eligible professional, more frequently than

is required to qualify for or maintain board certification status— 
‘‘(I) participates in such a Maintenance of Cer-
tification program for a year; and 
‘‘(II) successfully completes a qualified Mainte-
nance of Certification Program practice assessment (as defined in subparagraph (C)(ii)) for such year. ‘‘(iii) A Maintenance of Certification program sub-
mits to the Secretary, on behalf of the eligible profes-sional, information— 
‘‘(I) in a form and manner specified by the

‘‘(I) in a form and manner specified by the 
Secretary, that the eligible professional has successfully met the requirements of clause (ii) (which may be in the form of a structural measure); 
‘‘(II) if requested by the Secretary, on the 
survey of patient experience with care (as described in subparagraph (C)(ii)(II)); and 
‘‘(III) as the Secretary may require, on the 
methods, measures, and data used under the Maintenance of Certification Program and the Time period. Certification.

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124 STAT. 963 PUBLIC LAW 111–148—MAR. 23, 2010 
qualified Maintenance of Certification Program 
practice assessment. 
‘‘(C) D EFINITIONS .—For purposes of this paragraph: 
‘‘(i) The term ‘Maintenance of Certification Pro-

gram’ means a continuous assessment program, such as qualified American Board of Medical Specialties Maintenance of Certification program or an equivalent program (as determined by the Secretary), that advances quality and the lifelong learning and self- assessment of board certified specialty physicians by focusing on the competencies of patient care, medical knowledge, practice-based learning, interpersonal and communication skills and professionalism. Such a pro-gram shall include the

‘‘(I) The program requires the physician to 
maintain a valid, unrestricted medical license in the United States. 
‘‘(II) The program requires a physician to 
participate in educational and self-assessment pro-grams that require an assessment of what was learned. 
‘‘(III) The program requires a physician to

‘‘(III) The program requires a physician to 
demonstrate, through a formalized, secure exam-ination, that the physician has the fundamental diagnostic skills, medical knowledge, and clinical judgment to provide quality care in their respective specialty. 
‘‘(IV) The program requires successful comple-
tion of a qualified Maintenance of Certification Program practice assessment as described in clause (ii). ‘‘(ii) The term ‘qualified Maintenance of Certifi-

cation Program practice assessment’ means an assess-ment of a physician’s practice that— 
‘‘(I) includes an initial assessment of an 
eligible professional’s practice that is designed to demonstrate the physician’s use of evidence-based medicine; 
‘‘(II) includes a survey of patient experience 
with care; and 
‘‘(III) requires a physician to implement a

‘‘(III) requires a physician to implement a 
quality improvement intervention to address a practice weakness identified in the initial assess-ment under subclause (I) and then to remeasure to assess performance improvement after such intervention.’’. 
(b) A
UTHORITY .—Section 3002(c) of this Act is amended by 
adding at the end the following new paragraph: 
‘‘(3) A UTHORITY .—For years after 2014, if the Secretary

of Health and Human Services determines it to be appropriate, the Secretary may incorporate participation in a Maintenance of Certification Program and successful completion of a qualified Maintenance of Certification Program practice assessment into the composite of measures of quality of care furnished pursuant to the physician fee schedule payment modifier, as described in section 1848(p)(2) of the Social Security Act (42 U.S.C. 1395w–4(p)(2)).’’. Determination. 42 USC 1395w–4 
note.

note. 
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124 STAT. 964 PUBLIC LAW 111–148—MAR. 23, 2010 
(c) E LIMINATION OF MA R EGIONAL PLANSTABILIZATION FUND.— 
(1) I N GENERAL .—Section 1858 of the Social Security Act 
(42 U.S.C. 1395w–27a) is amended by striking subsection (e). 
(2) T RANSITION .—Any amount contained in the MA 
Regional Plan Stabilization Fund as of the date of the enact-ment of this Act shall be transferred to the Federal Supple-mentary Medical Insurance Trust Fund. 
SEC. 10328. IMPROVEMENT IN PART D MEDICATION THERAPY MANAGE-

MENT (MTM) PROGRAMS. 
(a) I NGENERAL .—Section 1860D–4(c)(2) of the Social Security 
Act (42 U.S.C. 1395w–104(c)(2)) is amended— 
(1) by redesignating subparagraphs (C), (D), and (E) as 
subparagraphs (E), (F), and (G), respectively; and 
(2) by inserting after subparagraph (B) the following new 
subparagraphs: 
‘‘(C) R EQUIRED INTERVENTIONS .—For plan years begin-

ning on or after the date that is 2 years after the date of the enactment of the Patient Protection and Affordable Care Act, prescription drug plan sponsors shall offer medi-cation therapy management services to targeted bene-ficiaries described in subparagraph (A)(ii) that include, at a minimum, the following to increase adherence to prescrip-tion medications or other goals deemed necessary by the Secretary: 
‘‘(i) An annual comprehensive medication review

‘‘(i) An annual comprehensive medication review 
furnished person-to-person or using telehealth tech-nologies (as defined by the Secretary) by a licensed pharmacist or other qualified provider. The comprehen-sive medication review— 
‘‘(I) shall include a review of the individual’s 
medications and may result in the creation of a recommended medication action plan or other actions in consultation with the individual and with input from the prescriber to the extent nec-

essary and practicable; and 
‘‘(II) shall include providing the individual 
with a written or printed summary of the results of the review. 
The Secretary, in consultation with relevant stake-holders, shall develop a standardized format for the action plan under subclause (I) and the summary under subclause (II). 
‘‘(ii) Follow-up interventions as warranted based

on the findings of the annual medication review or the targeted medication enrollment and which may be provided person-to-person or using telehealth tech-nologies (as defined by the Secretary). ‘‘(D) A
SSESSMENT .—The prescription drug plan sponsor

SSESSMENT .—The prescription drug plan sponsor 
shall have in place a process to assess, at least on a quarterly basis, the medication use of individuals who are at risk but not enrolled in the medication therapy manage-ment program, including individuals who have experienced a transition in care, if the prescription drug plan sponsor has access to that information. 42 USC 
1395w–27a note.

1395w–27a note. 
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124 STAT. 965 PUBLIC LAW 111–148—MAR. 23, 2010 
‘‘(E) A UTOMATIC ENROLLMENT WITH ABILITY TO OPT - 
OUT.—The prescription drug plan sponsor shall have in 
place a process to— 
‘‘(i) subject to clause (ii), automatically enroll tar-
geted beneficiaries described in subparagraph (A)(ii), including beneficiaries identified under subparagraph (D), in the medication therapy management program required under this subsection; and 
‘‘(ii) permit such beneficiaries to opt-out of enroll-

ment in such program.’’. 
(b) R
ULE OF CONSTRUCTION .—Nothing in this section shall limit 
the authority of the Secretary of Health and Human Services to modify or broaden requirements for a medication therapy manage-ment program under part D of title XVIII of the Social Security Act or to study new models for medication therapy management through the Center for Medicare and Medicaid Innovation under section 1115A of such Act, as added by section 3021.

SEC. 10329. DEVELOPING METHODOLOGY TO ASSESS HEALTH PLAN 
VALUE. 
(a) D EVELOPMENT .—The Secretary of Health and Human Serv-

ices (referred to in this section as the ‘‘Secretary’’), in consultation with relevant stakeholders including health insurance issuers, health care consumers, employers, health care providers, and other entities determined appropriate by the Secretary, shall develop a methodology to measure health plan value. Such methodology shall take into consideration, where applicable—

(1) the overall cost to enrollees under the plan; (2) the quality of the care provided for under the plan; (3) the efficiency of the plan in providing care; (4) the relative risk of the plan’s enrollees as compared 
to other plans; 
(5) the actuarial value or other comparative measure of 
the benefits covered under the plan; and 
(6) other factors determined relevant by the Secretary. 
(b) R
EPORT .—Not later than 18 months after the date of enact-

ment of this Act, the Secretary shall submit to Congress a report concerning the methodology developed under subsection (a). 
SEC. 10330. MODERNIZING COMPUTER AND DATA SYSTEMS OF THE 
CENTERS FOR MEDICARE & MEDICAID SERVICES TO SUP-PORT IMPROVEMENTS IN CARE DELIVERY. 

(in this section referred to as the ‘‘Secretary’’) shall develop a plan (and detailed budget for the resources needed to implement such plan) to modernize the computer and data systems of the Centers for Medicare & Medicaid Services (in this section referred to as ‘‘CMS’’). 
(b) C
ONSIDERATIONS .—In developing the plan, the Secretary 
shall consider how such modernized computer system could— 
(1) in accordance with the regulations promulgated under

section 264(c) of the Health Insurance Portability and Account-ability Act of 1996, make available data in a reliable and timely manner to providers of services and suppliers to support their efforts to better manage and coordinate care furnished to beneficiaries of CMS programs; and 
(2) support consistent evaluations of payment and delivery 
system reforms under CMS programs. Plan. 42 USC 

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124 STAT. 966 PUBLIC LAW 111–148—MAR. 23, 2010 
(c) P OSTING OF PLAN.—By not later than 9 months after the 
date of the enactment of this Act, the Secretary shall post on the website of the Centers for Medicare & Medicaid Services the plan described in subsection (a). 
SEC. 10331. PUBLIC REPORTING OF PERFORMANCE INFORMATION. 
(1) D EVELOPMENT .—Not later than January 1, 2011, the

Secretary shall develop a Physician Compare Internet website with information on physicians enrolled in the Medicare pro-gram under section 1866(j) of the Social Security Act (42 U.S.C. 1395cc(j)) and other eligible professionals who participate in the Physician Quality Reporting Initiative under section 1848 of such Act (42 U.S.C. 1395w–4). 
(2) P
LAN.—Not later than January 1, 2013, and with

respect to reporting periods that begin no earlier than January 1, 2012, the Secretary shall also implement a plan for making publicly available through Physician Compare, consistent with subsection (c), information on physician performance that pro-vides comparable information for the public on quality and patient experience measures with respect to physicians enrolled in the Medicare program under such section 1866(j). To the extent scientifically sound measures that are developed con-sistent

sound measures that are developed con-sistent with the requirements of this section are available, such information, to the extent practicable, shall include—

(A) measures collected under the Physician Quality 
Reporting Initiative; 
(B) an assessment of patient health outcomes and the 
functional status of patients; 
(C) an assessment of the continuity and coordination 
of care and care transitions, including episodes of care and risk-adjusted resource use; 
(D) an assessment of efficiency; (E) an assessment of patient experience and patient, 
caregiver, and family engagement; 
(F) an assessment of the safety, effectiveness, and time-

liness of care; and 
(G) other information as determined appropriate by 
the Secretary. 
(b) O
THER REQUIRED CONSIDERATIONS .—In developing and 
implementing the plan described in subsection (a)(2), the Secretary shall, to the extent practicable, include— 
(1) processes to assure that data made public, either by 
the Centers for Medicare & Medicaid Services or by other entities, is statistically valid and reliable, including risk adjust-ment mechanisms used by the Secretary;

(2) processes by which a physician or other eligible profes-
sional whose performance on measures is being publicly reported has a reasonable opportunity, as determined by the Secretary, to review his or her individual results before they are made public; 
(3) processes by the Secretary to assure that the 
implementation of the plan and the data made available on Physician Compare provide a robust and accurate portrayal of a physician’s performance;

(4) data that reflects the care provided to all patients 
seen by physicians, under both the Medicare program and, Time period. Web site. Deadline. 42 USC 1395w–5. Deadline. 
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124 STAT. 967 PUBLIC LAW 111–148—MAR. 23, 2010 
to the extent practicable, other payers, to the extent such 
information would provide a more accurate portrayal of physi-cian performance; 
(5) processes to ensure appropriate attribution of care when 
multiple physicians and other providers are involved in the care of a patient; 
(6) processes to ensure timely statistical performance feed-

back is provided to physicians concerning the data reported under any program subject to public reporting under this sec-tion; and 
(7) implementation of computer and data systems of the 
Centers for Medicare & Medicaid Services that support valid, reliable, and accurate public reporting activities authorized under this section. (c) E
NSURING PATIENT PRIVACY .—The Secretary shall ensure

that information on physician performance and patient experience is not disclosed under this section in a manner that violates sections 552 or 552a of title 5, United States Code, with regard to the privacy of individually identifiable health information. 
(d) F
EEDBACK FROM MULTI-STAKEHOLDER GROUPS .—The Sec-

retary shall take into consideration input provided by multi-stake-holder groups, consistent with sections 1890(b)(7) and 1890A of the Social Security Act, as added by section 3014 of this Act, in selecting quality measures for use under this section. 
(e) C
ONSIDERATION OF TRANSITION TO VALUE -BASED PUR-
CHASING .—In developing the plan under this subsection (a)(2), the

Secretary shall, as the Secretary determines appropriate, consider the plan to transition to a value-based purchasing program for physicians and other practitioners developed under section 131 of the Medicare Improvements for Patients and Providers Act of 2008 (Public Law 110–275). 
(f) R
EPORT TO CONGRESS .—Not later than January 1, 2015,

the Secretary shall submit to Congress a report on the Physician Compare Internet website developed under subsection (a)(1). Such report shall include information on the efforts of and plans made by the Secretary to collect and publish data on physician quality and efficiency and on patient experience of care in support of value-based purchasing and consumer choice, together with rec-ommendations for such legislation and administrative action as 
(g) E

(g) E
XPANSION .—At any time before the date on which the 
report is submitted under subsection (f), the Secretary may expand (including expansion to other providers of services and suppliers under title XVIII of the Social Security Act) the information made available on such website. 
(h) F
INANCIAL INCENTIVES TOENCOURAGE CONSUMERS TO 
CHOOSE HIGH QUALITY PROVIDERS .—The Secretary may establish

a demonstration program, not later than January 1, 2019, to provide financial incentives to Medicare beneficiaries who are furnished services by high quality physicians, as determined by the Secretary based on factors in subparagraphs (A) through (G) of subsection (a)(2). In no case may Medicare beneficiaries be required to pay increased premiums or cost sharing or be subject to a reduction in benefits under title XVIII of the Social Security Act as a result of such demonstration program. The

as a result of such demonstration program. The Secretary shall ensure that Deadline.

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124 STAT. 968 PUBLIC LAW 111–148—MAR. 23, 2010 
any such demonstration program does not disadvantage those bene-
ficiaries without reasonable access to high performing physicians or create financial inequities under such title. 
(i) D
(1) E LIGIBLE PROFESSIONAL .—The term ‘‘eligible profes-
sional’’ has the meaning given that term for purposes of the Physician Quality Reporting Initiative under section 1848 of the Social Security Act (42 U.S.C. 1395w–4). 
(2) P

(2) P
HYSICIAN .—The term ‘‘physician’’ has the meaning 
given that term in section 1861(r) of such Act (42 U.S.C. 1395x(r)). 
(3) P
HYSICIAN COMPARE .—The term ‘‘Physician Compare’’ 
means the Internet website developed under subsection (a)(1). 
(4) S ECRETARY .—The term ‘‘Secretary’’ means the Secretary 
SEC. 10332. AVAILABILITY OF MEDICARE DATA FOR PERFORMANCE 
MEASUREMENT. 
(a) I NGENERAL .—Section 1874 of the Social Security Act (42

U.S.C. 1395kk) is amended by adding at the end the following new subsection: 
‘‘(e) A
VAILABILITY OF MEDICARE DATA.— 
‘‘(1) I N GENERAL .—Subject to paragraph (4), the Secretary 
shall make available to qualified entities (as defined in para-graph (2)) data described in paragraph (3) for the evaluation of the performance of providers of services and suppliers. 
‘‘(2) Q
UALIFIED ENTITIES .—For purposes of this subsection, 
the term ‘qualified entity’ means a public or private entity that—

‘‘(A) is qualified (as determined by the Secretary) to 
use claims data to evaluate the performance of providers of services and suppliers on measures of quality, efficiency, effectiveness, and resource use; and 
‘‘(B) agrees to meet the requirements described in para-
graph (4) and meets such other requirements as the Sec-retary may specify, such as ensuring security of data. ‘‘(3) D
ATA DESCRIBED .—The data described in this para-
graph are standardized extracts (as determined by the Sec-

retary) of claims data under parts A, B, and D for items and services furnished under such parts for one or more speci-fied geographic areas and time periods requested by a qualified entity. The Secretary shall take such actions as the Secretary deems necessary to protect the identity of individuals entitled to or enrolled for benefits under such parts. 
‘‘(4) R
‘‘(A) F EE.—Data described in paragraph (3) shall be

made available to a qualified entity under this subsection at a fee equal to the cost of making such data available. Any fee collected pursuant to the preceding sentence shall be deposited into the Federal Supplementary Medical Insurance Trust Fund under section 1841. 
‘‘(B) S
PECIFICATION OF USES AND METHODOLOGIES .— 
A qualified entity requesting data under this subsection shall— 
‘‘(i) submit to the Secretary a description of the 
methodologies that such qualified entity will use to

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124 STAT. 969 PUBLIC LAW 111–148—MAR. 23, 2010 
evaluate the performance of providers of services and 
suppliers using such data; 
‘‘(ii)(I) except as provided in subclause (II), if avail-
able, use standard measures, such as measures endorsed by the entity with a contract under section 1890(a) and measures developed pursuant to section 931 of the Public Health Service Act; or 
‘‘(II) use alternative measures if the Secretary,

in consultation with appropriate stakeholders, deter-mines that use of such alternative measures would be more valid, reliable, responsive to consumer pref-erences, cost-effective, or relevant to dimensions of quality and resource use not addressed by such standard measures; 
‘‘(iii) include data made available under this sub-
section with claims data from sources other than claims data under this title in the evaluation of performance of providers of services and suppliers;

‘‘(iv) only include information on the evaluation 
of performance of providers and suppliers in reports described in subparagraph (C); 
‘‘(v) make available to providers of services and 
suppliers, upon their request, data made available under this subsection; and 
‘‘(vi) prior to their release, submit to the Secretary 
the format of reports under subparagraph (C). ‘‘(C) R
EPORTS .—Any report by a qualified entity evalu-

ating the performance of providers of services and suppliers using data made available under this subsection shall— 
‘‘(i) include an understandable description of the

measures, which shall include quality measures and the rationale for use of other measures described in subparagraph (B)(ii)(II), risk adjustment methods, physician attribution methods, other applicable methods, data specifications and limitations, and the sponsors, so that consumers, providers of services and suppliers, health plans, researchers, and other stake-holders can assess such reports; 
‘‘(ii) be made available confidentially, to any pro-

vider of services or supplier to be identified in such report, prior to the public release of such report, and provide an opportunity to appeal and correct errors; 
‘‘(iii) only include information on a provider of 
services or supplier in an aggregate form as determined appropriate by the Secretary; and 
‘‘(iv) except as described in clause (ii), be made 
available to the public. ‘‘(D) A
PPROVAL AND LIMITATION OF USES .—The Sec-

retary shall not make data described in paragraph (3) available to a qualified entity unless the qualified entity agrees to release the information on the evaluation of performance of providers of services and suppliers. Such entity shall only use such data, and information derived from such evaluation, for the reports under subparagraph (C). Data released to a qualified entity under this sub-section shall not be subject to discovery or admission as Public 

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124 STAT. 970 PUBLIC LAW 111–148—MAR. 23, 2010 
evidence in judicial or administrative proceedings without 
consent of the applicable provider of services or supplier.’’. 
shall take effect on January 1, 2012. 
SEC. 10333. COMMUNITY-BASED COLLABORATIVE CARE NETWORKS. 
Part D of title III of the Public Health Service Act (42 U.S.C. 
254b et seq.) is amended by adding at the end the following new subpart:

‘‘Subpart XI—Community-Based Collaborative 
Care Network Program 
‘‘SEC. 340H. COMMUNITY-BASED COLLABORATIVE CARE NETWORK 
PROGRAM. 
‘‘(a) I NGENERAL .—The Secretary may award grants to eligible 
entities to support community-based collaborative care networks that meet the requirements of subsection (b). 
‘‘(b) C
OMMUNITY -BASED COLLABORATIVE CARENETWORKS .— 
‘‘(1) D ESCRIPTION .—A community-based collaborative care

network (referred to in this section as a ‘network’) shall be a consortium of health care providers with a joint governance structure (including providers within a single entity) that pro-
vides comprehensive coordinated and integrated health care services (as defined by the Secretary) for low-income popu-lations. 
‘‘(2) R
EQUIRED INCLUSION .—A network shall include the

EQUIRED INCLUSION .—A network shall include the 
following providers (unless such provider does not exist within the community, declines or refuses to participate, or places unreasonable conditions on their participation): 
‘‘(A) A hospital that meets the criteria in section 
1923(b)(1) of the Social Security Act; and 
‘‘(B) All Federally qualified health centers (as defined 
in section 1861(aa) of the Social Security Act located in the community. ‘‘(3) P

RIORITY .—In awarding grants, the Secretary shall 
give priority to networks that include— 
‘‘(A) the capability to provide the broadest range of 
services to low-income individuals; 
‘‘(B) the broadest range of providers that currently 
serve a high volume of low-income individuals; and 
‘‘(C) a county or municipal department of health. 
‘‘(c) A PPLICATION .— 
‘‘(1) A PPLICATION .—A network described in subsection (b) 
shall submit an application to the Secretary.

shall submit an application to the Secretary. 
‘‘(2) R ENEWAL .—In subsequent years, based on the perform-
ance of grantees, the Secretary may provide renewal grants to prior year grant recipients. ‘‘(d) U
‘‘(1) U SE BY GRANTEES .—Grant funds may be used for the 
following activities: 
‘‘(A) Assist low-income individuals to— 
‘‘(i) access and appropriately use health services; ‘‘(ii) enroll in health coverage programs; and ‘‘(iii) obtain a regular primary care provider or

a medical home. ‘‘(B) Provide case management and care management. 42 USC 256i. 42 USC 1395kk 
note. 
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124 STAT. 971 PUBLIC LAW 111–148—MAR. 23, 2010 
‘‘(C) Perform health outreach using neighborhood 
health workers or through other means. 
‘‘(D) Provide transportation. ‘‘(E) Expand capacity, including through telehealth, 
after-hours services or urgent care. 
‘‘(F) Provide direct patient care services. 
‘‘(2) G
RANT FUNDS TO HRSA GRANTEES .—The Secretary may

RANT FUNDS TO HRSA GRANTEES .—The Secretary may 
limit the percent of grant funding that may be spent on direct care services provided by grantees of programs administered by the Health Resources and Services Administration or impose other requirements on such grantees deemed necessary. ‘‘(e) A
to be appropriated to carry out this section such sums as may be necessary for each of fiscal years 2011 through 2015.’’.

SEC. 10334. MINORITY HEALTH. 
(a) O FFICE OF MINORITY HEALTH .— 
(1) I N GENERAL .—Section 1707 of the Public Health Service 
Act (42 U.S.C. 300u–6) is amended— 
(A) in subsection (a), by striking ‘‘within the Office

of Public Health and Science’’ and all that follows through the end and inserting ‘‘. The Office of Minority Health as existing on the date of enactment of the Patient Protec-tion and Affordable Care Act shall be transferred to the Office of the Secretary in such manner that there is estab-lished in the Office of the Secretary, the Office of Minority Health, which shall be headed by the Deputy Assistant Secretary for Minority Health who shall report directly to the Secretary, and shall retain

directly to the Secretary, and shall retain and strengthen authori-ties (as in existence on such date of enactment) for the purpose of improving minority health and the quality of health care minorities receive, and eliminating racial and ethnic disparities. In carrying out this subsection, the Sec-retary, acting through the Deputy Assistant Secretary, shall award grants, contracts, enter into memoranda of understanding, cooperative, interagency, intra-agency and other agreements with public

intra-agency and other agreements with public and nonprofit private entities, agencies, as well as Departmental and Cabinet agencies and organizations, and with organizations that are indige-nous human resource providers in communities of color to assure improved health status of racial and ethnic minorities, and shall develop measures to evaluate the effectiveness of activities aimed at reducing health dispari-ties and supporting the local community. Such measures shall evaluate community

community. Such measures shall evaluate community outreach activities, language services, workforce cultural competence, and other areas as determined by the Secretary.’’; and

(B) by striking subsection (h) and inserting the fol-
lowing: 
‘‘(h) A
carrying out this section, there are authorized to be appropriated such sums as may be necessary for each of fiscal years 2011 through 2016.’’. 
(2) T
RANSFER OF FUNCTIONS .—There are transferred to the

Office of Minority Health in the office of the Secretary of Health and Human Services, all duties, responsibilities, authorities, accountabilities, functions, staff, funds, award 42 USC 300u–6 note. Grants. 
Contracts. Memorandum. Establishment. 
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124 STAT. 972 PUBLIC LAW 111–148—MAR. 23, 2010 
mechanisms, and other entities under the authority of the

Office of Minority Health of the Public Health Service as in effect on the date before the date of enactment of this Act, which shall continue in effect according to the terms in effect on the date before such date of enactment, until modified, terminated, superseded, set aside, or revoked in accordance with law by the President, the Secretary, a court of competent jurisdiction, or by operation of law. 
(3) R

ment of this section, and biennially thereafter, the Secretary of Health and Human Services shall prepare and submit to the appropriate committees of Congress a report describing the activities carried out under section 1707 of the Public Health Service Act (as amended by this subsection) during the period for which the report is being prepared. Not later than 1 year after the date of enactment of this section, and biennially thereafter, the heads of each of the agencies of the Department of

of each of the agencies of the Department of Health and Human Services shall submit to the Deputy Assistant Secretary for Minority Health a report summarizing the minority health activities of each of the respective agencies. (b) E

STABLISHMENT OF INDIVIDUAL OFFICES OF MINORITY  
HEALTH WITHIN THE DEPARTMENT OF HEALTH AND HUMAN SERV-
ICES.— 
(1) I N GENERAL .—Title XVII of the Public Health Service 
Act (42 U.S.C. 300u et seq.) is amended by inserting after section 1707 the following section: 
‘‘SEC. 1707A. INDIVIDUAL OFFICES OF MINORITY HEALTH WITHIN THE 
DEPARTMENT. 
‘‘(a) I NGENERAL .—The head of each agency specified in sub-

section (b)(1) shall establish within the agency an office to be known as the Office of Minority Health. The head of each such Office shall be appointed by the head of the agency within which the Office is established, and shall report directly to the head of the agency. The head of such agency shall carry out this section (as this section relates to the agency) acting through such Director. 
‘‘(b) S
PECIFIED AGENCIES .—The agencies referred to in sub-

section (a) are the Centers for Disease Control and Prevention, the Health Resources and Services Administration, the Substance Abuse and Mental Health Services Administration, the Agency for Healthcare Research and Quality, the Food and Drug Administra-tion, and the Centers for Medicare & Medicaid Services. 
‘‘(c) D
IRECTOR ; APPOINTMENT .—Each Office of Minority Health

established in an agency listed in subsection (a) shall be headed by a director, with documented experience and expertise in minority health services research and health disparities elimination. 
‘‘(d) R
EFERENCES .—Except as otherwise specified, any reference 
in Federal law to an Office of Minority Health (in the Department of Health and Human Services) is deemed to be a reference to the Office of Minority Health in the Office of the Secretary. 
‘‘(e) F
UNDING .—

‘‘(e) F
UNDING .— 
‘‘(1) A LLOCATIONS .—Of the amounts appropriated for a 
specified agency for a fiscal year, the Secretary must designate an appropriate amount of funds for the purpose of carrying out activities under this section through the minority health office of the agency. In reserving an amount under the preceding Appointment. 42 USC 300u–6a. 42 USC 300u–6 
note.

note. 
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124 STAT. 973 PUBLIC LAW 111–148—MAR. 23, 2010 
sentence for a minority health office for a fiscal year, the 
Secretary shall reduce, by substantially the same percentage, the amount that otherwise would be available for each of the programs of the designated agency involved. 
‘‘(2) A
VAILABILITY OF FUNDS FOR STAFFING .—The purposes 
for which amounts made available under paragraph may be expended by a minority health office include the costs of employing staff for such office.’’. 
(2) N

(2) N
O NEW REGULATORY AUTHORITY .—Nothing in this sub-
section and the amendments made by this subsection may be construed as establishing regulatory authority or modifying any existing regulatory authority. 
(3) L
IMITATION ON TERMINATION .—Notwithstanding any

other provision of law, a Federal office of minority health or Federal appointive position with primary responsibility over minority health issues that is in existence in an office of agency of the Department of Health and Human Services on the date of enactment of this section shall not be terminated, reorga-nized, or have any of its power or duties transferred unless such termination, reorganization, or transfer is approved by an Act of Congress. (c) R

EDESIGNATION OF NATIONAL CENTER ON MINORITY HEALTH  
AND HEALTH DISPARITIES .— 
(1) R EDESIGNATION .—Title IV of the Public Health Service 
Act (42 U.S.C. 281 et seq.) is amended— 
(A) by redesignating subpart 6 of part E as subpart 
20; 
(B) by transferring subpart 20, as so redesignated, 
to part C of such title IV; 
(C) by inserting subpart 20, as so redesignated, after 
subpart 19 of such part C; and 
(D) in subpart 20, as so redesignated— 
(i) by redesignating sections 485E through 485H

(i) by redesignating sections 485E through 485H 
as sections 464z–3 through 464z–6, respectively; 
(ii) by striking ‘‘National Center on Minority 
Health and Health Disparities’’ each place such term appears and inserting ‘‘National Institute on Minority Health and Health Disparities’’; and 
(iii) by striking ‘‘Center’’ each place such term 
appears and inserting ‘‘Institute’’. 
(2) P
URPOSE OF INSTITUTE ; DUTIES .—Section 464z–3 of the

Public Health Service Act, as so redesignated, is amended— 
(A) in subsection (h)(1), by striking ‘‘research endow-
ments at centers of excellence under section 736.’’ and inserting the following: ‘‘research endowments— ‘‘(1) at centers of excellence under section 736; and ‘‘(2) at centers of excellence under section 464z–4.’’; 
(B) in subsection (h)(2)(A), by striking ‘‘average’’ and 
inserting ‘‘median’’; and 
‘‘(h) I

‘‘(h) I
NTERAGENCY COORDINATION .—The Director of the 
Institute, as the primary Federal officials with responsibility for coordinating all research and activities conducted or supported by the National Institutes of Health on minority health and health disparities, shall plan, coordinate, review and evaluate research and other activities conducted or supported by the Institutes and Centers of the National Institutes of Health.’’. 42 USC 285t. 42 USC

285t—285t–3. 42 USC 285t. 42 USC 
285t—285t–3. 42 USC 300u–6a 
note. 42 USC 300u–6a 
note. 
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124 STAT. 974 PUBLIC LAW 111–148—MAR. 23, 2010 
(3) T ECHNICAL AND CONFORMING AMENDMENTS .— 
(A) Section 401(b)(24) of the Public Health Service 
Act (42 U.S.C. 281(b)(24)) is amended by striking ‘‘Center’’ and inserting ‘‘Institute’’. 
(B) Subsection (d)(1) of section 903 of the Public Health 
Service Act (42 U.S.C. 299a–1(d)(1)) is amended by striking ‘‘section 485E’’ and inserting ‘‘section 464z–3’’. 
SEC. 10335. TECHNICAL CORRECTION TO THE HOSPITAL VALUE-BASED 
PURCHASING PROGRAM.

PURCHASING PROGRAM. 
Section 1886(o)(2)A) of the Social Security Act, as added by 
section 3001, is amended, in the first sentence, by inserting ‘‘, other than measures of readmissions,’’ after ‘‘shall select measures’’. 
SEC. 10336. GAO STUDY AND REPORT ON MEDICARE BENEFICIARY 
ACCESS TO HIGH-QUALITY DIALYSIS SERVICES. 
(1) I N GENERAL .—The Comptroller General of the United

States shall conduct a study on the impact on Medicare bene-ficiary access to high-quality dialysis services of including speci-fied oral drugs that are furnished to such beneficiaries for the treatment of end stage renal disease in the bundled prospec-tive payment system under section 1881(b)(14) of the Social Security Act (42 U.S.C. 1395rr(b)(14)) (pursuant to the proposed rule published by the Secretary of Health and Human Services in the Federal Register on September 29, 2009 (74 Fed. Reg.

Register on September 29, 2009 (74 Fed. Reg. 49922 et seq.)). Such study shall include an analysis of—

(A) the ability of providers of services and renal dialysis 
facilities to furnish specified oral drugs or arrange for the provision of such drugs; 
(B) the ability of providers of services and renal dialysis 
facilities to comply, if necessary, with applicable State laws (such as State pharmacy licensure requirements) in order 
to furnish specified oral drugs; 
(C) whether appropriate quality measures exist to safe-

guard care for Medicare beneficiaries being furnished speci-fied oral drugs by providers of services and renal dialysis facilities; and 
(D) other areas determined appropriate by the Comp-
troller General. (2) S
PECIFIED ORAL DRUG DEFINED .—For purposes of para-
graph (1), the term ‘‘specified oral drug’’ means a drug or biological for which there is no injectable equivalent (or other non-oral form of administration). (b) R
EPORT .—Not later than 1 year after the date of the enact-

ment of this Act, the Comptroller General of the United States shall submit to Congress a report containing the results of the study conducted under subsection (a), together with recommenda-tions for such legislation and administrative action as the Comp-troller General determines appropriate. 
SEC. 10401. AMENDMENTS TO SUBTITLE A. 
(a) Section 4001(h)(4) and (5) of this Act is amended by striking

‘‘2010’’ each place such appears and inserting ‘‘2020’’. 
(b) Section 4002(c) of this Act is amended— 42 USC 300u–11. 42 USC 300u–10. 42 USC 1395ww. 
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124 STAT. 975 PUBLIC LAW 111–148—MAR. 23, 2010 
(1) by striking ‘‘research and health screenings’’ and 
inserting ‘‘research, health screenings, and initiatives’’; and 
(2) by striking ‘‘for Preventive’’ and inserting ‘‘Regarding 
Preventive’’. (c) Section 4004(a)(4) of this Act is amended by striking ‘‘a 
Gateway’’ and inserting ‘‘an Exchange’’. 
SEC. 10402. AMENDMENTS TO SUBTITLE B. 
(a) Section 399Z–1(a)(1(A) of the Public Health Service Act,

as added by section 4101(b) of this Act, is amended by inserting ‘‘and vision’’ after ‘‘oral’’. 
(b) Section 1861(hhh)(4)(G) of the Social Security Act, as added 
by section 4103(b), is amended to read as follows: 
‘‘(G) A beneficiary shall be eligible to receive only an

initial preventive physical examination (as defined under subsection (ww)(1)) during the 12-month period after the date that the beneficiary’s coverage begins under part B and shall be eligible to receive personalized prevention plan services under this subsection each year thereafter provided that the beneficiary has not received either an initial preventive physical examination or personalized prevention plan services within the preceding 12-month period.’’.

SEC. 10403. AMENDMENTS TO SUBTITLE C. 
Section 4201 of this Act is amended— 
(1) in subsection (a), by adding before the period the fol-
lowing: ‘‘, with not less than 20 percent of such grants being awarded to rural and frontier areas’’; 
(2) in subsection (c)(2)(B)(vii), by striking ‘‘both urban and 
rural areas’’ and inserting ‘‘urban, rural, and frontier areas’’; and 
(3) in subsection (f), by striking ‘‘each fiscal years’’ and 
inserting ‘‘each of fiscal year’’.

inserting ‘‘each of fiscal year’’. 
SEC. 10404. AMENDMENTS TO SUBTITLE D. 
Section 399MM(2) of the Public Health Service Act, as added 
by section 4303 of this Act, is amended by striking ‘‘by ensuring’’ and inserting ‘‘and ensuring’’. 
SEC. 10405. AMENDMENTS TO SUBTITLE E. 
Subtitle E of title IV of this Act is amended by striking section 
4401. 
SEC. 10406. AMENDMENT RELATING TO WAIVING COINSURANCE FOR 
PREVENTIVE SERVICES. 
Section 4104(b) of this Act is amended to read as follows:

‘‘(b) P AYMENT AND ELIMINATION OF COINSURANCE IN ALLSET-
TINGS .—Section 1833(a)(1) of the Social Security Act (42 U.S.C. 
1395l(a)(1)), as amended by section 4103(c)(1), is amended— 
‘‘(1) in subparagraph (T), by inserting ‘(or 100 percent 
if such services are recommended with a grade of A or B by the United States Preventive Services Task Force for any indication or population and are appropriate for the individual)’ after ‘80 percent’;

‘‘(2) in subparagraph (W)— 42 USC 280 l. 42 USC 300u–13. 42 USC 1395k. 42 USC 280n–5. 42 USC 300u–12. 
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124 STAT. 976 PUBLIC LAW 111–148—MAR. 23, 2010 
‘‘(A) in clause (i), by inserting ‘(if such subparagraph 
were applied, by substituting ‘‘100 percent’’ for ‘‘80 per-cent’’)’ after ‘subparagraph (D)’; and 
‘‘(B) in clause (ii), by striking ‘80 percent’ and inserting 
‘100 percent’; ‘‘(3) by striking ‘and’ before ‘(X)’; and ‘‘(4) by inserting before the semicolon at the end the fol-

lowing: ‘, and (Y) with respect to preventive services described in subparagraphs (A) and (B) of section 1861(ddd)(3) that are appropriate for the individual and, in the case of such services described in subparagraph (A), are recommended with a grade of A or B by the United States Preventive Services Task Force for any indication or population, the amount paid shall be 100 percent of (i) except as provided in clause (ii), the lesser of the actual charge for the services or the amount

the actual charge for the services or the amount determined under the fee schedule that applies to such services under this part, and (ii) in the case of such services that are covered OPD services (as defined in subsection (t)(1)(B)), the amount determined under subsection (t)’.’’.

SEC. 10407. BETTER DIABETES CARE. 
(a) S HORT TITLE.—This section may be cited as the ‘‘Catalyst 
to Better Diabetes Care Act of 2009’’. 
(b) N ATIONAL DIABETES REPORT CARD.— 
(1) I N GENERAL .—The Secretary, in collaboration with the

Director of the Centers for Disease Control and Prevention (referred to in this section as the ‘‘Director’’), shall prepare on a biennial basis a national diabetes report card (referred to in this section as a ‘‘Report Card’’) and, to the extent possible, for each State. 
(2) C
ONTENTS .— 
(A) I N GENERAL .—Each Report Card shall include 
aggregate health outcomes related to individuals diagnosed with diabetes and prediabetes including—

(i) preventative care practices and quality of care; (ii) risk factors; and (iii) outcomes. 
(B) U
PDATED REPORTS .—Each Report Card that is pre-
pared after the initial Report Card shall include trend analysis for the Nation and, to the extent possible, for each State, for the purpose of— 
(i) tracking progress in meeting established 
national goals and objectives for improving diabetes care, costs, and prevalence (including Healthy People 2010); and

(ii) informing policy and program development. 
(3) A
VAILABILITY .—The Secretary, in collaboration with the 
Director, shall make each Report Card publicly available, including by posting the Report Card on the Internet. (c) I
MPROVEMENT OF VITAL STATISTICS COLLECTION .— 
(1) I N GENERAL .—The Secretary, acting through the 
Director of the Centers for Disease Control and Prevention and in collaboration with appropriate agencies and States, shall—

(A) promote the education and training of physicians 
on the importance of birth and death certificate data and how to properly complete these documents, including the Public information. Web posting. Catalyst to 
Better Diabetes Care Act of 2009. 42 USC 247b–9g. 
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124 STAT. 977 PUBLIC LAW 111–148—MAR. 23, 2010 
collection of such data for diabetes and other chronic dis-
eases; 
(B) encourage State adoption of the latest standard 
revisions of birth and death certificates; and 
(C) work with States to re-engineer their vital statistics 
systems in order to provide cost-effective, timely, and accurate vital systems data. (2) D
EATH CERTIFICATE ADDITIONAL LANGUAGE .—In car-

rying out this subsection, the Secretary may promote improve-ments to the collection of diabetes mortality data, including the addition of a question for the individual certifying the cause of death regarding whether the deceased had diabetes. (d) S
TUDY ON APPROPRIATE LEVEL OF DIABETES MEDICAL EDU-
CATION .— 
(1) I N GENERAL .—The Secretary shall, in collaboration with

the Institute of Medicine and appropriate associations and coun-cils, conduct a study of the impact of diabetes on the practice of medicine in the United States and the appropriateness of the level of diabetes medical education that should be required prior to licensure, board certification, and board recertification. 
(2) R
EPORT .—Not later than 2 years after the date of the

enactment of this Act, the Secretary shall submit a report on the study under paragraph (1) to the Committees on Ways and Means and Energy and Commerce of the House of Rep-resentatives and the Committees on Finance and Health, Edu-cation, Labor, and Pensions of the Senate. (e) A
to be appropriated to carry out this section such sums as may be necessary. 
SEC. 10408. GRANTS FOR SMALL BUSINESSES TO PROVIDE COM-

PREHENSIVE WORKPLACE WELLNESS PROGRAMS. 
(a) E STABLISHMENT .—The Secretary shall award grants to 
eligible employers to provide their employees with access to com-prehensive workplace wellness programs (as described under sub-section (c)). 
(b) S
COPE .— 
(1) D URATION .—The grant program established under this 
section shall be conducted for a 5-year period. 
(2) E LIGIBLE EMPLOYER .—The term ‘‘eligible employer’’ 
means an employer (including a non-profit employer) that—

(A) employs less than 100 employees who work 25 
hours or greater per week; and 
(B) does not provide a workplace wellness program 
as of the date of enactment of this Act. 
(c) C OMPREHENSIVE WORKPLACE WELLNESS PROGRAMS .— 
(1) C RITERIA .—The Secretary shall develop program criteria

for comprehensive workplace wellness programs under this sec-tion that are based on and consistent with evidence-based research and best practices, including research and practices as provided in the Guide to Community Preventive Services, the Guide to Clinical Preventive Services, and the National Registry for Effective Programs. 
(2) R
EQUIREMENTS .—A comprehensive workplace wellness

EQUIREMENTS .—A comprehensive workplace wellness 
program shall be made available by an eligible employer to all employees and include the following components: Definition. 
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124 STAT. 978 PUBLIC LAW 111–148—MAR. 23, 2010 
(A) Health awareness initiatives (including health edu-
cation, preventive screenings, and health risk assessments). 
(B) Efforts to maximize employee engagement 
(including mechanisms to encourage employee participa-tion). 
(C) Initiatives to change unhealthy behaviors and life-
style choices (including counseling, seminars, online pro-grams, and self-help materials). 
(D) Supportive environment efforts (including work-

place policies to encourage healthy lifestyles, healthy eating, increased physical activity, and improved mental health). 
(d) A
PPLICATION .—An eligible employer desiring to participate

in the grant program under this section shall submit an application to the Secretary, in such manner and containing such information as the Secretary may require, which shall include a proposal for a comprehensive workplace wellness program that meet the criteria and requirements described under subsection (c). 
(e) A
UTHORIZATION OF APPROPRIATION .—For purposes of car-

rying out the grant program under this section, there is authorized to be appropriated $200,000,000 for the period of fiscal years 2011 through 2015. Amounts appropriated pursuant to this subsection shall remain available until expended. 
SEC. 10409. CURES ACCELERATION NETWORK. 
(a) S HORT TITLE.—This section may be cited as the ‘‘Cures 
Acceleration Network Act of 2009’’. 
(b) R EQUIREMENT FOR THE DIRECTOR OF NIH T OESTABLISH  
ACURES ACCELERATION NETWORK .—Section 402(b) of the Public

Health Service Act (42 U.S.C. 282(b)) is amended— 
(1) in paragraph (22), by striking ‘‘and’’ at the end; (2) in paragraph (23), by striking the period and inserting 
(3) by inserting after paragraph (23), the following: ‘‘(24) implement the Cures Acceleration Network described 
in section 402C.’’. (c) A
CCEPTING GIFTS TOSUPPORT THE CURES ACCELERATION  
NETWORK .—Section 499(c)(1) of the Public Health Service Act (42

U.S.C. 290b(c)(1)) is amended by adding at the end the following: 
‘‘(E) The Cures Acceleration Network described in sec-
tion 402C.’’. 
(d) E STABLISHMENT OF THE CURES ACCELERATION NETWORK .— 
Part A of title IV of the Public Health Service Act is amended by inserting after section 402B (42 U.S.C. 282b) the following: 
‘‘SEC. 402C. CURES ACCELERATION NETWORK. 
‘‘(1) B IOLOGICAL PRODUCT .—The term ‘biological product’

has the meaning given such term in section 351 of the Public 
Health Service Act. 
‘‘(2) D RUG; DEVICE .—The terms ‘drug’ and ‘device’ have 
the meanings given such terms in section 201 of the Federal Food, Drug, and Cosmetic Act. 
‘‘(3) H
IGH NEED CURE .—The term ‘high need cure’ means

IGH NEED CURE .—The term ‘high need cure’ means 
a drug (as that term is defined by section 201(g)(1) of the Federal Food, Drug, and Cosmetic Act, biological product (as that term is defined by section 262(i)), or device (as that term is defined by section 201(h) of the Federal Food, Drug, and 42 USC 282d. Cures 
Acceleration Network Act of 2009. 42 USC 201 note.

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124 STAT. 979 PUBLIC LAW 111–148—MAR. 23, 2010 
Cosmetic Act) that, in the determination of the Director of 
NIH— 
‘‘(A) is a priority to diagnose, mitigate, prevent, or 
treat harm from any disease or condition; and 
‘‘(B) for which the incentives of the commercial market 
are unlikely to result in its adequate or timely development. ‘‘(4) M
EDICAL PRODUCT .—The term ‘medical product’ means

a drug, device, biological product, or product that is a combina-tion of drugs, devices, and biological products. ‘‘(b) E
STABLISHMENT OF THE CURES ACCELERATION NETWORK .— 
Subject to the appropriation of funds as described in subsection (g), there is established within the Office of the Director of NIH a program to be known as the Cures Acceleration Network (referred to in this section as ‘CAN’), which shall— 
‘‘(1) be under the direction of the Director of NIH, taking

into account the recommendations of a CAN Review Board (referred to in this section as the ‘Board’), described in sub-section (d); and 
‘‘(2) award grants and contracts to eligible entities, as 
described in subsection (e), to accelerate the development of high need cures, including through the development of medical products and behavioral therapies. ‘‘(c) F
UNCTIONS .—The functions of the CAN are to— 
‘‘(1) conduct and support revolutionary advances in basic

research, translating scientific discoveries from bench to bed-side; 
‘‘(2) award grants and contracts to eligible entities to accel-
erate the development of high need cures; 
‘‘(3) provide the resources necessary for government agen-
cies, independent investigators, research organizations, bio-technology companies, academic research institutions, and other entities to develop high need cures; 
‘‘(4) reduce the barriers between laboratory discoveries and

clinical trials for new therapies; and 
‘‘(5) facilitate review in the Food and Drug Administration 
for the high need cures funded by the CAN, through activities that may include— 
‘‘(A) the facilitation of regular and ongoing communica-
tion with the Food and Drug Administration regarding the status of activities conducted under this section; 
‘‘(B) ensuring that such activities are coordinated with

the approval requirements of the Food and Drug Adminis-tration, with the goal of expediting the development and approval of countermeasures and products; and 
‘‘(C) connecting interested persons with additional tech-
nical assistance made available under section 565 of the Federal Food, Drug, and Cosmetic Act. 
‘‘(d) CAN B
OARD .— 
‘‘(1) E STABLISHMENT .—There is established a Cures Accel-

eration Network Review Board (referred to in this section as the ‘Board’), which shall advise the Director of NIH on the conduct of the activities of the Cures Acceleration Network. 
‘‘(2) M
‘‘(i) A PPOINTMENT .—The Board shall be comprised 
of 24 members who are appointed by the Secretary and who serve at the pleasure of the Secretary. Grants. Contracts.

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124 STAT. 980 PUBLIC LAW 111–148—MAR. 23, 2010 
‘‘(ii) C HAIRPERSON AND VICE CHAIRPERSON .—The 
Secretary shall designate, from among the 24 members appointed under clause (i), one Chairperson of the Board (referred to in this section as the ‘Chairperson’) and one Vice Chairperson. ‘‘(B) T
ERMS .— 
‘‘(i) I N GENERAL .—Each member shall be appointed

to serve a 4-year term, except that any member appointed to fill a vacancy occurring prior to the expira-tion of the term for which the member’s predecessor was appointed shall be appointed for the remainder of such term. 
‘‘(ii) C
ONSECUTIVE APPOINTMENTS ; MAXIMUM  
TERMS .—A member may be appointed to serve not 
more than 3 terms on the Board, and may not serve more than 2 such terms consecutively. ‘‘(C) Q
‘‘(i) I N GENERAL .—The Secretary shall appoint

‘‘(i) I N GENERAL .—The Secretary shall appoint 
individuals to the Board based solely upon the individ-ual’s established record of distinguished service in one of the areas of expertise described in clause (ii). Each individual appointed to the Board shall be of distin-guished achievement and have a broad range of dis-ciplinary interests. 
‘‘(ii) E
XPERTISE .—The Secretary shall select 
individuals based upon the following requirements: 
‘‘(I) For each of the fields of—

‘‘(I) For each of the fields of— 
‘‘(aa) basic research; ‘‘(bb) medicine; ‘‘(cc) biopharmaceuticals; ‘‘(dd) discovery and delivery of medical 
products; 
‘‘(ee) bioinformatics and gene therapy; ‘‘(ff) medical instrumentation; and ‘‘(gg) regulatory review and approval of 
medical products, 
the Secretary shall select at least 1 individual who is eminent in such fields. 
‘‘(II) At least 4 individuals shall be recognized

leaders in professional venture capital or private equity organizations and have demonstrated experience in private equity investing. 
‘‘(III) At least 8 individuals shall represent 
disease advocacy organizations. 
‘‘(3) E
X-OFFICIO MEMBERS .— 
‘‘(A) A PPOINTMENT .—In addition to the 24 Board mem-
bers described in paragraph (2), the Secretary shall appoint as ex-officio members of the Board— 
‘‘(i) a representative of the National Institutes of

Health, recommended by the Secretary of the Depart-ment of Health and Human Services; 
‘‘(ii) a representative of the Office of the Assistant 
Secretary of Defense for Health Affairs, recommended by the Secretary of Defense; 
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124 STAT. 981 PUBLIC LAW 111–148—MAR. 23, 2010 
‘‘(iii) a representative of the Office of the Under 
Secretary for Health for the Veterans Health Adminis-tration, recommended by the Secretary of Veterans Affairs; 
‘‘(iv) a representative of the National Science 
Foundation, recommended by the Chair of the National Science Board; and 
‘‘(v) a representative of the Food and Drug 
Administration, recommended by the Commissioner of Food and Drugs. ‘‘(B) T

ERMS .—Each ex-officio member shall serve a 3- 
year term on the Board, except that the Chairperson may adjust the terms of the initial ex-officio members in order to provide for a staggered term of appointment for all such members. ‘‘(4) R
ESPONSIBILITIES OF THE BOARD AND THE DIRECTOR  
OF NIH .— 
‘‘(A) R ESPONSIBILITIES OF THE BOARD .— 
‘‘(i) I N GENERAL .—The Board shall advise, and pro-
vide recommendations to, the Director of NIH with respect to—

‘‘(I) policies, programs, and procedures for car-
rying out the duties of the Director of NIH under this section; and 
‘‘(II) significant barriers to successful trans-
lation of basic science into clinical application (including issues under the purview of other agen-cies and departments). ‘‘(ii) R
EPORT .—In the case that the Board identifies 
a significant barrier, as described in clause (i)(II), the Board shall submit to the Secretary a report regarding such barrier. ‘‘(B) R

ESPONSIBILITIES OF THE DIRECTOR OF NIH .—With 
respect to each recommendation provided by the Board under subparagraph (A)(i), the Director of NIH shall respond in writing to the Board, indicating whether such Director will implement such recommendation. In the case that the Director of NIH indicates a recommendation of the Board will not be implemented, such Director shall provide an explanation of the reasons for not implementing such recommendation. ‘‘(5) M
EETINGS .—

EETINGS .— 
‘‘(A) I N GENERAL .—The Board shall meet 4 times per 
calendar year, at the call of the Chairperson. 
‘‘(B) Q UORUM ; REQUIREMENTS ; LIMITATIONS .— 
‘‘(i) Q UORUM .—A quorum shall consist of a total 
of 13 members of the Board, excluding ex-officio mem-bers, with diverse representation as described in clause (iii). 
‘‘(ii) C
HAIRPERSON OR VICE CHAIRPERSON .—Each 
meeting of the Board shall be attended by either the Chairperson or the Vice Chairperson. 
‘‘(iii) D

‘‘(iii) D
IVERSE REPRESENTATION .—At each meeting 
of the Board, there shall be not less than one scientist, one representative of a disease advocacy organization, and one representative of a professional venture capital or private equity organization. Recommenda- tions. 
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124 STAT. 982 PUBLIC LAW 111–148—MAR. 23, 2010 
‘‘(6) C OMPENSATION AND TRAVEL EXPENSES .— 
‘‘(A) C OMPENSATION .—Members shall receive com-

pensation at a rate to be fixed by the Chairperson but not to exceed a rate equal to the daily equivalent of the annual rate of basic pay prescribed for level IV of the Executive Schedule under section 5315 of title 5, United States Code, for each day (including travel time) during which the member is engaged in the performance of the duties of the Board. All members of the Board who are officers or employees of the United States shall serve with-out compensation in addition to that received

compensation in addition to that received for their services as officers or employees of the United States.

‘‘(B) T
RAVEL EXPENSES .—Members of the Board shall 
be allowed travel expenses, including per diem in lieu of subsistence, at rates authorized for persons employed intermittently by the Federal Government under section 5703(b) of title 5, United States Code, while away from their homes or regular places of business in the perform-ance of services for the Board. 
‘‘(e) G
RANT PROGRAM .— 
‘‘(1) S UPPORTING INNOVATION .—To carry out the purposes

described in this section, the Director of NIH shall award contracts, grants, or cooperative agreements to the entities described in paragraph (2), to— 
‘‘(A) promote innovation in technologies supporting the 
advanced research and development and production of high need cures, including through the development of medical products and behavioral therapies. 
‘‘(B) accelerate the development of high need cures,

including through the development of medical products, behavioral therapies, and biomarkers that demonstrate the safety or effectiveness of medical products; or 
‘‘(C) help the award recipient establish protocols that 
comply with Food and Drug Administration standards and otherwise permit the recipient to meet regulatory require-ments at all stages of development, manufacturing, review, approval, and safety surveillance of a medical product. ‘‘(2) E

LIGIBLE ENTITIES .—To receive assistance under para-
graph (1), an entity shall— 
‘‘(A) be a public or private entity, which may include 
a private or public research institution, an institution of higher education, a medical center, a biotechnology com-pany, a pharmaceutical company, a disease advocacy organization, a patient advocacy organization, or an aca-demic research institution; 
‘‘(B) submit an application containing— 
‘‘(i) a detailed description of the project for which

the entity seeks such grant or contract; 
‘‘(ii) a timetable for such project; ‘‘(iii) an assurance that the entity will submit— 
‘‘(I) interim reports describing the entity’s— 
‘‘(aa) progress in carrying out the project; 
and 
‘‘(bb) compliance with all provisions of this 
section and conditions of receipt of such grant or contract; and Contracts.

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124 STAT. 983 PUBLIC LAW 111–148—MAR. 23, 2010 
‘‘(II) a final report at the conclusion of the 
grant period, describing the outcomes of the project; and ‘‘(iv) a description of the protocols the entity will 
follow to comply with Food and Drug Administration standards and regulatory requirements at all stages of development, manufacturing, review, approval, and safety surveillance of a medical product; and ‘‘(C) provide such additional information as the Director 
of NIH may require. ‘‘(3) A

WARDS .— 
‘‘(A) T HE CURES ACCELERATION PARTNERSHIP AWARDS .— 
‘‘(i) I NITIAL AWARD AMOUNT .—Each award under 
this subparagraph shall be not more than $15,000,000 per project for the first fiscal year for which the project is funded, which shall be payable in one payment. 
‘‘(ii) F
UNDING IN SUBSEQUENT FISCAL YEARS .—An

‘‘(ii) F
UNDING IN SUBSEQUENT FISCAL YEARS .—An 
eligible entity receiving an award under clause (i) may apply for additional funding for such project by submit-ting to the Director of NIH the information required under subparagraphs (B) and (C) of paragraph (2). The Director may fund a project of such eligible entity in an amount not to exceed $15,000,000 for a fiscal year subsequent to the initial award under clause (i). 
‘‘(iii) M
ATCHING FUNDS .—As a condition for

‘‘(iii) M
ATCHING FUNDS .—As a condition for 
receiving an award under this subsection, an eligible entity shall contribute to the project non-Federal funds in the amount of $1 for every $3 awarded under clauses (i) and (ii), except that the Director of NIH may waive or modify such matching requirement in any case where the Director determines that the goals and objec-tives of this section cannot adequately be carried out unless such requirement is waived. ‘‘(B) T

HE CURES ACCELERATION GRANT AWARDS .— 
‘‘(ii) F

‘‘(ii) F
eligible entity receiving an award under clause (i) may apply for additional funding for such project by submit-ting to the Board the information required under sub-paragraphs (B) and (C) of paragraph (2). The Director of NIH may fund a project of such eligible entity in an amount not to exceed $15,000,000 for a fiscal year subsequent to the initial award under clause (i). 
‘‘(C) T
HE CURES ACCELERATION FLEXIBLE RESEARCH

‘‘(C) T
HE CURES ACCELERATION FLEXIBLE RESEARCH  
AWARDS .—If the Director of NIH determines that the goals

and objectives of this section cannot adequately be carried out through a contract, grant, or cooperative agreement, the Director of NIH shall have flexible research authority to use other transactions to fund projects in accordance with the terms and conditions of this section. Awards made under such flexible research authority for a fiscal year shall not exceed 20 percent of the total funds appropriated under subsection (g)(1) for such fiscal year. Determination. Waiver authority.

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124 STAT. 984 PUBLIC LAW 111–148—MAR. 23, 2010 
‘‘(4) S USPENSION OF AWARDS FOR DEFAULTS , NONCOMPLI -
ANCE WITH PROVISIONS AND PLANS , AND DIVERSION OF FUNDS ; 
REPAYMENT OF FUNDS .—The Director of NIH may suspend the 
award to any entity upon noncompliance by such entity with provisions and plans under this section or diversion of funds. 
‘‘(5) A
UDITS .—The Director of NIH may enter into agree-

ments with other entities to conduct periodic audits of the projects funded by grants or contracts awarded under this subsection. 
‘‘(6) C
LOSEOUT PROCEDURES .—At the end of a grant or 
contract period, a recipient shall follow the closeout procedures under section 74.71 of title 45, Code of Federal Regulations (or any successor regulation). 
‘‘(7) R
EVIEW .—A determination by the Director of NIH as

to whether a drug, device, or biological product is a high need cure (for purposes of subsection (a)(3)) shall not be subject to judicial review. ‘‘(f) C
OMPETITIVE BASIS OF AWARDS .—Any grant, cooperative 
agreement, or contract awarded under this section shall be awarded on a competitive basis. 
‘‘(g) A
‘‘(1) I N GENERAL .—For purposes of carrying out this section,

there are authorized to be appropriated $500,000,000 for fiscal year 2010, and such sums as may be necessary for subsequent fiscal years. Funds appropriated under this section shall be available until expended. 
‘‘(2) L
IMITATION ON USE OF FUNDS OTHERWISE APPRO -
PRIATED .—No funds appropriated under this Act, other than 
funds appropriated under paragraph (1), may be allocated to the Cures Acceleration Network.’’. 
SEC. 10410. CENTERS OF EXCELLENCE FOR DEPRESSION.

(a) S HORT TITLE.—This section may be cited as the ‘‘Estab-
lishing a Network of Health-Advancing National Centers of Excel-lence for Depression Act of 2009’’ or the ‘‘ENHANCED Act of 2009’’. 
(b) C
ENTERS OF EXCELLENCE FOR DEPRESSION .—Subpart 3 of 
part B of title V of the Public Health Service Act (42 U.S.C. 290bb et seq.) is amended by inserting after section 520A the following: 
‘‘SEC. 520B. NATIONAL CENTERS OF EXCELLENCE FOR DEPRESSION.

‘‘(a) D EPRESSIVE DISORDER DEFINED .—In this section, the term 
‘depressive disorder’ means a mental or brain disorder relating to depression, including major depression, bipolar disorder, and related mood disorders. 
‘‘(b) G

Administrator, shall award grants on a competitive basis to eligible entities to establish national centers of excellence for depression (referred to in this section as ‘Centers’), which shall engage in activities related to the treatment of depressive dis-orders. 
‘‘(2) A
LLOCATION OF AWARDS .—If the funds authorized 
under subsection (f) are appropriated in the amounts provided for under such subsection, the Secretary shall allocate such amounts so that— Deadlines. 42 USC

290bb–33. Establishing a 
Network of Health- Advancing National Centers of Excellence for Depression Act of 2009. 42 USC 201 note. 
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124 STAT. 985 PUBLIC LAW 111–148—MAR. 23, 2010 
‘‘(A) not later than 1 year after the date of enactment 
of the ENHANCED Act of 2009, not more than 20 Centers may be established; and 
‘‘(B) not later than September 30, 2016, not more than 
30 Centers may be established. ‘‘(3) G
RANT PERIOD .— 
‘‘(A) I N GENERAL .—A grant awarded under this section 
shall be for a period of 5 years. 
‘‘(B) R ENEWAL .—A grant awarded under subparagraph

(A) may be renewed, on a competitive basis, for 1 additional 5-year period, at the discretion of the Secretary. In deter-mining whether to renew a grant, the Secretary shall con-sider the report cards issued under subsection (e)(2). ‘‘(4) U
SE OF FUNDS .—Grant funds awarded under this sub-
section shall be used for the establishment and ongoing activi-ties of the recipient of such funds. 
‘‘(5) E
‘‘(A) R EQUIREMENTS .—To be eligible to receive a grant

under this section, an entity shall— 
‘‘(i) be an institution of higher education or a public 
or private nonprofit research institution; and 
‘‘(ii) submit an application to the Secretary at such 
time and in such manner as the Secretary may require, as described in subparagraph (B). ‘‘(B) A
PPLICATION .—An application described in 
subparagraph (A)(ii) shall include— 
‘‘(i) evidence that such entity— 
‘‘(I) provides, or is capable of coordinating with

other entities to provide, comprehensive health services with a focus on mental health services and subspecialty expertise for depressive disorders; 
‘‘(II) collaborates with other mental health pro-
viders, as necessary, to address co-occurring mental illnesses; 
‘‘(III) is capable of training health profes-
sionals about mental health; and ‘‘(ii) such other information, as the Secretary may 
require. ‘‘(C) P
RIORITIES .—In awarding grants under this sec-

tion, the Secretary shall give priority to eligible entities that meet 1 or more of the following criteria: 
‘‘(i) Demonstrated capacity and expertise to serve 
the targeted population. 
‘‘(ii) Existing infrastructure or expertise to provide 
appropriate, evidence-based and culturally and linguis-tically competent services. 
‘‘(iii) A location in a geographic area with dis-

proportionate numbers of underserved and at-risk populations in medically underserved areas and health professional shortage areas. 
‘‘(iv) Proposed innovative approaches for outreach 
to initiate or expand services. 
‘‘(v) Use of the most up-to-date science, practices, 
and interventions available. 
‘‘(vi) Demonstrated capacity to establish coopera-

tive and collaborative agreements with community mental health centers and other community entities 
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124 STAT. 986 PUBLIC LAW 111–148—MAR. 23, 2010 
to provide mental health, social, and human services 
to individuals with depressive disorders. 
‘‘(6) N ATIONAL COORDINATING CENTER .— 
‘‘(A) I N GENERAL .—The Secretary, acting through the

Administrator, shall designate 1 recipient of a grant under this section to be the coordinating center of excellence for depression (referred to in this section as the ‘coordi-nating center’). The Secretary shall select such coordinating center on a competitive basis, based upon the demonstrated capacity of such center to perform the duties described in subparagraph (C). 
‘‘(B) A
PPLICATION .—A Center that has been awarded

PPLICATION .—A Center that has been awarded 
a grant under paragraph (1) may apply for designation as the coordinating center by submitting an application to the Secretary at such time, in such manner, and con-taining such information as the Secretary may require. 
‘‘(C) D
UTIES .—The coordinating center shall— 
‘‘(i) develop, administer, and coordinate the net-
work of Centers under this section; 
‘‘(ii) oversee and coordinate the national database 
described in subsection (d);

described in subsection (d); 
‘‘(iii) lead a strategy to disseminate the findings 
and activities of the Centers through such database; and 
‘‘(iv) serve as a liaison with the Administration, 
the National Registry of Evidence-based Programs and Practices of the Administration, and any Federal inter-agency or interagency forum on mental health. 
‘‘(7) M
ATCHING FUNDS .—The Secretary may not award a

grant or contract under this section to an entity unless the entity agrees that it will make available (directly or through contributions from other public or private entities) non-Federal contributions toward the activities to be carried out under the grant or contract in an amount equal to $1 for each $5 of Federal funds provided under the grant or contract. Such non-Federal matching funds may be provided directly or through donations from public or private entities and may be in cash or

public or private entities and may be in cash or in-kind, fairly evaluated, including plant, equip-ment, or services.

‘‘(c) A
CTIVITIES OF THE CENTERS .—Each Center shall carry out 
the following activities: 
‘‘(1) G ENERAL ACTIVITIES .—Each Center shall— 
‘‘(A) integrate basic, clinical, or health services inter-
disciplinary research and practice in the development, implementation, and dissemination of evidence-based inter-ventions; 
‘‘(B) involve a broad cross-section of stakeholders, such

as researchers, clinicians, consumers, families of con-sumers, and voluntary health organizations, to develop a research agenda and disseminate findings, and to provide support in the implementation of evidence-based practices; 
‘‘(C) provide training and technical assistance to mental 
health professionals, and engage in and disseminate translational research with a focus on meeting the needs of individuals with depressive disorders; and Designation.

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124 STAT. 987 PUBLIC LAW 111–148—MAR. 23, 2010 
‘‘(D) educate policy makers, employers, community 
leaders, and the public about depressive disorders to reduce stigma and raise awareness of treatments. ‘‘(2) I
MPROVED TREATMENT STANDARDS , CLINICAL GUIDE -
LINES , DIAGNOSTIC PROTOCOLS , AND CARE COORDINATION PRAC -
TICE.—Each Center shall collaborate with other Centers in 
the network to— 
‘‘(A) develop and implement treatment standards, clin-

ical guidelines, and protocols that emphasize primary prevention, early intervention, treatment for, and recovery from, depressive disorders; 
‘‘(B) foster communication with other providers 
attending to co-occurring physical health conditions such as cardiovascular, diabetes, cancer, and substance abuse disorders; 
‘‘(C) leverage available community resources, develop

and implement improved self-management programs, and, when appropriate, involve family and other providers of social support in the development and implementation of care plans; and 
‘‘(D) use electronic health records and telehealth tech-
nology to better coordinate and manage, and improve access to, care, as determined by the coordinating center. ‘‘(3) T
RANSLATIONAL RESEARCH THROUGH COLLABORATION  
OF CENTERS AND COMMUNITY -BASED ORGANIZATIONS .—Each 
Center shall—

Center shall— 
‘‘(A) demonstrate effective use of a public-private part-
nership to foster collaborations among members of the net-work and community-based organizations such as commu-nity mental health centers and other social and human services providers; 
‘‘(B) expand interdisciplinary, translational, and 
patient-oriented research and treatment; and 
‘‘(C) coordinate with accredited academic programs to

provide ongoing opportunities for the professional and con-tinuing education of mental health providers. 
‘‘(d) N
ATIONAL DATABASE .— 
‘‘(1) I N GENERAL .—The coordinating center shall establish 
and maintain a national, publicly available database to improve prevention programs, evidence-based interventions, and disease management programs for depressive disorders, using data col-lected from the Centers, as described in paragraph (2). 
‘‘(2) D
ATA COLLECTION .—Each Center shall submit data

ATA COLLECTION .—Each Center shall submit data 
gathered at such center, as appropriate, to the coordinating center regarding— 
‘‘(A) the prevalence and incidence of depressive dis-
orders; 
‘‘(B) the health and social outcomes of individuals with 
depressive disorders; 
‘‘(C) the effectiveness of interventions designed, tested, 
and evaluated; 
‘‘(D) other information, as the Secretary may require. 
‘‘(3) S
UBMISSION OF DATA TO THE ADMINISTRATOR .—The

UBMISSION OF DATA TO THE ADMINISTRATOR .—The 
coordinating center shall submit to the Administrator the data and financial information gathered under paragraph (2). 
‘‘(4) P
UBLICATION USING DATA FROM THE DATABASE .—A 
Center, or an individual affiliated with a Center, may publish 
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124 STAT. 988 PUBLIC LAW 111–148—MAR. 23, 2010 
findings using the data described in paragraph (2) only if such 
center submits such data to the coordinating center, as required under such paragraph. ‘‘(e) E
STABLISHMENT OF STANDARDS ; REPORT CARDS AND REC-
OMMENDATIONS ; THIRD PARTY REVIEW .— 
‘‘(1) E STABLISHMENT OF STANDARDS .—The Secretary, acting 
through the Administrator, shall establish performance stand-ards for— 
‘‘(A) each Center; and ‘‘(B) the network of Centers as a whole. 
‘‘(2) R

‘‘(2) R
EPORT CARDS .—The Secretary, acting through the 
Administrator, shall— 
‘‘(A) for each Center, not later than 3 years after the 
date on which such center of excellence is established and annually thereafter, issue a report card to the coordinating center to rate the performance of such Center; and 
‘‘(B) not later than 3 years after the date on which

the first grant is awarded under subsection (b)(1) and annually thereafter, issue a report card to Congress to rate the performance of the network of centers of excellence as a whole. ‘‘(3) R
ECOMMENDATIONS .—Based upon the report cards 
described in paragraph (2), the Secretary shall, not later than September 30, 2015— 
‘‘(A) make recommendations to the Centers regarding 
improvements such centers shall make; and 
‘‘(B) make recommendations to Congress for expanding

the Centers to serve individuals with other types of mental disorders. ‘‘(4) T
HIRD PARTY REVIEW .—Not later than 3 years after 
the date on which the first grant is awarded under subsection (b)(1) and annually thereafter, the Secretary shall arrange for an independent third party to conduct an evaluation of the network of Centers to ensure that such centers are meeting the goals of this section. ‘‘(f) A

‘‘(1) I N GENERAL .—To carry out this section, there are 
authorized to be appropriated— 
‘‘(A) $100,000,000 for each of the fiscal years 2011 
through 2015; and 
‘‘(B) $150,000,000 for each of the fiscal years 2016 
through 2020. ‘‘(2) A
LLOCATION OF FUNDS AUTHORIZED .—Of the amount

LLOCATION OF FUNDS AUTHORIZED .—Of the amount 
appropriated under paragraph (1) for a fiscal year, the Secretary shall determine the allocation of each Center receiving a grant under this section, but in no case may the allocation be more than $5,000,000, except that the Secretary may allocate not more than $10,000,000 to the coordinating center.’’. 
SEC. 10411. PROGRAMS RELATING TO CONGENITAL HEART DISEASE. 
(a) S HORT TITLE.—This subtitle may be cited as the ‘‘Congenital

Heart Futures Act’’. 
(b) P ROGRAMS RELATING TO CONGENITAL HEART DISEASE .— 
(1) N ATIONAL CONGENITAL HEART DISEASE SURVEILLANCE  
SYSTEM .—Part P of title III of the Public Health Service Act 
(42 U.S.C. 280g et seq.), as amended by section 5405, is further amended by adding at the end the following: Congenital Heart Futures Act. 42 USC 201 note. Determination.

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124 STAT. 989 PUBLIC LAW 111–148—MAR. 23, 2010 
‘‘SEC. 399V–2. NATIONAL CONGENITAL HEART DISEASE SURVEILLANCE 
SYSTEM. 
of the Centers for Disease Control and Prevention, may— 
‘‘(1) enhance and expand infrastructure to track the epide-

miology of congenital heart disease and to organize such information into a nationally-representative, population-based surveillance system that compiles data concerning actual occur-rences of congenital heart disease, to be known as the ‘National Congenital Heart Disease Surveillance System’; or 
‘‘(2) award a grant to one eligible entity to undertake 
the activities described in paragraph (1). ‘‘(b) P
URPOSE .—The purpose of the Congenital Heart Disease

Surveillance System shall be to facilitate further research into the types of health services patients use and to identify possible areas for educational outreach and prevention in accordance with standard practices of the Centers for Disease Control and Preven-tion. 
‘‘(c) C
ONTENT .—The Congenital Heart Disease Surveillance 
System— 
‘‘(1) may include information concerning the incidence and 
prevalence of congenital heart disease in the United States;

‘‘(2) may be used to collect and store data on congenital 
heart disease, including data concerning— 
‘‘(A) demographic factors associated with congenital 
heart disease, such as age, race, ethnicity, sex, and family 
history of individuals who are diagnosed with the disease; 
‘‘(B) risk factors associated with the disease; ‘‘(C) causation of the disease; ‘‘(D) treatment approaches; and ‘‘(E) outcome measures, such that analysis of the out-

come measures will allow derivation of evidence-based best practices and guidelines for congenital heart disease patients; and ‘‘(3) may ensure the collection and analysis of longitudinal 
data related to individuals of all ages with congenital heart disease, including infants, young children, adolescents, and adults of all ages. ‘‘(d) P
UBLIC ACCESS .—The Congenital Heart Disease Surveil-

lance System shall be made available to the public, as appropriate, including congenital heart disease researchers. 
‘‘(e) P
ATIENT PRIVACY .—The Secretary shall ensure that the 
Congenital Heart Disease Surveillance System is maintained in a manner that complies with the regulations promulgated under section 264 of the Health Insurance Portability and Accountability Act of 1996. 
‘‘(f) E
LIGIBILITY FOR GRANT .—To be eligible to receive a grant 
under subsection (a)(2), an entity shall—

under subsection (a)(2), an entity shall— 
‘‘(1) be a public or private nonprofit entity with specialized 
experience in congenital heart disease; and 
in such manner, and containing such information as the Sec-retary may require.’’. 
(2) C
ONGENITAL HEART DISEASE RESEARCH .—Subpart 2 of 
part C of title IV of the Public Health Service Act (42 U.S.C. 285b et seq.) is amended by adding at the end the following: 42 USC 280g–13.

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124 STAT. 990 PUBLIC LAW 111–148—MAR. 23, 2010 
‘‘SEC. 425. CONGENITAL HEART DISEASE. 
‘‘(a) I NGENERAL .—The Director of the Institute may expand, 
intensify, and coordinate research and related activities of the Institute with respect to congenital heart disease, which may include congenital heart disease research with respect to— 
‘‘(1) causation of congenital heart disease, including genetic 
causes; 
‘‘(2) long-term outcomes in individuals with congenital

heart disease, including infants, children, teenagers, adults, and elderly individuals; 
‘‘(3) diagnosis, treatment, and prevention; ‘‘(4) studies using longitudinal data and retrospective anal-
ysis to identify effective treatments and outcomes for individ-uals with congenital heart disease; and 
‘‘(5) identifying barriers to life-long care for individuals 
with congenital heart disease. ‘‘(b) C
OORDINATION OF RESEARCH ACTIVITIES .—The Director of

the Institute may coordinate research efforts related to congenital heart disease among multiple research institutions and may develop research networks. 
‘‘(c) M
INORITY AND MEDICALLY UNDERSERVED COMMUNITIES .— 
In carrying out the activities described in this section, the Director of the Institute shall consider the application of such research and other activities to minority and medically underserved commu-nities.’’. 
(c) A

to be appropriated to carry out the amendments made by this section such sums as may be necessary for each of fiscal years 2011 through 2015. 
SEC. 10412. AUTOMATED DEFIBRILLATION IN ADAM’S MEMORY ACT. 
Section 312 of the Public Health Service Act (42 U.S.C. 244) 
(1) in subsection (c)(6), after ‘‘clearinghouse’’ insert ‘‘, that

shall be administered by an organization that has substantial expertise in pediatric education, pediatric medicine, and electrophysiology and sudden death,’’; and 
(2) in the first sentence of subsection (e), by striking ‘‘fiscal 
year 2003’’ and all that follows through ‘‘2006’’ and inserting ‘‘for each of fiscal years 2003 through 2014’’. 
SEC. 10413. YOUNG WOMEN’S BREAST HEALTH AWARENESS AND SUP-
PORT OF YOUNG WOMEN DIAGNOSED WITH BREAST CANCER.

(a) S HORT TITLE.—This section may be cited as the ‘‘Young 
Women’s Breast Health Education and Awareness Requires Learning Young Act of 2009’’ or the ‘‘EARLY Act’’. 
(b) A
MENDMENT .—Title III of the Public Health Service Act 
(42 U.S.C. 241 et seq.), as amended by this Act, is further amended by adding at the end the following: Young Women’s 
Breast Health Education and Awareness Requires Learning Young Act of 2009. 42 USC 201 note. 42 USC 285b–8.

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124 STAT. 991 PUBLIC LAW 111–148—MAR. 23, 2010 
‘‘PART V—PROGRAMS RELATING TO BREAST 
HEALTH AND CANCER 
‘‘SEC. 399NN. YOUNG WOMEN’S BREAST HEALTH AWARENESS AND SUP-
PORT OF YOUNG WOMEN DIAGNOSED WITH BREAST CANCER. 
‘‘(a) P UBLIC EDUCATION CAMPAIGN .— 
‘‘(1) I N GENERAL .—The Secretary, acting through the 
Director of the Centers for Disease Control and Prevention, shall conduct a national evidence-based education campaign to increase awareness of young women’s knowledge regarding—

‘‘(A) breast health in young women of all racial, ethnic, 
and cultural backgrounds; 
‘‘(B) breast awareness and good breast health habits; ‘‘(C) the occurrence of breast cancer and the general 
and specific risk factors in women who may be at high risk for breast cancer based on familial, racial, ethnic, and cultural backgrounds such as Ashkenazi Jewish popu-lations; 
‘‘(D) evidence-based information that would encourage

young women and their health care professional to increase early detection of breast cancers; and 
‘‘(E) the availability of health information and other 
resources for young women diagnosed with breast cancer. ‘‘(2) E
VIDENCE -BASED , AGE APPROPRIATE MESSAGES .—The 
campaign shall provide evidence-based, age-appropriate mes-sages and materials as developed by the Centers for Disease Control and Prevention and the Advisory Committee estab-lished under paragraph (4). 
‘‘(3) M

‘‘(3) M
EDIA CAMPAIGN .—In conducting the education cam-
paign under paragraph (1), the Secretary shall award grants to entities to establish national multimedia campaigns oriented to young women that may include advertising through tele-vision, radio, print media, billboards, posters, all forms of existing and especially emerging social networking media, other Internet media, and any other medium determined appropriate by the Secretary. 
‘‘(4) A
DVISORY COMMITTEE .—

‘‘(4) A
DVISORY COMMITTEE .— 
‘‘(A) E STABLISHMENT .—Not later than 60 days after 
the date of the enactment of this section, the Secretary, acting through the Director of the Centers for Disease Control and Prevention, shall establish an advisory com-mittee to assist in creating and conducting the education campaigns under paragraph (1) and subsection (b)(1). 
‘‘(B) M
EMBERSHIP .—The Secretary, acting through the

Director of the Centers for Disease Control and Prevention, shall appoint to the advisory committee under subpara-graph (A) such members as deemed necessary to properly advise the Secretary, and shall include organizations and individuals with expertise in breast cancer, disease preven-tion, early detection, diagnosis, public health, social mar-keting, genetic screening and counseling, treatment, rehabilitation, palliative care, and survivorship in young women. 
‘‘(b) H

‘‘(b) H
EALTH CARE PROFESSIONAL EDUCATION CAMPAIGN .—The 
Secretary, acting through the Director of the Centers for Disease Appointment. Deadline. Grants. 42 USC 280m. 
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124 STAT. 992 PUBLIC LAW 111–148—MAR. 23, 2010 
Control and Prevention, and in consultation with the Administrator 
of the Health Resources and Services Administration, shall conduct an education campaign among physicians and other health care professionals to increase awareness— 
‘‘(1) of breast health, symptoms, and early diagnosis and

treatment of breast cancer in young women, including specific risk factors such as family history of cancer and women that may be at high risk for breast cancer, such as Ashkenazi Jewish population; 
‘‘(2) on how to provide counseling to young women about 
their breast health, including knowledge of their family cancer history and importance of providing regular clinical breast examinations; 
‘‘(3) concerning the importance of discussing healthy behav-

iors, and increasing awareness of services and programs avail-able to address overall health and wellness, and making patient referrals to address tobacco cessation, good nutrition, and phys-ical activity; 
‘‘(4) on when to refer patients to a health care provider 
with genetics expertise; 
‘‘(5) on how to provide counseling that addresses long- 
term survivorship and health concerns of young women diagnosed with breast cancer; and 
‘‘(6) on when to provide referrals to organizations and

institutions that provide credible health information and sub-stantive assistance and support to young women diagnosed with breast cancer. ‘‘(c) P
REVENTION RESEARCH ACTIVITIES .—The Secretary, acting 
through— 
‘‘(1) the Director of the Centers for Disease Control and 
Prevention, shall conduct prevention research on breast cancer in younger women, including— 
‘‘(A) behavioral, survivorship studies, and other 
research on the impact of breast cancer diagnosis on young women;

‘‘(B) formative research to assist with the development 
of educational messages and information for the public, targeted populations, and their families about breast health, breast cancer, and healthy lifestyles; 
‘‘(C) testing and evaluating existing and new social 
marketing strategies targeted at young women; and 
‘‘(D) surveys of health care providers and the public

regarding knowledge, attitudes, and practices related to breast health and breast cancer prevention and control in high-risk populations; and ‘‘(2) the Director of the National Institutes of Health, shall 
conduct research to develop and validate new screening tests and methods for prevention and early detection of breast cancer in young women. ‘‘(d) S
UPPORT FOR YOUNG WOMEN DIAGNOSED WITH BREAST  
CANCER .— 
‘‘(1) I N GENERAL .—The Secretary shall award grants to

organizations and institutions to provide health information from credible sources and substantive assistance directed to young women diagnosed with breast cancer and pre-neoplastic breast diseases. Grants. 
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124 STAT. 993 PUBLIC LAW 111–148—MAR. 23, 2010 
‘‘(2) P RIORITY .—In making grants under paragraph (1), the 
Secretary shall give priority to applicants that deal specifically with young women diagnosed with breast cancer and pre-neo-plastic breast disease. ‘‘(e) N
ODUPLICATION OF EFFORT .—In conducting an education 
campaign or other program under subsections (a), (b), (c), or (d), the Secretary shall avoid duplicating other existing Federal breast cancer education efforts. 
‘‘(f) M

‘‘(f) M
EASUREMENT ; REPORTING .—The Secretary, acting through 
the Director of the Centers for Disease Control and Prevention, shall— 
‘‘(1) measure— 
‘‘(A) young women’s awareness regarding breast health, 
including knowledge of family cancer history, specific risk factors and early warning signs, and young women’s proactive efforts at early detection; 
‘‘(B) the number or percentage of young women uti-
lizing information regarding lifestyle interventions that foster healthy behaviors;

‘‘(C) the number or percentage of young women 
receiving regular clinical breast exams; and 
‘‘(D) the number or percentage of young women who 
perform breast self exams, and the frequency of such exams, before the implementation of this section; ‘‘(2) not less than every 3 years, measure the impact of 
such activities; and 
‘‘(3) submit reports to the Congress on the results of such 
measurements. ‘‘(g) D
EFINITION .—In this section, the term ‘young women’ 
means women 15 to 44 years of age.

means women 15 to 44 years of age. 
‘‘(h) A UTHORIZATION OF APPROPRIATIONS .—To carry out sub-
sections (a), (b), (c)(1), and (d), there are authorized to be appro-priated $9,000,000 for each of the fiscal years 2010 through 2014.’’. 
SEC. 10501. AMENDMENTS TO THE PUBLIC HEALTH SERVICE ACT, THE 
SOCIAL SECURITY ACT, AND TITLE V OF THIS ACT. 
(a) Section 5101 of this Act is amended— 
(1) in subsection (c)(2)(B)(i)(II), by inserting ‘‘, including

representatives of small business and self-employed individ-uals’’ after ‘‘employers’’; 
(2) in subsection (d)(4)(A)— 
(A) by redesignating clause (iv) as clause (v); and (B) by inserting after clause (iii) the following: 
‘‘(iv) An analysis of, and recommendations for, 
eliminating the barriers to entering and staying in primary care, including provider compensation.’’; and 
(3) in subsection (i)(2)(B), by inserting ‘‘optometrists,

ophthalmologists,’’ after ‘‘occupational therapists,’’. (b) Subtitle B of title V of this Act is amended by adding 
at the end the following: 42 USC 294q. 
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124 STAT. 994 PUBLIC LAW 111–148—MAR. 23, 2010 
‘‘SEC. 5104. INTERAGENCY TASK FORCE TO ASSESS AND IMPROVE 
ACCESS TO HEALTH CARE IN THE STATE OF ALASKA. 
‘‘(a) E STABLISHMENT .—There is established a task force to be 
known as the ‘Interagency Access to Health Care in Alaska Task Force’ (referred to in this section as the ‘Task Force’). 
‘‘(b) D
UTIES .—The Task Force shall— 
‘‘(1) assess access to health care for beneficiaries of Federal 
health care systems in Alaska; and

health care systems in Alaska; and 
‘‘(2) develop a strategy for the Federal Government to 
improve delivery of health care to Federal beneficiaries in the State of Alaska. ‘‘(c) M
EMBERSHIP .—The Task Force shall be comprised of Fed-
eral members who shall be appointed, not later than 45 days after the date of enactment of this Act, as follows: 
‘‘(1) The Secretary of Health and Human Services shall 
appoint one representative of each of the following:

‘‘(A) The Department of Health and Human Services. ‘‘(B) The Centers for Medicare and Medicaid Services. ‘‘(C) The Indian Health Service. 
‘‘(2) The Secretary of Defense shall appoint one representa-
tive of the TRICARE Management Activity. 
‘‘(3) The Secretary of the Army shall appoint one represent-
ative of the Army Medical Department. 
‘‘(4) The Secretary of the Air Force shall appoint one rep-

resentative of the Air Force, from among officers at the Air Force performing medical service functions. 
‘‘(5) The Secretary of Veterans Affairs shall appoint one 
representative of each of the following: 
‘‘(A) The Department of Veterans Affairs. ‘‘(B) The Veterans Health Administration. 
‘‘(6) The Secretary of Homeland Security shall appoint one 
representative of the United States Coast Guard. ‘‘(d) C
HAIRPERSON .—One chairperson of the Task Force shall

be appointed by the Secretary at the time of appointment of mem-bers under subsection (c), selected from among the members appointed under paragraph (1). 
‘‘(e) M
EETINGS .—The Task Force shall meet at the call of the 
chairperson. 
‘‘(f) R EPORT .—Not later than 180 days after the date of enact-

ment of this Act, the Task Force shall submit to Congress a report detailing the activities of the Task Force and containing the findings, strategies, recommendations, policies, and initiatives developed pursuant to the duty described in subsection (b)(2). In preparing such report, the Task Force shall consider completed and ongoing efforts by Federal agencies to improve access to health care in the State of Alaska. 
‘‘(g) T
ERMINATION .—The Task Force shall be terminated on

the date of submission of the report described in subsection (f).’’. 
(c) Section 399V of the Public Health Service Act, as added 
by section 5313, is amended— 
(1) in subsection (b)(4), by striking ‘‘identify, educate, refer, 
and enroll’’ and inserting ‘‘identify and refer’’; and 
(2) in subsection (k)(1), by striking ‘‘, as defined by the 
Department of Labor as Standard Occupational Classification [21–1094]’’. 42 USC 280g–11. Deadline.

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124 STAT. 995 PUBLIC LAW 111–148—MAR. 23, 2010 
(d) Section 738(a)(3) of the Public Health Service Act (42 U.S.C. 
293b(a)(3)) is amended by inserting ‘‘schools offering physician assistant education programs,’’ after ‘‘public health,’’. 
(e) Subtitle D of title V of this Act is amended by adding 
‘‘SEC. 5316. DEMONSTRATION GRANTS FOR FAMILY NURSE PRACTI-
TIONER TRAINING PROGRAMS. 
‘‘(a) E STABLISHMENT OF PROGRAM .—The Secretary of Health

and Human Services (referred to in this section as the ‘Secretary’) shall establish a training demonstration program for family nurse practitioners (referred to in this section as the ‘program’) to employ and provide 1-year training for nurse practitioners who have grad-uated from a nurse practitioner program for careers as primary care providers in Federally qualified health centers (referred to in this section as ‘FQHCs’) and nurse-managed health clinics (referred to in this section as

‘‘(b) P
URPOSE .—The purpose of the program is to enable each 
grant recipient to— 
‘‘(1) provide new nurse practitioners with clinical training 
to enable them to serve as primary care providers in FQHCs and NMHCs; 
‘‘(2) train new nurse practitioners to work under a model 
of primary care that is consistent with the principles set forth by the Institute of Medicine and the needs of vulnerable popu-lations; and 
‘‘(3) create a model of FQHC and NMHC training for nurse

practitioners that may be replicated nationwide. ‘‘(c) G
RANTS .—The Secretary shall award 3-year grants to 
eligible entities that meet the requirements established by the Secretary, for the purpose of operating the nurse practitioner pri-mary care programs described in subsection (a) in such entities. 
‘‘(d) E
‘‘(1)(A) be a FQHC as defined in section 1861(aa) of the

Social Security Act (42 U.S.C. 1395x(aa)); or 
‘‘(B) be a nurse-managed health clinic, as defined in section 
330A–1 of the Public Health Service Act (as added by section 5208 of this Act); and 
in such manner, and containing such information as the Sec-retary may require. ‘‘(e) P
RIORITY IN AWARDING GRANTS .—In awarding grants under 
this section, the Secretary shall give priority to eligible entities that—

‘‘(1) demonstrate sufficient infrastructure in size, scope, 
and capacity to undertake the requisite training of a minimum of 3 nurse practitioners per year, and to provide to each awardee 12 full months of full-time, paid employment and benefits con-sistent with the benefits offered to other full-time employees of such entity; 
‘‘(2) will assign not less than 1 staff nurse practitioner 
or physician to each of 4 precepted clinics; 
‘‘(3) will provide to each awardee specialty rotations,

including specialty training in prenatal care and women’s health, adult and child psychiatry, orthopedics, geriatrics, and at least 3 other high-volume, high-burden specialty areas; 42 USC 296j–1. 
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124 STAT. 996 PUBLIC LAW 111–148—MAR. 23, 2010 
‘‘(4) provide sessions on high-volume, high-risk health prob-
lems and have a record of training health care professionals in the care of children, older adults, and underserved popu-lations; and 
‘‘(5) collaborate with other safety net providers, schools, 
colleges, and universities that provide health professions training. ‘‘(f) E
LIGIBILITY OF NURSE PRACTITIONERS .— 
‘‘(1) I N GENERAL .—To be eligible for acceptance to a pro-

gram funded through a grant awarded under this section, an individual shall— 
‘‘(A) be licensed or eligible for licensure in the State 
in which the program is located as an advanced practice registered nurse or advanced practice nurse and be eligible or board-certified as a family nurse practitioner; and 
‘‘(B) demonstrate commitment to a career as a primary 
care provider in a FQHC or in a NMHC. ‘‘(2) P
REFERENCE .—In selecting awardees under the pro-

gram, each grant recipient shall give preference to bilingual candidates that meet the requirements described in paragraph (1). 
‘‘(3) D
EFERRAL OF CERTAIN SERVICE .—The starting date

EFERRAL OF CERTAIN SERVICE .—The starting date 
of required service of individuals in the National Health Service Corps Service program under title II of the Public Health Service Act (42 U.S.C. 202 et seq.) who receive training under this section shall be deferred until the date that is 22 days after the date of completion of the program. ‘‘(g) G
RANT AMOUNT .—Each grant awarded under this section

shall be in an amount not to exceed $600,000 per year. A grant recipient may carry over funds from 1 fiscal year to another without obtaining approval from the Secretary. 
‘‘(h) T
ECHNICAL ASSISTANCE GRANTS .—The Secretary may

ECHNICAL ASSISTANCE GRANTS .—The Secretary may 
award technical assistance grants to 1 or more FQHCs or NMHCs that have demonstrated expertise in establishing a nurse practi-tioner residency training program. Such technical assistance grants shall be for the purpose of providing technical assistance to other recipients of grants under subsection (c). 
‘‘(i) A

tion, there is authorized to be appropriated such sums as may be necessary for each of fiscal years 2011 through 2014.’’. 
(f)(1) Section 399W of the Public Health Service Act, as added 
by section 5405, is redesignated as section 399V–1. 
(2) Section 399V–1 of the Public Health Service Act, as so

redesignated, is amended in subsection (b)(2)(A) by striking ‘‘and the departments of 1 or more health professions schools in the State that train providers in primary care’’ and inserting ‘‘and the departments that train providers in primary care in 1 or more health professions schools in the State’’. 
(3) Section 934 of the Public Health Service Act, as added 
by section 3501, is amended by striking ‘‘399W’’ each place such term appears and inserting ‘‘399V–1’’.

(4) Section 935(b) of the Public Health Service Act, as added 
by section 3503, is amended by striking ‘‘399W’’ and inserting ‘‘399V–1’’. 
(g) Part P of title III of the Public Health Service Act 42 
U.S.C. 280g et seq.), as amended by section 10411, is amended by adding at the end the following: 
42 USC 299b–35. 42 USC 299b–34. 42 USC 280g–12.

42 USC 299b–35. 42 USC 299b–34. 42 USC 280g–12. 
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124 STAT. 997 PUBLIC LAW 111–148—MAR. 23, 2010 
‘‘SEC. 399V–3. NATIONAL DIABETES PREVENTION PROGRAM. 
of the Centers for Disease Control and Prevention, shall establish a national diabetes prevention program (referred to in this section as the ‘program’) targeted at adults at high risk for diabetes in order to eliminate the preventable burden of diabetes. 
‘‘(b) P
ROGRAM ACTIVITIES .—The program described in sub-

section (a) shall include— 
‘‘(1) a grant program for community-based diabetes preven-
tion program model sites; 
‘‘(2) a program within the Centers for Disease Control 
and Prevention to determine eligibility of entities to deliver community-based diabetes prevention services; 
‘‘(3) a training and outreach program for lifestyle interven-
tion instructors; and 
‘‘(4) evaluation, monitoring and technical assistance, and

applied research carried out by the Centers for Disease Control and Prevention. ‘‘(c) E
LIGIBLE ENTITIES .—To be eligible for a grant under sub-
section (b)(1), an entity shall be a State or local health department, a tribal organization, a national network of community-based non- 
profits focused on health and wellbeing, an academic institution, or other entity, as the Secretary determines. 
‘‘(d) A

carrying out this section, there are authorized to be appropriated such sums as may be necessary for each of fiscal years 2010 through 2014.’’. 
(h) The provisions of, and amendment made by, section 5501(c) 
of this Act are repealed. 
(i)(1) The provisions of, and amendments made by, section 
5502 of this Act are repealed. 
(2)(A) Section 1861(aa)(3)(A) of the Social Security Act (42 
U.S.C. 1395w(aa)(3)(A)) is amended to read as follows:

‘‘(A) services of the type described in subparagraphs (A) 
through (C) of paragraph (1) and preventive services (as defined in section 1861(ddd)(3)); and’’. (B) The amendment made by subparagraph (A) shall apply 
to services furnished on or after January 1, 2011. 
(3)(A) Section 1834 of the Social Security Act (42 U.S.C. 1395m), 
as amended by section 4105, is amended by adding at the end the following new subsection: 
‘‘(o) D
EVELOPMENT AND IMPLEMENTATION OF PROSPECTIVE PAY-
MENT SYSTEM .—

prospective payment system for payment for Federally qualified health center services furnished by Federally qualified health centers under this title. Such system shall include a process for appropriately describing the services furnished by Federally qualified health centers and shall establish payment rates for specific payment codes based on such appropriate descriptions of services. Such system shall be established to take into account the type, intensity, and duration of services

the type, intensity, and duration of services furnished by Federally qualified health centers. Such system may include adjustments, including geographic adjustments, determined appropriate by the Secretary. Applicability. 42 USC 1395x note. 42 USC 1395m,

1395x and note. 42 USC 1395x. Repeals. 
42 USC 1395w–4. 42 USC 280g–14. 
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124 STAT. 998 PUBLIC LAW 111–148—MAR. 23, 2010 
‘‘(B) C OLLECTION OF DATA AND EVALUATION .—By not 
later than January 1, 2011, the Secretary shall require Federally qualified health centers to submit to the Sec-retary such information as the Secretary may require in order to develop and implement the prospective payment system under this subsection, including the reporting of services using HCPCS codes. ‘‘(2) I

1833(a)(3)(A), the Secretary shall provide, for cost reporting periods beginning on or after October 1, 2014, for payments of prospective payment rates for Federally qualified health center services furnished by Federally qualified health cen-ters under this title in accordance with the prospective payment system developed by the Secretary under para-graph (1). 
‘‘(B) P
AYMENTS .— 

ment such prospective payment system so that the estimated aggregate amount of prospective payment rates (determined prior to the application of section 1833(a)(1)(Z)) under this title for Federally qualified health center services in the first year that such system is implemented is equal to 100 percent of the estimated amount of reasonable costs (determined without the application of a per visit payment limit or productivity screen and prior to the application of section 1866(a)(2)(A)(ii))

to the application of section 1866(a)(2)(A)(ii)) that would have occurred for such services under this title in such year if the system had not been implemented.

‘‘(ii) P
AYMENTS IN SUBSEQUENT YEARS .—Payment 
rates in years after the year of implementation of such system shall be the payment rates in the previous year increased— 
‘‘(I) in the first year after implementation of 
such system, by the percentage increase in the MEI (as defined in section 1842(i)(3)) for the year involved; and 
‘‘(II) in subsequent years, by the percentage

‘‘(II) in subsequent years, by the percentage 
increase in a market basket of Federally qualified health center goods and services as promulgated through regulations, or if such an index is not available, by the percentage increase in the MEI (as defined in section 1842(i)(3)) for the year involved. 
‘‘(C) P
REPARATION FOR PPS IMPLEMENTATION .—Notwith-

standing any other provision of law, the Secretary may establish and implement by program instruction or other-wise the payment codes to be used under the prospective payment system under this section.’’. 
(B) Section 1833(a)(1) of the Social Security Act (42 U.S.C. 
1395l(a)(1)), as amended by section 4104, is amended— 
(i) by striking ‘‘and’’ before ‘‘(Y)’’; and (ii) by inserting before the semicolon at the end the fol-

lowing: ‘‘, and (Z) with respect to Federally qualified health center services for which payment is made under section 1834(o), the amounts paid shall be 80 percent of the lesser Deadline. 
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124 STAT. 999 PUBLIC LAW 111–148—MAR. 23, 2010 
of the actual charge or the amount determined under such 
section’’. (C) Section 1833(a) of the Social Security Act (42 U.S.C. 
1395l(a)) is amended— 
(i) in paragraph (3)(B)(i)— 
(I) by inserting ‘‘(I)’’ after ‘‘otherwise been provided’’; 
and 
(II) by inserting ‘‘, or (II) in the case of such services

furnished on or after the implementation date of the prospective payment system under section 1834(o), under such section (calculated as if ‘100 percent’ were substituted for ‘80 percent’ in such section) for such services if the individual had not been so enrolled’’ after ‘‘been so enrolled’’; and (ii) by adding at the end the following flush sentence:

‘‘Paragraph (3)(A) shall not apply to Federally qualified health center services furnished on or after the implementation date of the prospective payment system under section 1834(0).’’. (j) Section 5505 is amended by adding at the end the following 
‘‘(d) A

not be applied in a manner that requires reopening of any settled cost reports as to which there is not a jurisdictionally proper appeal pending as of the date of the enactment of this Act on the issue of payment for indirect costs of medical education under section 1886(d)(5)(B) of the Social Security Act (42 U.S.C. 1395ww(d)(5)(B)) or for direct graduate medical education costs under section 1886(h) of such Act (42 U.S.C. 1395ww(h)).’’.

(k) Subtitle G of title V of this Act is amended by adding 
‘‘SEC. 5606. STATE GRANTS TO HEALTH CARE PROVIDERS WHO PRO-
VIDE SERVICES TO A HIGH PERCENTAGE OF MEDICALLY UNDERSERVED POPULATIONS OR OTHER SPECIAL POPU-LATIONS. 
‘‘(a) I NGENERAL .—A State may award grants to health care 
providers who treat a high percentage, as determined by such State, of medically underserved populations or other special popu-lations in such State. 
‘‘(b) S

State under subsection (a) may not be established within a depart-ment, agency, or other entity of such State that administers the Medicaid program under title XIX of the Social Security Act (42 U.S.C. 1396 et seq.), and no Federal or State funds allocated to such Medicaid program, the Medicare program under title XVIII of the Social Security Act (42 U.S.C. 1395 et seq.), or the TRICARE program under chapter 55 of title 10, United States Code, may be used to award grants or to pay

Code, may be used to award grants or to pay administrative costs associated with a grant program established under subsection (a).’’.

(l) Part C of title VII of the Public Health Service Act (42 
U.S.C. 293k et seq.) is amended— 
(1) after the part heading, by inserting the following: 
‘‘Subpart I—Medical Training Generally’’; 
and 
(2) by inserting at the end the following: 42 USC 254b–1. 42 USC 1395ww 
note. 
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124 STAT. 1000 PUBLIC LAW 111–148—MAR. 23, 2010 
‘‘Subpart II—Training in Underserved 
‘‘SEC. 749B. RURAL PHYSICIAN TRAINING GRANTS. 

trator of the Health Resources and Services Administration, shall establish a grant program for the purposes of assisting eligible entities in recruiting students most likely to practice medicine in underserved rural communities, providing rural-focused training and experience, and increasing the number of recent allopathic and osteopathic medical school graduates who practice in under-served rural communities. 
‘‘(b) E
LIGIBLE ENTITIES .—In order to be eligible to receive a

grant under this section, an entity shall— 
‘‘(1) be a school of allopathic or osteopathic medicine accred-
ited by a nationally recognized accrediting agency or association approved by the Secretary for this purpose, or any combination or consortium of such schools; and 
‘‘(2) submit an application to the Secretary that includes 
a certification that such entity will use amounts provided to the institution as described in subsection (d)(1). ‘‘(c) P

RIORITY .—In awarding grant funds under this section, 
the Secretary shall give priority to eligible entities that— 
‘‘(1) demonstrate a record of successfully training students, 
as determined by the Secretary, who practice medicine in under-served rural communities; 
‘‘(2) demonstrate that an existing academic program of 
the eligible entity produces a high percentage, as determined by the Secretary, of graduates from such program who practice medicine in underserved rural communities;

‘‘(3) demonstrate rural community institutional partner-
ships, through such mechanisms as matching or contributory funding, documented in-kind services for implementation, or existence of training partners with interprofessional expertise in community health center training locations or other similar facilities; or 
‘‘(4) submit, as part of the application of the entity under 
subsection (b), a plan for the long-term tracking of where the graduates of such entity practice medicine. ‘‘(d) U

‘‘(1) E STABLISHMENT .—An eligible entity receiving a grant 
under this section shall use the funds made available under such grant to establish, improve, or expand a rural-focused training program (referred to in this section as the ‘Program’) meeting the requirements described in this subsection and to carry out such program. 
‘‘(2) S
TRUCTURE OF PROGRAM .—An eligible entity shall— 
‘‘(A) enroll no fewer than 10 students per class year 
into the Program; and

into the Program; and 
‘‘(B) develop criteria for admission to the Program that 
gives priority to students— 
‘‘(i) who have originated from or lived for a period 
of 2 or more years in an underserved rural community; and 
‘‘(ii) who express a commitment to practice medi-
cine in an underserved rural community. 42 USC 293m. 
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124 STAT. 1001 PUBLIC LAW 111–148—MAR. 23, 2010 
‘‘(3) C URRICULA .—The Program shall require students to 
enroll in didactic coursework and clinical experience particu-larly applicable to medical practice in underserved rural communities, including— 
‘‘(A) clinical rotations in underserved rural commu-
nities, and in applicable specialties, or other coursework or clinical experience deemed appropriate by the Secretary; and 
‘‘(B) in addition to core school curricula, additional

coursework or training experiences focused on medical issues prevalent in underserved rural communities. ‘‘(4) R
ESIDENCY PLACEMENT ASSISTANCE .—Where available, 
the Program shall assist all students of the Program in obtaining clinical training experiences in locations with post-graduate programs offering residency training opportunities in underserved rural communities, or in local residency training programs that support and train physicians to practice in underserved rural communities.

‘‘(5) P
ROGRAM STUDENT COHORT SUPPORT .—The Program 
shall provide and require all students of the Program to partici-pate in group activities designed to further develop, maintain, and reinforce the original commitment of such students to practice in an underserved rural community. ‘‘(e) A
NNUAL REPORTING .—An eligible entity receiving a grant

under this section shall submit an annual report to the Secretary on the success of the Program, based on criteria the Secretary determines appropriate, including the residency program selection of graduating students who participated in the Program. 
‘‘(f) R
EGULATIONS .—Not later than 60 days after the date of 
enactment of this section, the Secretary shall by regulation define ‘underserved rural community’ for purposes of this section. 
‘‘(g) S

‘‘(g) S
UPPLEMENT NOTSUPPLANT .—Any eligible entity receiving 
funds under this section shall use such funds to supplement, not supplant, any other Federal, State, and local funds that would otherwise be expended by such entity to carry out the activities described in this section. 
‘‘(h) M
AINTENANCE OF EFFORT .—With respect to activities for

which funds awarded under this section are to be expended, the entity shall agree to maintain expenditures of non-Federal amounts for such activities at a level that is not less than the level of such expenditures maintained by the entity for the fiscal year preceding the fiscal year for which the entity receives a grant under this section. 
‘‘(i) A
to be appropriated $4,000,000 for each of the fiscal years 2010 through 2013.’’.

(m)(1) Section 768 of the Public Health Service Act (42 U.S.C. 
295c) is amended to read as follows: 
‘‘SEC. 768. PREVENTIVE MEDICINE AND PUBLIC HEALTH TRAINING 
GRANT PROGRAM. 
‘‘(a) G RANTS .—The Secretary, acting through the Administrator

of the Health Resources and Services Administration and in con-sultation with the Director of the Centers for Disease Control and Prevention, shall award grants to, or enter into contracts with, eligible entities to provide training to graduate medical residents in preventive medicine specialties. Contracts. Deadline. 
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124 STAT. 1002 PUBLIC LAW 111–148—MAR. 23, 2010 
‘‘(b) E LIGIBILITY .—To be eligible for a grant or contract under 
subsection (a), an entity shall be— 
‘‘(1) an accredited school of public health or school of medi-
cine or osteopathic medicine; 
‘‘(2) an accredited public or private nonprofit hospital; ‘‘(3) a State, local, or tribal health department; or ‘‘(4) a consortium of 2 or more entities described in para-
graphs (1) through (3). ‘‘(c) U

SE OF FUNDS .—Amounts received under a grant or con-
tract under this section shall be used to— 
‘‘(1) plan, develop (including the development of curricula), 
operate, or participate in an accredited residency or internship program in preventive medicine or public health; 
‘‘(2) defray the costs of practicum experiences, as required 
in such a program; and 
‘‘(3) establish, maintain, or improve— 
‘‘(A) academic administrative units (including depart-

ments, divisions, or other appropriate units) in preventive medicine and public health; or 
‘‘(B) programs that improve clinical teaching in preven-
tive medicine and public health. 
‘‘(d) R
EPORT .—The Secretary shall submit to the Congress an 
annual report on the program carried out under this section.’’. 
(2) Section 770(a) of the Public Health Service Act (42 
U.S.C. 295e(a)) is amended to read as follows: ‘‘(a) I
NGENERAL .—For the purpose of carrying out this subpart,

there is authorized to be appropriated $43,000,000 for fiscal year 2011, and such sums as may be necessary for each of the fiscal years 2012 through 2015.’’. 
(n)(1) Subsection (i) of section 331 of the Public Health Service 
Act (42 U.S.C. 254d) of the Public Health Service Act is amended— 
(A) in paragraph (1), by striking ‘‘In carrying out subpart

III’’ and all that follows through the period and inserting ‘‘In carrying out subpart III, the Secretary may, in accordance with this subsection, issue waivers to individuals who have entered into a contract for obligated service under the Scholar-ship Program or the Loan Repayment Program under which the individuals are authorized to satisfy the requirement of obligated service through providing clinical practice that is half time.’’; 
(B) in paragraph (2)—

(i) in subparagraphs (A)(ii) and (B), by striking ‘‘less 
than full time’’ each place it appears and inserting ‘‘half time’’; 
(ii) in subparagraphs (C) and (F), by striking ‘‘less 
than full-time service’’ each place it appears and inserting 
‘‘half-time service’’; and 
(iii) by amending subparagraphs (D) and (E) to read 
as follows: ‘‘(D) the entity and the Corps member agree in writing 
that the Corps member will perform half-time clinical practice;

‘‘(E) the Corps member agrees in writing to fulfill all of 
the service obligations under section 338C through half-time clinical practice and either— 
‘‘(i) double the period of obligated service that would 
otherwise be required; or 
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124 STAT. 1003 PUBLIC LAW 111–148—MAR. 23, 2010 
‘‘(ii) in the case of contracts entered into under section 
338B, accept a minimum service obligation of 2 years with an award amount equal to 50 percent of the amount that would otherwise be payable for full-time service; and’’; and (C) in paragraph (3), by striking ‘‘In evaluating a dem-

onstration project described in paragraph (1)’’ and inserting ‘‘In evaluating waivers issued under paragraph (1)’’. (2) Subsection (j) of section 331 of the Public Health Service 
Act (42 U.S.C. 254d) is amended by adding at the end the following: 
‘‘(5) The terms ‘full time’ and ‘full-time’ mean a minimum 
of 40 hours per week in a clinical practice, for a minimum of 45 weeks per year. 
‘‘(6) The terms ‘half time’ and ‘half-time’ mean a minimum

of 20 hours per week (not to exceed 39 hours per week) in a clinical practice, for a minimum of 45 weeks per year.’’. (3) Section 337(b)(1) of the Public Health Service Act (42 U.S.C. 
254j(b)(1)) is amended by striking ‘‘Members may not be reappointed to the Council.’’. 
(4) Section 338B(g)(2)(A) of the Public Health Service Act (42

U.S.C. 254l–1(g)(2)(A)) is amended by striking ‘‘$35,000’’ and inserting ‘‘$50,000, plus, beginning with fiscal year 2012, an amount determined by the Secretary on an annual basis to reflect inflation,’’. 
(5) Subsection (a) of section 338C of the Public Health Service 
Act (42 U.S.C. 254m), as amended by section 5508, is amended— 
(A) by striking the second sentence and inserting the fol-

lowing: ‘‘The Secretary may treat teaching as clinical practice for up to 20 percent of such period of obligated service.’’; and 
(B) by adding at the end the following: ‘‘Notwithstanding

the preceding sentence, with respect to a member of the Corps participating in the teaching health centers graduate medical education program under section 340H, for the purpose of calcu-lating time spent in full-time clinical practice under this section, up to 50 percent of time spent teaching by such member may be counted toward his or her service obligation.’’. 
SEC. 10502. INFRASTRUCTURE TO EXPAND ACCESS TO CARE. 
(a) A PPROPRIATION .—There are authorized to be appropriated,

and there are appropriated to the Department of Health and Human Services, $100,000,000 for fiscal year 2010, to remain available for obligation until September 30, 2011, to be used for debt service on, or direct construction or renovation of, a health care facility that provides research, inpatient tertiary care, or outpatient clinical services. Such facility shall be affiliated with an academic health center at a public research university in the United States that contains a State’s sole

in the United States that contains a State’s sole public academic medical and dental school.

(b) R
EQUIREMENT .—Amount appropriated under subsection (a) 
may only be made available by the Secretary of Health and Human Services upon the receipt of an application from the Governor of a State that certifies that— 
(1) the new health care facility is critical for the provision 
of greater access to health care within the State; 
(2) such facility is essential for the continued financial 
viability of the State’s sole public medical and dental school and its academic health center;

(3) the request for Federal support represents not more 
than 40 percent of the total cost of the proposed new facility; and Certification. Definitions. 
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124 STAT. 1004 PUBLIC LAW 111–148—MAR. 23, 2010 
(4) the State has established a dedicated funding mecha-
nism to provide all remaining funds necessary to complete the construction or renovation of the proposed facility. 
SEC. 10503. COMMUNITY HEALTH CENTERS AND THE NATIONAL 
HEALTH SERVICE CORPS FUND. 

a Community Health Center Fund (referred to in this section as the ‘‘CHC Fund’’), to be administered through the Office of the Secretary of the Department of Health and Human Services to provide for expanded and sustained national investment in commu-nity health centers under section 330 of the Public Health Service Act and the National Health Service Corps. 
(b) F
UNDING .—There is authorized to be appropriated, and there

is appropriated, out of any monies in the Treasury not otherwise appropriated, to the CHC Fund— 
(1) to be transferred to the Secretary of Health and Human 
Services to provide enhanced funding for the community health center program under section 330 of the Public Health Service Act— 
(A) $700,000,000 for fiscal year 2011; (B) $800,000,000 for fiscal year 2012; (C) $1,000,000,000 for fiscal year 2013; (D) $1,600,000,000 for fiscal year 2014; and (E) $2,900,000,000 for fiscal year 2015; and

(2) to be transferred to the Secretary of Health and Human 
Services to provide enhanced funding for the National Health Service Corps— 
(A) $290,000,000 for fiscal year 2011; (B) $295,000,000 for fiscal year 2012; (C) $300,000,000 for fiscal year 2013; (D) $305,000,000 for fiscal year 2014; and (E) $310,000,000 for fiscal year 2015. 
(c) C
ONSTRUCTION .—There is authorized to be appropriated,

and there is appropriated, out of any monies in the Treasury not otherwise appropriated, $1,500,000,000 to be available for fiscal years 2011 through 2015 to be used by the Secretary of Health and Human Services for the construction and renovation of commu-nity health centers. 
(d) U
SE OF FUND.—The Secretary of Health and Human Serv-

ices shall transfer amounts in the CHC Fund to accounts within the Department of Health and Human Services to increase funding, over the fiscal year 2008 level, for community health centers and the National Health Service Corps. 
(e) A
VAILABILITY .—Amounts appropriated under subsections (b) 
and (c) shall remain available until expended. 
SEC. 10504. DEMONSTRATION PROJECT TO PROVIDE ACCESS TO 
AFFORDABLE CARE. 
(a) I NGENERAL .—Not later than 6 months after the date of

enactment of this Act, the Secretary of Health and Human Services (referred to in this section as the ‘‘Secretary’’), acting through the Health Resources and Services Administration, shall establish a 3 year demonstration project in up to 10 States to provide access to comprehensive health care services to the uninsured at reduced fees. The Secretary shall evaluate the feasibility of expanding the project to additional States. 
Evaluation. Deadline. 42 USC 256 note. Appropriation

authorization. 42 USC 254b–2. 
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124 STAT. 1005 PUBLIC LAW 111–148—MAR. 23, 2010 
(b) E LIGIBILITY .—To be eligible to participate in the demonstra-
tion project, an entity shall be a State-based, nonprofit, public- private partnership that provides access to comprehensive health care services to the uninsured at reduced fees. Each State in which a participant selected by the Secretary is located shall receive not more than $2,000,000 to establish and carry out the project for the 3-year demonstration period. 
(c) A

(c) A
such sums as may be necessary to carry out this section. 
SEC. 10601. REVISIONS TO LIMITATION ON MEDICARE EXCEPTION TO 
THE PROHIBITION ON CERTAIN PHYSICIAN REFERRALS FOR HOSPITALS. 
(a) I NGENERAL .—Section 1877(i) of the Social Security Act, 
as added by section 6001(a), is amended— 
(1) in paragraph (1)(A)(i), by striking ‘‘February 1, 2010’’ 
and inserting ‘‘August 1, 2010’’; and

and inserting ‘‘August 1, 2010’’; and 
(2) in paragraph (3)(A)— 
(A) in clause (iii), by striking ‘‘August 1, 2011’’ and 
inserting ‘‘February 1, 2012’’; and 
(B) in clause (iv), by striking ‘‘July 1, 2011’’ and 
inserting ‘‘January 1, 2012’’. 
(b) C ONFORMING AMENDMENT .—Section 6001(b)(2) of this Act 
is amended by striking ‘‘November 1, 2011’’ and inserting ‘‘May 1, 2012’’. 
SEC. 10602. CLARIFICATIONS TO PATIENT-CENTERED OUTCOMES 
RESEARCH.

RESEARCH. 
Section 1181 of the Social Security Act (as added by section 
6301) is amended— 
(1) in subsection (d)(2)(B)— 
(A) in clause (ii)(IV)— 
(i) by inserting ‘‘, as described in subparagraph 
(A)(ii),’’ after ‘‘original research’’; and 
(ii) by inserting ‘‘, as long as the researcher enters 
into a data use agreement with the Institute for use of the data from the original research, as appropriate’’ after ‘‘publication’’; and (B) by amending clause (iv) to read as follows: 
‘‘(iv) S

‘‘(iv) S
UBSEQUENT USE OF THE DATA .—The Institute 
shall not allow the subsequent use of data from original research in work-for-hire contracts with individuals, entities, or instrumentalities that have a financial interest in the results, unless approved under a data use agreement with the Institute.’’; 
(2) in subsection (d)(8)(A)(iv), by striking ‘‘not be construed 
as mandates for’’ and inserting ‘‘do not include’’; and 
(3) in subsection (f)(1)(C), by amending clause (ii) to read

as follows: 
‘‘(ii) 7 members representing physicians and pro-
viders, including 4 members representing physicians (at least 1 of whom is a surgeon), 1 nurse, 1 State- licensed integrative health care practitioner, and 1 rep-resentative of a hospital.’’. 42 USC 1320e. 42 USC 1395nn 
note. 42 USC 1395nn. 
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124 STAT. 1006 PUBLIC LAW 111–148—MAR. 23, 2010 
SEC. 10603. STRIKING PROVISIONS RELATING TO INDIVIDUAL PRO-
VIDER APPLICATION FEES. 
(a) I NGENERAL .—Section 1866(j)(2)(C) of the Social Security 
Act, as added by section 6401(a), is amended— 
(1) by striking clause (i); (2) by redesignating clauses (ii) through (iv), respectively, 
as clauses (i) through (iii); and 
(3) in clause (i), as redesignated by paragraph (2), by 
striking ‘‘clause (iii)’’ and inserting ‘‘clause (ii)’’. (b) T

ECHNICAL CORRECTION .—Section 6401(a)(2) of this Act is 
amended to read as follows: 
‘‘(2) by redesignating paragraph (2) as paragraph (8); and’’. 
SEC. 10604. TECHNICAL CORRECTION TO SECTION 6405. 
Paragraphs (1) and (2) of section 6405(b) are amended to read 
‘‘(1) P ART A .—Section 1814(a)(2) of the Social Security Act

(42 U.S.C. 1395(a)(2)) is amended in the matter preceding subparagraph (A) by inserting ‘, or, in the case of services described in subparagraph (C), a physician enrolled under sec-tion 1866(j),’ after ‘in collaboration with a physician,’. 
‘‘(2) P
ART B .—Section 1835(a)(2) of the Social Security Act

(42 U.S.C. 1395n(a)(2)) is amended in the matter preceding subparagraph (A) by inserting ‘, or, in the case of services described in subparagraph (A), a physician enrolled under sec-tion 1866(j),’ after ‘a physician’.’’. 
SEC. 10605. CERTAIN OTHER PROVIDERS PERMITTED TO CONDUCT 
FACE TO FACE ENCOUNTER FOR HOME HEALTH SERV-ICES. 
(a) P ART A.—Section 1814(a)(2)(C) of the Social Security Act

(42 U.S.C. 1395f(a)(2)(C)), as amended by section 6407(a)(1), is amended by inserting ‘‘, or a nurse practitioner or clinical nurse specialist (as those terms are defined in section 1861(aa)(5)) who is working in collaboration with the physician in accordance with State law, or a certified nurse-midwife (as defined in section 1861(gg)) as authorized by State law, or a physician assistant (as defined in section 1861(aa)(5)) under the supervision of the physician,’’ after ‘‘himself or herself’’.

(b) P
ART B.—Section 1835(a)(2)(A)(iv) of the Social Security 
Act, as added by section 6407(a)(2), is amended by inserting ‘‘,

or a nurse practitioner or clinical nurse specialist (as those terms are defined in section 1861(aa)(5)) who is working in collaboration with the physician in accordance with State law, or a certified nurse-midwife (as defined in section 1861(gg)) as authorized by State law, or a physician assistant (as defined in section 1861(aa)(5)) under the supervision of the physician,’’ after ‘‘must document that the physician’’. 
SEC. 10606. HEALTH CARE FRAUD ENFORCEMENT.

SEC. 10606. HEALTH CARE FRAUD ENFORCEMENT. 
(a) F RAUD SENTENCING GUIDELINES .— 
(1) D EFINITION .—In this subsection, the term ‘‘Federal 
health care offense’’ has the meaning given that term in section 24 of title 18, United States Code, as amended by this Act. 
(2) R
EVIEW AND AMENDMENTS .—Pursuant to the authority

EVIEW AND AMENDMENTS .—Pursuant to the authority 
under section 994 of title 28, United States Code, and in accord-ance with this subsection, the United States Sentencing Commission shall— 28 USC 994 note. 42 USC 1395f. 42 USC 1395cc. 
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124 STAT. 1007 PUBLIC LAW 111–148—MAR. 23, 2010 
(A) review the Federal Sentencing Guidelines and 
policy statements applicable to persons convicted of Federal health care offenses; 
(B) amend the Federal Sentencing Guidelines and

(B) amend the Federal Sentencing Guidelines and 
policy statements applicable to persons convicted of Federal health care offenses involving Government health care pro-grams to provide that the aggregate dollar amount of fraudulent bills submitted to the Government health care program shall constitute prima facie evidence of the amount of the intended loss by the defendant; and 
(C) amend the Federal Sentencing Guidelines to pro-
vide— 
(i) a 2-level increase in the offense level for any

defendant convicted of a Federal health care offense relating to a Government health care program which involves a loss of not less than $1,000,000 and less than $7,000,000; 
(ii) a 3-level increase in the offense level for any 
defendant convicted of a Federal health care offense relating to a Government health care program which involves a loss of not less than $7,000,000 and less than $20,000,000; 
(iii) a 4-level increase in the offense level for any

defendant convicted of a Federal health care offense relating to a Government health care program which involves a loss of not less than $20,000,000; and 
(iv) if appropriate, otherwise amend the Federal 
Sentencing Guidelines and policy statements applicable to persons convicted of Federal health care offenses involving Government health care programs. 
(3) R
EQUIREMENTS .—In carrying this subsection, the United 
States Sentencing Commission shall—

States Sentencing Commission shall— 
(A) ensure that the Federal Sentencing Guidelines and 
policy statements— 
(i) reflect the serious harms associated with health 
care fraud and the need for aggressive and appropriate law enforcement action to prevent such fraud; and 
(ii) provide increased penalties for persons con-
victed of health care fraud offenses in appropriate cir-cumstances; (B) consult with individuals or groups representing

health care fraud victims, law enforcement officials, the health care industry, and the Federal judiciary as part of the review described in paragraph (2); 
(C) ensure reasonable consistency with other relevant 
directives and with other guidelines under the Federal 
Sentencing Guidelines; 
(D) account for any aggravating or mitigating cir-

cumstances that might justify exceptions, including cir-cumstances for which the Federal Sentencing Guidelines, as in effect on the date of enactment of this Act, provide sentencing enhancements; 
(E) make any necessary conforming changes to the 
Federal Sentencing Guidelines; and 
(F) ensure that the Federal Sentencing Guidelines ade-
quately meet the purposes of sentencing.

quately meet the purposes of sentencing. 
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124 STAT. 1008 PUBLIC LAW 111–148—MAR. 23, 2010 
(b) I NTENT REQUIREMENT FOR HEALTH CARE FRAUD .—Section 
1347 of title 18, United States Code, is amended— 
(1) by inserting ‘‘(a)’’ before ‘‘Whoever knowingly’’; and (2) by adding at the end the following: 
‘‘(b) With respect to violations of this section, a person need 
(c) H
EALTH CARE FRAUD OFFENSE .—Section 24(a) of title 18,

(1) in paragraph (1), by striking the semicolon and inserting 
‘‘or section 1128B of the Social Security Act (42 U.S.C. 1320a– 7b); or’’; and 
(A) by inserting ‘‘1349,’’ after ‘‘1343,’’; and (B) by inserting ‘‘section 301 of the Federal Food, Drug, 
and Cosmetic Act (21 U.S.C. 331), or section 501 of the Employee Retirement Income Security Act of 1974 (29 U.S.C. 1131),’’ after ‘‘title,’’. 
(d) S
UBPOENA AUTHORITY RELATING TO HEALTH CARE.—

UBPOENA AUTHORITY RELATING TO HEALTH CARE.— 
(1) S UBPOENAS UNDER THE HEALTH INSURANCE PORTABILITY  
AND ACCOUNTABILITY ACT OF 1996 .—Section 1510(b) of title 18, 
(A) in paragraph (1), by striking ‘‘to the grand jury’’; 
and 
(i) in subparagraph (A), by striking ‘‘grand jury 
subpoena’’ and inserting ‘‘subpoena for records’’; and 
(ii) in the matter following subparagraph (B), by 
striking ‘‘to the grand jury’’.

striking ‘‘to the grand jury’’. 
(2) S UBPOENAS UNDER THE CIVIL RIGHTS OF INSTITUTIONAL -
IZED PERSONS ACT .—The Civil Rights of Institutionalized Per-
sons Act (42 U.S.C. 1997 et seq.) is amended by inserting after section 3 the following: 
‘‘SEC. 3A. SUBPOENA AUTHORITY. 
‘‘(a) A UTHORITY .—The Attorney General, or at the direction

of the Attorney General, any officer or employee of the Department of Justice may require by subpoena access to any institution that is the subject of an investigation under this Act and to any docu-ment, record, material, file, report, memorandum, policy, procedure, investigation, video or audio recording, or quality assurance report relating to any institution that is the subject of an investigation under this Act to determine whether there are conditions which deprive persons residing in or

conditions which deprive persons residing in or confined to the institution of any rights, privileges, or immunities secured or protected by the Con-stitution or laws of the United States.

‘‘(b) I
SSUANCE AND ENFORCEMENT OF SUBPOENAS .— 
‘‘(1) I SSUANCE .—Subpoenas issued under this section— 
‘‘(A) shall bear the signature of the Attorney General 
or any officer or employee of the Department of Justice as designated by the Attorney General; and 
‘‘(B) shall be served by any person or class of persons 
designated by the Attorney General or a designated officer or employee for that purpose. ‘‘(2) E
NFORCEMENT .—In the case of contumacy or failure

NFORCEMENT .—In the case of contumacy or failure 
to obey a subpoena issued under this section, the United States district court for the judicial district in which the institution 42 USC 1997a–1. 
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124 STAT. 1009 PUBLIC LAW 111–148—MAR. 23, 2010 
is located may issue an order requiring compliance. Any failure 
to obey the order of the court may be punished by the court as a contempt that court. ‘‘(c) P
ROTECTION OF SUBPOENAED RECORDS AND INFORMATION .— 
Any document, record, material, file, report, memorandum, policy, procedure, investigation, video or audio recording, or quality assur-ance report or other information obtained under a subpoena issued under this section—

‘‘(1) may not be used for any purpose other than to protect 
the rights, privileges, or immunities secured or protected by the Constitution or laws of the United States of persons who reside, have resided, or will reside in an institution; 
‘‘(2) may not be transmitted by or within the Department

of Justice for any purpose other than to protect the rights, privileges, or immunities secured or protected by the Constitu-tion or laws of the United States of persons who reside, have resided, or will reside in an institution; and 
‘‘(3) shall be redacted, obscured, or otherwise altered if 
used in any publicly available manner so as to prevent the disclosure of any personally identifiable information.’’. 
SEC. 10607. STATE DEMONSTRATION PROGRAMS TO EVALUATE ALTER-

NATIVES TO CURRENT MEDICAL TORT LITIGATION. 
280g et seq.), as amended by this Act, is further amended by adding at the end the following: 
‘‘SEC. 399V–4. STATE DEMONSTRATION PROGRAMS TO EVALUATE 
ALTERNATIVES TO CURRENT MEDICAL TORT LITIGA-TION. 
‘‘(a) I NGENERAL .—The Secretary is authorized to award dem-

onstration grants to States for the development, implementation, and evaluation of alternatives to current tort litigation for resolving disputes over injuries allegedly caused by health care providers or health care organizations. In awarding such grants, the Secretary shall ensure the diversity of the alternatives so funded. 
‘‘(b) D
URATION .—The Secretary may award grants under sub-
section (a) for a period not to exceed 5 years. 
‘‘(c) C ONDITIONS FOR DEMONSTRATION GRANTS .—

‘‘(c) C ONDITIONS FOR DEMONSTRATION GRANTS .— 
‘‘(1) R EQUIREMENTS .—Each State desiring a grant under 
subsection (a) shall develop an alternative to current tort litiga-tion that— 
‘‘(A) allows for the resolution of disputes over injuries 
allegedly caused by health care providers or health care organizations; and 
‘‘(B) promotes a reduction of health care errors by

encouraging the collection and analysis of patient safety data related to disputes resolved under subparagraph (A) by organizations that engage in efforts to improve patient 
safety and the quality of health care. ‘‘(2) A
LTERNATIVE TO CURRENT TORT LITIGATION .—Each 
State desiring a grant under subsection (a) shall demonstrate how the proposed alternative described in paragraph (1)(A)— 
‘‘(A) makes the medical liability system more reliable

by increasing the availability of prompt and fair resolution of disputes; 
‘‘(B) encourages the efficient resolution of disputes; ‘‘(C) encourages the disclosure of health care errors; Grants. 42 USC 280g–15. 
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124 STAT. 1010 PUBLIC LAW 111–148—MAR. 23, 2010 
‘‘(D) enhances patient safety by detecting, analyzing, 
and helping to reduce medical errors and adverse events; 
‘‘(E) improves access to liability insurance; ‘‘(F) fully informs patients about the differences in 
the alternative and current tort litigation; 
‘‘(G) provides patients the ability to opt out of or volun-

tarily withdraw from participating in the alternative at any time and to pursue other options, including litigation, outside the alternative; 
‘‘(H) would not conflict with State law at the time 
of the application in a way that would prohibit the adoption of an alternative to current tort litigation; and 
‘‘(I) would not limit or curtail a patient’s existing legal

rights, ability to file a claim in or access a State’s legal system, or otherwise abrogate a patient’s ability to file a medical malpractice claim. ‘‘(3) S
OURCES OF COMPENSATION .—Each State desiring a

OURCES OF COMPENSATION .—Each State desiring a 
grant under subsection (a) shall identify the sources from and methods by which compensation would be paid for claims resolved under the proposed alternative to current tort litiga-tion, which may include public or private funding sources, or a combination of such sources. Funding methods shall to the extent practicable provide financial incentives for activities that improve patient safety. 
‘‘(4) S
COPE .—

‘‘(4) S
COPE .— 
‘‘(A) I N GENERAL .—Each State desiring a grant under

subsection (a) shall establish a scope of jurisdiction (such as Statewide, designated geographic region, a designated area of health care practice, or a designated group of health care providers or health care organizations) for the pro-posed alternative to current tort litigation that is sufficient to evaluate the effects of the alternative. No scope of juris-diction shall be established under this paragraph that is based on a health care payer or patient population. 
‘‘(B) N

‘‘(B) N
OTIFICATION OF PATIENTS .—A State shall dem-
onstrate how patients would be notified that they are receiving health care services that fall within such scope, and the process by which they may opt out of or voluntarily withdraw from participating in the alternative. The deci-sion of the patient whether to participate or continue participating in the alternative process shall be made at any time and shall not be limited in any way. ‘‘(5) P
REFERENCE IN AWARDING DEMONSTRATION GRANTS .—

REFERENCE IN AWARDING DEMONSTRATION GRANTS .— 
In awarding grants under subsection (a), the Secretary shall give preference to States— 
‘‘(A) that have developed the proposed alternative 
through substantive consultation with relevant stake-holders, including patient advocates, health care providers and health care organizations, attorneys with expertise in representing patients and health care providers, medical malpractice insurers, and patient safety experts;

‘‘(B) that make proposals that are likely to enhance 
patient safety by detecting, analyzing, and helping to reduce medical errors and adverse events; and 
‘‘(C) that make proposals that are likely to improve 
access to liability insurance. 
‘‘(d) A
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124 STAT. 1011 PUBLIC LAW 111–148—MAR. 23, 2010 
‘‘(1) I N GENERAL .—Each State desiring a grant under sub-
section (a) shall submit to the Secretary an application, at such time, in such manner, and containing such information as the Secretary may require. 
‘‘(2) R
EVIEW PANEL .— 
‘‘(A) I N GENERAL .—In reviewing applications under 
paragraph (1), the Secretary shall consult with a review panel composed of relevant experts appointed by the Comp-troller General. 
‘‘(B) C
OMPOSITION .—

‘‘(B) C
‘‘(i) N OMINATIONS .—The Comptroller General shall 
solicit nominations from the public for individuals to serve on the review panel. 
‘‘(ii) A
PPOINTMENT .—The Comptroller General 
shall appoint, at least 9 but not more than 13, highly qualified and knowledgeable individuals to serve on the review panel and shall ensure that the following entities receive fair representation on such panel: 
‘‘(I) Patient advocates. ‘‘(II) Health care providers and health care

organizations. 
‘‘(III) Attorneys with expertise in representing 
patients and health care providers. 
‘‘(IV) Medical malpractice insurers. ‘‘(V) State officials. ‘‘(VI) Patient safety experts. 
‘‘(C) C
HAIRPERSON .—The Comptroller General, or an 
individual within the Government Accountability Office designated by the Comptroller General, shall be the chair-person of the review panel. 
‘‘(D) A
VAILABILITY OF INFORMATION .—The Comptroller

VAILABILITY OF INFORMATION .—The Comptroller 
General shall make available to the review panel such information, personnel, and administrative services and assistance as the review panel may reasonably require to carry out its duties. 
‘‘(E) I
NFORMATION FROM AGENCIES .—The review panel

NFORMATION FROM AGENCIES .—The review panel 
may request directly from any department or agency of the United States any information that such panel con-siders necessary to carry out its duties. To the extent consistent with applicable laws and regulations, the head of such department or agency shall furnish the requested information to the review panel. 
‘‘(e) R
EPORTS .— 
‘‘(1) B Y STATE .—Each State receiving a grant under sub-

section (a) shall submit to the Secretary an annual report evaluating the effectiveness of activities funded with grants 
awarded under such subsection. Such report shall, at a min-imum, include the impact of the activities funded on patient safety and on the availability and price of medical liability insurance. 
‘‘(2) B
Y SECRETARY .—The Secretary shall submit to Con-

gress an annual compendium of the reports submitted under paragraph (1) and an analysis of the activities funded under subsection (a) that examines any differences that result from such activities in terms of the quality of care, number and nature of medical errors, medical resources used, length of Establishment.

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124 STAT. 1012 PUBLIC LAW 111–148—MAR. 23, 2010 
time for dispute resolution, and the availability and price of 
liability insurance. ‘‘(f) T
‘‘(1) I N GENERAL .—The Secretary shall provide technical 
assistance to the States applying for or awarded grants under subsection (a). 
‘‘(2) R
EQUIREMENTS .—Technical assistance under para-
graph (1) shall include— 
‘‘(A) guidance on non-economic damages, including the

consideration of individual facts and circumstances in determining appropriate payment, guidance on identifying avoidable injuries, and guidance on disclosure to patients of health care errors and adverse events; and 
‘‘(B) the development, in consultation with States, of 
common definitions, formats, and data collection infrastruc-ture for States receiving grants under this section to use in reporting to facilitate aggregation and analysis of data both within and between States. ‘‘(3) U

SE OF COMMON DEFINITIONS , FORMATS , AND DATA  
COLLECTION INFRASTRUCTURE .—States not receiving grants 
under this section may also use the common definitions, for-mats, and data collection infrastructure developed under para-graph (2)(B). ‘‘(g) E
‘‘(1) I N GENERAL .—The Secretary, in consultation with the

review panel established under subsection (d)(2), shall enter into a contract with an appropriate research organization to conduct an overall evaluation of the effectiveness of grants awarded under subsection (a) and to annually prepare and submit a report to Congress. Such an evaluation shall begin not later than 18 months following the date of implementation of the first program funded by a grant under subsection (a). 
‘‘(2) C
ONTENTS .—The evaluation under paragraph (1) shall 
include—

include— 
‘‘(A) an analysis of the effects of the grants awarded 
under subsection (a) with regard to the measures described in paragraph (3); 
‘‘(B) for each State, an analysis of the extent to which 
the alternative developed under subsection (c)(1) is effective in meeting the elements described in subsection (c)(2); 
‘‘(C) a comparison among the States receiving grants 
under subsection (a) of the effectiveness of the various alternatives developed by such States under subsection (c)(1);

‘‘(D) a comparison, considering the measures described 
in paragraph (3), of States receiving grants approved under subsection (a) and similar States not receiving such grants; and 
‘‘(E) a comparison, with regard to the measures 
described in paragraph (3), of— 
‘‘(i) States receiving grants under subsection (a); ‘‘(ii) States that enacted, prior to the date of enact-
ment of the Patient Protection and Affordable Care Act, any cap on non-economic damages; and

‘‘(iii) States that have enacted, prior to the date 
of enactment of the Patient Protection and Affordable Care Act, a requirement that the complainant obtain Contracts. Deadlines. Reports. 
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124 STAT. 1013 PUBLIC LAW 111–148—MAR. 23, 2010 
an opinion regarding the merit of the claim, although 
the substance of such opinion may have no bearing on whether the complainant may proceed with a case. 
‘‘(3) M
EASURES .—The evaluations under paragraph (2) shall 
analyze and make comparisons on the basis of— 
‘‘(A) the nature and number of disputes over injuries 
allegedly caused by health care providers or health care organizations; 
‘‘(B) the nature and number of claims in which tort

litigation was pursued despite the existence of an alter-native under subsection (a); 
‘‘(C) the disposition of disputes and claims, including 
the length of time and estimated costs to all parties; 
‘‘(D) the medical liability environment; ‘‘(E) health care quality; ‘‘(F) patient safety in terms of detecting, analyzing, 
‘‘(G) patient and health care provider and organization

satisfaction with the alternative under subsection (a) and with the medical liability environment; and 
‘‘(H) impact on utilization of medical services, appro-
priately adjusted for risk. ‘‘(4) F
UNDING .—The Secretary shall reserve 5 percent of 
the amount appropriated in each fiscal year under subsection (k) to carry out this subsection. ‘‘(h) M
EDPAC AND MACPAC R EPORTS .— 
‘‘(1) M EDPAC.—The Medicare Payment Advisory Commis-

sion shall conduct an independent review of the alternatives to current tort litigation that are implemented under grants under subsection (a) to determine the impact of such alter-natives on the Medicare program under title XVIII of the Social Security Act, and its beneficiaries. 
‘‘(2) MACPAC.—The Medicaid and CHIP Payment and

‘‘(2) MACPAC.—The Medicaid and CHIP Payment and 
Access Commission shall conduct an independent review of the alternatives to current tort litigation that are implemented under grants under subsection (a) to determine the impact of such alternatives on the Medicaid or CHIP programs under titles XIX and XXI of the Social Security Act, and their bene-ficiaries. 
‘‘(3) R
EPORTS .—Not later than December 31, 2016, the

EPORTS .—Not later than December 31, 2016, the 
Medicare Payment Advisory Commission and the Medicaid and CHIP Payment and Access Commission shall each submit to Congress a report that includes the findings and recommenda-tions of each respective Commission based on independent reviews conducted under paragraphs (1) and (2), including an analysis of the impact of the alternatives reviewed on the efficiency and effectiveness of the respective programs. ‘‘(i) O

the funds appropriated pursuant to subsection (k), the Secretary may use a portion not to exceed $500,000 per State to provide planning grants to such States for the development of demonstration project applications meeting the criteria described in subsection (c). In selecting States to receive such planning grants, the Secretary shall give preference to those States in which State law at the time of the application would not prohibit the adoption of an alter-native to current tort litigation.

‘‘(j) D
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124 STAT. 1014 PUBLIC LAW 111–148—MAR. 23, 2010 
‘‘(1) H EALTH CARE SERVICES .—The term ‘health care serv-
ices’ means any services provided by a health care provider, or by any individual working under the supervision of a health care provider, that relate to— 
‘‘(A) the diagnosis, prevention, or treatment of any 
human disease or impairment; or 
‘‘(B) the assessment of the health of human beings. 
‘‘(2) H
EALTH CARE ORGANIZATION .—The term ‘health care

EALTH CARE ORGANIZATION .—The term ‘health care 
organization’ means any individual or entity which is obligated to provide, pay for, or administer health benefits under any health plan. 
‘‘(3) H
EALTH CARE PROVIDER .—The term ‘health care pro-
vider’ means any individual or entity— 
‘‘(A) licensed, registered, or certified under Federal or 
State laws or regulations to provide health care services; or 
‘‘(B) required to be so licensed, registered, or certified

but that is exempted by other statute or regulation. 
‘‘(k) A
to be appropriated to carry out this section, $50,000,000 for the 5-fiscal year period beginning with fiscal year 2011. 
‘‘(l) C
URRENT STATE EFFORTS TOESTABLISH ALTERNATIVE TO 
TORT LITIGATION .—Nothing in this section shall be construed to 
limit any prior, current, or future efforts of any State to establish any alternative to tort litigation. 
‘‘(m) R

‘‘(m) R
be construed as limiting states’ authority over or responsibility for their state justice systems.’’. 
SEC. 10608. EXTENSION OF MEDICAL MALPRACTICE COVERAGE TO 
FREE CLINICS. 
(a) I NGENERAL .—Section 224(o)(1) of the Public Health Service

Act (42 U.S.C. 233(o)(1)) is amended by inserting after ‘‘to an individual’’ the following: ‘‘, or an officer, governing board member, employee, or contractor of a free clinic shall in providing services for the free clinic,’’. 
(b) E
shall take effect on the date of enactment of this Act and apply to any act or omission which occurs on or after that date. 
SEC. 10609. LABELING CHANGES.

SEC. 10609. LABELING CHANGES. 
Section 505(j) of the Federal Food, Drug, and Cosmetic Act 
(21 U.S.C. 355(j)) is amended by adding at the end the following: 
‘‘(10)(A) If the proposed labeling of a drug that is the subject

of an application under this subsection differs from the listed drug due to a labeling revision described under clause (i), the drug that is the subject of such application shall, notwithstanding any other provision of this Act, be eligible for approval and shall not be considered misbranded under section 502 if— 
‘‘(i) the application is otherwise eligible for approval under

this subsection but for expiration of patent, an exclusivity period, or of a delay in approval described in paragraph (5)(B)(iii), and a revision to the labeling of the listed drug has been approved by the Secretary within 60 days of such expiration; 
‘‘(ii) the labeling revision described under clause (i) does 
not include a change to the ‘Warnings’ section of the labeling; Deadlines. Drugs and drug 
abuse. 42 USC 233 note.

abuse. 42 USC 233 note. 
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124 STAT. 1015 PUBLIC LAW 111–148—MAR. 23, 2010 
‘‘(iii) the sponsor of the application under this subsection 
agrees to submit revised labeling of the drug that is the subject of such application not later than 60 days after the notification of any changes to such labeling required by the Secretary; and 
‘‘(iv) such application otherwise meets the applicable 
requirements for approval under this subsection. ‘‘(B) If, after a labeling revision described in subparagraph

(A)(i), the Secretary determines that the continued presence in interstate commerce of the labeling of the listed drug (as in effect before the revision described in subparagraph (A)(i)) adversely impacts the safe use of the drug, no application under this sub-section shall be eligible for approval with such labeling.’’. 
Subtitle G—Provisions Relating to Title 
VIII 
SEC. 10801. PROVISIONS RELATING TO TITLE VIII. 
(a) Title XXXII of the Public Health Service Act, as added

by section 8002(a)(1), is amended— 
(1) in section 3203— 
(A) in subsection (a)(1), by striking subparagraph (E); (B) in subsection (b)(1)(C)(i), by striking ‘‘for enroll-
ment’’ and inserting ‘‘for reenrollment’’; and 
(C) in subsection (c)(1), by striking ‘‘, as part of their 
automatic enrollment in the CLASS program,’’; and (2) in section 3204— 
(A) in subsection (c)(2), by striking subparagraph (A) 
‘‘(A) receives wages or income on which there is

‘‘(A) receives wages or income on which there is 
imposed a tax under section 3101(a) or 3201(a) of the Internal Revenue Code of 1986; or’’; 
(B) in subsection (d), by striking ‘‘subparagraph (B) 
or (C) of subsection (c)(1)’’ and inserting ‘‘subparagraph (A) or (B) of subsection (c)(2)’’; 
(C) in subsection (e)(2)(A), by striking ‘‘subparagraph 
(A)’’ and inserting ‘‘paragraph (1)’’; and 
(D) in subsection (g)(1), by striking ‘‘has elected to

waive enrollment’’ and inserting ‘‘has not enrolled’’. 
(b) Section 8002 of this Act is amended in the heading for 
subsection (d), by striking ‘‘I
NFORMATION ON SUPPLEMENTAL COV-
ERAGE ’’ and inserting ‘‘CLASS P ROGRAM INFORMATION ’’. 
(c) Section 6021(d)(2)(A)(iv) of the Deficit Reduction Act of 
2005, as added by section 8002(d) of this Act, is amended by striking ‘‘and coverage available’’ and all that follows through ‘‘that program,’’. 
Subtitle H—Provisions Relating to Title IX

SEC. 10901. MODIFICATIONS TO EXCISE TAX ON HIGH COST EMPLOYER- 
SPONSORED HEALTH COVERAGE. 
(a) L ONGSHORE WORKERS TREATED AS EMPLOYEES ENGAGED  
INHIGH-RISK PROFESSIONS .—Paragraph (3) of section 4980I(f) of 
the Internal Revenue Code of 1986, as added by section 9001 of this Act, is amended by inserting ‘‘individuals whose primary 
26 USC 4980I. 42 USC 1396p 
note. 42 USC 300 ll–3. 42 USC 300 ll–2. Determination.

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124 STAT. 1016 PUBLIC LAW 111–148—MAR. 23, 2010 
work is longshore work (as defined in section 258(b) of the Immigra-
tion and Nationality Act (8 U.S.C. 1288(b)), determined without regard to paragraph (2) thereof),’’ before ‘‘and individuals engaged in the construction, mining’’. 
(b) E
XEMPTION FROM HIGH-COST INSURANCE TAXINCLUDES CER-
TAIN ADDITIONAL EXCEPTED BENEFITS .—Clause (i) of section

4980I(d)(1)(B) of the Internal Revenue Code of 1986, as added by section 9001 of this Act, is amended by striking ‘‘section 9832(c)(1)(A)’’ and inserting ‘‘section 9832(c)(1) (other than subpara-graph (G) thereof)’’. 
(c) E
SEC. 10902. INFLATION ADJUSTMENT OF LIMITATION ON HEALTH 
FLEXIBLE SPENDING ARRANGEMENTS UNDER CAFE-TERIA PLANS.

(a) I NGENERAL .—Subsection (i) of section 125 of the Internal 
Revenue Code of 1986, as added by section 9005 of this Act, is amended to read as follows: 
‘‘(i) L
MENTS .— 
‘‘(1) I N GENERAL .—For purposes of this section, if a benefit

is provided under a cafeteria plan through employer contribu-tions to a health flexible spending arrangement, such benefit shall not be treated as a qualified benefit unless the cafeteria plan provides that an employee may not elect for any taxable year to have salary reduction contributions in excess of $2,500 made to such arrangement. 
‘‘(2) A
DJUSTMENT FOR INFLATION .—In the case of any tax-

able year beginning after December 31, 2011, the dollar amount in paragraph (1) shall be increased by an amount equal to— 
‘‘(A) such 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 by substituting ‘calendar year 2010’ for ‘cal-endar year 1992’ in subparagraph (B) thereof.

If any increase determined under this paragraph is not a mul-tiple of $50, such increase shall be rounded to the next lowest multiple of $50.’’. (b) E
SEC. 10903. MODIFICATION OF LIMITATION ON CHARGES BY CHARI-
TABLE HOSPITALS. 
(a) I NGENERAL .—Subparagraph (A) of section 501(r)(5) of the

Internal Revenue Code of 1986, as added by section 9007 of this Act, is amended by striking ‘‘the lowest amounts charged’’ and inserting ‘‘the amounts generally billed’’. 
(b) E
shall apply to taxable years beginning after the date of the enact-ment of this Act. 
SEC. 10904. MODIFICATION OF ANNUAL FEE ON MEDICAL DEVICE 
MANUFACTURERS AND IMPORTERS. 
(a) I NGENERAL .—Section 9009 of this Act is amended—

(1) by striking ‘‘2009’’ in subsection (a)(1) and inserting 
‘‘2010’’, 26 USC 4001 note prec. 26 USC 501 note. 26 USC 501. 26 USC 125 note. Effective date. 26 USC 125. 26 USC 4980I 
note. 
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124 STAT. 1017 PUBLIC LAW 111–148—MAR. 23, 2010 
(2) by inserting ‘‘($3,000,000,000 after 2017)’’ after 
‘‘$2,000,000,000’’, and 
(3) by striking ‘‘2008’’ in subsection (i) and inserting ‘‘2009’’. 
(b) E FFECTIVE DATE.—The amendments made by this section 
shall take effect as if included in the enactment of section 9009. 
SEC. 10905. MODIFICATION OF ANNUAL FEE ON HEALTH INSURANCE 
PROVIDERS. 
(a) D ETERMINATION OF FEEAMOUNT .—Subsection (b) of section

9010 of this Act is amended to read as follows: 
‘‘(b) D ETERMINATION OF FEEAMOUNT .— 
‘‘(1) I N GENERAL .—With respect to each covered entity, 
the fee under this section for any calendar year shall be equal to an amount that bears the same ratio to the applicable amount as— 
‘‘(A) the covered entity’s net premiums written with 
respect to health insurance for any United States health risk that are taken into account during the preceding cal-endar year, bears to

‘‘(B) the aggregate net premiums written with respect 
to such health insurance of all covered entities that are 
taken into account during such preceding calendar year. ‘‘(2) A
graph (1), the net premiums written with respect to health insurance for any United States health risk that are taken into account during any calendar year with respect to any covered entity shall be determined in accordance with the fol-lowing table:

‘‘With respect to a covered entity’s net pre-
More than $50,000,000 ............................. 100 percent. 
‘‘(3) S
ECRETARIAL DETERMINATION .—The Secretary shall

ECRETARIAL DETERMINATION .—The Secretary shall 
calculate the amount of each covered entity’s fee for any cal-endar year under paragraph (1). In calculating such amount, the Secretary shall determine such covered entity’s net pre-miums written with respect to any United States health risk on the basis of reports submitted by the covered entity under subsection (g) and through the use of any other source of information available to the Secretary.’’. (b) A

PPLICABLE AMOUNT .—Subsection (e) of section 9010 of 
this Act is amended to read as follows: 
‘‘(e) A PPLICABLE AMOUNT .—For purposes of subsection (b)(1), 
the applicable amount shall be determined in accordance with the following table: 
‘‘Calendar year Applicable 
amount 
2011 ........................................................... $2,000,000,000 2012 ........................................................... $4,000,000,000 26 USC 4001 
note prec. 26 USC 4001 
note prec.

note prec. 
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124 STAT. 1018 PUBLIC LAW 111–148—MAR. 23, 2010 
2013 ........................................................... $7,000,000,000 
2014, 2015 and 2016 ................................. $9,000,000,000 2017 and thereafter .................................. $10,000,000,000.’’. 
(c) E
XEMPTION FROM ANNUAL FEE ON HEALTH INSURANCE FOR  
CERTAIN NONPROFIT ENTITIES .—Section 9010(c)(2) of this Act is

amended by striking ‘‘or’’ at the end of subparagraph (A), by striking the period at the end of subparagraph (B) and inserting a comma, and by adding at the end the following new subparagraphs: 
‘‘(C) any entity— 
‘‘(i)(I) which is incorporated as, is a wholly owned 
subsidiary of, or is a wholly owned affiliate of, a non-profit corporation under a State law, or 
‘‘(II) which is described in section 501(c)(4) of the

Internal Revenue Code of 1986 and the activities of which consist of providing commercial-type insurance (within the meaning of section 501(m) of such Code), 
‘‘(ii) the premium rate increases of which are regu-
lated by a State authority, 
‘‘(iii) which, as of the date of the enactment of 
this section, acts as the insurer of last resort in the State and is subject to State guarantee issue require-ments, and 
‘‘(iv) for which the medical loss ratio (determined

in a manner consistent with the determination of such ratio under section 2718(b)(1)(A) of the Public Health Service Act) with respect to the individual insurance market for such entity for the calendar year is not less than 100 percent, ‘‘(D) any entity— 
‘‘(i)(I) which is incorporated as a nonprofit corpora-
tion under a State law, or 

Internal Revenue Code of 1986 and the activities of which consist of providing commercial-type insurance (within the meaning of section 501(m) of such Code), and 
‘‘(ii) for which the medical loss ratio (as so deter-
mined)— 
‘‘(I) with respect to each of the individual, 
small group, and large group insurance markets for such entity for the calendar year is not less than 90 percent, and 
‘‘(II) with respect to all such markets for such

‘‘(II) with respect to all such markets for such 
entity for the calendar year is not less than 92 percent, or 
‘‘(E) any entity— 
‘‘(i) which is a mutual insurance company, ‘‘(ii) which for the period reported on the 2008 
Accident and Health Policy Experience Exhibit of the National Association of Insurance Commissioners had— 
‘‘(I) a market share of the insured population 
of a State of at least 40 but not more than 60 percent, and

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124 STAT. 1019 PUBLIC LAW 111–148—MAR. 23, 2010 
‘‘(II) with respect to all markets described in 
subparagraph (D)(ii)(I), a medical loss ratio of not less than 90 percent, and ‘‘(iii) with respect to annual payment dates in cal-

endar years after 2011, for which the medical loss ratio (determined in a manner consistent with the determination of such ratio under section 2718(b)(1)(A) of the Public Health Service Act) with respect to all such markets for such entity for the preceding calendar year is not less than 89 percent (except that with respect to such annual payment date for 2012, the calculation under 2718(b)(1)(B)(ii) of such Act is deter-mined by reference to the previous year, and with respect to such annual

previous year, and with respect to such annual payment date for 2013, such calculation is determined by reference to the average for the previous 2 years).’’.

(d) C
ERTAIN INSURANCE EXEMPTED FROM FEE.—Paragraph (3) 
of section 9010(h) of this Act is amended to read as follows: 
‘‘(3) H EALTH INSURANCE .—The term ‘health insurance’ shall 
not include— 
‘‘(A) any insurance coverage described in paragraph 
(1)(A) or (3) of section 9832(c) of the Internal Revenue Code of 1986, 
‘‘(B) any insurance for long-term care, or ‘‘(C) any medicare supplemental health insurance (as 
defined in section 1882(g)(1) of the Social Security Act).’’. 
(e) A

(e) A
NTI-AVOIDANCE GUIDANCE .—Subsection (i) of section 9010 
of this Act is amended by inserting ‘‘and shall prescribe such regula-tions as are necessary or appropriate to prevent avoidance of the purposes of this section, including inappropriate actions taken to qualify as an exempt entity under subsection (c)(2)’’ after ‘‘section’’. 
(f) C
(1) Section 9010(a)(1) of this Act is amended by striking 
‘‘2009’’ and inserting ‘‘2010’’.

‘‘2009’’ and inserting ‘‘2010’’. 
(2) Section 9010(c)(2)(B) of this Act is amended by striking 
‘‘(except’’ and all that follows through ‘‘1323)’’. 
(3) Section 9010(c)(3) of this Act is amended by adding

at the end the following new sentence: ‘‘If any entity described in subparagraph (C)(i)(I), (D)(i)(I), or (E)(i) of paragraph (2) is treated as a covered entity by reason of the application of the preceding sentence, the net premiums written with respect to health insurance for any United States health risk of such entity shall not be taken into account for purposes of this section.’’. 
(4) Section 9010(g)(1) of this Act is amended by striking

‘‘and third party administration agreement fees’’. 
(5) Section 9010(j) of this Act is amended— 
(A) by striking ‘‘2008’’ and inserting ‘‘2009’’, and (B) by striking ‘‘, and any third party administration 
agreement fees received after such date’’. 
(g) E
shall take effect as if included in the enactment of section 9010.

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124 STAT. 1020 PUBLIC LAW 111–148—MAR. 23, 2010 
SEC. 10906. MODIFICATIONS TO ADDITIONAL HOSPITAL INSURANCE 
TAX ON HIGH-INCOME TAXPAYERS. 
(a) FICA.—Section 3101(b)(2) of the Internal Revenue Code 
of 1986, as added by section 9015(a)(1) of this Act, is amended by striking ‘‘0.5 percent’’ and inserting ‘‘0.9 percent’’. 
(b) SECA.—Section 1401(b)(2)(A) of the Internal Revenue Code

of 1986, as added by section 9015(b)(1) of this Act, is amended by striking ‘‘0.5 percent’’ and inserting ‘‘0.9 percent’’. 
(c) E
SEC. 10907. EXCISE TAX ON INDOOR TANNING SERVICES IN LIEU OF 
ELECTIVE COSMETIC MEDICAL PROCEDURES. 
(a) I NGENERAL .—The provisions of, and amendments made

by, section 9017 of this Act are hereby deemed null, void, and of no effect. 
(b) E
XCISE TAX ON INDOOR TANNING SERVICES .—Subtitle D 
of the Internal Revenue Code of 1986, as amended by this Act, is amended by adding at the end the following new chapter: 
‘‘CHAPTER 49—COSMETIC SERVICES 
‘‘Sec. 5000B. Imposition of tax on indoor tanning services. 
‘‘SEC. 5000B. IMPOSITION OF TAX ON INDOOR TANNING SERVICES. 
‘‘(a) I NGENERAL .—There is hereby imposed on any indoor tan-

ning service a tax equal to 10 percent of the amount paid for such service (determined without regard to this section), whether paid by insurance or otherwise. 
‘‘(b) I
NDOOR TANNING SERVICE .—For purposes of this section— 
‘‘(1) I N GENERAL .—The term ‘indoor tanning service’ means

a service employing any electronic product designed to incor-porate 1 or more ultraviolet lamps and intended for the irradia-tion of an individual by ultraviolet radiation, with wavelengths in air between 200 and 400 nanometers, to induce skin tanning. 
‘‘(2) E
XCLUSION OF PHOTOTHERAPY SERVICES .—Such term 
does not include any phototherapy service performed by a licensed medical professional. ‘‘(c) P
‘‘(1) I N GENERAL .—The tax imposed by this section shall

be paid by the individual on whom the service is performed. 
‘‘(2) C OLLECTION .—Every person receiving a payment for 
services on which a tax is imposed under subsection (a) shall collect the amount of the tax from the individual on whom the service is performed and remit such tax quarterly to the Secretary at such time and in such manner as provided by the Secretary. 
‘‘(3) S

section (a) is not paid at the time payments for indoor tanning services are made, then to the extent that such tax is not collected, such tax shall be paid by the person who performs the service.’’. (c) C
LERICAL AMENDMENT .—The table of chapter for subtitle 
D of the Internal Revenue Code of 1986, as amended by this Act, is amended by inserting after the item relating to chapter 48 the following new item: Deadline. Definitions. 26 USC 5000B. 26 USC 5000B 
and note. 26 USC 1401

and note. 26 USC 1401 
note. 26 USC 1401. 26 USC 3101. 
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124 STAT. 1021 PUBLIC LAW 111–148—MAR. 23, 2010 
‘‘CHAPTER 49—C OSMETIC SERVICES ’’. 
shall apply to services performed on or after July 1, 2010. 
SEC. 10908. EXCLUSION FOR ASSISTANCE PROVIDED TO PARTICIPANTS 
IN STATE STUDENT LOAN REPAYMENT PROGRAMS FOR CERTAIN HEALTH PROFESSIONALS. 
(a) I NGENERAL .—Paragraph (4) of section 108(f) of the Internal 
Revenue Code of 1986 is amended to read as follows:

‘‘(4) P AYMENTS UNDER NATIONAL HEALTH SERVICE CORPS  
LOAN REPAYMENT PROGRAM AND CERTAIN STATE LOAN REPAY -
MENT PROGRAMS .—In the case of an individual, gross income

shall not include any amount received under section 338B(g) of the Public Health Service Act, under a State program described in section 338I of such Act, or under any other State loan repayment or loan forgiveness program that is intended to provide for the increased availability of health care services in underserved or health professional shortage areas (as determined by such State).’’. (b) E

shall apply to amounts received by an individual in taxable years beginning after December 31, 2008. 
SEC. 10909. EXPANSION OF ADOPTION CREDIT AND ADOPTION ASSIST-
ANCE PROGRAMS. 
(a) I NCREASE IN DOLLAR LIMITATION .— 
(1) A DOPTION CREDIT .— 
(A) I N GENERAL .—Paragraph (1) of section 23(b) of 
the Internal Revenue Code of 1986 (relating to dollar limitation) is amended by striking ‘‘$10,000’’ and inserting ‘‘$13,170’’. 
(B) C
HILD WITH SPECIAL NEEDS .—Paragraph (3) of sec-

tion 23(a) of such Code (relating to $10,000 credit for adop-tion of child with special needs regardless of expenses) is amended— 
(i) in the text by striking ‘‘$10,000’’ and inserting 
‘‘$13,170’’, and 
(ii) in the heading by striking ‘‘
$10,000’’ and 
inserting ‘‘ $13,170’’. 
(C) C ONFORMING AMENDMENT TO INFLATION ADJUST -
MENT .—Subsection (h) of section 23 of such Code (relating 
to adjustments for inflation) is amended to read as follows:

‘‘(h) A DJUSTMENTS FOR INFLATION .— 
‘‘(1) D OLLAR LIMITATIONS .—In the case of a taxable year 
beginning after December 31, 2010, each of the dollar amounts in subsections (a)(3) and (b)(1) shall be increased by an amount equal to— 
‘‘(A) such dollar amount, multiplied by ‘‘(B) the cost-of-living adjustment determined under

section 1(f)(3) for the calendar year in which the taxable year begins, determined by substituting ‘calendar year 2009’ for ‘calendar year 1992’ in subparagraph (B) thereof. 
If any amount as increased under the preceding sentence is not a multiple of $10, such amount shall be rounded to the nearest multiple of $10. 
‘‘(2) I
NCOME LIMITATION .—In the case of a taxable year

NCOME LIMITATION .—In the case of a taxable year 
beginning after December 31, 2002, the dollar amount in sub-section (b)(2)(A)(i) shall be increased by an amount equal to— Effective dates. 26 USC 23. 26 USC 108 note. 26 USC 108. 26 USC 5000B 
note. 
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124 STAT. 1022 PUBLIC LAW 111–148—MAR. 23, 2010 
‘‘(A) such dollar amount, multiplied by 
‘‘(B) the cost-of-living adjustment determined under 
section 1(f)(3) for the calendar year in which the taxable year begins, determined by substituting ‘calendar year 2001’ for ‘calendar year 1992’ in subparagraph (B) thereof. 
If any amount as increased under the preceding sentence is not a multiple of $10, such amount shall be rounded to the nearest multiple of $10.’’. 
(2) A

(2) A
DOPTION ASSISTANCE PROGRAMS .— 
(A) I N GENERAL .—Paragraph (1) of section 137(b) of 
(B) C
HILD WITH SPECIAL NEEDS .—Paragraph (2) of sec-
tion 137(a) of such Code (relating to $10,000 exclusion for adoption of child with special needs regardless of expenses) is amended— 
‘‘$13,170’’, and

MENT .—Subsection (f) of section 137 of such Code (relating 
to adjustments for inflation) is amended to read as follows: 
‘‘(f) A DJUSTMENTS FOR INFLATION .— 
beginning after December 31, 2010, each of the dollar amounts in subsections (a)(2) and (b)(1) shall be increased by an amount equal to—

‘‘(A) such dollar amount, multiplied by ‘‘(B) the cost-of-living adjustment determined under 
‘‘(2) I

beginning after December 31, 2002, the dollar amount in sub-section (b)(2)(A) shall be increased by an amount equal to— 
section 1(f)(3) for the calendar year in which the taxable year begins, determined by substituting ‘calendar year 2001’ for ‘calendar year 1992’ in subparagraph thereof.

If any amount as increased under the preceding sentence is not a multiple of $10, such amount shall be rounded to the nearest multiple of $10.’’. (b) C
REDIT MADEREFUNDABLE .— 
(1) C REDIT MOVED TO SUBPART RELATING TO REFUNDABLE  
CREDITS .—The Internal Revenue Code of 1986 is amended— 
(A) by redesignating section 23, as amended by sub-
section (a), as section 36C, and 
(B) by moving section 36C (as so redesignated) from

subpart A of part IV of subchapter A of chapter 1 to the location immediately before section 37 in subpart C of part IV of subchapter A of chapter 1. 26 USC 36C. Effective dates. 26 USC 137. 
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124 STAT. 1023 PUBLIC LAW 111–148—MAR. 23, 2010 
(A) Section 24(b)(3)(B) of such Code is amended by 
striking ‘‘23,’’. 
(B) Section 25(e)(1)(C) of such Code is amended by 
striking ‘‘23,’’ both places it appears. 
(C) Section 25A(i)(5)(B) of such Code is amended by 
striking ‘‘23, 25D,’’ and inserting ‘‘25D’’. 
(D) Section 25B(g)(2) of such Code is amended by 
(E) Section 26(a)(1) of such Code is amended by striking 
‘‘23,’’.

‘‘23,’’. 
(F) Section 30(c)(2)(B)(ii) of such Code is amended by 
(G) Section 30B(g)(2)(B)(ii) of such Code is amended 
by striking ‘‘23,’’. 
(H) Section 30D(c)(2)(B)(ii) of such Code is amended 
by striking ‘‘sections 23 and’’ and inserting ‘‘section’’. 
(I) Section 36C of such Code, as so redesignated, is 
amended— 
(i) by striking paragraph (4) of subsection (b), and (ii) by striking subsection (c). 
(J) Section 137 of such Code is amended—

(J) Section 137 of such Code is amended— 
(i) by striking ‘‘section 23(d)’’ in subsection (d) and 
inserting ‘‘section 36C(d)’’, and 
(ii) by striking ‘‘section 23’’ in subsection (e) and 
inserting ‘‘section 36C’’. (K) Section 904(i) of such Code is amended by striking 
‘‘23,’’. 
(L) Section 1016(a)(26) is amended by striking ‘‘23(g)’’ 
and inserting ‘‘36C(g)’’. 
(M) Section 1400C(d) of such Code is amended by 
(N) Section 6211(b)(4)(A) of such Code is amended by

inserting ‘‘36C,’’ before ‘‘53(e)’’. 
(O) The table of sections for subpart A of part IV 
of subchapter A of chapter 1 of such Code of 1986 is amended by striking the item relating to section 23. 
(P) Paragraph (2) of section 1324(b) of title 31, United 
States Code, as amended by this Act, is amended by inserting ‘‘36C,’’ after ‘‘36B,’’. 
(Q) The table of sections for subpart C of part IV

of subchapter A of chapter 1 of the Internal Revenue Code of 1986, as amended by this Act, is amended by inserting after the item relating to section 36B the following new item: 
‘‘Sec. 36C. Adoption expenses.’’. 
(c) A PPLICATION AND EXTENSION OF EGTRRA S UNSET .—Not-

withstanding section 901 of the Economic Growth and Tax Relief Reconciliation Act of 2001, such section shall apply to the amend-ments made by this section and the amendments made by section 202 of such Act by substituting ‘‘December 31, 2011’’ for ‘‘December 31, 2010’’ in subsection (a)(1) thereof. 26 USC 1 note. 26 USC 6211. 26 USC 1400C. 26 USC 1016. 26 USC 904. 26 USC 137. 26 USC 36C. 26 USC 30D. 26 USC 30B. 26 USC 30. 26 USC 26. 26 USC 25B. 26 USC 25A. 26 USC 25. 26 USC 24.

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124 STAT. 1024 PUBLIC LAW 111–148—MAR. 23, 2010 
LEGISLATIVE HISTORY—H.R. 3590: 
CONGRESSIONAL RECORD: 
Vol. 155 (2009): Oct. 7, 8, considered and passed House. 
Nov. 21, 30, Dec. 1–10, 13, 15, 16, 19–24, considered and 
passed Senate, amended. 
Vol. 156 (2010): Mar. 21, House concurred in Senate amendments. 
DAILY COMPILATION OF PRESIDENTIAL DOCUMENTS (2010): 
Mar. 23, Presidential remarks. 
Æ (d) E FFECTIVE DATE.—The amendments made by this section

Approved March 23, 2010. 26 USC 1 note. 
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AMERICANS WITH DISABILITIES ACT OF 1990, AS AMENDED
Following is the current text of the Americans with Disabilities Act of 1990 (ADA), including changes made
by the ADA Amendments Act of 2008 (P.L. 110-325), which became effective on January 1, 2009.  TheADA was originally enacted in public law format and later rearranged and published in the United StatesCode.  The United States Code is divided into titles and chapters that classify laws according to their

subject matter.  Titles I, II, III, and V of the original la w are codified in Title 42, chapter 126, of the United
States Code beginning at section 12101.  Title IV of the orig inal law is codified in Title 47, chapter 5, of the
United States Code.  Since this codification resu lted in changes in the numbering system, the Table of
Contents provides the section numbers of the ADA as originally enacted in brackets after the codified
section numbers and headings. 
Page

Page
TITLE 42 - THE PUBLIC HEALTH AND WELFARECHAPTER 126 - EQUAL OPPORTUNITY FOR INDIVIDUALS WITH DISABILITIES 4
Sec. 12101. Findings and purpose. [Section 2]
(a) Findings.(b) Purpose.
Sec. 12101 note:  Findings and Purposes of the ADA Amendments Act of 2008Sec. 12102. Definition of disability. [Section 3] Sec. 12103. Additional definitions.
SUBCHAPTER I - EMPLOYMENT [Title I] 8
Sec. 12111. Definitions. [Section 101]Sec. 12112. Discrimination. [Section 102]

(a) General rule.(b) Construction.(c) Covered entities in foreign countries.(d) Medical examinations and inquiries.
Sec. 12113. Defenses. [Section 103]
(a) In general.(b) Qualification standards.(c) Qualification standards and tests related to uncorrected vision. (d)Religious entities.(e) List of infectious and communicable diseases.
Sec. 12114. Illegal use of drugs and alcohol. [Section 104]

(a) Qualified individual with a disability.(b) Rules of construction.(c) Authority of covered entity.(d) Drug testing.(e) Transportation employees.
Sec. 12115. Posting notices. [Section 105]Sec. 12116. Regulations. [Section 106]Sec. 12117. Enforcement. [Section 107]
(a) Powers, remedies, and procedures.(b) Coordination.
SUBCHAPTER II - PUBLIC SERVICES [Title II] 16
PART A - Prohibition Against Discrimi nation and Other Generally Applicable

Provisions [Subtitle A]Sec. 12131. Definitions. [Section 201]Sec. 12132. Discrimination. [Section 202]Sec. 12133. Enforcement. [Section 203]Sec. 12134. Regulations. [Section 204]
(a) In general.(b) Relationship to other regulations.(c) Standards.

-2-Page
PART B - Actions Applicable to Public Tr ansportation Provided by Public Entities 
Considered Discriminatory [Subtitle B]SUBPART I - Public Transportation Other Than by Aircraft or Certain Rail Operations [Part I]Sec. 12141. Definitions. [Section 221]Sec. 12142. Public entities operating fixed route systems. [Section 222]
(a) Purchase and lease of new vehicles.(b) Purchase and lease of used vehicles.(c) Remanufactured vehicles.

Sec. 12143. Paratransit as a complement to fixed route service. [Section 223]
(a) General rule.(b) Issuance of regulations.(c) Required contents of regulations.(d) Review of plan.(e) "Discrimination" defined.(f) Statutory construction.
Sec. 12144. Public entity operating a demand responsive system. [Section 224]
Sec. 12145. Temporary relief where lifts are unavailable. [Section 225]
(a) Granting.(b) Duration and notice to Congress.(c) Fraudulent application.

Sec. 12146. New facilities. [Section 226]Sec. 12147. Alterations of existing facilities. [Section 227]
(a) General rule.(b) Special rule for stations.
Sec. 12148. Public transportation programs and activities in existing facilities and one car per train rule. [Section 228]
(a) Public transportation programs and activities in existing facilities.(b) One car per train rule.
Sec. 12149. Regulations. [Section 229]
(a) In general.(b) Standards.

Sec. 12150. Interim accessibility requirements. [Section 230]SUBPART II - Public Transportation by Intercity and Commuter Rail [Part II]Sec. 12161. Definitions. [Section 241]Sec. 12162. Intercity and commuter rail actions  considered discriminatory. [Section 242]
(a) Intercity rail transportation.(b) Commuter rail transportation.(c) Used rail cars.(d) Remanufactured rail cars.(e) Stations.

Sec. 12163. Conformance of accessibility standards. [Section 243]Sec. 12164. Regulations. [Section 244]Sec. 12165. Interim accessibility requirements. [Section 245]
(a) Stations.(b) Rail passenger cars.
SUBCHAPTER III - PUBLIC ACCOMMODATIONS AND SERVICES OPERATED BY PRIVATE ENTITIES [Title III] 30
Sec. 12181. Definitions. [Section 301]Sec. 12182. Prohibition of discriminati on by public accommodations. [Section 302]
(a) General rule.(b) Construction.

Sec. 12183. New construction and alterations in public accommodations and commercial facilities. [Section 303]
(a) Application of term.(b) Elevator.

-3-Page
Sec. 12184. Prohibition of discrimination in  specified public transportation services 
provided by private entities. [Section 304]
(a) General rule.(b) Construction.(c) Historical or antiquated cars.
Sec. 12185. Study. [Section 305]
(a) Purposes.(b) Contents.(c) Advisory committee.(d) Deadline.(e) Review.
Sec. 12186. Regulations. [Section 306]
(a) Transportation provisions.(b) Other provisions.(c) Consistency with ATBCB guidelines.(d) Interim accessibility standards.

Sec. 12187. Exemptions for private clubs  and religious organizations. [Section 307]
Sec. 12188. Enforcement. [Section 308]
(a) In general.(b) Enforcement by Attorney General.
Sec. 12189. Examinations and courses. [Section 309]
SUBCHAPTER IV MISCELLANEOUS PROVISIONS [Title V] 41
Sec. 12201. Construction. [Section 501]

(a) In general.(b) Relationship to other laws.(c) Insurance.(d) Accommodations and services.(e) Benefits under State worker’s compensation laws.(f) Fundamental alteration.(g) Claims of no disability.(h) Reasonable accommodation and modifications.
Sec. 12202. State immunity. [Section 502]Sec. 12203. Prohibition against retaliation and coercion. [Section 503]
(a) Retaliation.(b) Interference, coercion, or intimidation.(c) Remedies and procedures.

Sec. 12204. Regulations by the Architectural and Transportation Barriers Compliance Board.[Section 504]
(a) Issuance of guidelines.(b) Contents of guidelines.(c) Qualified historic properties.
Sec. 12205. Attorney’s fees. [Section 505]Sec. 12205a. Rule of construction regarding regulatory authority.Sec. 12206.  Technical assistance. [Section 506]
(a) Plan for assistance.(b) Agency and public assistance.(c) Implementation.(d) Grants and contracts.(e) Failure to receive assistance.

Sec. 12207. Federal wilderness areas. [Section 507]
(a) Study.(b) Submission of report.(c) Specific wilderness access.
Sec. 12208. Transvestites. [Section 508]Sec. 12209. Instrumentalities of Congress. [Section 509]

-4-Page
Sec. 12210. Illegal use of drugs. [Section 510]
(a) In general.(b) Rules of construction.(c) Health and other services.(d) "Illegal use of drugs" defined.
Sec. 12211. Definitions. [Section 511]
(a) Homosexuality and bisexuality.(b) Certain conditions.
Sec. 12212. Alternative means of dispute resolution. [Section 512]Sec. 12213. Severability. [Section 513]

TITLE 47 - TELEGRAPHS, TELEPHONES, AND RADIOTELEGRAPHSCHAPTER 5 - WIRE OR RADIO COMMUNICATIONSUBCHAPTER II - COMMON CARRIERS 47Part I - Common Carrier Regulation
Sec. 225. Telecommunications services for hearing-impaired and speech-impaired individuals.
[Section 401]
(a) Definitions.(b) Availability of telecommunications relay services.(c) Provision of services. (d) Regulations.(e) Enforcement.(f) Certification.(g) Complaint.

TITLE 47 - TELEGRAPHS, TELEPHONES, AND RADIOTELEGRAPHSCHAPTER 5 - WIRE OR RADIO COMMUNICATIONSUBCHAPTER VI - MISCELLANEOUS PROVISIONS 50
Sec. 611. Closed-captioning of public service announcements. [Section 402]
TITLE 42 - THE PUBLIC HEALTH AND WELFARE
CHAPTER 126 - EQUAL OPPORTUNITY FOR INDIVIDUALS WITH 
DISABILITIES
Sec. 12101. Findings and purpose
(a) Findings.  The Congress finds that
(1) physical or mental disabilities in no way dimi nish a person’s right to fully participate in all

aspects of society, yet many people with physical or mental disabilities have been precludedfrom doing so because of discrimination; others who have a record of a disability or areregarded as having a disability also have been subjected to discrimination;
(2) historically, society has tended to isolat e and segregate individuals with disabilities, and,
despite some improvements, such forms of di scrimination against individuals with disabilities

continue to be a serious and pervasive social problem;
(3) discrimination against individuals with disab ilities persists in such critical areas as
employment, housing, public accommodations , education, transportation, communication,
recreation, institutionalization, health services, voting, and access to public services;
(4) unlike individuals who have experienced discrim ination on the basis of race, color, sex,

national origin, religion, or age, individuals who have experienced discrimination on the basis
of disability have often had no legal recourse to redress such discrimination;

-5-(5) individuals with disabilities continually encount er various forms of discrimination, including
outright intentional exclusion, the discriminator y effects of architectural, transportation, and
communication barriers, overprotective rules and policies, failure to make modifications toexisting facilities and practices, exclusionary qualification standards and criteria, segregation,
and relegation to lesser services, programs, acti vities, benefits, jobs, or other opportunities;

(6) census data, national polls, and other  studies have documented that people with
disabilities, as a group, occupy an inferior status in our society, and are severelydisadvantaged socially, vocationally , economically, and educationally;
(7) the Nation's proper goals regarding individuals with disabilities are to assure equality of
opportunity, full participation, independent livi ng, and economic self-sufficiency for such
individuals; and

(8) the continuing existence of unfair and unnecessary discrimination and prejudice denies
people with disabilities the opportunity to compete on an equal basis and to pursue thoseopportunities for which our free society is justifiably famous, and costs the United Statesbillions of dollars in unnecessary expenses resulting from dependency and nonproductivity.
(b) Purpose.  It is the purpose of this chapter

(1) to provide a clear and comprehensive national mandate for the elimination of
discrimination against individuals with disabilities;
(2) to provide clear, strong, consistent, enforceable standards addressing discrimination
against individuals with disabilities;
(3) to ensure that the Federal Government plays a central role in enforcing the standards
established in this chapter on behalf of individuals with disabilities; and

(4) to invoke the sweep of congressional authority, including the power to enforce the
fourteenth amendment and to regulate commerce, in order to address the major areas ofdiscrimination faced day-to-day by people with disabilities.
Sec. 12101 note:  Findings and Purposes of ADA Amendments Act of 2008, Pub. L. 110-325, § 2,
Sept. 25, 2008, 122 Stat. 3553, provided that:
(a) Findings.  Congress finds that

(1) in enacting the Americans with Disabilities Act of 1990 (ADA), Congress intended that the
Act “provide a clear and comprehensive national m andate for the elimination of discrimination
against individuals with disabilities” and provide broad coverage;
(2) in enacting the ADA, Congress recognized that physical and mental disabilities in no way
diminish a person’s right to fully participate in  all aspects of society, but that people with

physical or mental disabilities are frequently precluded from doing so because of prejudice,antiquated attitudes, or the failure to remove societal and institutional barriers;
(3) while Congress expected that the definition of disability under the ADA would be
interpreted consistently with how courts had applied the definition of a handicapped individual
under the Rehabilitation Act of 1973, that expectation has not been fulfilled;

(4) the holdings of the Supreme Court in Sutton v. United Air Lines, Inc., 527 U.S. 471 (1999)
and its companion cases have narrowed the broad scope of protection intended to beafforded by the ADA, thus eliminating pr otection for many individuals whom Congress
intended to protect;

-6-(5) the holding of the Supreme Court in Toyota Motor Manufacturing, Kentucky, Inc. v.
Williams, 534 U.S. 184 (2002) further narrowed the broad scope of protection intended to beafforded by the ADA;
(6) as a result of these Supreme Court cases, lower courts have incorrectly found in individual
cases that people with a range of substantially limiting impairments are not people withdisabilities;
(7) in particular, the Supreme Court, in the case of Toyota Motor Manufacturing, Kentucky,

Inc. v. Williams, 534 U.S. 184 (2002), interpreted the term “substantially limits” to require agreater degree of limitation than was intended by Congress; and
(8) Congress finds that the current Equal  Employment Opportunity Commission ADA
regulations defining the term “substantially limits” as “significantly restricted” are inconsistent
with congressional intent, by expressing too high a standard.
(b) Purposes.  The purposes of this Act are

(1) to carry out the ADA’s objectives of providing “a clear and comprehensive national
mandate for the elimination of discrimination”  and “clear, strong, consistent, enforceable
standards addressing discrimination” by reinstat ing a broad scope of protection to be available
under the ADA;
(2) to reject the requirement enunciated by the Supreme Court in Sutton v. United Air Lines,

Inc., 527 U.S. 471 (1999) and its companion cases that whether an impairment substantiallylimits a major life activity is to be determined with reference to the ameliorative effects ofmitigating measures; 
(3) to reject the Supreme Court’s reasoning in Sutton v. United Air Lines, Inc., 527 U.S. 471
(1999) with regard to coverage under the third prong of the definition of disability and toreinstate the reasoning of the Supreme Court in School Board of Nassau County v. Arline,

480 U.S. 273 (1987) which set forth a broad view of the third prong of the definition ofhandicap under the Rehabilitation Act of 1973;
(4) to reject the standards enunciated by the Supreme Court in Toyota Motor Manufacturing,

Kentucky, Inc. v. Williams, 534 U.S. 184 (2002), that the terms “substantially” and “major” inthe definition of disability under the ADA “need to be interpreted strictly to create a demandingstandard for qualifying as disabled,” and that to be substantially limited in performing a majorlife activity under the ADA “an individual must have an impairment that prevents or severelyrestricts the individual from doing activities t hat are of central importance to most people’s
daily lives”;

(5) to convey congressional intent that the standard created by the Supreme Court in the case

of Toyota Motor Manufacturing, Kentucky, Inc. v. Williams, 534 U.S. 184 (2002) for“substantially limits”, and applied by lower courts in numerous decisions, has created aninappropriately high level of limitation necessary to obtain coverage under the ADA, to conveythat it is the intent of Congress that the primary object of attention in cases brought under theADA should be whether entities covered under the ADA have complied with their obligations,and to convey that the question of whether an i

to convey that the question of whether an i ndividual’s impairment is a disability under the

ADA should not demand extensive analysis; and 
(6) to express Congress’ expectation that t he Equal Employment Opportunity Commission will
revise that portion of its current regulations that defines the term “substantially limits” as“significantly restricted” to be consistent with this Act, including the amendments made by this
Act.

-7-Sec. 12102. Definition of disability
As used in this chapter:
(1) Disability.  The term "disability" means, with respect to an individual
(A) a physical or mental impairment that substantially limits one or more major life
activities of such individual;
(B) a record of such an impairment; or(C) being regarded as having such an impairment (as described in paragraph (3)).
(2) Major Life Activities
(A) In general.  For purposes of paragraph (1), major life activities include, but are not

limited to, caring for oneself, performing manual  tasks, seeing, hearing, eating, sleeping,
walking, standing, lifting, bending, speaking, breathing, learning, reading, concentrating,
thinking, communicating, and working.
(B) Major bodily functions.  For purposes of paragraph (1), a major life activity also
includes the operation of a major bodily function, including but not limited to, functions ofthe immune system, normal cell growth, di gestive, bowel, bladder, neurological, brain,

respiratory, circulatory, endocri ne, and reproductive functions.  
(3) Regarded as having such an impairment.  For purposes of paragraph (1)(C):
(A) An individual meets the requirement  of “being regarded as having such an
impairment” if the individual establishes t hat he or she has been subjected to an action
prohibited under this chapter because of an actual or perceived physical or mentalimpairment whether or not the impairment limits or is perceived to limit a major life activity.

(B) Paragraph (1)(C) shall not apply to impairments that are transitory and minor.  A
transitory impairment is an impairment with an ac tual or expected duration of 6 months or
less.
(4) Rules of construction regarding the definition of disability.  The definition of “disability” in
paragraph (1) shall be construed in accordance with the following:
(A) The definition of disability in this chapter shall be construed in favor of broad coverage

of individuals under this chapter, to the maxi mum extent permitted by the terms of this
chapter.
(B) The term “substantially limits” shall be interpreted consistently with the findings and
purposes of the ADA Amendments Act of 2008.
(C) An impairment that substantially limits one major life activity need not limit other major
life activities in order to be considered a disability.
(D) An impairment that is episodic or in remission is a disability if it would substantially

limit a major life activity when active.
(E) (i) The determination of whether an impairment substantially limits a major life activity
shall be made without regard to the ameliorative effects of mitigating measures suchas

-8-(I) medication, medical supplies, equipment, or appliances, low-vision devices
(which do not include ordinary eyeglasse s or contact lenses), prosthetics
including limbs and devices, hearing aids and cochlear implants or otherimplantable hearing devices, mobility devices, or oxygen therapy equipment andsupplies;
(II) use of assistive technology;(III) reasonable accommodations or auxiliary aids or services; or(IV) learned behavioral or adaptive neurological modifications.

(ii) The ameliorative effects of the mitigating measures of ordinary eyeglasses or
contact lenses shall be considered in determining whether an impairment
substantially limits a major life activity.
(iii) As used in this subparagraph
(I) the term “ordinary eyeglasses or c ontact lenses” means lenses that are
intended to fully correct visual acuity or eliminate refractive error; and 
(II) the term “low-vision devices” m eans devices that magnify, enhance, or
otherwise augment a visual image.

Sec. 12103. Additional definitions.  As used in this chapter
(1) Auxiliary aids and services.  The term “auxiliary aids and services” includes
(A) qualified interpreters or other effective methods of making aurally delivered materials
available to individuals with hearing impairments;
(B) qualified readers, taped texts, or other effective methods of making visually delivered
materials available to individuals with visual impairments;

(C) acquisition or modification of equipment or devices; and (D) other similar services and actions.
(2) State.  The term “State” means each of the several States, the District of Columbia, the
Commonwealth of Puerto Rico, Guam, American Samoa, the Virgin Islands of the UnitedStates, the Trust Territory of the Pacific Islands, and the Commonwealth of the NorthernMariana Islands. 
SUBCHAPTER I - EMPLOYMENT
Sec. 12111. DefinitionsAs used in this subchapter:

(1) Commission.  The term "Commission" m eans the Equal Employment Opportunity
Commission established by section 2000e-4 of this title.
(2) Covered entity.  The term "covered entity"  means an employer, employment agency, labor
organization, or joint labor-management committee.

-9-(3) Direct threat.  The term "direct threat" means a significant risk to the health or safety of
others that cannot be eliminated by reasonable accommodation.
(4) Employee.  The term "employee" means an individual employed by an employer. With
respect to employment in a foreign country, su ch term includes an individual who is a citizen
of the United States.
(5) Employer
(A) In general.  The term "employer" means a person engaged in an industry affecting

commerce who has 15 or more employees for each working day in each of 20 or morecalendar weeks in the current or preceding calendar year, and any agent of such person,except that, for two years following the effective date of this subchapter, an employermeans a person engaged in an industry affecting commerce who has 25 or moreemployees for each working day in each of 20 or more calendar weeks in the current orpreceding year, and any agent of such person.

(B) Exceptions.  The term "employer" does not include
(i) the United States, a corporation wholly owned by the government of the United
States, or an Indian tribe; or
(ii) a bona fide private membership club (other than a labor organization) that is
exempt from taxation under section 501(c) of title 26.
(6) Illegal use of drugs
(A) In general.  The term "illegal use of dr ugs" means the use of drugs, the possession or

distribution of which is unlawful under the Controlled Substances Act [21 U.S.C. 801 et
seq.]. Such term does not include the use of a drug taken under supervision by a licensedhealth care professional, or other uses aut horized by the Controlled Substances Act or
other provisions of Federal law.
(B) Drugs.  The term "drug" means a contro lled substance, as defined in schedules I
through V of section 202 of the Controlled Substances Act [21 U.S.C. 812].

(7) Person, etc.  The terms "person", "labor  organization", "employment agency", "commerce",
and "industry affecting commerce", shall have the same meaning given such terms in section2000e of this title.
(8) Qualified individual.  The term "qualifi ed individual" means an individual who, with or
without reasonable accommodation, can perform the essential functions of the employmentposition that such individual holds or des ires. For the purposes of this subchapter,

consideration shall be given to the employer's judgment as to what functions of a job are
essential, and if an employer has prepared a written description before advertising orinterviewing applicants for the job, this description shall be considered evidence of theessential functions of the job.
(9) Reasonable accommodation.  The term "reasonable accommodation" may include
(A) making existing facilities used by employees readily accessible to and usable by
individuals with disabilities; and

(B) job restructuring, part-time or modi fied work schedules, reassignment to a vacant
position, acquisition or modification of equi pment or devices, appropriate adjustment or
modifications of examinations, training materi als or policies, the provision of qualified

-10-readers or interpreters, and other similar accommodations for individuals with disabilities.
(10) Undue hardship
(A) In general.  The term "undue hardship" means  an action requiring significant difficulty
or expense, when considered in light of the factors set forth in subparagraph (B).
(B) Factors to be considered.  In dete rmining whether an accommodation would impose
an undue hardship on a covered entity, factors to be considered include

(i) the nature and cost of the accommodation needed under this chapter;(ii) the overall financial resources of the facility or facilities involved in the provision of
the reasonable accommodation; the number of persons employed at such facility; theeffect on expenses and resources, or the impact otherwise of such accommodationupon the operation of the facility;
(iii) the overall financial resources of the covered entity; the overall size of the

business of a covered entity with respect to the number of its employees; the number,type, and location of its facilities; and
(iv) the type of operation or operations of the covered entity, including the
composition, structure, and functions of the workforce of such entity; the geographicseparateness, administrative, or fiscal relationship of the facility or facilities inquestion to the covered entity.
Sec. 12112. Discrimination

(a) General rule.  No covered entity shall discr iminate against a qualified individual on the basis of
disability in regard to job application proc edures, the hiring, advancement, or discharge of
employees, employee compensation, job traini ng, and other terms, conditions, and privileges of
employment.
(b) Construction.  As used in subsection (a) of  this section, the term “discriminate against a
qualified individual on the basis of disability” includes

(1) limiting, segregating, or classifying a j ob applicant or employee in a way that adversely
affects the opportunities or status of such applicant or employee because of the disability ofsuch applicant or employee;
(2) participating in a contractual or other arr angement or relationship that has the effect of
subjecting a covered entity's qualified applicant or employee with a disability to thediscrimination prohibited by this subchapter (s uch relationship includes a relationship with an

employment or referral agency, labor union, an organization providing fringe benefits to an
employee of the covered entity, or an or ganization providing training and apprenticeship
programs);
(3) utilizing standards, criteria, or methods of administration
(A) that have the effect of discrimination on the basis of disability;(B) that perpetuates the discrimination of others who are subject to common
administrative control;

(4) excluding or otherwise denying equal jobs or  benefits to a qualified individual because of
the known disability of an individual with whom  the qualified individual is known to have a

-11-relationship or association;
(5) (A) not making reasonable accommodations to the known physical or mental limitations of
an otherwise qualified individual with a disabilit y who is an applicant or employee, unless
such covered entity can demonstrate that the accommodation would impose an unduehardship on the operation of the business of such covered entity; or
(B) denying employment opportunities to a j ob applicant or employee who is an otherwise

qualified individual with a disability, if such denial is based on the need of such coveredentity to make reasonable accommodation to the physical or mental impairments of theemployee or applicant;
(6) using qualification standards, employment tests or other selection criteria that screen out
or tend to screen out an individual with a disabilit y or a class of individuals with disabilities

unless the standard, test or other selection criteria, as used by the covered entity, is shown tobe job-related for the position in question and is consistent with business necessity; and
(7) failing to select and administer tests concerning employment in the most effective manner

to ensure that, when such test is administered to a job applicant or employee who has adisability that impairs sensory, manual, or speaking skills, such test results accurately reflectthe skills, aptitude, or whatever other factor of such applicant or employee that such testpurports to measure, rather than reflecting t he impaired sensory, manual, or speaking skills of
such employee or applicant (except where such skills are the factors that the test purports tomeasure).

(c) Covered entities in foreign countries
(1) In general.  It shall not be unlawful under this section for a covered entity to take any
action that constitute discrimination under th is section with respect to an employee in a
workplace in a foreign country if compliance wit h this section would cause such covered entity
to violate the law of the foreign country in which such workplace is located.
(2) Control of corporation

(A) Presumption.  If an employer controls a co rporation whose place of incorporation is a
foreign country, any practice that consti tutes discrimination under this section and is
engaged in by such corporation shall be presumed to be engaged in by such employer.
(B) Exception.  This section shall not apply with respect to the foreign operations of an
employer that is a foreign person not controlled by an American employer.

(C) Determination.  For purposes of this  paragraph, the determination of whether an
employer controls a corporation shall be based on
(i) the interrelation of operations;(ii) the common management;(iii) the centralized control of labor relations; and(iv) the common ownership or financial control of the employer and the corporation.
(d) Medical examinations and inquiries
(1) In general.  The prohibition against discriminat ion as referred to in subsection (a) of this

-12-(2) Preemployment
(A) Prohibited examination or inquiry.  Exc ept as provided in paragraph (3), a covered
entity shall not conduct a medical examination or make inquiries of a job applicant as to
whether such applicant is an individual with a disability or as to the nature or severity ofsuch disability.
(B) Acceptable inquiry.  A covered entity ma y make preemployment inquiries into the
ability of an applicant to perform job-related functions.

(3) Employment entrance examination.  A cove red entity may require a medical examination
after an offer of employment has been made to a job applicant and prior to thecommencement of the employment duties of such applicant, and may condition an offer ofemployment on the results of such examination, if
(A) all entering employees are subjected to such an examination regardless of disability;
(B) information obtained regarding the medical condition or history of the applicant is

collected and maintained on separate forms and in separate medical files and is treatedas a confidential medical record, except that
(i) supervisors and managers may be informed regarding necessary restrictions on
the work or duties of the employee and necessary accommodations;
(ii) first aid and safety personnel may be informed, when appropriate, if the disability
might require emergency treatment; and
(iii) government officials investigating compliance with this chapter shall be provided

relevant information on request; and
(C) the results of such examination are used only in accordance with this subchapter.
(4) Examination and inquiry
(A) Prohibited examinations and inquiries.  A covered entity shall not require a medical
examination and shall not make inquiries of an employee as to whether such employee is

an individual with a disability or as to the nature or severity of the disability, unless suchexamination or inquiry is shown to be job -related and consistent with business necessity.
(B) Acceptable examinations  and inquiries.  A covered entity may conduct voluntary

medical examinations, including voluntary medical histories, which are part of anemployee health program available to employees at that work site. A covered entity maymake inquiries into the ability of an employee to perform job-related functions.
(C) Requirement.  Information obtained under  subparagraph (B) regarding the medical
condition or history of any employee are subj ect to the requirements of subparagraphs (B)
and (C) of paragraph (3).
Sec. 12113. Defenses

(a) In general.  It may be a defense to a charge of discrimination under this chapter that an alleged
application of qualification standards, tests, or selection criteria that screen out or tend to screenout or otherwise deny a job or benefit to an indi vidual with a disability has been shown to be job-

related and consistent with business necessity, and such performance cannot be accomplished byreasonable accommodation, as required under this subchapter.

-13-(b) Qualification standards.  The term "qualificat ion standards" may include a requirement that an
individual shall not pose a direct threat to the health  or safety of other individuals in the workplace.
(c) Qualification standards and tests related to uncorrected vision.  Notwithstanding section

12102(4)(E)(ii), a covered entity shall not use qualification standards, employment tests, or otherselection criteria based on an individual’s uncorrected vision unless the standard, test, or otherselection criteria, as used by the covered entity, is shown to be job-related for the position inquestion and consistent with business necessity.
(d) Religious entities
(1) In general.  This subchapter shall not pr ohibit a religious corporation, association,

educational institution, or society from giving preference in employment to individuals of a
particular religion to perform work connected with the carrying on by such corporation,association, educational institution, or society of its activities.
(2) Religious tenets requirement.  Under this  subchapter, a religious organization may require
that all applicants and employees conform to the religious tenets of such organization.
(e) List of infectious and communicable diseases

(1) In general.  The Secretary of Health and Human Services, not later than 6 months after
July 26, 1990, shall
(A) review all infectious and communicabl e diseases which may be transmitted through
handling the food supply;
(B) publish a list of infectious and communic able diseases which are transmitted through

(C) publish the methods by which such diseases are transmitted; and(D) widely disseminate such information regardi ng the list of diseases and their modes of
transmissibility to the general public.
Such list shall be updated annually.
(2) Applications.  In any case in which an individual has an infectious or communicable
disease that is transmitted to others through t he handling of food, that is included on the list

developed by the Secretary of Health and Human Services under paragraph (1), and whichcannot be eliminated by reasonable accommodation, a covered entity may refuse to assign orcontinue to assign such individual to a job involving food handling.
(3) Construction.  Nothing in this chapter shall be construed to preempt, modify, or amend any

State, county, or local law, ordinance, or regulation applicable to food handling which isdesigned to protect the public health from indi viduals who pose a significant risk to the health
or safety of others, which cannot be eliminated by reasonable accommodation, pursuant tothe list of infectious or communicable dis eases and the modes of transmissibility published by
the Secretary of Health and Human Services.
Sec. 12114. Illegal use of drugs and alcohol

(a) Qualified individual with a disability.  For pur poses of this subchapter, a qualified individual with
a disability shall not include any employee or applicant who is currently engaging in the illegal useof drugs, when the covered entity acts on the basis of such use.

-14-(b) Rules of construction.  Nothing in subsection (a) of this section shall be construed to exclude
as a qualified individual with a disability an individual who
(1) has successfully completed a supervised drug rehabilitation program and is no longer
engaging in the illegal use of drugs, or has otherwise been rehabilitated successfully and is nolonger engaging in such use;
(2) is participating in a supervised rehabilitation program and is no longer engaging in such
use; or

use; or
(3) is erroneously regarded as engaging in such use, but is not engaging in such use;except that it shall not be a violation of this chapter for a covered entity to adopt or administer
reasonable policies or procedures, including but not limited to drug testing, designed toensure that an individual described in paragraph (1) or (2) is no longer engaging in the illegal
use of drugs.
(c) Authority of covered entity.  A covered entity

(1) may prohibit the illegal use of drugs and t he use of alcohol at the workplace by all
employees;
(2) may require that employees shall not be under the influence of alcohol or be engaging in
the illegal use of drugs at the workplace;
(3) may require that employees behave in conformance with the requirements established
under the Drug-Free Workplace Act of 1988 (41 U.S.C. 701 et seq.);
(4) may hold an employee who engages in the illegal  use of drugs or who is an alcoholic to

the same qualification standards for employment or job performance and behavior that suchentity holds other employees, even if any unsat isfactory performance or behavior is related to
the drug use or alcoholism of such employee; and
(5) may, with respect to Federal regulations  regarding alcohol and the illegal use of drugs,
require that
(A) employees comply with the standards established in such regulations of the

Department of Defense, if the employees of the covered entity are employed in anindustry subject to such regulations, incl uding complying with regulations (if any) that
apply to employment in sensitive positions in  such an industry, in the case of employees
of the covered entity who are employed in such  positions (as defined in the regulations of
the Department of Defense);
(B) employees comply with the standards established in such regulations of the Nuclear

Regulatory Commission, if the employees of  the covered entity are employed in an
industry subject to such regulations, incl uding complying with regulations (if any) that
the Nuclear Regulatory Commission); and
(C) employees comply with the standards established in such regulations of the

Department of Transportation, if the employees of the covered entity are employed in atransportation industry subject to such regulations, including complying with such
regulations (if any) that apply to employment in  sensitive positions in such an industry, in
the case of employees of the covered entity who are employed in such positions (asdefined in the regulations of the Department of Transportation).

-15-(d) Drug testing
(1) In general.  For purposes of this subchapter, a test to determine the illegal use of drugs
shall not be considered a medical examination.
(2) Construction.  Nothing in this subchapt er shall be construed to encourage, prohibit, or
authorize the conducting of drug testing for t he illegal use of drugs by job applicants or
employees or making employment decisions based on such test results.

(e) Transportation employees.  Nothing in this subchapter shall be construed to encourage,
prohibit, restrict, or authorize the otherwise lawful ex ercise by entities subject to the jurisdiction of
the Department of Transportation of authority to
(1) test employees of such entities in, and applic ants for, positions involving safety-sensitive
duties for the illegal use of drugs and for on-duty impairment by alcohol; and

(2) remove such persons who test positive for illegal use of drugs and on-duty impairment by
alcohol pursuant to paragraph (1) from safety-s ensitive duties in implementing subsection (c)
of this section.
Sec. 12115. Posting noticesEvery employer, employment agency, labor or ganization, or joint labor-management committee

covered under this subchapter shall post notices in an accessible format to applicants, employees,and members describing the applicable provisions of this chapter, in the manner prescribed by section2000e-10 of this title.
Sec. 12116. RegulationsNot later than 1 year after July 26, 1990, the Commission shall issue regulations in an accessible
format to carry out this subchapter in accordance with subchapter II of chapter 5 of title 5.
Sec. 12117. Enforcement

(a) Powers, remedies, and procedures.  The powers, remedies, and procedures set forth in
sections 2000e-4, 2000e-5, 2000e-6, 2000e-8, and 2000e-9 of this title shall be the powers,remedies, and procedures this subchapter provides  to the Commission, to the Attorney General,
or to any person alleging discrimination on the basis of  disability in violation of any provision of this

chapter, or regulations promulgated under secti on 12116 of this title, concerning employment.
(b) Coordination.  The agencies with enforcement  authority for actions which allege employment

discrimination under this subchapter and under the Rehabilitation Act of 1973 [29 U.S.C. 701 etseq.] shall develop procedures to ensure that administrative complaints filed under this subchapterand under the Rehabilitation Act of 1973 are dealt with in a manner that avoids duplication of effortand prevents imposition of inconsistent or conflicting standards for the same requirements underthis subchapter and the Rehabilitation Act of 1973. The Commission, the Attorney General, andthe Office of

the Attorney General, andthe Office of Federal Contract Compliance Programs shall establish such coordinatingmechanisms (similar to provisions contained in  the joint regulations promulgated by the

Commission and the Attorney General at part 42 of title 28 and part 1691 of title 29, Code of
Federal Regulations, and the Memorandum of  Understanding between the Commission and the
Office of Federal Contract Compliance Programs dated January 16, 1981 (46 Fed. Reg. 7435,January 23, 1981)) in regulations implementing this subchapter and Rehabilitation Act of 1973 not
later than 18 months after July 26, 1990.

-16-SUBCHAPTER II - PUBLIC SERVICES
Part A - Prohibition Against Discriminati on and Other Generally Applicable Provisions
Sec. 12131. DefinitionsAs used in this subchapter:
(1) Public entity.  The term "public entity" means
(A) any State or local government;(B) any department, agency, special purpose district, or other instrumentality of a State or
States or local government; and
(C) the National Railroad Passenger Corporation, and any commuter authority (as defined

in section 24102(4) of title 49).
(2) Qualified individual with a disability.  The term "qualified individual with a disability" means
an individual who, with or without reasonable modifica tions to rules, policies, or practices, the
removal of architectural, communication, or transportation barriers, or the provision of auxiliaryaids and services, meets the essential eligibility requirements for the receipt of services or theparticipation in programs or activities provided by a public entity.

Sec. 12132. DiscriminationSubject to the provisions of this subchapter, no qua lified individual with a disability shall, by reason of
such disability, be excluded from participation in or be denied the benefits of services, programs, oractivities of a public entity, or be subjec ted to discrimination by any such entity.
Sec. 12133. EnforcementThe remedies, procedures, and rights set forth in section 794a of title 29 shall be the remedies,

procedures, and rights this subchapter provides to any person alleging discrimination on the basis of
disability in violation of section 12132 of this title.
Sec. 12134. Regulations
(a) In general.  Not later than 1 year after July  26, 1990, the Attorney General shall promulgate

regulations in an accessible format that implement this part. Such regulations shall not include anymatter within the scope of the authority of the Secretary of Transportation under section 12143,12149, or 12164 of this title.
(b) Relationship to other regulations.  Except for "program accessibility, existing facilities", and
"communications", regulations under subsection (a) of this section shall be consistent with this

chapter and with the coordination regulations  under part 41 of title 28, Code of Federal
Regulations (as promulgated by the Department of Health, Education, and Welfare on January 13,
1978),   applicable to recipients of Federal financ ial assistance under section 794 of title 29. With
respect to "program accessibility, existing facilities", and "communications", such regulations shallbe consistent with regulations and analysis as in part 39 of title 28 of the Code of Federal

Regulations, applicable to federally conduct ed activities under section 794 of title 29.
(c) Standards.  Regulations under subsection (a) of  this section shall include standards applicable
to facilities and vehicles covered by this part, other than facilities, stations, rail passenger cars,and vehicles covered by part B of this subchapter. Such standards shall be consistent with theminimum guidelines and requirements issued by the Architectural and Transportation Barriers

-17-Compliance Board in accordance with section 12204(a) of this title.
Part B - Actions Applicable to Public Transportation Pr ovided by Public Entities Considered Discriminatory
Subpart I - Public Transportation Other than by Aircraft or Certain Rail Operations
Sec. 12141. DefinitionsAs used in this subpart:
(1) Demand responsive system.  The term "dem and responsive system" means any system of
providing designated public transportation which is not a fixed route system.

(2) Designated public transportation.  The term "designated public transportation" means
transportation (other than public school transporta tion) by bus, rail, or any other conveyance
(other than transportation by aircraft or intercity or commuter rail transportation (as defined insection 12161 of this title)) that provides the general public with general or special service(including charter service) on a regular and continuing basis.

(3) Fixed route system.  The term "fixed route system" means a system of providing
designated public transportation on which a v ehicle is operated along a prescribed route
according to a fixed schedule.
(4) Operates.  The term "operates", as used with respect to a fixed route system or demand
responsive system, includes operation of such system by a person under a contractual orother arrangement or relationship with a public entity.

(5) Public school transportation.  The term " public school transportation" means transportation
by school bus vehicles of schoolchildren,  personnel, and equipment to and from a public
elementary or secondary school and school-related activities.
(6) Secretary.  The term "Secretary" means the Secretary of Transportation.
Sec. 12142. Public entities operating fixed route systems
(a) Purchase and lease of new vehicles.  It s hall be considered discrimination for purposes of

section which operates a fixed route system to  purchase or lease a new bus, a new rapid rail
vehicle, a new light rail vehicle, or any other  new vehicle to be used on such system, if the
solicitation for such purchase or lease is made after the 30th day following July 26, 1990, and ifsuch bus, rail vehicle, or other vehicle is not readily accessible to and usable by individuals with
disabilities, including individuals who use wheelchairs.

(b) Purchase and lease of used vehicles.  Subject to  subsection (c)(1) of this section, it shall be
considered discrimination for purposes of section 12132 of this title and section 794 of title 29 for a

public entity which operates a fixed route system to purchase or lease, after the 30th day followingJuly 26, 1990, a used vehicle for use on such system unless such entity makes demonstratedgood faith efforts to purchase or lease a used vehicle for use on such system that is readilyaccessible to and usable by individuals with disabilities, including individuals who use
wheelchairs.
(c) Remanufactured vehicles

(1) General rule.  Except as provided in paragr aph (2), it shall be considered discrimination for
purposes of section 12132 of this title and sect ion 794 of title 29 for a public entity which
operates a fixed route system

-18-(A) to remanufacture a vehicle for use on such system so as to extend its usable life for 5
years or more, which remanufacture begins (or for which the solicitation is made) after the30th day following July 26, 1990; or
(B) to purchase or lease for use on such system a remanufactured vehicle which has

been remanufactured so as to extend its usable life for 5 years or more, which purchaseor lease occurs after such 30th day and during the period in which the usable life isextended; unless, after remanufacture, the vehicle is, to the maximum extent feasible,readily accessible to and usable by individual s with disabilities, including individuals who
use wheelchairs.
(2) Exception for historic vehicles
(A) General rule.  If a public entity operates a fixed route system any segment of which is

included on the National Register of Historic Places and if making a vehicle of historic
character to be used solely on such segment readily accessible to and usable byindividuals with disabilities would significantly al ter the historic character of such vehicle,
the public entity only has to make (or to pur chase or lease a remanufactured vehicle with)

those modifications which are necessary to meet the requirements of paragraph (1) andwhich do not significantly alter the historic character of such vehicle.
(B) Vehicles of historic character defined by  regulations.  For purposes of this paragraph
and section 12148(a) of this title, a vehicle of  historic character shall be defined by the
regulations issued by the Secretary to carry out this subsection.
Sec. 12143. Paratransit as a complement to fixed route service

(a) General rule.  It shall be considered discrimi nation for purposes of section 12132 of this title
and section 794 of title 29 for a public entity whic h operates a fixed route system (other than a
system which provides solely commuter bus serv ice) to fail to provide with respect to the
operations of its fixed route system, in accordance with this section, paratransit and other specialtransportation services to individuals with disab ilities, including individuals who use wheelchairs

that are sufficient to provide to such individuals a level of service
(1) which is comparable to the level of designated public transportation services provided to
individuals without disabilities using such system; or
(2) in the case of response time, which is comparable, to the extent practicable, to the level of
designated public transportation services provi ded to individuals without disabilities using
such system.

(b) Issuance of regulations.  Not later than 1 year after July 26, 1990, the Secretary shall issue
final regulations to carry out this section.
(c) Required contents of regulations
(1) Eligible recipients of service.  The regulat ions issued under this section shall require each
public entity which operates a fixed route system to provide the paratransit and other specialtransportation services required under this section

(A) (i) to any individual with a disability who is unable, as a result of a physical or mental
impairment (including a vision impairm ent) and without the assistance of another
individual (except an operator of a wheel chair lift or other boarding assistance
device), to board, ride, or disembark from any vehicle on the system which is readilyaccessible to and usable by individuals with disabilities;

-19-(ii) to any individual with a disability w ho needs the assistance of a wheelchair lift or
other boarding assistance device (and is able with such assistance) to board, ride,and disembark from any vehicle which is readily accessible to and usable byindividuals with disabilities if the individual  wants to travel on a route on the system

during the hours of operation of the system at a time (or within a reasonable period ofsuch time) when such a vehicle is not being used to provide designated publictransportation on the route; and
(iii) to any individual with a disability w ho has a specific impairment-related condition
which prevents such individual from traveling to a boarding location or from adisembarking location on such system;
(B) to one other individual accompanying the individual with the disability; and

(C) to other individuals, in addition to the one individual described in subparagraph (a),
accompanying the individual with a disabilit y provided that space for these additional
individuals are available on the paratransit v ehicle carrying the individual with a disability
and that the transportation of such additional individuals will not result in a denial ofservice to individuals with disabilities.
For purposes of clauses (i) and (ii) of s ubparagraph (A), boarding or disembarking from a

vehicle does not include travel to the boarding location or from the disembarking location.
(2) Service area.  The regulations issued under this section shall require the provision of
paratransit and special transportation services required under this section in the service areaof each public entity which operates a fixed rout e system, other than any portion of the service
area in which the public entity solely provides commuter bus service.

(3) Service criteria.  Subject to paragraphs (1) and (2), the regulations issued under this
section shall establish minimum service criteria for determining the level of services to berequired under this section.
(4) Undue financial burden limitation.  The regulat ions issued under this section shall provide

that, if the public entity is able to demonstrate to the satisfaction of the Secretary that theprovision of paratransit and other special transportation services otherwise required under thissection would impose an undue financial burden on the public entity, the public entity,notwithstanding any other provision of this se ction (other than paragraph (5)), shall only be
required to provide such services to the extent  that providing such services would not impose
such a burden.

(5) Additional services.  The regulations issued under this section shall establish
circumstances under which the Secretary may require a public entity to provide,notwithstanding paragraph (4), paratransit and other special transportation services under thissection beyond the level of paratransit and other special transportation services which wouldotherwise be required under paragraph (4).

(6) Public participation.  The regulations i ssued under this section shall require that each
public entity which operates a fixed route syst em hold a public hearing, provide an opportunity
for public comment, and consult with individuals with disabilities in preparing its plan underparagraph (7).
(7) Plans.  The regulations issued under this sect ion shall require that each public entity which

(A) within 18 months after July 26, 1990, submit to the Secretary, and commence
implementation of, a plan for providing paratransit and other special transportation

-20-services which meets the requirements of this section; and
(B) on an annual basis thereafter, submit to the Secretary, and commence implementation
of, a plan for providing such services.
(8) Provision of services by others.  T he regulations issued under this section shall
(A) require that a public entity submitting a pl an to the Secretary under this section identify

in the plan any person or other public entity which is providing a paratransit or otherspecial transportation service for individuals with disabilities in the service area to whichthe plan applies; and
(B) provide that the public entity submitti ng the plan does not have to provide under the
plan such service for individuals with disabilities.
(9) Other provisions.  The regulations iss ued under this section shall include such other

provisions and requirements as the Secretary determines are necessary to carry out theobjectives of this section.
(d) Review of plan
(1) General rule.  The Secretary shall review a plan submitted under this section for the
purpose of determining whether or not such plan meets the requirements of this section,including the regulations issued under this section.
(2) Disapproval.  If the Secretary determines t hat a plan reviewed under this subsection fails

to meet the requirements of this section, t he Secretary shall disapprove the plan and notify the
public entity which submitted the plan of su ch disapproval and the reasons therefor.
(3) Modification of disapproved plan.  Not later than 90 days after the date of disapproval of a
plan under this subsection, the public entity whic h submitted the plan shall modify the plan to

meet the requirements of this section and shall submit to the Secretary, and commenceimplementation of, such modified plan.
(e) "Discrimination" defined.  As used in subsecti on (a) of this section, the term "discrimination"
includes
(1) a failure of a public entity to which t he regulations issued under this section apply to
submit, or commence implementation of, a pl an in accordance with subsections (c)(6) and
(c)(7) of this section;

(2) a failure of such entity to submit, or commence implementation of, a modified plan in
accordance with subsection (d) (3) of this section;
(3) submission to the Secretary of a modifi ed plan under subsection (d)(3) of this section
which does not meet the requirements of this section; or
(4) a failure of such entity to provide paratransit or other special transportation services in

accordance with the plan or modified plan the public entity submitted to the Secretary under
this section.
(f) Statutory construction.  Nothing in this se ction shall be construed as preventing a public entity
(1) from providing paratransit or other special transportation services at a level which is
greater than the level of such services which are required by this section,

-21-(2) from providing paratransit or other special transportation services in addition to those
paratransit and special transportation services required by this section, or
(3) from providing such services to individual s in addition to those individuals to whom such
services are required to be provided by this section.
Sec. 12144. Public entity operating a demand responsive systemIf a public entity operates a demand responsive system , it shall be considered discrimination, for

purposes of section 12132 of this title and section 794 of  title 29, for such entity to purchase or lease a
new vehicle for use on such system, for which a solicitation is made after the 30th day following July26, 1990, that is not readily accessible to and usable by individuals with disabilities, including
individuals who use wheelchairs, unless such system, when viewed in its entirety, provides a level of

service to such individuals equivalent to the level of service such system provides to individuals
without disabilities.
Sec. 12145. Temporary relief where lifts are unavailable
(a) Granting.  With respect to the purchase of  new buses, a public entity may apply for, and the
Secretary may temporarily relieve such public entity from the obligation under section 12142(a) or12144 of this title to purchase new buses that ar e readily accessible to and usable by individuals

with disabilities if such public entity demonstrates to the satisfaction of the Secretary
(1) that the initial solicitation for new buses made by the public entity specified that all new
buses were to be lift-equipped and were to be otherwise accessible to and usable byindividuals with disabilities;
(2) the unavailability from any qualified manufacturer of hydraulic, electromechanical, or other
lifts for such new buses;

(3) that the public entity seeking temporary relief has made good faith efforts to locate a
qualified manufacturer to supply the lifts to the m anufacturer of such buses in sufficient time to
comply with such solicitation; and
(4) that any further delay in purchasing new buses necessary to obtain such lifts would
significantly impair transportation services in  the community served by the public entity.

(b) Duration and notice to Congress.  Any relief gr anted under subsection (a) of this section shall
be limited in duration by a specified date, and the appropriate committees of Congress shall benotified of any such relief granted.
(c) Fraudulent application.  If, at any time, the Se cretary has reasonable cause to believe that any
relief granted under subsection (a) of this section was fraudulently applied for, the Secretary shall

(1) cancel such relief if such relief is still in effect; and(2) take such other action as the Secretary considers appropriate.
Sec. 12146. New facilitiesFor purposes of section 12132 of this title and se ction 794 of title 29, it shall be considered
discrimination for a public entity to construct a new  facility to be used in the provision of designated
public transportation services unless such facility is readily accessible to and usable by individuals

with disabilities, including individuals who use wheelchairs.
Sec. 12147. Alterations of existing facilities

-22-(a) General rule.  With respect to alterations of an existing facility or part thereof used in the
provision of designated public transportation services t hat affect or could affect the usability of the

facility or part thereof, it shall be considered discrimination, for purposes of section 12132 of thistitle and section 794 of title 29, for a public entity to fail to make such alterations (or to ensure thatthe alterations are made) in such a manner that, to the maximum extent feasible, the alteredportions of the facility are readily accessible to and usable by individuals with disabilities, including

individuals who use wheelchairs, upon the completion of such alterations. Where the public entity
is undertaking an alteration that affects or could affect usability of or access to an area of thefacility containing a primary function, the entity shall also make the alterations in such a mannerthat, to the maximum extent feasible, the path of travel to the altered area and the bathrooms,telephones, and drinking fountains serving the alte red area, are readily accessible to and usable

by individuals with disabilities, including indivi duals who use wheelchairs, upon completion of such
alterations, where such alterations to the path of travel or the bathrooms, telephones, and drinking
fountains serving the altered area are not dispr oportionate to the overall alterations in terms of
cost and scope (as determined under criteria established by the Attorney General).
(b) Special rule for stations

(1) General rule.  For purposes of section 12132 of this title and section 794 of title 29, it shall
be considered discrimination for a public entity that provides designated public transportation

to fail, in accordance with the provisions of this subsection, to make key stations (asdetermined under criteria established by the Secretary by regulation) in rapid rail and light railsystems readily accessible to and usable by i ndividuals with disabilities, including individuals
who use wheelchairs.
(2) Rapid rail and light rail key stations
(A) Accessibility.  Except as otherwise provided in this paragraph, all key stations (as

determined under criteria established by the Secretary by regulation] in rapid rail and lightrail systems shall be made readily accessible to and usable by individuals with disabilities,including individuals who use wheelchairs, as soon as practicable but in no event later
than the last day of the 3-year period beginning on July 26, 1990.
(B) Extension for extraordinarily expensive st ructural changes.  The Secretary may extend

the 3-year period under subparagraph (A) up to a 30-year period for key stations in arapid rail or light rail system which stations need extraordinarily expensive structuralchanges to, or replacement of, existing facilities; except that by the last day of the 20thyear following July 26, 1990, at least 2/3 of such key stations must be readily accessible
to and usable by individuals with disabilities.
(3) Plans and milestones.  The Secretary shall require the appropriate public entity to develop

and submit to the Secretary a plan for compliance with this subsection
(A) that reflects consultation with individuals with disabilities affected by such plan and the
results of a public hearing and public comments on such plan, and
(B) that establishes milestones for achievem ent of the requirements of this subsection.
Sec. 12148. Public transportation programs and activi ties in existing facilities and one car per train
rule

rule
(a) Public transportation programs and activities in existing facilities
(1) In general.  With respect to existing facilities used in the provision of designated public
transportation services, it shall be considered discrimination, for purposes of section 12132 of

-23-this title and section 794 of title 29, for a public entity to fail to operate a designated public
transportation program or activity conducted in such facilities so that, when viewed in theentirety, the program or activity is read ily accessible to and usable by individuals with
(2) Exception.  Paragraph (1) shall not require a public entity to make structural changes to

existing facilities in order to make such facilities accessible to individuals who usewheelchairs, unless and to the extent required by section 12147(a) of this title (relating to
alterations) or section 12147(a) of this title (relating to key stations).
(3) Utilization.  Paragraph (1) shall not require a public entity to which paragraph (2) applies,
to provide to individuals who use wheelchairs services made available to the general public at

such facilities when such individuals could not utilize or benefit from such services provided atsuch facilities.
(b) One car per train rule
(1) General rule.  Subject to paragraph (2), with respect to 2 or more vehicles operated as a
train by a light or rapid rail system, for purposes of section 12132 of this title and section 794of title 29, it shall be considered discriminati on for a public entity to fail to have at least 1

vehicle per train that is accessible to indivi duals with disabilities, including individuals who use
wheelchairs, as soon as practicable but in no event  later than the last day of the 5-year period
beginning on the effective date of this section.
(2) Historic trains.  In order to comply with paragraph (1) with respect to the remanufacture of
a vehicle of historic character which is to be used on a segment of a light or rapid rail system

which is included on the National Register of His toric Places, if making such vehicle readily
accessible to and usable by individuals with disab ilities would significantly alter the historic
character of such vehicle, the public entity which operates such system only has to make (orto purchase or lease a remanufactured vehicle with) those modifications which are necessary
to meet the requirements of section 12142(c)(1) of  this title and which do not significantly alter

the historic character of such vehicle.
Sec. 12149. Regulations
(a) In general.  Not later than 1 year after July 26, 1990, the Secretary of Transportation shall
issue regulations, in an accessible format, necessary for carrying out this subpart (other thansection 12143 of this title).
(b) Standards.  The regulations issued under this  section and section 12143 of this title shall

include standards applicable to facilities and vehicles covered by this part. The standards shall beconsistent with the minimum guidelines and r equirements issued by the Architectural and
Transportation Barriers Compliance Board in accordance with section 12204 of this title.
Sec. 12150. Interim accessibility requirementsIf final regulations have not been issued pursuant to se ction 12149 of this title, for new construction or

alterations for which a valid and appropriate State or local building permit is obtained prior to theissuance of final regulations under such secti on, and for which the construction or alteration

authorized by such permit begins within one year of the receipt of such permit and is completed underthe terms of such permit, compliance with the Uniform Federal Accessibility Standards in effect at thetime the building permit is issued shall suffice to satisfy the requirement that facilities be readilyaccessible to and usable by persons with dis abilities as required under sections 12146 and 12147 of

this title, except that, if such final regulations  have not been issued one year after the Architectural and
Transportation Barriers Compliance Board has iss ued the supplemental minimum guidelines required
under section 12204(a) of this title, compliance wit h such supplemental minimum guidelines shall be

-24-necessary to satisfy the requirement that facilities be readily accessible to and usable by persons with
disabilities prior to issuance of the final regulations.
Subpart II - Public Transportation by Intercity and Commuter Rail
Sec. 12161. DefinitionsAs used in this subpart:
(1) Commuter authority.  The term "commuter authority" has the meaning given such term in
section 24102(4) of title 49.
(2) Commuter rail transportation.  The term "commuter rail transportation" has the meaning

given the term "commuter rail passenger transportation" in section 24102(5) of title 49.
(3) Intercity rail transportation.  The term "intercity rail transportation" means transportation
provided by the National Railroad Passenger Corporation.
(4) Rail passenger car.  The term "rail passenger car" means, with respect to intercity rail
transportation, single-level and bi-level coach cars, single-level and bi-level dining cars,

single- level and bi-level sleeping cars, single- level and bi-level lounge cars, and food service
cars.
(5) Responsible person.  The term "responsible person" means
(A) in the case of a station more than 50 percent of which is owned by a public entity,
such public entity;
(B) in the case of a station more than 50 percent of which is owned by a private party, the

persons providing intercity or commuter rail transportation to such station, as allocated onan equitable basis by regulation by the Secretary of Transportation; and
(C) in a case where no party owns more than 50 percent of a station, the persons
providing intercity or commuter rail transportation to such station and the owners of thestation, other than private party owners, as  allocated on an equitable basis by regulation
by the Secretary of Transportation.

(6) Station.  The term "station" means the portion of a property located appurtenant to a
right-of-way on which intercity or commuter rail transportation is operated, where such portionis used by the general public and is related to the provision of such transportation, including
passenger platforms, designated waiting areas, ticketing areas, restrooms, and, where apublic entity providing rail transportation owns the property, concession areas, to the extent

that such public entity exercises control over t he selection, design, construction, or alteration
of the property, but such term does not include flag stops.
Sec. 12162. Intercity and commuter rail actions considered discriminatory
(a) Intercity rail transportation
(1) One car per train rule.  It shall be considered discrimination for purposes of section 12132
of this title and section 794 of title 29 for a per son who provides intercity rail transportation to

fail to have at least one passenger car per train that is readily accessible to and usable byindividuals with disabilities, including indivi duals who use wheelchairs, in accordance with
regulations issued under section 12164 of this titl e, as soon as practicable, but in no event
later than 5 years after July 26, 1990.

-25-(2) New intercity cars
(A) General rule.  Except as otherwise pr ovided in this subsection with respect to
individuals who use wheelchairs, it shall be considered discrimination for purposes of
section 12132 of this title and section 794 of ti tle 29 for a person to purchase or lease any

new rail passenger cars for use in intercity rail transportation, and for which a solicitationis made later than 30 days after July 26, 1990, unless all such rail cars are readilyaccessible to and usable by individuals with disabilities, including individuals who use
wheelchairs, as prescribed by the Secretar y of Transportation in regulations issued under
section 12164 of this title.
(B) Special rule for single-level passenger coaches for individuals who use wheelchairs.

Single-level passenger coaches shall be required to
(i) be able to be entered by an i ndividual who uses a wheelchair;
(ii) have space to park and secure a wheelchair;(iii) have a seat to which a passenger in a wheelchair can transfer, and a space to fold
and store such passenger's wheelchair; and
(iv) have a restroom usable by an individual who uses a wheelchair, only to the extent
provided in paragraph (3).
(C) Special rule for single-level dining cars for individuals who use wheelchairs.

Single-level dining cars shall not be required to
(i) be able to be entered from the stati on platform by an individual who uses a
wheelchair; or
(ii) have a restroom usable by an individual  who uses a wheelchair if no restroom is
provided in such car for any passenger.
(D) Special rule for bi-level dining cars for individuals who use wheelchairs.  Bi-level
dining cars shall not be required to

(ii) have space to park and secure a wheelchair;(iii) have a seat to which a passenger in a wheelchair can transfer, or a space to fold
and store such passenger's wheelchair; or
(iv) have a restroom usable by an individual who uses a wheelchair.
(3) Accessibility of single-level coaches
(A) General rule.  It shall be considered di scrimination for purposes of section 12132 of
this title and section 794 of title 29 for a pers on who provides intercity rail transportation to

fail to have on each train which includes one or more single-level rail passenger coaches
(i) a number of spaces
(I) to park and secure wheelchairs (to accommodate individuals who wish to
remain in their wheelchairs) equal to not less than one-half of the number ofsingle-level rail passenger coaches in such train; and

-26-(II) to fold and store wheelchairs (to accommodate individuals who wish to
transfer to coach seats) equal to not less than one-half of the number ofsingle-level rail passenger coaches in such train, as soon as practicable, but in noevent later than 5 years after July 26, 1990; and
(ii) a number of spaces

remain in their wheelchairs) equal to not less than the total number of single-levelrail passenger coaches in such train; and
(II) to fold and store wheelchairs (to accommodate individuals who wish to
transfer to coach seats) equal to not less than the total number of single-level railpassenger coaches in such train, as soon as practicable, but in no event laterthan 10 years after July 26, 1990.
(B) Location.  Spaces required by subparagr aph (A) shall be located in single-level rail

passenger coaches or food service cars.
(C) Limitation.  Of the number of spaces  required on a train by subparagraph (A), not
more than two spaces to park and secure wheel chairs nor more than two spaces to fold
and store wheelchairs shall be located in any one coach or food service car.
(D) Other accessibility features.  Single-level rail passenger coaches and food service

cars on which the spaces required by subparagraph (a) are located shall have a restroomusable by an individual who uses a wheelc hair and shall be able to be entered from the
station platform by an indivi dual who uses a wheelchair.
(4) Food service
(A) Single-level dining cars.  On any train in which a single-level dining car is used to
provide food service
(i) if such single-level dining car was purchased after July 26, 1990, table service in

such car shall be provided to a passenger who uses a wheelchair if
(I) the car adjacent to the end of the dining car through which a wheelchair may
enter is itself accessible to a wheelchair;
(II) such passenger can exit to the platform from the car such passenger
occupies, move down the platform, and enter the adjacent accessible cardescribed in subclause (I) without the nec essity of the train being moved within
the station; and

(III) space to park and secure a wheelchair is available in the dining car at the
time such passenger wishes to eat (if such passenger wishes to remain in awheelchair), or space to store and fold a wheelchair is available in the dining car
at the time such passenger wishes to eat (if such passenger wishes to transfer toa dining car seat); and
(ii) appropriate auxiliary aids and services, including a hard surface on which to eat,

shall be provided to ensure that other equivalent food service is available toindividuals with disabilities, including individuals who use wheelchairs, and to
passengers traveling with such individuals. Unless not practicable, a person providingintercity rail transportation shall place an accessible car adjacent to the end of adining car described in clause (I) through wh ich an individual who uses a wheelchair

-27-may enter.
(B) Bi-level dining cars.  On any train in whic h a bi-level dining car is used to provide food
service
(i) if such train includes a bi-level l ounge car purchased after July 26, 1990, table
service in such lounge car shall be provi ded to individuals who use wheelchairs and
to other passengers; and

passengers traveling with such individuals.
(b) Commuter rail transportation
of this title and section 794 of title 29 for a person who provides commuter rail transportation

to fail to have at least one passenger car per train that is readily accessible to and usable byindividuals with disabilities, including indivi duals who use wheelchairs, in accordance with
(2) New commuter rail cars

this title and section 794 of title 29 for a person to purchase or lease any new rail
passenger cars for use in commuter rail transportation, and for which a solicitation ismade later than 30 days after July 26, 1990, unless all such rail cars are readilyaccessible to and usable by individuals with disabilities, including individuals who use

(B) Accessibility.  For purposes of section 12132 of this title and section 794 of title 29, a
requirement that a rail passenger car used in commuter rail transportation be accessibleto or readily accessible to and usable by i ndividuals with disabilities, including individuals
who use wheelchairs, shall not be construed to require
(i) a restroom usable by an individual w ho uses a wheelchair if no restroom is
provided in such car for any passenger;

(ii) space to fold and store a wheelchair; or(iii) a seat to which a passenger who uses a wheelchair can transfer.
(c) Used rail cars.  It shall be considered discrimi nation for purposes of section 1132 of this title

and section 794 of title 29 for a person to purchase or lease a used rail passenger car for use inintercity or commuter rail transportation, unless such person makes demonstrated good faithefforts to purchase or lease a used rail car that is readily accessible to and usable by individuals
with disabilities, including individuals who use w heelchairs, as prescribed by the Secretary of
Transportation in regulations issued under section 12164 of this title.
(d) Remanufactured rail cars

(1) Remanufacturing.  It shall be considered discrimination for purposes of section 12132 of
this title and section 794 of title 29 for a person to remanufacture a rail passenger car for use

-28-in intercity or commuter rail transportation so as to extend its usable life for 10 years or more,
unless the rail car, to the maximum extent feasible, is made readily accessible to and usableby individuals with disabilities, including indivi duals who use wheelchairs, as prescribed by the
Secretary of Transportation in regulations  issued under section 12164 of this title.
(2) Purchase or lease.  It shall be consider ed discrimination for purposes of section 12132 of

this title and section 794 of title 29 for a pers on to purchase or lease a remanufactured rail
passenger car for use in intercity or commuter rail transportation unless such car wasremanufactured in accordance with paragraph (1).
(e) Stations
(1) New stations.  It shall be considered discrimination for purposes of section 12132 of this
title and section 794 of title 29 for a person to build a new station for use in intercity or

commuter rail transportation that is not readily accessible to and usable by individuals withdisabilities, including individuals who use wheel chairs, as prescribed by the Secretary of
(2) Existing stations
(A) Failure to make readily accessible
(i) General rule.  It shall be considered discrimination for purposes of section 12132 of

this title and section 794 of title 29 for a responsible person to fail to make existingstations in the intercity rail transportation system, and existing key stations incommuter rail transportation systems, readily  accessible to and usable by individuals
with disabilities, including individuals who use wheelchairs, as prescribed by the
(ii) Period for compliance

(I) Intercity rail.  All stations in the intercity rail transportation system shall be
made readily accessible to and usable by individuals with disabilities, includingindividuals who use wheelchairs, as soon as  practicable, but in no event later
than 20 years after July 26, 1990.
(II) Commuter rail.  Key stations in commuter rail transportation systems shall be

made readily accessible to and usable by individuals with disabilities, includingindividuals who use wheelchairs, as soon as  practicable but in no event later than
3 years after July 26, 1990, except that the time limit may be extended by theSecretary of Transportation up to 20 years after July 26, 1990, in a case wherethe raising of the entire passenger pl atform is the only means available of

attaining accessibility or where other extraordinarily expensive structural changesare necessary to attain accessibility.
(iii) Designation of key stations.  Each commuter authority shall designate the key
stations in its commuter rail transportation system, in consultation with individuals withdisabilities and organizations representing such  individuals, taking into consideration

such factors as high ridership and whether such station serves as a transfer or feederstation. Before the final designation of key stations under this clause, a commuter
authority shall hold a public hearing.
(iv) Plans and milestones.  The Secretary of Transportation shall require the

appropriate person to develop a plan for carrying out this subparagraph that reflectsconsultation with individuals with disabilities affected by such plan and thatestablishes milestones for achievement of the requirements of this subparagraph.

-29-(B) Requirement when making alterations
(i) General rule.  It shall be considered di scrimination, for purposes of section 12132
of this title and section 794 of title 29, with respect to alterations of an existing station

or part thereof in the intercity or commuter rail transportation systems that affect orcould affect the usability of the station or part thereof, for the responsible person,owner, or person in control of the station to fail to make the alterations in such amanner that, to the maximum extent feasible, the altered portions of the station arereadily accessible to and usable by indivi duals with disabilities, including individuals
who use wheelchairs, upon completion of such alterations.

(ii) Alterations to a primary function area.  It shall be considered discrimination, for
purposes of section 12132 of this title and section 794 of title 29, with respect toalterations that affect or could affect the usability of or access to an area of the stationcontaining a primary function, for the respons ible person, owner, or person in control

of the station to fail to make the alterations in such a manner that, to the maximumextent feasible, the path of travel to the altered area, and the bathrooms, telephones,and drinking fountains serving the altered area, are readily accessible to and usable
by individuals with disabilities, incl uding individuals who use wheelchairs, upon

completion of such alterations, where such alterations to the path of travel or thebathrooms, telephones, and drinking fountains serving the altered area are notdisproportionate to the overall alterations in terms of cost and scope (as determinedunder criteria established by the Attorney General).
(C) Required cooperation.  It shall be consi dered discrimination for purposes of section

12132 of this title and section 794 of title 29 for an owner, or person in control, of a stationgoverned by subparagraph (a) or (b) to fail to provide reasonable cooperation to aresponsible person with respect to such station in that responsible person's efforts tocomply with such subparagraph. An owner, or person in control, of a station shall be liableto a responsible person for any failure to provide reasonable cooperation as required bythis subparagraph. Failure to receive reasonable

subparagraph. Failure to receive reasonable cooperation required by thissubparagraph shall not be a defense to a claim of discrimination under this chapter.

Sec. 12163. Conformance of accessibility standardsAccessibility standards included in regulations issued under this subpart shall be consistent with the
minimum guidelines issued by the Architectura l and Transportation Barriers Compliance Board under
section 504(a) of this title.
Sec. 12164. RegulationsNot later than 1 year after July 26, 1990, the Secretary of Transportation shall issue regulations, in an
accessible format, necessary for carrying out this subpart.

Sec. 12165. Interim accessibility requirements
(a) Stations.  If final regulations have not been i ssued pursuant to section 12164 of this title, for
new construction or alterations for which a valid and appropriate State or local building permit isobtained prior to the issuance of final regulat ions under such section, and for which the

construction or alteration authorized by such permit begins within one year of the receipt of suchpermit and is completed under the terms of such permit, compliance with the Uniform FederalAccessibility Standards in effect at the time the building permit is issued shall suffice to satisfy therequirement that stations be readily accessible to and usable by persons with disabilities asrequired under section 12162(e) of this title, exc ept that, if such final regulations have not been

issued one year after the Architectural and Trans portation Barriers Compliance Board has issued
the supplemental minimum guidelines required under  section 12204(a) of this title, compliance

-30-with such supplemental minimum guidelines shall be necessary to satisfy the requirement that
stations be readily accessible to and usable by persons with disabilities prior to issuance of thefinal regulations.
(b) Rail passenger cars.  If final regulations  have not been issued pursuant to section 12164 of
this title, a person shall be considered to hav e complied with the requirements of section 12162(a)

through (d) of this title that a rail passenger ca r be readily accessible to and usable by individuals
with disabilities, if the design for such car complies with the laws and regulations (including theMinimum Guidelines and Requirements for Acce ssible Design and such supplemental minimum
guidelines as are issued under section 12204(a) of th is title) governing accessibility of such cars,

to the extent that such laws and regulations are not inconsistent with this subpart and are in effectat the time such design is substantially completed.
SUBCHAPTER III - PUBLIC ACCOMMODATIONS A ND SERVICES OPERATED BY PRIVATE ENTITIES
Sec. 12181. DefinitionsAs used in this subchapter:
(1) Commerce.  The term "commerce" means travel, trade, traffic, commerce, transportation,
or communications

(A) among the several States;(B) between any foreign country or any te rritory or possession and any State; or 
(C) between points in the same State but through another State or foreign country.
(2) Commercial facilities.  The term "commercial facilities" means facilities
(A) that are intended for nonresidential use; and(B) whose operations will affect commerce.Such term shall not include railroad locomotives, railroad freight cars, railroad cabooses,

railroad cars described in section 12162 of this title or covered under this subchapter,railroad rights-of-way, or facilities that are covered or expressly exempted from coverageunder the Fair Housing Act of 1968 (42 U.S.C. 3601 et seq.).
(3) Demand responsive system.  The term "dem and responsive system" means any system of
providing transportation of individuals by a vehicl e, other than a system which is a fixed route
system.

system.
(4) Fixed route system.  The term "fixed route system" means a system of providing
transportation of individuals (other than by ai rcraft) on which a vehicle is operated along a
prescribed route according to a fixed schedule.
(5) Over-the-road bus.  The term "over-the-road bus" means a bus characterized by an
elevated passenger deck located over a baggage compartment.
(6) Private entity.  The term "private entity" means any entity other than a public entity (as

defined in section 12131(1) of this title).
(7) Public accommodation.  The following private entities are considered public
accommodations for purposes of this subchapter, if the operations of such entities affect

-31-commerce
(A) an inn, hotel, motel, or other place of lodging, except for an establishment located
within a building that contains not more than five rooms for rent or hire and that is actuallyoccupied by the proprietor of such establishment as the residence of such proprietor;
(B) a restaurant, bar, or other establishment serving food or drink;(C) a motion picture house, theater, concert ha ll, stadium, or other place of exhibition
entertainment;

(D) an auditorium, convention center, lecture hall, or other place of public gathering;
(E) a bakery, grocery store, clothing store, hardware store, shopping center, or other sales
or rental establishment;
(F) a laundromat, dry-cleaner, bank, barber shop,  beauty shop, travel service, shoe repair

service, funeral parlor, gas station, office of an accountant or lawyer, pharmacy, insuranceoffice, professional office of a health care provider, hospital, or other serviceestablishment;
(G) a terminal, depot, or other station used for specified public transportation;(H) a museum, library, gallery, or other place of public display or collection;(I) a park, zoo, amusement park, or other place of recreation;(J) a nursery, elementary, secondary, undergraduate, or postgraduate private school, or

other place of education;
(K) a day care center, senior citizen center, homeless shelter, food bank, adoption
agency, or other social service center establishment; and
(L) a gymnasium, health spa, bowling alley, golf course, or other place of exercise or
recreation.
(8) Rail and railroad.  The terms "rail" and "railroad" have the meaning given the term
"railroad" in section 20102[1] of title 49.
(9) Readily achievable.  The term "readily achievable" means easily accomplishable and able

to be carried out without much difficulty or expense. In determining whether an action is
readily achievable, factors to be considered include
(A) the nature and cost of the action needed under this chapter;(B) the overall financial resources of the facility or facilities involved in the action; the
number of persons employed at such facility; the effect on expenses and resources, or theimpact otherwise of such action upon the operation of the facility;

(C) the overall financial resources of the covered entity; the overall size of the business of
a covered entity with respect to the number of its employees; the number, type, andlocation of its facilities; and
(D) the type of operation or operations of t he covered entity, including the composition,
structure, and functions of the workforce of such entity; the geographic separateness,administrative or fiscal relationship of the facility or facilities in question to the covered

-32-entity.
(10) Specified public transportation.  T he term "specified public transportation" means
transportation by bus, rail, or any other conveyanc e (other than by aircraft) that provides the
general public with general or special service (including charter service) on a regular and
continuing basis.
(11) Vehicle.  The term "vehicle" does not include a rail passenger car, railroad locomotive,

railroad freight car, railroad caboose, or a railroad car described in section 12162 of this titleor covered under this subchapter.
Sec. 12182. Prohibition of discrimination by public accommodations
(a) General rule.  No individual shall be discrimi nated against on the basis of disability in the full
and equal enjoyment of the goods, services, facilities, privileges, advantages, or accommodationsof any place of public accommodation by any pers on who owns, leases (or leases to), or operates

a place of public accommodation.
(b) Construction
(1) General prohibition
(A) Activities
(i) Denial of participation.  It shall be discr iminatory to subject an individual or class of
individuals on the basis of a disability or disabilities of such individual or class,

directly, or through contractual, licensing, or other arrangements, to a denial of theopportunity of the individual or class to participate in or benefit from the goods,services, facilities, privileges, advantages, or accommodations of an entity.
(ii) Participation in unequal benefit.  It shall be discriminatory to afford an individual or
class of individuals, on the basis of a dis ability or disabilities of such individual or

class, directly, or through contractual, licensing, or other arrangements with theopportunity to participate in or benefit from a good, service, facility, privilege,advantage, or accommodation that is not equal to that afforded to other individuals.
(iii) Separate benefit.  It shall be discriminatory to provide an individual or class of
individuals, on the basis of a disability or disabilities of such individual or class,

directly, or through contractual, licensing, or other arrangements with a good, service,facility, privilege, advantage, or accommodation that is different or separate from thatprovided to other individuals, unless such ac tion is necessary to provide the individual
or class of individuals with a good, service, facility, privilege, advantage, oraccommodation, or other opportunity that is as effective as that provided to others.

(iv) Individual or class of individuals.  Fo r purposes of clauses (i) through (iii) of this
subparagraph, the term "individual or class of  individuals" refers to the clients or
customers of the covered public accommodation that enters into the contractual,licensing or other arrangement.
(B) Integrated settings.  Goods, services, facilities, privileges, advantages, and

accommodations shall be afforded to an individual with a disability in the most integratedsetting appropriate to the needs of the individual.
(C) Opportunity to participate.  Notwithst anding the existence of separate or different
programs or activities provided in accordance with this section, an individual with adisability shall not be denied the opportunity to participate in such programs or activities

-33-that are not separate or different.
(D) Administrative methods.  An individual  or entity shall not, directly or through
contractual or other arrangements, utilize standards or criteria or methods of
administration
(i) that have the effect of discriminating on the basis of disability
; or
(ii) that perpetuate the discrimination of others who are subject to common
administrative control.
(E) Association.  It shall be discriminat ory to exclude or otherwise deny equal goods,

services, facilities, privileges, advantages, accommodations, or other opportunities to anindividual or entity
 because of the known disability of an individual with whom the
individual or entity is known to have a relationship or association.
(2) Specific prohibitions
(A) Discrimination.  For purposes of subsecti on (a) of this section, discrimination includes
(i) the imposition or application of eligibility
 criteria that screen out or tend to screen

criteria that screen out or tend to screen
out an individual with a disability or any class of individuals with disabilities from fullyand equally enjoying any goods, services, facilities, privileges, advantages, oraccommodations, unless such criteria can be shown to be necessary for the provisionof the goods, services, facilities, privileges, advantages, or accommodations beingoffered;
(ii) a failure to make reasonable modifications in policies, practices, or procedures,

when such modifications are necessary
 to afford such goods, services, facilities,
privileges, advantages, or accommodations to individuals with disabilities, unless theentity can demonstrate that making such m odifications would fundamentally alter the
nature of such goods, services, facilities, privileges, advantages, or accommodations;
(iii) a failure to take such steps as may
 be necessary to ensure that no individual with

be necessary to ensure that no individual with
a disability is excluded, denied services, segregated or otherwise treated differentlythan other individuals because of the absenc e of auxiliary aids and services, unless
the entity can demonstrate that taking such steps would fundamentally alter thenature of the good, service, facility, privilege, advantage, or accommodation beingoffered or would result in an undue burden;

(iv) a failure to remove architectural barriers, and communication barriers that are
structural in nature, in existing facilities, and transportation barriers in existing vehiclesand rail passenger cars used by an establishment for transporting individuals (notincluding barriers that can only be removed th rough the retrofitting of vehicles or rail
passenger cars by the installation of a hydraulic or other lift), where such removal isreadily achievable; and

(v) where an entity can demonstrate that the removal of a barrier under clause (iv) is
not readily
 achievable, a failure to make such goods, services, facilities, privileges,
advantages, or accommodations available through alternative methods if suchmethods are readily achievable.
(B) Fixed route system
(i) Accessibility
.  It shall be considered discrimination for a private entity which
operates a fixed route system and which is not subject to section 12184 of this title to

-34-purchase or lease a vehicle with a seating capacity in excess of 16 passengers
(including the driver) for use on such system, for which a solicitation is made after the30th day following the effective date of this subparagraph, that is not readilyaccessible to and usable by individuals with disabilities, including individuals who use
(ii) Equivalent service.  If a private entity which operates a fixed route system and

which is not subject to section 12184 of this title purchases or leases a vehicle with a

seating capacity of 16 passengers or less (including the driver) for use on suchsystem after the effective date of this subparagraph that is not readily accessible to orusable by individuals with disabilities, it shall be considered discrimination for suchentity to fail to operate such system so that, when viewed in its entirety, such systemensures a level of service to individuals wit h disabilities, including individuals who use

wheelchairs, equivalent to the level of  service provided to individuals without
(C) Demand responsive system.  For purposes of subsection (a) of this section,
discrimination includes
(i) a failure of a private entity which operates a demand responsive system and which

is not subject to section 12184 of this title to operate such system so that, whenviewed in its entirety, such system ensures a level of service to individuals withdisabilities, including individuals who use wheelchairs, equivalent to the level of
service provided to individuals without disabilities; and
(ii) the purchase or lease by such entity for use on such system of a vehicle with a

seating capacity in excess of 16 passengers (including the driver), for whichsolicitations are made after the 30th day following the effective date of thissubparagraph, that is not readily accessible to and usable by individuals withdisabilities (including individuals who us e wheelchairs) unless such entity can
demonstrate that such system, when viewed in its entirety, provides a level of serviceto individuals with disabilities equivalent  to that provided to individuals without

(D) Over-the-road buses
(i) Limitation on applicability.  Subparagraphs (B) and (C) do not apply to
over-the-road buses.
(ii) Accessibility requirements.  For purposes of subsection (a) of this section,
(I) the purchase or lease of an over-the-road bus which does not comply with the
regulations issued under section 12186(a)(2) of  this title by a private entity which

provides transportation of individuals and which is not primarily engaged in thebusiness of transporting people, and
(II) any other failure of such entity to comply with such regulations.
(3) Specific construction.  Nothing in this  subchapter shall require an entity to permit an
individual to participate in or benefit from t he goods, services, facilities, privileges, advantages
and accommodations of such entity where such i ndividual poses a direct threat to the health

or safety of others. The term "direct threat" m eans a significant risk to the health or safety of
others that cannot be eliminated by a modification of policies, practices, or procedures or bythe provision of auxiliary aids or services.

-35-Sec. 12183. New construction and alterations in public accommodations and commercial facilities
(a) Application of term.  Except as provided in subsection (b) of this section, as applied to public
accommodations and commercial facilities, discrimination for purposes of section 12182(a) of thistitle includes
(1) a failure to design and construct facilities for first occupancy later than 30 months after July

26, 1990, that are readily accessible to and usable by individuals with disabilities, exceptwhere an entity can demonstrate that it is struct urally impracticable to meet the requirements
of such subsection in accordance with standards set forth or incorporated by reference inregulations issued under this subchapter; and
(2) with respect to a facility or part thereof that is altered by, on behalf of, or for the use of an

establishment in a manner that affects or could affect the usability of the facility or partthereof, a failure to make alterations in such a manner that, to the maximum extent feasible,the altered portions of the facility are readily accessible to and usable by individuals withdisabilities, including individuals who use w heelchairs. Where the entity is undertaking an

alteration that affects or could affect usability of or access to an area of the facility containinga primary function, the entity shall also make the alterations in such a manner that, to themaximum extent feasible, the path of travel to the altered area and the bathrooms,telephones, and drinking fountains serving the al tered area, are readily accessible to and
usable by individuals with disabilities where such  alterations to the path of travel or the

bathrooms, telephones, and drinking fountains serving the altered area are notdisproportionate to the overall alterations in terms of cost and scope (as determined undercriteria established by the Attorney General).
(b) Elevator.  Subsection (a) of this section sha ll not be construed to require the installation of an

elevator for facilities that are less than three stories or have less than 3,000 square feet per storyunless the building is a shopping center, a shopping mall, or the professional office of a health
care provider or unless the Attorney General determines that a particular category of suchfacilities requires the installation of elevators based on the usage of such facilities.
Sec. 12184. Prohibition of discrimination in specifi ed public transportation services provided by private
entities

entities
and equal enjoyment of specified public transportation services provided by a private entity that is
primarily engaged in the business of transporting people and whose operations affect commerce.
(b) Construction.  For purposes of subsection (a) of this section, discrimination includes
(1) the imposition or application by an entity described in subsection (a) of eligibility criteria

that screen out or tend to screen out an individual with a disability or any class of individuals
with disabilities from fully enjoying the specifi ed public transportation services provided by the
entity, unless such criteria can be shown to be necessary for the provision of the servicesbeing offered;
(2) the failure of such entity to
(A) make reasonable modifications consis tent with those required under section
12182(b)(2)(A)(ii) of this title;

(B) provide auxiliary aids and services consistent with the requirements of section
12182(b)(2)(A)(iii) of this title; and
(C) remove barriers consistent with the require ments of section 12182(b)(2)(A) of this title

-36-and with the requirements of section 12183(a)(2) of this title;
(3) the purchase or lease by such entity of a new vehicle (other than an automobile, a van

with a seating capacity of less than 8 passengers, including the driver, or an over- the-roadbus) which is to be used to provide specified public transportation and for which a solicitationis made after the 30th day following the effective date of this section, that is not readilyaccessible to and usable by individuals with disabilities, including individuals who use
wheelchairs; except that the new vehicle need not be readily accessible to and usable by such

individuals if the new vehicle is to be used so lely in a demand responsive system and if the
entity can demonstrate that such system, when viewed in its entirety, provides a level ofservice to such individuals equivalent to the level of service provided to the general public;
(4) (A) the purchase or lease by such entity of an over-the-road bus which does not comply
with the regulations issued under section 12186(a)(2) of this title; and

(B) any other failure of such entity to comply with such regulations; and
(5) the purchase or lease by such entity of a new van with a seating capacity of less than 8
passengers, including the driver, which is to be used to provide specified public transportation

and for which a solicitation is made after the 30th day following the effective date of thissection that is not readily accessible to or usable by individuals with disabilities, includingindividuals who use wheelchairs; except that  the new van need not be readily accessible to
and usable by such individuals if the entity can demonstrate that the system for which the van

is being purchased or leased, when viewed in its entirety, provides a level of service to suchindividuals equivalent to the level of service provided to the general public;
(6) the purchase or lease by such entity of a new rail passenger car that is to be used to

provide specified public transportation, and for which a solicitation is made later than 30 daysafter the effective date of this paragraph, that is not readily accessible to and usable byindividuals with disabilities, includi ng individuals who use wheelchairs; and
(7) the remanufacture by such entity of a rail passenger car that is to be used to provide

specified public transportation so as to extend its usable life for 10 years or more, or thepurchase or lease by such entity of such a rail car, unless the rail car, to the maximum extentfeasible, is made readily accessible to and usable by individuals with disabilities, includingindividuals who use wheelchairs.
(c) Historical or antiquated cars
(1) Exception.  To the extent that compliance with subsection (a)(2)© or (a)(7)of this section

would significantly alter the historic or anti quated character of a historical or antiquated rail
passenger car, or a rail station served exclusively by such cars, or would result in violation of
any rule, regulation, standard, or order issued by the Secretary of Transportation under theFederal Railroad Safety Act of 1970, such compliance shall not be required.
(2) Definition.  As used in this subsection, the term "historical or antiquated rail passenger car"
means a rail passenger car

(A) which is not less than 30 years old at t he time of its use for transporting individuals;
(B) the manufacturer of which is no longer in the business of manufacturing rail passenger
cars; and
(C) which
(i) has a consequential association with events or persons significant to the past; or

-37-(ii) embodies, or is being restored to embody, the distinctive characteristics of a type
of rail passenger car used in the past, or to represent a time period which has passed.
Sec. 12185. Study
(a) Purposes.  The Office of Technology Assessment shall undertake a study to determine
(1) the access needs of individuals with disabilities to over-the-road buses and over-the- road
bus service; and
(2) the most cost-effective methods for providing access to over-the-road buses and

over-the-road bus service to individuals with di sabilities, particularly individuals who use
wheelchairs, through all forms of boarding options.
(b) Contents.  The study shall include, at a minimum, an analysis of the following:
(1) The anticipated demand by individuals with di sabilities for accessible over-the-road buses
and over-the-road bus service.
(2) The degree to which such buses and service, including any service required under

sections 12184(a)(4) and 12186(a)(2) of this title, are readily accessible to and usable byindividuals with disabilities.
(3) The effectiveness of various methods of providing accessibility to such buses and service
to individuals with disabilities.
(4) The cost of providing accessible over-t he-road buses and bus service to individuals with
disabilities, including consideration of rec ent technological and cost saving developments in
equipment and devices.

(5) Possible design changes in over-the-road buses that could enhance accessibility,
including the installation of accessible restrooms which do not result in a loss of seatingcapacity.
(6) The impact of accessibility requirements on the continuation of over-the-road bus service,
with particular consideration of the impact of such requirements on such service to ruralcommunities.

(c) Advisory committee.  In conducting the study r equired by subsection (a) of this section, the
Office of Technology Assessment shall establis h an advisory committee, which shall consist of
(1) members selected from among private operators and manufacturers of over-the-road
buses;
(2) members selected from among individuals with disabilities, particularly individuals who use
wheelchairs, who are potential riders of such buses; and

(3) members selected for their technical expertise on issues included in the study, including
manufacturers of boarding assistance equipment and devices.
The number of members selected under each of paragraphs (1) and (2) shall be equal, and
the total number of members selected under paragraphs (1) and (2) shall exceed the numberof members selected under paragraph (3).
(d) Deadline.  The study required by subsecti on (a) of this section, along with recommendations

by the Office of Technology Assessment, including any  policy options for legislative action, shall

-38-be submitted to the President and Congress within 36 months after July 26, 1990. If the President
determines that compliance with the regulations issued pursuant to section 12186(a)(2)(B) of this
title on or before the applicable deadlines specified in section 12186(a)(2)(B) of this title will result
in a significant reduction in intercity over-the -road bus service, the President shall extend each
such deadline by 1 year.

(e) Review.  In developing the study required by subsection (a) of this section, the Office of
Technology Assessment shall provide a preliminary draft of such study to the Architectural and
Transportation Barriers Compliance Board established under section 792 of title 29. The Boardshall have an opportunity to comment on such dr aft study, and any such comments by the Board

made in writing within 120 days after the Board's receipt of the draft study shall be incorporated aspart of the final study required to be subm itted under subsection (d) of this section.
Sec. 12186. Regulations
(a)Transportation provisions
(1)General rule.  Not later than 1 year after July 26, 1990, the Secretary of Transportation  
shall issue regulations in an accessible format to carry out sections12182 (b)(2)(B) and (C) of

this title and to carry out section 12184 of this title (other than subsection (a)(4)).
(2)Special rules for providing access to over-the-road buses
(A)Interim requirements
(i)Issuance.  Not later than 1 year after July 26, 1990, the Secretary of Transportation  
shall issue regulations in an accessible format to carry out sections 12184(b)(4) and  
12182(b)(2)(D)(ii) of this title that require each private entity which us es an

over-the-road bus to provide transportation of individuals to provide acces sibility  to 
such bus; except that such regulations shall not require any s tructural c hanges in  
over-the-road buses in order to provide access to indiv iduals who use wheelchairs  
during the effective period of such regulations and shall not require the purchase of  
boarding as sistance dev ices to provide access to such individuals.

(ii)Effective period.  The regulations iss ued pursuant to this s ubparagraph shall be  
effective until the effective date of the regulations issued under subparagraph (a).
(B)Final requirement
(i)Review of study and interim requirements.  The Secretary shall review the study  
submitted under s ection 12185 of this title and the regulations  issued pursuant to  
subparagraph (A).
(ii)Issuance.  Not later than 1 year after the date of the submission of the study under

section 12185 of this title, the Secretary shall issue in an accessible format new  
regulations to c arry out sections 12184(b)(4) and 12182(b)(2)(D)(ii) of this title that  
require, taking into account the purposes of the study under section 12185 of this title  
and any  recommendations resulting from such study, each private entity which uses  
an over-the-road bus to provide transportation to individuals to provide accessibility  to

such bus to individuals with disabilities, including individuals who use wheelc hairs.
(iii) Effective period.  Subject to section 12185(d) of this title, the regulations issued  
pursuant to this subparagraph shall tak e effect
(I)with respect to small providers of transportation (as  defined by the Secretary),  
3 years  after the date of is suance of final regulations  under clause (ii); and

-39-(II) with respect to other providers of transportation, 2 years after the date of
issuance of such final regulations.
(C) Limitation on requiring installation of acce ssible restrooms.  The regulations issued
pursuant to this paragraph shall not require the installation of accessible restrooms inover-the-road buses if such installation would result in a loss of seating capacity.
(3) Standards.  The regulations issued pursuant  to this subsection shall include standards

applicable to facilities and vehicles covered by sections 12182(b) (2) and 12184 of this title.
(b) Other provisions.  Not later than 1 year afte r July 26, 1990, the Attorney General shall issue
regulations in an accessible format to carry out the provisions of this subchapter not referred to in
subsection (a) of this section that include standar ds applicable to facilities and vehicles covered
under section 12182 of this title.

(c) Consistency with ATBCB guidelines.  Standards included in regulations issued under
subsections (a) and (b) of this section sha ll be consistent with the minimum guidelines and
requirements issued by the Architectural and Transportation Barriers Compliance Board inaccordance with section 12204 of this title.
(d) Interim accessibility standards
(1) Facilities.  If final regulations have not  been issued pursuant to this section, for new

construction or alterations for which a valid and appropriate State or local building permit isobtained prior to the issuance of final regulat ions under this section, and for which the
construction or alteration authorized by such permit begins within one year of the receipt of

such permit and is completed under the terms of such permit, compliance with the UniformFederal Accessibility Standards in effect at the time the building permit is issued shall sufficeto satisfy the requirement that facilities be readily accessible to and usable by persons withdisabilities as required under section 12183 of this title, except that, if such final regulations

have not been issued one year after the Architectural and Transportation Barriers ComplianceBoard has issued the supplemental minimum guidelines required under section 12204(a) of
this title, compliance with such supplemental mi nimum guidelines shall be necessary to satisfy
the requirement that facilities be readily accessible to and usable by persons with disabilitiesprior to issuance of the final regulations.

(2) Vehicles and rail passenger cars.  If final regulations have not been issued pursuant to this
section, a private entity shall be considered to have complied with the requirements of thissubchapter, if any, that a vehicle or rail passenger car be readily accessible to and usable byindividuals with disabilities, if the design for such vehicle or car complies with the laws andregulations (including the Minimum Guideli nes and Requirements for Accessible Design and

such supplemental minimum guidelines as ar e issued under section 12204(a) of this title)
governing accessibility of such vehicles or cars, to the extent that such laws and regulationsare not inconsistent with this subchapter and are in effect at the time such design issubstantially completed.
Sec. 12187. Exemptions for private clubs and religious organizationsThe provisions of this subchapter shall not apply to private clubs or establishments exempted from

coverage under title II of the Civil Rights Act of 1964 (42 U.S.C. 2000-a(e)) or to religiousorganizations or entities controlled by religi ous organizations, including places of worship.
Sec. 12188. Enforcement
(a) In general

-40-(1) Availability of remedies and procedures.  The remedies and procedures set forth in section
2000a-3(a) of this title are the remedies and procedures this subchapter provides to any
person who is being subjected to discrimination on the basis of disability in violation of this
subchapter or who has reasonable grounds for believing that such person is about to besubjected to discrimination in violation of sect ion 12183 of this title. Nothing in this section

shall require a person with a disability to engage in a futile gesture if such person has actualnotice that a person or organization covered by this subchapter does not intend to comply withits provisions.
(2) Injunctive relief.  In the case of violations of sections 12182(b)(2)(A)(iv) and Section

12183(a) of this title, injunctive relief shall include an order to alter facilities to make suchfacilities readily accessible to and usable by individuals with disabilities to the extent requiredby this subchapter. Where appropriate, injunctive relief shall also include requiring theprovision of an auxiliary aid or service, modifica tion of a policy, or provision of alternative
methods, to the extent required by this subchapter.
(b) Enforcement by Attorney General
(1) Denial of rights

(A) Duty to investigate
(i) In general.  The Attorney General sha ll investigate alleged violations of this
subchapter, and shall undertake periodic reviews of compliance of covered entitiesunder this subchapter.
(ii) Attorney General certification.  On the application of a State or local government,

the Attorney General may, in consultation with the Architectural and TransportationBarriers Compliance Board, and after prior notice and a public hearing at whichpersons, including individuals with disabilitie s, are provided an opportunity to testify

against such certification, certify that a State law or local building code or similarordinance that establishes accessibility requirements meets or exceeds the minimumrequirements of this chapter for the accessibility and usability of covered facilitiesunder this subchapter. At any enforcement proceeding under this section, suchcertification by the Attorney General sha ll be rebuttable evidence that such State law
or local ordinance does meet or exceed the minimum requirements of this chapter.

(B) Potential violation.  If the Attorney General has reasonable cause to believe that
(i) any person or group of persons is engaged in a pattern or practice of discrimination
under this subchapter; or
(ii) any person or group of persons has been discriminated against under this
subchapter and such discrimination raises an issue of general public importance, 
the Attorney General may commence a civil action in any appropriate United States
district court.

(2) Authority of court.  In a civil action under paragraph (1) (B), the court
(A) may grant any equitable relief that such court considers to be appropriate, including, to
the extent required by this subchapter
(i) granting temporary, preliminary, or permanent relief;(ii) providing an auxiliary aid or service, modification of policy, practice, or procedure,

-41-or alternative method; and
(iii) making facilities readily accessible to and usable by individuals with disabilities;
(B) may award such other relief as the court considers to be appropriate, including
monetary damages to persons aggrieved when requested by the Attorney General; and
(C) may, to vindicate the public interest, assess a civil penalty against the entity in an
amount
(i) not exceeding $50,000 for a first violation; and(ii) not exceeding $100,000 for any subsequent violation.

(3) Single violation.  For purposes of paragr aph (2) (C), in determining whether a first or
subsequent violation has occurred, a determi nation in a single action, by judgment or
settlement, that the covered entity has engaged in more than one discriminatory act shall becounted as a single violation.
(4) Punitive damages.  For purposes of subsec tion (b) (2) (B) of this section, the term
"monetary damages" and "such other relief" does not include punitive damages.

(5) Judicial consideration.  In a civ il action under paragraph (1)(B), the court, when
considering what amount of civil penalty, if any, is appropriate, shall give consideration to any

good faith effort or attempt to comply with this chapter by the entity. In evaluating good faith,the court shall consider, among other factors it deems relevant, whether the entity could havereasonably anticipated the need for an appropriate type of auxiliary aid needed toaccommodate the unique needs of a particular individual with a disability.
Sec. 12189. Examinations and coursesAny person that offers examinations or courses re lated to applications, licensing, certification, or

credentialing for secondary or postsecondary education,  professional, or trade purposes shall offer
such examinations or courses in a place and manner accessible to persons with disabilities or offeralternative accessible arrangements for such individuals.
SUBCHAPTER IV - MISCELLANEOUS PROVISIONS
Sec. 12201. Construction
(a) In general.  Except as otherwise provided in this chapter, nothing in this chapter shall be

construed to apply a lesser standard than the standards applied under title V of the RehabilitationAct of 1973 (29 U.S.C. 790 et seq.) or the regulations issued by Federal agencies pursuant tosuch title.
(b) Relationship to other laws.  Nothing in this chapter shall be construed to invalidate or limit the
remedies, rights, and procedures of any Federal law or law of any State or political subdivision of

any State or jurisdiction that provides greater or equal protection for the rights of individuals with
disabilities than are afforded by this chapter. Nothing in this chapter shall be construed to precludethe prohibition of, or the imposition of restrictions  on, smoking in places of employment covered by
subchapter I of this chapter, in transportation covered by subchapter II or III of this chapter, or inplaces of public accommodation covered by subchapter III of this chapter.

(c) Insurance.  Subchapters I through III of this chapter and title IV of this Act shall not be
construed to prohibit or restrict

-42-(1) an insurer, hospital or medical service company, health maintenance organization, or any
agent, or entity that administers benefit plans, or similar organizations from underwriting risks,classifying risks, or administering such risks that are based on or not inconsistent with Statelaw; or
(2) a person or organization covered by this c hapter from establishing, sponsoring, observing

or administering the terms of a bona fide benefit plan that are based on underwriting risks,classifying risks, or administering such risks that are based on or not inconsistent with Statelaw; or
(3) a person or organization covered by this c hapter from establishing, sponsoring, observing
or administering the terms of a bona fide benefit plan that is not subject to State laws thatregulate insurance.
Paragraphs (1), (2), and (3) shall not be used as a subterfuge to evade the purposes of

subchapter I and III of this chapter.
(d) Accommodations and services.  Nothing in this chapter shall be construed to require an
individual with a disability to accept an accommodat ion, aid, service, opportunity, or benefit which
such individual chooses not to accept.
(e) Benefits under State worker’s compensation laws.  Nothing in this chapter alters the standards

for determining eligibility for benefits under State worker’s compensation laws or under State andFederal disability benefit programs.
(f) Fundamental alteration.  Nothing in this chapter alters the provision of section
12182(b)(2)(A)(ii), specifying that reasonable modifica tions in policies, practices, or procedures

shall be required, unless an entity can demonstrate that making such modifications in policies,practices, or procedures, including academic requirements in postsecondary education, would
fundamentally alter the nature of the goods, services, facilities, privileges, advantages, oraccommodations involved.
(g) Claims of no disability.  Nothing in this chapter shall provide the basis for a claim by an
individual without a disability that the individual  was subject to discrimination because of the

individual’s lack of disability.
(h) Reasonable accommodations and modifications.  A covered entity under subchapter I, a public
entity under subchapter II, and any person who owns, l eases (or leases to), or operates a place of
public accommodation under subchapter III, need not provide a reasonable accommodation or areasonable modification to policies, practices, or procedures to an individual who meets the

definition of disability in section 12102(1) solely under subparagraph (C) of such section.
 
Sec. 12202. State immunity
A State shall not be immune under the eleventh amendment to the Constitution of the United States
from an action in Federal or State court of competent  jurisdiction for a violation of this chapter. In any
action against a State for a violation of the requirem ents of this chapter, remedies (including remedies

both at law and in equity) are available for such a viol ation to the same extent as such remedies are
available for such a violation in an action agains t any public or private entity other than a State.
Sec. 12203. Prohibition against retaliation and coercion
(a) Retaliation.  No person shall discriminate against any individual because such individual has
opposed any act or practice made unlawful by th is chapter or because such individual made a

charge, testified, assisted, or participated in  any manner in an investigation, proceeding, or
hearing under this chapter.

-43-(b) Interference, coercion, or intimidation.  It s hall be unlawful to coerce, intimidate, threaten, or
interfere with any individual in the exercise or enjoyment of, or on account of his or her havingexercised or enjoyed, or on account of his or  her having aided or encouraged any other individual
in the exercise or enjoyment of, any right granted or protected by this chapter.
(c) Remedies and procedures.  The remedies  and procedures available under sections 12117,

12133, and 12188 of this title shall be available to aggrieved persons for violations of subsections
(a) and (b) of this section, with respect to subchapter I, subchapter II and subchapter III of thischapter, respectively.
Sec. 12204. Regulations by Architectural and Transportation Barriers Compliance Board
(a) Issuance of guidelines.  Not later than 9 months after July 26, 1990, the Architectural and
Transportation Barriers Compliance Board shall i ssue minimum guidelines that shall supplement

the existing Minimum Guidelines and Require ments for Accessible Design for purposes of
subchapters II and III of this chapter.
(b) Contents of guidelines.  The supplemental guidelines issued under subsection (a) of this
section shall establish additional requirements, consistent with this chapter, to ensure that
buildings, facilities, rail passenger cars, and vehicles are accessible, in terms of architecture anddesign, transportation, and communication, to individuals with disabilities.

(c) Qualified historic properties 
(1) In general.  The supplemental guidelines iss ued under subsection (a) of this section shall
include procedures and requirements for alterations that will threaten or destroy the historicsignificance of qualified historic buildings and fac ilities as defined in 4.1.7(1)(a) of the Uniform
Federal Accessibility Standards.
(2) Sites eligible for listing in National Register.  With respect to alterations of buildings or

facilities that are eligible for listing in the National Register of Historic Places under theNational Historic Preservation Act (16 U.S.C. 470 et seq.), the guidelines described inparagraph (1) shall, at a minimum, maintain the procedures and requirements established in4.1.7(1) and (2) of the Uniform Federal Accessibility Standards.
(3) Other sites.  With respect to alterations of buildings or facilities designated as historic

under State or local law, the guidelines described in paragraph (1) shall establish proceduresequivalent to those established by 4.1.7(1)(b) and (c) of the Uniform Federal AccessibilityStandards, and shall require, at a minimum, compliance with the requirements established in4.1.7(2) of such standards.
Sec. 12205. Attorney's feesIn any action or administrative proceeding commenc ed pursuant to this chapter, the court or agency,

in its discretion, may allow the prevailing party, other than the United States, a reasonable attorney'sfee, including litigation expenses, and costs, and the United States shall be liable for the foregoing the
same as a private individual.
Sec. 12205a. Rule of Construction Regarding Regulatory AuthorityThe authority to issue regulations granted to t he Equal Employment Opportunity Commission, the

Attorney General, and the Secretary of Transporta tion under this chapter includes the authority to
issue regulations implementing the definitions of disability in section 12102 (including rules of
construction) and the definitions in section 12103, consistent with the ADA Amendments Act of 2008.
Sec. 12206. Technical assistance

-44-(a) Plan for assistance
(1) In general.  Not later than 180 days after July 26, 1990, the Attorney General, in
consultation with the Chair of the Equal Empl oyment Opportunity Commission, the Secretary
of Transportation, the Chair of the Architectural and Transportation Barriers ComplianceBoard, and the Chairman of the Federal Comm unications Commission, shall develop a plan to

assist entities covered under this chapter, and other Federal agencies, in understanding theresponsibility of such entities and agencies under this chapter.
(2) Publication of plan.  The Attorney Gener al shall publish the plan referred to in paragraph
(1) for public comment in accordance with subchapter II of chapter 5 of title 5 (commonlyknown as the Administrative Procedure Act).
(b) Agency and public assistance.  The Attorney  General may obtain the assistance of other

Federal agencies in carrying out subsection (a) of  this section, including the National Council on
Disability, the President's Committee on Employment of People with Disabilities, the SmallBusiness Administration, and the Department of Commerce.
(c) Implementation
(1) Rendering assistance.  Each Federal agency that has responsibility under paragraph (2)
for implementing this chapter may render tec hnical assistance to individuals and institutions

that have rights or duties under the respective subchapter or subchapters of this chapter forwhich such agency has responsibility.
(2) Implementation of subchapters
(A) Subchapter I.  The Equal Employment  Opportunity Commission and the Attorney
General shall implement the plan for assi stance developed under subsection (a) of this
section, for subchapter I of this chapter.
(B) Subchapter II
(i) Part A.  The Attorney General shall implement such plan for assistance for part A

of subchapter II of this chapter.
(ii) Part B.  The Secretary of Transportation shall implement such plan for assistance
for part B of subchapter II of this chapter.
(C) Subchapter III.  The Attorney General , in coordination with the Secretary of

Transportation and the Chair of the Architectural Transportation Barriers ComplianceBoard, shall implement such plan for assistance for subchapter III of this chapter, exceptfor section 12184 of this title, the plan for assistance for which shall be implemented bythe Secretary of Transportation.
(D) Title IV.  The Chairman of the Federal  Communications Commission, in coordination
with the Attorney General, shall implement such plan for assistance for title IV.

(3) Technical assistance manuals.  Each Federal agency that has responsibility under
paragraph (2) for implementing this chapter shall, as part of its implementationresponsibilities, ensure the availability and provision of appropriate technical assistancemanuals to individuals or entities with rights or duties under this chapter no later than sixmonths after applicable final regulations are published under subchapters I, II, and III of thischapter and title IV.
(d) Grants and contracts

-45-(1) In general.  Each Federal agency that has responsibility under subsection (2) of this
section for implementing this chapter may make grants or award contracts to effectuate thepurposes of this section, subject to the availability of appropriations. Such grants andcontracts may be awarded to individuals, institut ions not organized for profit and no part of the
net earnings of which inures to the benefit of any private shareholder or individual (including

educational institutions), and associations r epresenting individuals who have rights or duties
under this chapter. Contracts may be awarded to entities organized for profit, but such entitiesmay not be the recipients or grants described in this paragraph.
(2) Dissemination of information.  Such grants and contracts, among other uses, may be
designed to ensure wide dissemination of info rmation about the rights and duties established

by this chapter and to provide information and technical assistance about techniques foreffective compliance with this chapter.
(e) Failure to receive assistance.  An employer, public accommodation, or other entity covered
under this chapter shall not be excused from compliance with the requirements of this chapterbecause of any failure to receive technical assi stance under this section, including any failure in

the development or dissemination of any technica l assistance manual authorized by this section.
Sec. 12207. Federal wilderness areas
(a) Study.  The National Council on Disability shall conduct a study and report on the effect that
wilderness designations and wilderness land management practices have on the ability ofindividuals with disabilities to use and enjoy t he National Wilderness Preservation System as
established under the Wilderness Act (16 U.S.C. 1131 et seq.).

(b) Submission of report.  Not later than 1 year after July 26, 1990, the National Council on
Disability shall submit the report required under subsection (a) of this section to Congress.
(c) Specific wilderness access
(1) In general.  Congress reaffirms that nothing in the Wilderness Act (16 U.S.C. 1131 et seq.)
is to be construed as prohibiting the use of a wheelchair in a wilderness area by an individual

whose disability requires use of a wheelchai r, and consistent with the Wilderness Act no
agency is required to provide any form of special treatment or accommodation, or to construct
any facilities or modify any conditions of lands within a wilderness area in order to facilitatesuch use.
(2) "Wheelchair" defined.  For purposes of paragraph (1), the term "wheelchair" means a

device designed solely for use by a mobility-impaired person for locomotion, that is suitablefor use in an indoor pedestrian area.
Sec. 12208. TransvestitesFor the purposes of this chapter, the term "disabl ed" or "disability" shall not apply to an individual
solely because that individual is a transvestite.
Sec. 12209. Instrumentalities of CongressThe General Accounting Office, the Government Pr inting Office, and the Library of Congress shall be
covered as follows:

(1) In general.  The rights and protections under this chapter shall, subject to paragraph (2),
apply with respect to the conduct of each instrumentality of the Congress.
(2) Establishment of remedies and procedures by instrumentalities.  The chief official of each

-46-instrumentality of the Congress shall establish remedies and procedures to be utilized with
respect to the rights and protections provided pursuant to paragraph (1).
(3) Report to Congress.  The chief official of each instrumentality of the Congress shall, after
establishing remedies and procedures for purposes  of paragraph (2), submit to the Congress
a report describing the remedies and procedures.

(4) Definition of instrumentalities.  For purposes of this section, the term "instrumentality of the
Congress" means the following: the General Accounting Office, the Government PrintingOffice, and the Library of Congress.
(5) Enforcement of employment rights.  The remedies and procedures set forth in section
2000e -16 of this title shall be available to any employee of an instrumentality of the Congress

who alleges a violation of the rights and protections under sections 12112 through 12114 of
this title that are made applicable by this section, except that the authorities of the EqualEmployment Opportunity Commission shall be ex ercised by the chief official of the
instrumentality of the Congress.
(6) Enforcement of rights to public services and accommodations.  The remedies and

procedures set forth in section 2000e -16 of this title shall be available to any qualified personwith a disability who is a visitor, guest, or patron of an instrumentality of Congress and whoalleges a violation of the rights and prot ections under sections 12131 through 12150 of this
title or section 12182 or 12183 of this title that are made applicable by this section, except that
the authorities of the Equal Employment Oppor tunity Commission shall be exercised by the

chief official of the instrumentality of the Congress.
(7) Construction.  Nothing in this section sha ll alter the enforcement procedures for individuals
with disabilities provided in the General Accounting Office Personnel Act of 1980 andregulations promulgated pursuant to that Act.
Sec. 12210. Illegal use of drugs
(a) In general.  For purposes of this chapter, t he term "individual with a disability" does not include

an individual who is currently engaging in the illegal  use of drugs, when the covered entity acts on
the basis of such use.
(b) Rules of construction.  Nothing in subsection (a) of this section shall be construed to exclude
as an individual with a disability an individual who

use; or

use of drugs; however, nothing in this section shall be construed to encourage, prohibit,restrict, or authorize the conducting of testing for the illegal use of drugs.
(c) Health and other services.  Notwithstanding subsection (a) of this section and section
12211(b)(3) of this subchapter, an individual s hall not be denied health services, or services

-47-provided in connection with drug rehabilitation, on the bas is of the current illegal use of drugs if the
individual is otherwise entitled to such services.
(d) "Illegal use of drugs" defined
(1) In general.  The term "illegal use of drugs" means the use of drugs, the possession or
distribution of which is unlawful under the Cont rolled Substances Act (21 U.S.C. 801 et seq.).

Such term does not include the use of a drug taken under supervision by a licensed healthcare professional, or other uses authorized by the Controlled Substances Act or other
provisions of Federal law.
(2) Drugs.  The term "drug" means a controll ed substance, as defined in schedules I through
V of section 202 of the Controlled Substances Act (21 U.S.C. 812).
Sec. 12211. Definitions
(a) Homosexuality and bisexuality.  For purposes of the definition of "disability" in section 12102(2)

of this title, homosexuality and bisexuality are not impairments and as such are not disabilitiesunder this chapter.
(b) Certain conditions.  Under this chapter, the term "disability" shall not include
(1) transvestism, transsexualism, pedophilia, exhibitionism, voyeurism, gender identity
disorders not resulting from physical impairments, or other sexual behavior disorders;

(2) compulsive gambling, kleptomania, or pyromania; or(3) psychoactive substance use disorders resulting from current illegal use of drugs.
Sec. 12212. Alternative means of dispute resolutionWhere appropriate and to the extent authorized by la w, the use of alternative means of dispute
resolution, including settlement negotiations, conciliation, facilitation, mediation, fact-finding, minitrials,
and arbitration, is encouraged to resolve disputes arising under this chapter.

Sec. 12213. SeverabilityShould any provision in this chapter be found to be unc onstitutional by a court of law, such provision
shall be severed from the remainder of the chapter, and such action shall not affect the enforceabilityof the remaining provisions of the chapter.
TITLE 47 - TELEGRAPHS, TELEPHONES, AND RADIOTELEGRAPHS
CHAPTER 5 - WIRE OR RADIO COMMUNICATIONSUBCHAPTER II - COMMON CARRIERSPart I - Common Carrier Regulation

Sec. 225. Telecommunications services for hearing-impaired and speech-impaired individuals
(a) Definitions.  As used in this section
(1) Common carrier or carrier.  The term "common carrier" or "carrier" includes any common
carrier engaged in interstate communication by wire or radio as defined in section 153 of this

-48-title and any common carrier engaged in intrastate communication by wire or radio,
notwithstanding sections 152(a) and 221(a) of this title.
(2) TDD.  The term "TDD" means a Telecommunications Device for the Deaf which is a
machine that employs graphic communication in the transmission of coded signals through a
wire or radio communication system.
(3) Telecommunications relay services.  The term "telecommunications relay services" means

telephone transmission services that provide t he ability for an individual who has a hearing
impairment or speech impairment to engage in communication by wire or radio with a hearingindividual in a manner that is functionally equiva lent to the ability of an individual who does not
have a hearing impairment or speech impairment to communicate using voice communication

services by wire or radio. Such term includes services that enable two-way communicationbetween an individual who uses a TDD or ot her nonvoice terminal device and an individual
who does not use such a device.
(b) Availability of telecommunications relay services
(1) In general.  In order to carry out the purposes established under section 151 of this title, to

make available to all individuals in the United States a rapid, efficient nationwidecommunication service, and to increase the utility of the telephone system of the Nation, theCommission shall ensure that interstate and intrastate telecommunications relay services areavailable, to the extent possible and in t he most efficient manner, to hearing-impaired and
speech-impaired individuals in the United States.

(2) Use of general authority and remedies.  For the purposes of administering and enforcing
the provisions of this section and the regul ations prescribed thereunder, the Commission shall

have the same authority, power, and functions with respect to common carriers engaged inintrastate communication as the Commission has in administering and enforcing theprovisions of this subchapter with respect to any common carrier engaged in interstatecommunication. Any violation of this section by any common carrier engaged in intrastatecommunication shall be subject to the same  remedies, penalties, and procedures as are

applicable to a violation of this chapter by a common carrier engaged in interstatecommunication.
(c) Provision of services.  Each common carri er providing telephone voice transmission services
shall, not later than 3 years after July 26, 1990, provide in compliance with the regulationsprescribed under this section, throughout the area in which it offers service, telecommunicationsrelay services, individually, through designees, through a competitively selected vendor, or in

concert with other carriers. A common carrier shall be considered to be in compliance with suchregulations
(1) with respect to intrastate telecommunications relay services in any State that does not
have a certified program under subsection (f) of this section and with respect to interstatetelecommunications relay services, if such common carrier (or other entity through which thecarrier is providing such relay services) is  in compliance with the Commission's regulations

under subsection (d) of this section; or
(2) with respect to intrastate telecommunications relay services in any State that has a
certified program under subsection (f) of this section for such State, if such common carrier (orother entity through which the carrier is providing such relay services) is in compliance withthe program certified under subsection (f) of this section for such State.
(d) Regulations

(1) In general.  The Commission shall, not later than 1 year after July 26, 1990, prescribe

-49-regulations to implement this section, including regulations that
(A) establish functional requirements, guidelines, and operations procedures for
telecommunications relay services;
(B) establish minimum standards that shall be met in carrying out subsection (c) of this
section;
(C) require that telecommunications relay services operate every day for 24 hours per
day;
(D) require that users of telecommunications relay services pay rates no greater than the

rates paid for functionally equivalent voice communication services with respect to suchfactors as the duration of the call, the time of day, and the distance from point oforigination to point of termination;
(E) prohibit relay operators from failing to fulfill the obligations of common carriers by
refusing calls or limiting the length of calls that use telecommunications relay services;
(F) prohibit relay operators from disclosing the content of any relayed conversation and

from keeping records of the content of any such conversation beyond the duration of thecall; and
(G) prohibit relay operators from intentionally altering a relayed conversation.
(2) Technology.  The Commission shall ensure that  regulations prescribed to implement this
section encourage, consistent with section 157(a) of this title, the use of existing technology
and do not discourage or impair the development of improved technology.
(3) Jurisdictional separation of costs

(A) In general.  Consistent with the provisions  of section 410 of this title, the Commission
shall prescribe regulations governing the jurisd ictional separation of costs for the services
provided pursuant to this section.
(B) Recovering costs.  Such regulations shall generally provide that costs caused by

interstate telecommunications relay services shall be recovered from all subscribers forevery interstate service and costs caused by intrastate telecommunications relay servicesshall be recovered from the intrastate jurisdiction. In a State that has a certified programunder subsection (f) of this section, a State commission shall permit a common carrier torecover the costs incurred in providing intrastate telecommunications relay services by amethod consistent with the requirements of this

(e) Enforcement
(1) In general.  Subject to subsections (f) and (g ) of this section, the Commission shall enforce
(2) Complaint.  The Commission shall resolve, by  final order, a complaint alleging a violation
of this section within 180 days after the date such complaint is filed.
(f) Certification
(1) State documentation.  Any State desiring to establish a State program under this section

shall submit documentation to the Commission that describes the program of such State forimplementing intrastate telecommunications relay services and the procedures and remedies

-50-available for enforcing any requirements imposed by the State program.
(2) Requirements for certification.  After revi ew of such documentation, the Commission shall
certify the State program if the Commission determines that
(A) the program makes available to hear ing-impaired and speech-impaired individuals,

either directly, through designees, through a competitively selected vendor, or throughregulation of intrastate common carriers, intrastate telecommunications relay services insuch State in a manner that meets or exceeds the requirements of regulations prescribedby the Commission under subsection (d) of this section; and
(B) the program makes available adequate procedures and remedies for enforcing the
requirements of the State program.

(3) Method of funding.  Except as provided in subsection (d) of this section, the Commission
shall not refuse to certify a State program based solely on the method such State willimplement for funding intrastate telecommunication relay services.
(4) Suspension or revocation of certification.  The Commission may suspend or revoke such
certification if, after notice and opportunity fo r hearing, the Commission determines that such

certification is no longer warranted. In a State whose program has been suspended orrevoked, the Commission shall take such steps as may be necessary, consistent with thissection, to ensure continuity of telecommunications relay services.
(g) Complaint
(1) Referral of complaint.  If a complaint to the Commission alleges a violation of this section

with respect to intrastate telecommunications relay services within a State and certification ofthe program of such State under subsection (f) of this section is in effect, the Commissionshall refer such complaint to such State.
(2) Jurisdiction of Commission.  After referring a complaint to a State under paragraph (1), the
Commission shall exercise jurisdiction over such complaint only if
(A) final action under such State program has not been taken on such complaint by such
State

State
(i) within 180 days after the complaint is filed with such State; or(ii) within a shorter period as prescribed by the regulations of such State; or
(B) the Commission determines that such State program is no longer qualified for
certification under subsection (f) of this section.
CHAPTER 5 - WIRE OR RADIO COMMUNICATIONSUBCHAPTER VI - MISCELLANEOUS PROVISIONS

Sec. 611. Closed-captioning of public service announcementsAny television public service announcement that is produced or funded in whole or in part by any
agency or instrumentality of Federal Government s hall include closed captioning of the verbal content
of such announcement. A television broadcast station licensee

-51-(1) shall not be required to supply closed capt ioning for any such announcement that fails to
include it; and
(2) shall not be liable for broadcasting any such announcement without transmitting a closed
caption unless the licensee intentionally fails to  transmit the closed caption that was included
with the announcement.

CHARTER 
 
EMERGENCY MEDICAL TREATMENT AND LABOR ACT  
TECHNICAL ADVISORY GROUP 
PURPOSE  
The Secretary of Health and Human Services  is mandated by Secti on 945 of the Medicare 
Prescription Drug, Improvement, and Modernizat ion Act of 2003 (P.L. 108-173), to establish a 
Technical Advisory Group (TAG) to review issues related to the Emergency Medical Treatment 
and Labor Act (EMTALA) and its implementation.  The EMTALA TAG will advise the

Secretary and the Administrator for the Cent ers for Medicare & Medicaid Services (CMS) 
concerning issues related to EMTALA regulations and implementation.   
AUTHORITY  
Section 945 of Public Law 108-173  (reference to  42 U.S.C.  1395dd, section 1867 of the Social 
Security Act).  The TAG is governed by the prov isions of Public law 92-463, as amended (5 
USC Appendix 2), which set forth standards for the formation and use of advisory committees. 
FUNCTION

FUNCTION  
The EMTALA TAG shall advise the Secretary a nd the Administrator of CMS concerning issues 
related to EMTALA regulations and implementa tion.  General responsibil ities of the EMTALA 
TAG include, but are not limited to, the follo wing: (1) the TAG shall review EMTALA 
regulations; (2) the TAG may pr ovide advice and recommendations  to the Secretary concerning

these regulations and their application to hospitals and physicians; (3) the TAG shall solicit comments and recommendations from hospitals, physicians, and the public regarding implementation of such regulations; and (4) th e TAG may disseminate information concerning 
the application of these regulations to hospita ls, physicians, and the public.  The agenda, which 
will set forth the boundaries for discu ssion, will be developed by CMS.

The EMTALA TAG, in conducting its review, may use data or other information collected or 
developed by entities and organizations other than the Department of Health and Human 
Services and CMS. 
To obtain the broadest possible input for its work, the EMTALA TAG may consult with medical 
or hospital organizations that have expert technical knowledge of emergency medical treatment 
and labor services provided by hospitals.

and labor services provided by hospitals. 
The Secretary and the Administrator of CMS shall be advised of all matters pertaining to the 
EMTALA TAG.

2 
STRUCTURE  
The EMTALA TAG shall consist of 19 members, in cluding the Administrato r of the Centers for 
Medicare & Medicaid Services and the Inspector General of th e Department of Health and 
Human Services or their desi gnees.  Members appointed by th e Secretary shall include: 
Four representatives of hospitals, including at  least one public hospital representative having 
experience with the application of  EMTALA and at least two repres entatives from hospitals that

have not been cited for EMTALA violations; se ven practicing physicians drawn from the fields 
of emergency medicine, cardiology or cardio-thoracic surgery, orthopedic surgery, neurosurgery, 
pediatrics or a pediatric subsp ecialty, obstetrics-gyn ecology, and psychiatry, with not more than 
one physician from any particular field; two representatives of pa tients;  two staff involved in

EMTALA investigations from different CMS regional offices; one representative from a state survey agency involved in EMTA LA investigations; and one representative from a Quality 
Improvement Organization, both from areas differe nt from that of the two CMS regional staff 
members.  All members must have technical expertis e that will enable them to participate fully in 
the work of the EMTALA TAG.   
The Secretary shall consider qualified indivi duals nominated by orga nizations representing

providers and patients when selecting practicing physicians, patient, and hospital representatives.  
 
The members of the TAG shall elect a member to serve as chairperson for the life of the 
EMTALA TAG.  
A quorum for the conduct of busines s shall consist of a majority of  currently appo inted members. 
As necessary, standing and ad hoc subcommittees  composed of members of the parent TAG, 
may be established, with the approval of the Secr etary of designee, to perform functions within

the EMTALA TAG’s jurisdiction. The Departme nt Committee Management Officer shall be 
notified upon the establishment of each standing subcommittee and shall be given information on 
its name, membership, function, and estimated frequency of meetings. 
Management and support services shall be provi ded by the Centers for Medicare Management 
(CMM) and the Center for Medicaid and State Operations (CMSO), CMS. 
MEETINGS

MEETINGS  
Meetings shall be held at least twice a year at the call of the Designated Fe deral Official.  If the 
Chair is selected from among the non-Federal memb ers, the Chair will call a meeting with the 
advance approval of the Designated Federal Offici al who shall also approve the agenda and be 
present at all meetings.   
Meetings shall be open to the public except as determined othe rwise by the Secretary or other

official to whom the authority has been dele gated in accordance with the Government in the 
Sunshine Act (5 U.S.C. 552b(c)) and of the Federal Advisory Committee Act; notice of all 
meetings shall be given to the public.

3 
Meetings shall be conducted and records of the proceedings kept, as required by applicable laws 
and Departmental regulations. 
COMPENSATION  
Members who are not full-time Federal employees sh all be paid at the rate of $250 per day, plus 
per diem and travel expenses in accordance with  Standard Government Travel Regulations.   
Members who are industry or consumer representati ves, shall serve in a voluntary status without

compensation, pursuant to advance written agreem ent.  Members will receive travel and per 
diem.  
ANNUAL COST ESTIMATE  
Estimated Fiscal Year (FY) 2007 annual  cost for operating the EMTALA TAG, including 
compensation and travel expenses for member s, but excluding staff support, is $83,862.  
Estimated FY 2007 annual person-years of CMM staff support required is 1.15 FTE, at an 
estimated annual  cost of $125,870 and annual person-years of  CMSO staff support required is

.65 FTE, at an annual cost of $98,692.  Total es timated FY 2007 annual person-years of staff 
support are 1.8 FTE at an estimated  FY 2007 annual cost of  $224,562.  
REPORTS  
In the event a portion of a meeting is closed to  the public, as determined by the Secretary, HHS, 
in accordance with the Government in the Sunshine Act (5 U.S.C. 552b(c)) and the Federal 
Advisory Committee Act, a report shall be prepared  which shall contain, at a minimum, a list of

members and their business addresses, the EM TALA TAG's function, dates and places of 
meetings, and a summary of EMTALA TAG activ ities and recommendations made during the 
fiscal year. A copy of the report shall be prov ided to the Department Committee Management 
Officer. 
TERMINATION DATE  
 
The EMTALA TAG will terminate September 30, 2007, which is 30 months af ter the date of its 
first meeting. 
 
APPROVED :

APPROVED :  
 
____5/11/2006____________                                      ___/s/Michael O. Leavitt _______  
 D a t e         S e c r e t a r y

PUBLIC LAW 104±191ÐAUG. 21, 1996
HEALTH INSURANCE PORTABILITY AND
ACCOUNTABILITY ACT OF 1996

110 STAT. 1936 PUBLIC LAW 104±191ÐAUG. 21, 1996
Public Law 104±191
104th Congress
An Act
To amend the Internal Revenue Code of 1986 to improve portability and continuity
of health insurance coverage in the group and individual markets, to combatwaste, fraud, and abuse in health insurance and health care delivery, to promotethe use of medical savings accounts, to improve access to long-term care servicesand coverage, to simplify the administration of health insurance, and for otherpurposes.

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) S HORT TITLE.ÐThis Act may be cited as the ``Health Insur-
ance Portability and Accountability Act of 1996''.
(b) T ABLE OF CONTENTS .ÐThe table of contents of this Act
Sec. 1. Short title; table of contents.
TITLE IÐHEALTH CARE ACCESS, PORTABILITY, AND RENEWABILITY
Subtitle AÐGroup Market Rules

PART1ÐP ORTABILITY , ACCESS , AND RENEWABILITY REQUIREMENTS
Sec. 101. Through the Employee Retirement Income Security Act of 1974.
``PART7ÐG ROUP HEALTH PLAN PORTABILITY , ACCESS , AND RENEWABILITY
REQUIREMENTS
``Sec. 701. Increased portability through limitation on preexisting condition ex-
clusions.
``Sec. 702. Prohibiting discrimination against individual participants and bene-
ficiaries based on health status.

``Sec. 703. Guaranteed renewability in multiemployer plans and multiple em-
ployer welfare arrangements.
``Sec. 704. Preemption; State flexibility; construction.``Sec. 705. Special rules relating to group health plans.``Sec. 706. Definitions.``Sec. 707. Regulations.''.
Sec. 102. Through the Public Health Service Act.
``TITLE XXVIIÐASSURING PORTABILITY, AVAILABILITY, AND
RENEWABILITY OF HEALTH INSURANCE COVERAGE
``P
ARTAÐG ROUP MARKET REFORMS

``P
``Subpart 1ÐPortability, Access, and Renewability Requirements
``Sec. 2701. Increased portability through limitation on preexisting condition
exclusions.
``Sec. 2702. Prohibiting discrimination against individual participants and
beneficiaries based on health status.
``Subpart 2ÐProvisions Applicable Only to Health Insurance Issuers
``Sec. 2711. Guaranteed availability of coverage for employers in the group
market.42 USC 201 note.Health Insurance

Portability andAccountabilityAct of 1996.Aug. 21, 1996
[H.R. 3103]

110 STAT. 1937 PUBLIC LAW 104±191ÐAUG. 21, 1996
``Sec. 2712. Guaranteed renewability of coverage for employers in the group
market.
``Sec. 2713. Disclosure of information.
``Subpart 3ÐExclusion of Plans; Enforcement; Preemption
``Sec. 2721. Exclusion of certain plans.
``Sec. 2722. Enforcement.``Sec. 2723. Preemption; State flexibility; construction.
``P
ARTCÐD EFINITIONS ; MISCELLANEOUS PROVISIONS
``Sec. 2791. Definitions.
``Sec. 2792. Regulations.''.

Sec. 103. Reference to implementation through the Internal Revenue Code of 1986.Sec. 104. Assuring coordination.
Subtitle BÐIndividual Market Rules
Sec. 111. Amendment to Public Health Service Act.
``P
ARTBÐI NDIVIDUAL MARKET RULES
``Sec. 2741. Guaranteed availability of individual health insurance coverage to
certain individuals with prior group coverage.

``Sec. 2742. Guaranteed renewability of individual health insurance coverage.``Sec. 2743. Certification of coverage.``Sec. 2744. State flexibility in individual market reforms.``Sec. 2745. Enforcement.``Sec. 2746. Preemption.``Sec. 2747. General exceptions.''.
Subtitle CÐGeneral and Miscellaneous Provisions
Sec. 191. Health coverage availability studies.

Sec. 192. Report on Medicare reimbursement of telemedicine.Sec. 193. Allowing federally-qualified HMOs to offer high deductible plans.Sec. 194. Volunteer services provided by health professionals at free clinics.Sec. 195. Findings; severability.
TITLE IIÐPREVENTING HEALTH CARE FRAUD AND ABUSE;
ADMINISTRATIVE SIMPLIFICATION; MEDICAL LIABILITY REFORM
Sec. 200. References in title.
Subtitle AÐFraud and Abuse Control Program

Sec. 201. Fraud and abuse control program.
Sec. 202. Medicare integrity program.Sec. 203. Beneficiary incentive programs.Sec. 204. Application of certain health antifraud and abuse sanctions to fraud and
abuse against Federal health care programs.
Sec. 205. Guidance regarding application of health care fraud and abuse sanctions.
Subtitle BÐRevisions to Current Sanctions for Fraud and Abuse

Sec. 211. Mandatory exclusion from participation in Medicare and State health
care programs.
Sec. 212. Establishment of minimum period of exclusion for certain individuals and
entities subject to permissive exclusion from Medicare and State healthcare programs.
Sec. 213. Permissive exclusion of individuals with ownership or control interest in
sanctioned entities.
Sec. 214. Sanctions against practitioners and persons for failure to comply with
statutory obligations.

Sec. 215. Intermediate sanctions for Medicare health maintenance organizations.Sec. 216. Additional exception to anti-kickback penalties for risk-sharing arrange-
ments.
Sec. 217. Criminal penalty for fraudulent disposition of assets in order to obtain
medicaid benefits.
Sec. 218. Effective date.
Subtitle CÐData Collection
Sec. 221. Establishment of the health care fraud and abuse data collection
program.
Subtitle DÐCivil Monetary Penalties

program.
Sec. 231. Social Security Act civil monetary penalties.

110 STAT. 1938 PUBLIC LAW 104±191ÐAUG. 21, 1996
Sec. 232. Penalty for false certification for home health services.
Subtitle EÐRevisions to Criminal Law
Sec. 241. Definitions relating to Federal health care offense.

Sec. 242. Health care fraud.Sec. 243. Theft or embezzlement.Sec. 244. False statements.Sec. 245. Obstruction of criminal investigations of health care offenses.Sec. 246. Laundering of monetary instruments.Sec. 247. Injunctive relief relating to health care offenses.Sec. 248. Authorized investigative demand procedures.Sec. 249. Forfeitures for Federal health care offenses.Sec. 250. Relation to ERISA authority.
Subtitle FÐAdministrative Simplification
Sec. 261. Purpose.

Sec. 262. Administrative simplification.
``P
ARTCÐA DMINISTRATIVE SIMPLIFICATION
``Sec. 1171. Definitions.
``Sec. 1172. General requirements for adoption of standards.``Sec. 1173. Standards for information transactions and data elements.``Sec. 1174. Timetables for adoption of standards.``Sec. 1175. Requirements.``Sec. 1176. General penalty for failure to comply with requirements and stand-
ards.

ards.
``Sec. 1177. Wrongful disclosure of individually identifiable health information.``Sec. 1178. Effect on State law.``Sec. 1179. Processing payment transactions.''.
Sec. 263. Changes in membership and duties of National Committee on Vital and
Health Statistics.
Sec. 264. Recommendations with respect to privacy of certain health information.
Subtitle GÐDuplication and Coordination of Medicare-Related Plans
Sec. 271. Duplication and coordination of Medicare-related plans.

TITLE IIIÐTAX-RELATED HEALTH PROVISIONS
Sec. 300. Amendment of 1986 Code.
Subtitle AÐMedical Savings Accounts
Sec. 301. Medical savings accounts.
Subtitle BÐIncrease in Deduction for Health Insurance Costs of Self-Employed
Individuals
Sec. 311. Increase in deduction for health insurance costs of self-employed indi-
viduals.
Subtitle CÐLong-Term Care Services and Contracts
P
ARTIÐG ENERAL PROVISIONS
Sec. 321. Treatment of long-term care insurance.

Sec. 322. Qualified long-term care services treated as medical care.Sec. 323. Reporting requirements.
P
ARTIIÐC ONSUMER PROTECTION PROVISIONS
Sec. 325. Policy requirements.
Sec. 326. Requirements for issuers of qualified long-term care insurance contracts.Sec. 327. Effective dates.
Subtitle DÐTreatment of Accelerated Death Benefits
Sec. 331. Treatment of accelerated death benefits by recipient.

Sec. 332. Tax treatment of companies issuing qualified accelerated death benefit
riders.
Subtitle EÐState Insurance Pools
Sec. 341. Exemption from income tax for State-sponsored organizations providing
health coverage for high-risk individuals.
Sec. 342. Exemption from income tax for State-sponsored workmen's compensation
reinsurance organizations.

110 STAT. 1939 PUBLIC LAW 104±191ÐAUG. 21, 1996
Subtitle FÐOrganizations Subject to Section 833
Sec. 351. Organizations subject to section 833.
Subtitle GÐIRA Distributions to the Unemployed
Sec. 361. Distributions from certain plans may be used without additional tax to
pay financially devastating medical expenses.
Subtitle HÐOrgan and Tissue Donation Information Included With Income Tax
Refund Payments
Sec. 371. Organ and tissue donation information included with income tax refund
payments.

payments.
TITLE IVÐAPPLICATION AND ENFORCEMENT OF GROUP HEALTH PLAN
Subtitle AÐApplication and Enforcement of Group Health Plan Requirements
Sec. 401. Group health plan portability, access, and renewability requirements.
Sec. 402. Penalty on failure to meet certain group health plan requirements.
Subtitle BÐClarification of Certain Continuation Coverage Requirements
Sec. 421. COBRA clarifications.
TITLE VÐREVENUE OFFSETS
Sec. 500. Amendment of 1986 Code.

Subtitle AÐCompany-Owned Life Insurance
Sec. 501. Denial of deduction for interest on loans with respect to company-owned
life insurance.
Subtitle BÐTreatment of Individuals Who Lose United States Citizenship
Sec. 511. Revision of income, estate, and gift taxes on individuals who lose United
States citizenship.
Sec. 512. Information on individuals losing United States citizenship.Sec. 513. Report on tax compliance by United States citizens and residents living

abroad.
Subtitle CÐRepeal of Financial Institution Transition Rule to Interest Allocation
Rules
Sec. 521. Repeal of financial institution transition rule to interest allocation rules.
TITLE IÐHEALTH CARE ACCESS,
PORTABILITY, AND RENEWABILITY
SEC. 101. THROUGH THE EMPLOYEE RETIREMENT INCOME SECURITY
ACT OF 1974.
(a) I NGENERAL .ÐSubtitle B of title I of the Employee Retire-

ment Income Security Act of 1974 is amended by adding at theend the following new part:
``P
ART7ÐG ROUP HEALTH PLAN PORTABILITY , ACCESS , AND
RENEWABILITY REQUIREMENTS
``SEC. 701. INCREASED PORTABILITY THROUGH LIMITATION ON
PREEXISTING CONDITION EXCLUSIONS.
``(a) L IMITATION ON PREEXISTING CONDITION EXCLUSION PERIOD ;
CREDITING FOR PERIODS OF PREVIOUS COVERAGE .ÐSubject to sub-
section (d), a group health plan, and a health insurance issuer29 USC 1181.

110 STAT. 1940 PUBLIC LAW 104±191ÐAUG. 21, 1996
offering group health insurance coverage, may, with respect to
a participant or beneficiary, impose a preexisting condition exclusiononly ifÐ
``(1) such exclusion relates to a condition (whether physical
or mental), regardless of the cause of the condition, for whichmedical advice, diagnosis, care, or treatment was recommendedor received within the 6-month period ending on the enrollmentdate;

``(2) such exclusion extends for a period of not more than
12 months (or 18 months in the case of a late enrollee) afterthe enrollment date; and
``(3) the period of any such preexisting condition exclusion
is reduced by the aggregate of the periods of creditable coverage(if any, as defined in subsection (c)(1)) applicable to the partici-pant or beneficiary as of the enrollment date.``(b) D
EFINITIONS .ÐFor purposes of this partÐ
``(1) P REEXISTING CONDITION EXCLUSION .Ð

``(A) I N GENERAL .ÐThe term `preexisting condition
exclusion' means, with respect to coverage, a limitationor exclusion of benefits relating to a condition based onthe fact that the condition was present before the dateof enrollment for such coverage, whether or not any medicaladvice, diagnosis, care, or treatment was recommendedor received before such date.
``(B) T
REATMENT OF GENETIC INFORMATION .ÐGenetic

``(B) T
information shall not be treated as a condition describedin subsection (a)(1) in the absence of a diagnosis of thecondition related to such information.``(2) E
NROLLMENT DATE .ÐThe term `enrollment date'
means, with respect to an individual covered under a grouphealth plan or health insurance coverage, the date of enrollmentof the individual in the plan or coverage or, if earlier, thefirst day of the waiting period for such enrollment.
``(3) L

``(3) L
ATE ENROLLEE .ÐThe term `late enrollee' means, with
respect to coverage under a group health plan, a participantor beneficiary who enrolls under the plan other than duringÐ
``(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) W
AITING PERIOD .ÐThe term `waiting period' means,

with respect to a group health plan and an individual whois a potential participant or beneficiary in the plan, the periodthat must pass with respect to the individual before the individ-ual is eligible to be covered for benefits under the terms ofthe plan.``(c) R
ULES RELATING TO CREDITING PREVIOUS COVERAGE .Ð
``(1) C REDITABLE COVERAGE DEFINED .ÐFor purposes of this

part, the term `creditable coverage' means, with respect toan individual, coverage of the individual under any of thefollowing:
``(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.

110 STAT. 1941 PUBLIC LAW 104±191ÐAUG. 21, 1996
``(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 cov-erage of excepted benefits (as defined in section 706(c)).
``(2) N
OT COUNTING PERIODS BEFORE SIGNIFICANT BREAKS
IN COVERAGE .Ð
``(A) I N GENERAL .ÐA period of creditable coverage shall

not be counted, with respect to enrollment of an individualunder a group health plan, if, after such period and beforethe enrollment date, there was a 63-day period duringall of which the individual was not covered under anycreditable coverage.
``(B) W
AITING PERIOD NOT TREATED AS A BREAK IN COV -
ERAGE .ÐFor purposes of subparagraph (A) and subsection

(d)(4), any period that an individual is in a waiting periodfor any coverage under a group health plan (or for grouphealth insurance coverage) or is in an affiliation period(as defined in subsection (g)(2)) shall not be taken intoaccount in determining the continuous period undersubparagraph (A).``(3) M
ETHOD OF CREDITING COVERAGE .Ð
``(A) S TANDARD METHOD .ÐExcept as otherwise provided

under subparagraph (B), for purposes of applying sub-section (a)(3), a group health plan, and a health insuranceissuer offering group health insurance coverage, shall counta period of creditable coverage without regard to the specificbenefits covered during the period.
``(B) E
LECTION OF ALTERNATIVE METHOD .ÐA group

health plan, or a health insurance issuer offering grouphealth insurance coverage, may elect to apply subsection(a)(3) based on coverage of benefits within each of severalclasses or categories of benefits specified in regulationsrather than as provided under subparagraph (A). Suchelection shall be made on a uniform basis for all partici-pants and beneficiaries. Under such election a group healthplan or issuer shall count a period of creditable coveragewith respect to any class or category of

coveragewith respect to any class or category of benefits if anylevel of benefits is covered within such class or category.

``(C) P
LAN NOTICE .ÐIn the case of an election with
respect to a group health plan under subparagraph (B)
(whether or not health insurance coverage is provided inconnection with such plan), the plan shallÐ
``(i) prominently state in any disclosure statements
concerning the plan, and state to each enrollee at thetime of enrollment under the plan, that the plan hasmade such election, and
``(ii) include in such statements a description of
the effect of this election.
``(4) E

``(4) E
STABLISHMENT OF PERIOD .ÐPeriods of creditable cov-
erage with respect to an individual shall be established through

110 STAT. 1942 PUBLIC LAW 104±191ÐAUG. 21, 1996
presentation of certifications described in subsection (e) or in
such other manner as may be specified in regulations.``(d) E
XCEPTIONS .Ð
``(1) E XCLUSION NOT APPLICABLE TO CERTAIN NEWBORNS .Ð

Subject to paragraph (4), a group health plan, and a healthinsurance issuer offering group health insurance coverage, maynot impose any preexisting condition exclusion in the caseof an individual who, as of the last day of the 30-day periodbeginning with the date of birth, is covered under creditablecoverage.
``(2) E
XCLUSION NOT APPLICABLE TO CERTAIN ADOPTED CHIL -
DREN .ÐSubject to paragraph (4), a group health plan, and

a health insurance issuer offering group health insurance cov-erage, may not impose any preexisting condition exclusion inthe case of a child who is adopted or placed for adoptionbefore attaining 18 years of age and who, as of the last dayof the 30-day period beginning on the date of the adoptionor placement for adoption, is covered under creditable coverage.The previous sentence shall not apply to coverage before thedate of such adoption or placement for adoption.
``(3) E

``(3) E
XCLUSION NOT APPLICABLE TO PREGNANCY .ÐA group
health plan, and health insurance issuer offering group healthinsurance coverage, may not impose any preexisting conditionexclusion relating to pregnancy as a preexisting condition.
``(4) L
OSS IF BREAK IN COVERAGE .ÐParagraphs (1) and (2)
shall no longer apply to an individual after the end of thefirst 63-day period during all of which the individual was notcovered under any creditable coverage.``(e) C

ERTIFICATIONS AND DISCLOSURE OF COVERAGE .Ð
``(1) R EQUIREMENT FOR CERTIFICATION OF PERIOD OF CRED -
ITABLE COVERAGE .Ð
``(A) I N GENERAL .ÐA group health plan, and a health
insurance issuer offering group health insurance coverage,shall provide the certification described in subparagraph(B)Ð
``(i) at the time an individual ceases to be covered
under the plan or otherwise becomes covered undera COBRA continuation provision,
``(ii) in the case of an individual becoming covered

under such a provision, at the time the individualceases 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 ces-sation of the coverage described in clause (i) or (ii),whichever is later.
The certification under clause (i) may be provided, to theextent practicable, at a time consistent with noticesrequired under any applicable COBRA continuation provi-sion.
``(B) C

``(B) C
ERTIFICATION .ÐThe certification described in this
subparagraph is a written certification ofÐ
``(i) the period of creditable coverage of the individ-
ual under such plan and the coverage (if any) undersuch COBRA continuation provision, and
``(ii) the waiting period (if any) (and affiliation
period, if applicable) imposed with respect to theindividual for any coverage under such plan.

110 STAT. 1943 PUBLIC LAW 104±191ÐAUG. 21, 1996
``(C) I SSUER COMPLIANCE .ÐTo the extent that medical
care under a group health plan consists of group healthinsurance coverage, the plan is deemed to have satisfiedthe certification requirement under this paragraph if thehealth insurance issuer offering the coverage provides forsuch certification in accordance with this paragraph.``(2) D
ISCLOSURE OF INFORMATION ON PREVIOUS BENEFITS .Ð

In the case of an election described in subsection (c)(3)(B)by a group health plan or health insurance issuer, if the planor issuer enrolls an individual for coverage under the planand the individual provides a certification of coverage of theindividual under paragraph (1)Ð
``(A) upon request of such plan or issuer, the entity

which issued the certification provided by the individualshall promptly disclose to such requesting plan or issuerinformation on coverage of classes and categories of healthbenefits 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) R
EGULATIONS .ÐThe Secretary shall establish rules to

prevent an entity's failure to provide information under para-graph (1) or (2) with respect to previous coverage of an individ-ual from adversely affecting any subsequent coverage of theindividual under another group health plan or health insurancecoverage.``(f) S
PECIAL ENROLLMENT PERIODS .Ð
``(1) I NDIVIDUALS LOSING OTHER COVERAGE .ÐA group health

plan, and a health insurance issuer offering group health insur-ance coverage in connection with a group health plan, shallpermit an employee who is eligible, but not enrolled, for cov-erage under the terms of the plan (or a dependent of suchan employee if the dependent is eligible, but not enrolled,for coverage under such terms) to enroll for coverage underthe terms of the plan if each of the following conditions ismet:
``(A) The employee or dependent was covered under

a group health plan or had health insurance coverage atthe time coverage was previously offered to the employeeor dependent.
``(B) The employee stated in writing at such time that

coverage under a group health plan or health insurancecoverage was the reason for declining enrollment, but onlyif the plan sponsor or issuer (if applicable) required sucha statement at such time and provided the employee withnotice of such requirement (and the consequences of suchrequirement) at such time.
``(C) The employee's or dependent's coverage described
in subparagraph (A)Ð
``(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 ofeligibility for the coverage (including as a result oflegal separation, divorce, death, termination of employ-ment, or reduction in the number of hours of employ-

110 STAT. 1944 PUBLIC LAW 104±191ÐAUG. 21, 1996
ment) 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 thedate of exhaustion of coverage described in subparagraph(C)(i) or termination of coverage or employer contributiondescribed in subparagraph (C)(ii).``(2) F
OR DEPENDENT BENEFICIARIES .Ð
``(A) I N GENERAL .ÐIfÐ
``(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 becominga participant under the plan and is eligible to beenrolled under the plan but for a failure to enrollduring a previous enrollment period), and
``(iii) a person becomes such a dependent of the
individual through marriage, birth, or adoption orplacement for adoption,

the group health plan shall provide for a dependent specialenrollment period described in subparagraph (B) duringwhich the person (or, if not otherwise enrolled, the individ-ual) may be enrolled under the plan as a dependent ofthe individual, and in the case of the birth or adoptionof a child, the spouse of the individual may be enrolledas a dependent of the individual if such spouse is otherwiseeligible for coverage.
``(B) D
EPENDENT SPECIAL ENROLLMENT PERIOD .ÐA

``(B) D
dependent special enrollment period under this subpara-graph shall be a period of not less than 30 days andshall begin on the later ofÐ
``(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) N
O WAITING PERIOD .ÐIf an individual seeks to

enroll a dependent during the first 30 days of such adependent special enrollment period, the coverage of thedependent shall become effectiveÐ
``(i) in the case of marriage, not later than the
first day of the first month beginning after the datethe 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 place-

ment for adoption, the date of such adoption or place-ment for adoption.
``(g) U
SE OF AFFILIATION PERIOD BY HMO SA S ALTERNATIVE
TOPREEXISTING CONDITION EXCLUSION .Ð
``(1) I N GENERAL .ÐIn the case of a group health plan that
offers medical care through health insurance coverage offeredby a health maintenance organization, the plan may providefor an affiliation period with respect to coverage through theorganization only ifÐ
``(A) no preexisting condition exclusion is imposed with

110 STAT. 1945 PUBLIC LAW 104±191ÐAUG. 21, 1996
``(B) the period is applied uniformly without regard
to any health status-related factors, and
``(C) such period does not exceed 2 months (or 3 months
in the case of a late enrollee).``(2) A
FFILIATION PERIOD .Ð
``(A) D EFINED .ÐFor purposes of this part, the term

`affiliation period' means a period which, under the termsof the health insurance coverage offered by the healthmaintenance organization, must expire before the healthinsurance coverage becomes effective. The organization isnot required to provide health care services or benefitsduring such period and no premium shall be charged tothe participant or beneficiary for any coverage during theperiod.
``(B) B
EGINNING .ÐSuch period shall begin on the enroll-
ment date.

ment date.
``(C) R UNS CONCURRENTLY WITH WAITING PERIODS .Ð
An affiliation period under a plan shall run concurrentlywith any waiting period under the plan.``(3) A
LTERNATIVE METHODS .ÐA health maintenance

organization described in paragraph (1) may use alternativemethods, from those described in such paragraph, to addressadverse selection as approved by the State insurance commis-sioner or official or officials designated by the State to enforcethe requirements of part A of title XXVII of the Public HealthService Act for the State involved with respect to such issuer.
``SEC. 702. PROHIBITING DISCRIMINATION AGAINST INDIVIDUAL

PARTICIPANTS AND BENEFICIARIES BASED ON HEALTHSTATUS.
``(a) I NELIGIBILITY TOENROLL .Ð
``(1) I N GENERAL .ÐSubject to paragraph (2), a group health

plan, and a health insurance issuer offering group health insur-ance coverage in connection with a group health plan, maynot establish rules for eligibility (including continued eligibility)of any individual to enroll under the terms of the plan basedon any of the following health status-related factors in relationto the individual or a dependent of the individual:
``(A) Health status.``(B) Medical condition (including both physical and
mental illnesses).

``(C) Claims experience.``(D) Receipt of health care.``(E) Medical history.``(F) Genetic information.``(G) Evidence of insurability (including conditions aris-
ing out of acts of domestic violence).
``(H) Disability.
``(2) N
O APPLICATION TO BENEFITS OR EXCLUSIONS .ÐTo the
extent consistent with section 701, paragraph (1) shall notbe construedÐ
``(A) to require a group health plan, or group health

insurance coverage, to provide particular benefits otherthan those provided under the terms of such plan or cov-erage, or
``(B) to prevent such a plan or coverage from establish-
ing limitations or restrictions on the amount, level, extent,29 USC 1182.

110 STAT. 1946 PUBLIC LAW 104±191ÐAUG. 21, 1996
or nature of the benefits or coverage for similarly situated
individuals enrolled in the plan or coverage.``(3) C
ONSTRUCTION .ÐFor purposes of paragraph (1), rules
for eligibility to enroll under a plan include rules definingany applicable waiting periods for such enrollment.``(b) I
NPREMIUM CONTRIBUTIONS .Ð
``(1) I N GENERAL .ÐA group health plan, and a health insur-

ance issuer offering health insurance coverage in connectionwith a group health plan, may not require any individual(as a condition of enrollment or continued enrollment underthe plan) to pay a premium or contribution which is greaterthan such premium or contribution for a similarly situatedindividual enrolled in the plan on the basis of any healthstatus-related factor in relation to the individual or to anindividual enrolled under the plan as a dependent of theindividual.
``(2) C

``(2) C
ONSTRUCTION .ÐNothing in paragraph (1) shall be
construedÐ
``(A) to restrict the amount that an employer may be
charged for coverage under a group health plan; 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 modify-ing otherwise applicable copayments or deductibles inreturn for adherence to programs of health promotion anddisease prevention.

``SEC. 703. GUARANTEED RENEWABILITY IN MULTIEMPLOYER PLANS
AND MULTIPLE EMPLOYER WELFARE ARRANGEMENTS.
``A group health plan which is a multiemployer plan or which
is a multiple employer welfare arrangement may not deny anemployer whose employees are covered under such a plan continuedaccess to the same or different coverage under the terms of sucha plan, other thanÐ
``(1) for nonpayment of contributions;``(2) for fraud or other intentional misrepresentation of
material fact by the employer;

``(3) for noncompliance with material plan provisions;``(4) because the plan is ceasing to offer any coverage in
a geographic area;
``(5) in the case of a plan that offers benefits through

a network plan, there is no longer any individual enrolledthrough the employer who lives, resides, or works in the servicearea of the network plan and the plan applies this paragraphuniformly without regard to the claims experience of employersor any health status-related factor in relation to such individ-uals or their dependents; and
``(6) for failure to meet the terms of an applicable collective

bargaining agreement, to renew a collective bargaining or otheragreement requiring or authorizing contributions to the plan,or to employ employees covered by such an agreement.
``SEC. 704. PREEMPTION; STATE FLEXIBILITY; CONSTRUCTION.
``(a) C ONTINUED APPLICABILITY OF STATE LAWWITHRESPECT
TOHEALTH INSURANCE ISSUERS .Ð
``(1) I NGENERAL .ÐSubject to paragraph (2) and except

as provided in subsection (b), this part shall not be construedto supersede any provision of State law which establishes,29 USC 1184.29 USC 1183.

110 STAT. 1947 PUBLIC LAW 104±191ÐAUG. 21, 1996
implements, or continues in effect any standard or requirement
solely relating to health insurance issuers in connection withgroup health insurance coverage except to the extent that suchstandard or requirement prevents the application of a require-ment of this part.
``(2) C
ONTINUED PREEMPTION WITH RESPECT TO GROUP
HEALTH PLANS .ÐNothing in this part shall be construed to

affect or modify the provisions of section 514 with respectto group health plans.``(b) S
PECIAL RULES IN CASE OF PORTABILITY REQUIREMENTS .Ð
``(1) I N GENERAL .ÐSubject to paragraph (2), the provisions

of this part relating to health insurance coverage offered bya health insurance issuer supersede any provision of Statelaw which establishes, implements, or continues in effect astandard or requirement applicable to imposition of a preexist-ing condition exclusion specifically governed by section 701which differs from the standards or requirements specifiedin such section.
``(2) E
XCEPTIONS .ÐOnly in relation to health insurance cov-

erage offered by a health insurance issuer, the provisions ofthis part do not supersede any provision of State law to theextent that such provisionÐ
``(A) substitutes for the reference to `6-month period'
in section 701(a)(1) a reference to any shorter period oftime;
``(B) substitutes for the reference to `12 months' and
`18 months' in section 701(a)(2) a reference to any shorterperiod of time;
``(C) substitutes for the references to `63 days' in sec-

tions 701 (c)(2)(A) and (d)(4)(A) a reference to any greaternumber of days;
``(D) substitutes for the reference to `30-day period'
in sections 701 (b)(2) and (d)(1) a reference to any greaterperiod;
``(E) prohibits the imposition of any preexisting condi-
tion exclusion in cases not described in section 701(d) orexpands the exceptions described in such section;
``(F) requires special enrollment periods in addition
to those required under section 701(f); or

``(G) reduces the maximum period permitted in an
affiliation period under section 701(g)(1)(B).
``(c) R
ULES OF CONSTRUCTION .ÐNothing in this part shall be
construed as requiring a group health plan or health insurancecoverage to provide specific benefits under the terms of such planor coverage.
``(d) D
EFINITIONS .ÐFor purposes of this sectionÐ
``(1) S TATE LAW .ÐThe term `State law' includes all laws,

decisions, rules, regulations, or other State action having theeffect of law, of any State. A law of the United States applicableonly to the District of Columbia shall be treated as a Statelaw rather than a law of the United States.
``(2) S
TATE .ÐThe term `State' includes a State, the Northern
Mariana Islands, any political subdivisions of a State or suchIslands, or any agency or instrumentality of either.

110 STAT. 1948 PUBLIC LAW 104±191ÐAUG. 21, 1996
``SEC. 705. SPECIAL RULES RELATING TO GROUP HEALTH PLANS.
``(a) G ENERAL EXCEPTION FOR CERTAIN SMALL GROUP HEALTH
PLANS .ÐThe requirements of this part shall not apply to any group
health plan (and group health insurance coverage offered in connec-tion with a group health plan) for any plan year if, on the firstday of such plan year, such plan has less than 2 participantswho are current employees.
``(b) E

``(b) E
XCEPTION FOR CERTAIN BENEFITS .ÐThe requirements of
this part shall not apply to any group health plan (and grouphealth insurance coverage) in relation to its provision of exceptedbenefits described in section 706(c)(1).
``(c) E
XCEPTION FOR CERTAIN BENEFITS IF CERTAIN CONDITIONS
MET.Ð
``(1) L IMITED , EXCEPTED BENEFITS .ÐThe requirements of

this part shall not apply to any group health plan (and grouphealth insurance coverage offered in connection with a grouphealth plan) in relation to its provision of excepted benefitsdescribed in section 706(c)(2) if the benefitsÐ
``(A) are provided under a separate policy, certificate,
or contract of insurance; or
``(B) are otherwise not an integral part of the plan.
``(2) N
ONCOORDINATED , EXCEPTED BENEFITS .ÐThe require-

ments of this part shall not apply to any group health plan(and group health insurance coverage offered in connectionwith a group health plan) in relation to its provision of exceptedbenefits described in section 706(c)(3) if all of the followingconditions are met:
``(A) The benefits are provided under a separate policy,
certificate, or contract of insurance.
``(B) There is no coordination between the provision

of such benefits and any exclusion of benefits under anygroup health plan maintained by the same plan sponsor.
``(C) Such benefits are paid with respect to an event
without regard to whether benefits are provided withrespect to such an event under any group health planmaintained by the same plan sponsor.``(3) S
UPPLEMENTAL EXCEPTED BENEFITS .ÐThe require-

ments of this part shall not apply to any group health plan(and group health insurance coverage) in relation to its provi-sion of excepted benefits described in section 706(c)(4) if thebenefits are provided under a separate policy, certificate, orcontract of insurance.``(d) T
REATMENT OF PARTNERSHIPS .ÐFor purposes of this partÐ
``(1) T REATMENT AS A GROUP HEALTH PLAN .ÐAny plan, fund,

or program which would not be (but for this subsection) anemployee welfare benefit plan and which is established or main-tained by a partnership, to the extent that such plan, fund,or program provides medical care (including items and servicespaid for as medical care) to present or former partners inthe partnership or to their dependents (as defined under theterms of the plan, fund, or program), directly or through insur-ance, reimbursement, or otherwise, shall be treated (subjectto paragraph

otherwise, shall be treated (subjectto paragraph (2)) as an employee welfare benefit plan whichis a group health plan.

``(2) E
MPLOYER .ÐIn the case of a group health plan, the
term `employer' also includes the partnership in relation toany partner.29 USC 1185.

110 STAT. 1949 PUBLIC LAW 104±191ÐAUG. 21, 1996
``(3) P ARTICIPANTS OF GROUP HEALTH PLANS .ÐIn the case
of a group health plan, the term `participant' also includesÐ
``(A) in connection with a group health plan maintained
by a partnership, an individual who is a partner in relationto the partnership, or
``(B) in connection with a group health plan maintained
by a self-employed individual (under which one or moreemployees are participants), the self-employed individual,

if such individual is, or may become, eligible to receive a benefitunder the plan or such individual's beneficiaries may be eligibleto receive any such benefit.
``SEC. 706. DEFINITIONS.
``(a) G ROUP HEALTH PLAN.ÐFor purposes of this partÐ
``(1) I N GENERAL .ÐThe term `group health plan' means

an employee welfare benefit plan to the extent that the planprovides medical care (as defined in paragraph (2) and includingitems and services paid for as medical care) to employees ortheir dependents (as defined under the terms of the plan)directly or through insurance, reimbursement, or otherwise.
``(2) M
EDICAL CARE .ÐThe term `medical care' means
amounts paid forÐ
``(A) the diagnosis, cure, mitigation, treatment, or

prevention of disease, or amounts paid for the purposeof affecting any structure or function of the body,
``(B) amounts paid for transportation primarily for and
essential to medical care referred to in subparagraph (A),and
``(C) amounts paid for insurance covering medical care
referred to in subparagraphs (A) and (B).
``(b) D
EFINITIONS RELATING TO HEALTH INSURANCE .ÐFor pur-
poses of this partÐ
``(1) H EALTH INSURANCE COVERAGE .ÐThe term `health

insurance coverage' means benefits consisting of medical care(provided directly, through insurance or reimbursement, orotherwise and including items and services paid for as medicalcare) under any hospital or medical service policy or certificate,hospital or medical service plan contract, or health maintenanceorganization contract offered by a health insurance issuer.
``(2) H
EALTH INSURANCE ISSUER .ÐThe term `health insur-

ance issuer' means an insurance company, insurance service,or insurance organization (including a health maintenanceorganization, as defined in paragraph (3)) which is licensedto engage in the business of insurance in a State and whichis subject to State law which regulates insurance (within themeaning of section 514(b)(2)). Such term does not include agroup health plan.
``(3) H
EALTH MAINTENANCE ORGANIZATION .ÐThe term

``(3) H
`health maintenance organization' meansÐ
``(A) a federally qualified health maintenance organiza-
tion (as defined in section 1301(a) of the Public HealthService Act (42 U.S.C. 300e(a))),
``(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 extentas such a health maintenance organization.29 USC 1186.

110 STAT. 1950 PUBLIC LAW 104±191ÐAUG. 21, 1996
``(4) G ROUP HEALTH INSURANCE COVERAGE .ÐThe term
`group health insurance coverage' means, in connection witha group health plan, health insurance coverage offered inconnection with such plan.``(c) E
XCEPTED BENEFITS .ÐFor purposes of this part, the term
`excepted benefits' means benefits under one or more (or any com-bination thereof) of the following:
``(1) B
ENEFITS NOT SUBJECT TO REQUIREMENTS .Ð

``(1) B
``(A) Coverage only for accident, or disability income
insurance, or any combination thereof.
``(B) Coverage issued as a supplement to liability insur-
ance.
``(C) Liability insurance, including general liability
insurance and automobile liability insurance.

``(D) Workers' compensation or similar insurance.``(E) Automobile medical payment insurance.``(F) Credit-only insurance.``(G) Coverage for on-site medical clinics.``(H) Other similar insurance coverage, specified in
regulations, under which benefits for medical care aresecondary or incidental to other insurance benefits.``(2) B
ENEFITS NOT SUBJECT TO REQUIREMENTS IF OFFERED
SEPARATELY .Ð

``(A) Limited scope dental or vision benefits.``(B) Benefits for long-term care, nursing home care,
home health care, community-based care, or any combina-tion thereof.
``(C) Such other similar, limited benefits as are specified
in regulations.``(3) B
AS INDEPENDENT , NONCOORDINATED BENEFITS .Ð
``(A) Coverage only for a specified disease or illness.``(B) Hospital indemnity or other fixed indemnity insur-
ance.``(4) B

AS SEPARATE INSURANCE POLICY .ÐMedicare supplemental
health insurance (as defined under section 1882(g)(1) of theSocial Security Act), coverage supplemental to the coverageprovided under chapter 55 of title 10, United States Code,and similar supplemental coverage provided to coverage undera group health plan.``(d) O
THER DEFINITIONS .ÐFor purposes of this partÐ
``(1) COBRA CONTINUATION PROVISION .ÐThe term `COBRA

continuation provision' means any of the following:
``(A) Part 6 of this subtitle.``(B) Section 4980B of the Internal Revenue Code of
1986, other than subsection (f)(1) of such section insofaras it relates to pediatric vaccines.
``(C) Title XXII of the Public Health Service Act.
``(2) H
EALTH STATUS -RELATED FACTOR .ÐThe term `health
status-related factor' means any of the factors described insection 702(a)(1).
``(3) N
ETWORK PLAN .ÐThe term `network plan' means

health insurance coverage offered by a health insurance issuerunder which the financing and delivery of medical care (includ-ing items and services paid for as medical care) are provided,

110 STAT. 1951 PUBLIC LAW 104±191ÐAUG. 21, 1996
in whole or in part, through a defined set of providers under
contract with the issuer.
``(4) P LACED FOR ADOPTION .ÐThe term `placement', or being
`placed', for adoption, has the meaning given such term insection 609(c)(3)(B).
``SEC. 707. REGULATIONS.
``The Secretary, consistent with section 104 of the Health Care

Portability and Accountability Act of 1996, may promulgate suchregulations as may be necessary or appropriate to carry out theprovisions of this part. The Secretary may promulgate any interimfinal rules as the Secretary determines are appropriate to carryout this part.''.
(b) E
NFORCEMENT WITHRESPECT TO HEALTH INSURANCE ISSU-
ERS.ÐSection 502(b) of such Act (29 U.S.C. 1132(b)) is amended
by adding at the end the following new paragraph:

``(3) The Secretary is not authorized to enforce under this part
any requirement of part 7 against a health insurance issuer offeringhealth insurance coverage in connection with a group health plan(as defined in section 706(a)(1)). Nothing in this paragraph shallaffect the authority of the Secretary to issue regulations to carryout such part.''.
(c) D
ISCLOSURE OF INFORMATION TO PARTICIPANTS AND BENE-
FICIARIES .Ð

(1) I N GENERAL .ÐSection 104(b)(1) of such Act (29 U.S.C.
1024(b)(1)) is amended in the matter following subpara-graph (B)Ð
(A) by striking ``102(a)(1),'' and inserting ``102(a)(1)
(other than a material reduction in covered services orbenefits provided in the case of a group health plan (asdefined in section 706(a)(1))),''; and
(B) by adding at the end the following new sentences:

``If there is a modification or change described in section102(a)(1) that is a material reduction in covered servicesor benefits provided under a group health plan (as definedin section 706(a)(1)), a summary description of such modi-fication or change shall be furnished to participants andbeneficiaries not later than 60 days after the date of the

adoption of the modification or change. In the alternative,the plan sponsors may provide such description at regularintervals of not more than 90 days. The Secretary shallissue regulations within 180 days after the date of enact-ment of the Health Insurance Portability and Accountabil-ity Act of 1996, providing alternative mechanisms todelivery by mail through which group health plans (asso defined) may notify participants and beneficiaries ofmaterial reductions in covered services or

LAN DESCRIPTION AND SUMMARY .ÐSection 102(b) of
such Act (29 U.S.C. 1022(b)) is amendedÐ
(A) by inserting ``in the case of a group health plan
(as defined in section 706(a)(1)), whether a health insuranceissuer (as defined in section 706(b)(2)) is responsible forthe financing or administration (including payment ofclaims) of the plan and (if so) the name and address ofsuch issuer;'' after ``type of administration of the plan;'';and29 USC 1187.

110 STAT. 1952 PUBLIC LAW 104±191ÐAUG. 21, 1996
(B) by inserting ``including the office at the Department
of Labor through which participants and beneficiaries mayseek assistance or information regarding their rights underthis Act and the Health Insurance Portability and Account-ability Act of 1996 with respect to health benefits thatare offered through a group health plan (as defined insection 706(a)(1))'' after ``benefits under the plan''.
(d) T
REATMENT OF HEALTH INSURANCE ISSUERS OFFERING

HEALTH INSURANCE COVERAGE TO NONCOVERED PLANS .ÐSection

4(b) of such Act (29 U.S.C. 1003(b)) is amended by adding atthe end (after and below paragraph (5)) the following:``The provisions of part 7 of subtitle B shall not apply to a healthinsurance issuer (as defined in section 706(b)(2)) solely by reasonof health insurance coverage (as defined in section 706(b)(1)) pro-vided by such issuer in connection with a group health plan (asdefined in section 706(a)(1)) if the provisions of this title do notapply to such group health plan.''.
(e) R

(e) R
EPORTING AND ENFORCEMENT WITHRESPECT TO CERTAIN
ARRANGEMENTS .Ð
(1) I N GENERAL .ÐSection 101 of such Act (29 U.S.C. 1021)
is amendedÐ
(A) by redesignating subsection (g) as subsection
(h), and
(B) by inserting after subsection (f) the following new
``(g) R EPORTING BY CERTAIN ARRANGEMENTS .ÐThe Secretary

may, by regulation, require multiple employer welfare arrangementsproviding benefits consisting of medical care (within the meaningof section 706(a)(2)) which are not group health plans to report,not more frequently than annually, in such form and such manneras the Secretary may require for the purpose of determining theextent to which the requirements of part 7 are being carried outin connection with such benefits.''.
(2) E
NFORCEMENT .Ð
(A) I N GENERAL .ÐSection 502 of such Act (29 U.S.C.

1132) is amendedÐ
(i) in subsection (a)(6), by striking ``under sub-
section (c)(2) or (i) or (l)'' and inserting ``under para-graph (2), (4), or (5) of subsection (c) or undersubsection (i) or (l)''; and
(ii) in the last 2 sentences of subsection (c), by
striking ``For purposes of this paragraph'' and all thatfollows through ``The Secretary and'' and inserting thefollowing:
``(5) The Secretary may assess a civil penalty against any person

of up to $1,000 a day from the date of the person's failure or
refusal to file the information required to be filed by such personwith the Secretary under regulations prescribed pursuant to section101(g).
``(6) The Secretary and''.
(B) T
ECHNICAL AND CONFORMING AMENDMENT .ÐSec-

(B) T
tion 502(c)(1) of such Act (29 U.S.C. 1132(c)(1)) is amendedby adding at the end the following sentence: ``For purposesof this paragraph, each violation described in subparagraph(A) with respect to any single participant, and each viola-tion described in subparagraph (B) with respect to any

110 STAT. 1953 PUBLIC LAW 104±191ÐAUG. 21, 1996
single participant or beneficiary, shall be treated as a sepa-
rate violation.''.(3) C
OORDINATION .ÐSection 506 of such Act (29 U.S.C.
1136) is amended by adding at the end the following newsubsection:``(c) C
OORDINATION OF ENFORCEMENT WITH STATES WITH
RESPECT TO CERTAIN ARRANGEMENTS .ÐA State may enter into

an agreement with the Secretary for delegation to the State ofsome or all of the Secretary's authority under sections 502 and504 to enforce the requirements under part 7 in connection withmultiple employer welfare arrangements, providing medical care(within the meaning of section 706(a)(2)), which are not grouphealth plans.''.
(f) C
ONFORMING AMENDMENTS .Ð
(1) Section 514(b) of such Act (29 U.S.C. 1144(b)) is

amended by adding at the end the following new paragraph:``(9) For additional provisions relating to group health plans,
see section 704.''.
(2)(A) Part 6 of subtitle B of title I of such Act (29 U.S.C.
1161 et seq.) is amended by striking the heading and insertingthe following:
``P
ART6ÐC ONTINUATION COVERAGE AND ADDITIONAL STANDARDS
FORGROUP HEALTH PLANS ''.
(B) The table of contents in section 1 of such Act is amended

by striking the item relating to the heading for part 6 ofsubtitle B of title I and inserting the following:
``PART6ÐC ONTINUATION COVERAGE AND ADDITIONAL STANDARDS FOR GROUP
HEALTH PLANS ''.
(3) The table of contents in section 1 of such Act (as
amended by the preceding provisions of this section) is amendedby inserting after the items relating to part 6 the followingnew items:

``Sec. 701. Increased portability through limitation on preexisting condition exclu-
sions.
``Sec. 703. Guaranteed renewability in multiemployer plans and multiple employer
welfare arrangements.

(g) E FFECTIVE DATES .Ð
(1) I N GENERAL .ÐExcept as provided in this section, this
section (and the amendments made by this section) shall applywith respect to group health plans for plan years beginningafter June 30, 1997.
(2) D
ETERMINATION OF CREDITABLE COVERAGE .Ð
(A) P ERIOD OF COVERAGE .Ð
(i) I N GENERAL .ÐSubject to clause (ii), no period

before July 1, 1996, shall be taken into account underpart 7 of subtitle B of title I of the Employee Retire-ment Income Security Act of 1974 (as added by thissection) in determining creditable coverage.29 USC 1181note.

110 STAT. 1954 PUBLIC LAW 104±191ÐAUG. 21, 1996
(ii) S PECIAL RULE FOR CERTAIN PERIODS .ÐThe Sec-
retary of Labor, consistent with section 104, shall pro-vide for a process whereby individuals who need toestablish creditable coverage for periods before July1, 1996, and who would have such coverage creditedbut for clause (i) may be given credit for creditablecoverage for such periods through the presentationof documents or other means.(B) C
ERTIFICATIONS , ETC.Ð

(i) I N GENERAL .ÐSubject to clauses (ii) and (iii),
subsection (e) of section 701 of the Employee Retire-ment Income Security Act of 1974 (as added by thissection) shall apply to events occurring after June 30,1996.
(ii) N
O CERTIFICATION REQUIRED TO BE PROVIDED
BEFORE JUNE 1 , 1997.ÐIn no case is a certification
required to be provided under such subsection beforeJune 1, 1997.
(iii) C
ERTIFICATION ONLY ON WRITTEN REQUEST FOR

(iii) C
EVENTS OCCURRING BEFORE OCTOBER 1 , 1996.ÐIn the
case of an event occurring after June 30, 1996, andbefore October 1, 1996, a certification is not requiredto be provided under such subsection unless an individ-ual (with respect to whom the certification is otherwiserequired to be made) requests such certification inwriting.(C) T
RANSITIONAL RULE .ÐIn the case of an individual

who seeks to establish creditable coverage for any periodfor which certification is not required because it relatesto an event occurring before June 30, 1996Ð
(i) the individual may present other credible evi-
dence of such coverage in order to establish the periodof creditable coverage; and
(ii) a group health plan and a health insurance

issuer shall not be subject to any penalty or enforce-ment action with respect to the plan's or issuer's credit-ing (or not crediting) such coverage if the plan orissuer has sought to comply in good faith with theapplicable requirements under the amendments madeby this section.
(3) S
PECIAL RULE FOR COLLECTIVE BARGAINING AGREE -
MENTS .ÐExcept as provided in paragraph (2), in the case of

a group health plan maintained pursuant to one or more collec-tive bargaining agreements between employee representativesand one or more employers ratified before the date of theenactment of this Act, part 7 of subtitle B of title I of EmployeeRetirement Income Security Act of 1974 (other than section701(e) thereof) shall not apply to plan years beginning beforethe later ofÐ
(A) the date on which the last of the collective bargain-

ing agreements relating to the plan terminates (determinedwithout regard to any extension thereof agreed to afterthe date of the enactment of this Act), or
(B) July 1, 1997.
For purposes of subparagraph (A), any plan amendment madepursuant to a collective bargaining agreement relating to theplan which amends the plan solely to conform to any require-

110 STAT. 1955 PUBLIC LAW 104±191ÐAUG. 21, 1996
ment of such part shall not be treated as a termination of
such collective bargaining agreement.
(4) T IMELY REGULATIONS .ÐThe Secretary of Labor, consist-
ent with section 104, shall first issue by not later than April1, 1997, such regulations as may be necessary to carry outthe amendments made by this section.
(5) L
IMITATION ON ACTIONS .ÐNo enforcement action shall

be taken, pursuant to the amendments made by this section,against a group health plan or health insurance issuer withrespect to a violation of a requirement imposed by such amend-ments before January 1, 1998, or, if later, the date of issuanceof regulations referred to in paragraph (4), if the plan or issuerhas sought to comply in good faith with such requirements.
SEC. 102. THROUGH THE PUBLIC HEALTH SERVICE ACT.
(a) I NGENERAL .ÐThe Public Health Service Act is amended

by adding at the end the following new title:
``TITLE XXVIIÐASSURING PORTABILITY,
AVAILABILITY, AND RENEWABILITYOF HEALTH INSURANCE COVERAGE
``PARTAÐG ROUP MARKET REFORMS
``SEC. 2701. INCREASED PORTABILITY THROUGH LIMITATION ON

section (d), a group health plan, and a health insurance issueroffering group health insurance coverage, may, with respect toa participant or beneficiary, impose a preexisting condition exclusiononly ifÐ

exclusion' means, with respect to coverage, a limitationor exclusion of benefits relating to a condition based onthe fact that the condition was present before the dateof enrollment for such coverage, whether or not any medicaladvice, diagnosis, care, or treatment was recommendedor received before such date.42 USC 300gg.

110 STAT. 1956 PUBLIC LAW 104±191ÐAUG. 21, 1996
``(B) T REATMENT OF GENETIC INFORMATION .ÐGenetic

``(3) L

``(4) W

title, the term `creditable coverage' means, with respect to anindividual, coverage of the individual under any of the following:

``(E) Chapter 55 of title 10, United States Code.``(F) A medical care program of the Indian Health
``(G) A State health benefits risk pool.``(H) A health plan offered under chapter 89 of
title 5, United States Code.

Such term does not include coverage consisting solely of cov-erage of excepted benefits (as defined in section 2791(c)).
``(2) N
not be counted, with respect to enrollment of an individual

under a group health plan, if, after such period and beforethe enrollment date, there was a 63-day period duringall of which the individual was not covered under anycreditable coverage.
``(B) W

(d)(4), any period that an individual is in a waiting periodfor any coverage under a group health plan (or for grouphealth insurance coverage) or is in an affiliation period(as defined in subsection (g)(2)) shall not be taken into

110 STAT. 1957 PUBLIC LAW 104±191ÐAUG. 21, 1996
account in determining the continuous period under
subparagraph (A).``(3) M
``(B) E

health plan, or a health insurance issuer offering grouphealth insurance, may elect to apply subsection (a)(3) basedon coverage of benefits within each of several classes orcategories of benefits specified in regulations rather thanas provided under subparagraph (A). Such election shallbe made on a uniform basis for all participants and bene-ficiaries. Under such election a group health plan or issuershall count a period of creditable coverage with respectto any class or category of benefits if

respectto any class or category of benefits if any level of benefitsis covered within such class or category.

``(C) P
respect to a group health plan under subparagraph (B)(whether or not health insurance coverage is provided inconnection with such plan), the plan shallÐ
the effect of this election.``(D) I

SSUER NOTICE .ÐIn the case of an election under
subparagraph (B) with respect to health insurance coverageoffered by an issuer in the small or large group market,the issuerÐ
``(i) shall prominently state in any disclosure state-
ments concerning the coverage, and to each employerat the time of the offer or sale of the coverage, thatthe issuer has made such election, and
``(ii) shall include in such statements a description
of the effect of such election.

``(4) E
erage with respect to an individual shall be established throughpresentation of certifications described in subsection (e) or insuch other manner as may be specified in regulations.``(d) E

a health insurance issuer offering group health insurance cov-erage, may not impose any preexisting condition exclusion inthe case of a child who is adopted or placed for adoption

110 STAT. 1958 PUBLIC LAW 104±191ÐAUG. 21, 1996
before attaining 18 years of age and who, as of the last day
of the 30-day period beginning on the date of the adoptionor placement for adoption, is covered under creditable coverage.The previous sentence shall not apply to coverage before thedate of such adoption or placement for adoption.
``(3) E

``(4) L

``(B) C
period, if applicable) imposed with respect to theindividual for any coverage under such plan.``(C) I
SSUER COMPLIANCE .ÐTo the extent that medical

which issued the certification provided by the individualshall promptly disclose to such requesting plan or issuer

110 STAT. 1959 PUBLIC LAW 104±191ÐAUG. 21, 1996
information on coverage of classes and categories of health
benefits available under such entity's plan or coverage,and

and the coverage under such provision wasexhausted; or

the coverage was terminated as a result of loss ofeligibility for the coverage (including as a result oflegal separation, divorce, death, termination of employ-ment, or reduction in the number of hours of employ-ment) or employer contributions toward such coveragewere 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 contributiondescribed in subparagraph (C)(ii).``(2) F
(or has met any waiting period applicable to becominga participant under the plan and is eligible to be

110 STAT. 1960 PUBLIC LAW 104±191ÐAUG. 21, 1996
enrolled under the plan but for a failure to enroll
during a previous enrollment period), and

``(g) U
``(1) I N GENERAL .ÐA health maintenance organization

which offers health insurance coverage in connection with agroup health plan and which does not impose any preexistingcondition exclusion allowed under subsection (a) with respectto any particular coverage option may impose an affiliationperiod for such coverage option, but only ifÐ
``(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) A

``(2) A
``(A) D EFINED .ÐFor purposes of this title, the term

110 STAT. 1961 PUBLIC LAW 104±191ÐAUG. 21, 1996
``(B) B EGINNING .ÐSuch period shall begin on the enroll-
ment date.

organization described in paragraph (1) may use alternativemethods, from those described in such paragraph, to addressadverse selection as approved by the State insurance commis-sioner or official or officials designated by the State to enforcethe requirements of this part for the State involved with respectto such issuer.
``SEC. 2702. PROHIBITING DISCRIMINATION AGAINST INDIVIDUAL

``(2) N

ing limitations or restrictions on the amount, level, extent,or nature of the benefits or coverage for similarly situatedindividuals enrolled in the plan or coverage.``(3) C

ance issuer offering health insurance coverage in connectionwith a group health plan, may not require any individual(as a condition of enrollment or continued enrollment underthe plan) to pay a premium or contribution which is greaterthan such premium or contribution for a similarly situatedindividual enrolled in the plan on the basis of any healthstatus-related factor in relation to the individual or to an42 USC 300gg±1.

110 STAT. 1962 PUBLIC LAW 104±191ÐAUG. 21, 1996
individual enrolled under the plan as a dependent of the
individual.
``(2) C ONSTRUCTION .ÐNothing in paragraph (1) shall be

``Subpart 2ÐProvisions Applicable Only to Health Insurance
Issuers
``SEC. 2711. GUARANTEED AVAILABILITY OF COVERAGE FOR
EMPLOYERS IN THE GROUP MARKET.
``(a) I SSUANCE OF COVERAGE IN THE SMALL GROUP MARKET .Ð

``(1) I N GENERAL .ÐSubject to subsections (c) through (f),
each health insurance issuer that offers health insurance cov-erage in the small group market in a StateÐ
``(A) must accept every small employer (as defined in
section 2791(e)(4)) in the State that applies for such cov-erage; and
``(B) must accept for enrollment under such coverage

every eligible individual (as defined in paragraph (2)) whoapplies for enrollment during the period in which theindividual first becomes eligible to enroll under the termsof the group health plan and may not place any restrictionwhich is inconsistent with section 2702 on an eligibleindividual being a participant or beneficiary.``(2) E
LIGIBLE INDIVIDUAL DEFINED .ÐFor purposes of this

section, the term `eligible individual' means, with respect toa health insurance issuer that offers health insurance coverageto a small employer in connection with a group health planin the small group market, such an individual in relation tothe employer as shall be determinedÐ
``(A) in accordance with the terms of such plan,``(B) as provided by the issuer under rules of the issuer

which are uniformly applicable in a State to small employ-ers in the small group market, and
``(C) in accordance with all applicable State laws
governing such issuer and such market.
``(b) A
SSURING ACCESS IN THE LARGE GROUP MARKET .Ð
``(1) R EPORTS TO HHS .ÐThe Secretary shall request that
the chief executive officer of each State submit to the Secretary,by not later December 31, 2000, and every 3 years thereaftera report onÐ
``(A) the access of large employers to health insurance

coverage in the State, and
``(B) the circumstances for lack of access (if any) of
large employers (or one or more classes of such employers)in the State to such coverage.``(2) T
RIENNIAL REPORTS TO CONGRESS .ÐThe Secretary,
based on the reports submitted under paragraph (1) and suchother information as the Secretary may use, shall prepare42 USC 300gg±11.

110 STAT. 1963 PUBLIC LAW 104±191ÐAUG. 21, 1996
and submit to Congress, every 3 years, a report describing
the extent to which large employers (and classes of such employ-ers) that seek health insurance coverage in the different Statesare able to obtain access to such coverage. Such report shallinclude such recommendations as the Secretary determines tobe appropriate.
``(3) GAO 
REPORT ON LARGE EMPLOYER ACCESS TO HEALTH
INSURANCE COVERAGE .ÐThe Comptroller General shall provide

for a study of the extent to which classes of large employersin the different States are able to obtain access to healthinsurance coverage and the circumstances for lack of access(if any) to such coverage. The Comptroller General shall submitto Congress a report on such study not later than 18 monthsafter the date of the enactment of this title.``(c) S
PECIAL RULES FOR NETWORK PLANS .Ð
``(1) I N GENERAL .ÐIn the case of a health insurance issuer

that offers health insurance coverage in the small group marketthrough a network plan, the issuer mayÐ
``(A) limit the employers that may apply for such cov-
erage 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 if the issuer has demonstrated,if required, to the applicable State authority thatÐ
``(i) it will not have the capacity to deliver services

adequately to enrollees of any additional groupsbecause of its obligations to existing group contractholders and enrollees, and
``(ii) it is applying this paragraph uniformly to
all employers without regard to the claims experienceof those employers and their employees (and theirdependents) or any health status-related factor relatingto such employees and dependents.
``(2) 180-
DAY SUSPENSION UPON DENIAL OF COVERAGE .ÐAn

issuer, upon denying health insurance coverage in any servicearea in accordance with paragraph (1)(B), may not offer cov-erage in the small group market within such service areafor a period of 180 days after the date such coverage is denied.``(d) A
PPLICATION OF FINANCIAL CAPACITY LIMITS .Ð
``(1) I N GENERAL .ÐA health insurance issuer may deny

health insurance coverage in the small group market if theissuer has demonstrated, if required, to the applicable Stateauthority thatÐ
``(A) it does not have the financial reserves necessary
to underwrite additional coverage; and
``(B) it is applying this paragraph uniformly to all

employers in the small group market in the State consistentwith applicable State law and without regard to the claimsexperience of those employers and their employees (andtheir dependents) or any health status-related factor relat-ing to such employees and dependents.``(2) 180-
DAY SUSPENSION UPON DENIAL OF COVERAGE .ÐA

health insurance issuer upon denying health insurance coveragein connection with group health plans in accordance with para-graph (1) in a State may not offer coverage in connectionwith group health plans in the small group market in theState for a period of 180 days after the date such coverage

110 STAT. 1964 PUBLIC LAW 104±191ÐAUG. 21, 1996
is denied or until the issuer has demonstrated to the applicable
State authority, if required under applicable State law, thatthe issuer has sufficient financial reserves to underwrite addi-tional coverage, whichever is later. An applicable State author-ity may provide for the application of this subsection on aservice-area-specific basis.``(e) E
XCEPTION TO REQUIREMENT FOR FAILURE TOMEET CER-
TAIN MINIMUM PARTICIPATION OR CONTRIBUTION RULES .Ð

``(1) I N GENERAL .ÐSubsection (a) shall not be construed
to preclude a health insurance issuer from establishingemployer contribution rules or group participation rules forthe offering of health insurance coverage in connection witha group health plan in the small group market, as allowedunder applicable State law.
``(2) R
ULES DEFINED .ÐFor purposes of paragraph (1)Ð
``(A) the term `employer contribution rule' means a

requirement relating to the minimum level or amount ofemployer contribution toward the premium for enrollmentof participants and beneficiaries; and
``(B) the term `group participation rule' means a
requirement relating to the minimum number of partici-pants or beneficiaries that must be enrolled in relationto a specified percentage or number of eligible individualsor employees of an employer.
``(f) E
XCEPTION FOR COVERAGE OFFERED ONLY TO BONA FIDE

ASSOCIATION MEMBERS .ÐSubsection (a) shall not apply to health
insurance coverage offered by a health insurance issuer if suchcoverage is made available in the small group market only throughone or more bona fide associations (as defined in section 2791(d)(3)).
``SEC. 2712. GUARANTEED RENEWABILITY OF COVERAGE FOR
``(a) I NGENERAL .ÐExcept as provided in this section, if a health

insurance issuer offers health insurance coverage in the small orlarge group market in connection with a group health plan, theissuer must renew or continue in force such coverage at the optionof the plan sponsor of the plan.
``(b) G
ENERAL EXCEPTIONS .ÐA health insurance issuer may
nonrenew or discontinue health insurance coverage offered inconnection with a group health plan in the small or large groupmarket based only on one or more of the following:
``(1) N

``(1) N
ONPAYMENT OF PREMIUMS .ÐThe plan sponsor has
failed to pay premiums or contributions in accordance withthe terms of the health insurance coverage or the issuer hasnot received timely premium payments.
``(2) F
RAUD .ÐThe plan sponsor has performed an act or
practice that constitutes fraud or made an intentional misrepre-sentation of material fact under the terms of the coverage.
``(3) V
IOLATION OF PARTICIPATION OR CONTRIBUTION

``(3) V
RULES .ÐThe plan sponsor has failed to comply with a material
plan provision relating to employer contribution or groupparticipation rules, as permitted under section 2711(e) in thecase of the small group market or pursuant to applicable Statelaw in the case of the large group market.
``(4) T
ERMINATION OF COVERAGE .ÐThe issuer is ceasing to
offer coverage in such market in accordance with subsection(c) and applicable State law.42 USC 300gg±12.

110 STAT. 1965 PUBLIC LAW 104±191ÐAUG. 21, 1996
``(5) M OVEMENT OUTSIDE SERVICE AREA .ÐIn the case of

a health insurance issuer that offers health insurance coveragein the market through a network plan, there is no longerany enrollee in connection with such plan who lives, resides,or works in the service area of the issuer (or in the areafor which the issuer is authorized to do business) and, inthe case of the small group market, the issuer would denyenrollment with respect to such plan under section2711(c)(1)(A).
``(6) A
SSOCIATION MEMBERSHIP CEASES .ÐIn the case of

health insurance coverage that is made available in the smallor large group market (as the case may be) only through oneor more bona fide associations, the membership of an employerin the association (on the basis of which the coverage is pro-vided) ceases but only if such coverage is terminated underthis paragraph uniformly without regard to any health status-related factor relating to any covered individual.``(c) R

EQUIREMENTS FOR UNIFORM TERMINATION OF COV-
ERAGE .Ð
``(1) P ARTICULAR TYPE OF COVERAGE NOT OFFERED .ÐIn any
case in which an issuer decides to discontinue offering a particu-lar type of group health insurance coverage offered in thesmall or large group market, coverage of such type may bediscontinued by the issuer in accordance with applicable Statelaw in such market only ifÐ
``(A) the issuer provides notice to each plan sponsor

provided coverage of this type in such market (and partici-pants and beneficiaries covered under such coverage) ofsuch discontinuation at least 90 days prior to the dateof the discontinuation of such coverage;
``(B) the issuer offers to each plan sponsor provided
coverage of this type in such market, the option to purchaseall (or, in the case of the large group market, any) otherhealth insurance coverage currently being offered by theissuer to a group health plan in such market; and

``(C) in exercising the option to discontinue coverage
of this type and in offering the option of coverage undersubparagraph (B), the issuer acts uniformly without regardto the claims experience of those sponsors or any healthstatus-related factor relating to any participants or bene-ficiaries covered or new participants or beneficiaries whomay become eligible for such coverage.``(2) D
ISCONTINUANCE OF ALL COVERAGE .Ð
``(A) I N GENERAL .ÐIn any case in which a health insur-

ance issuer elects to discontinue offering all health insur-ance coverage in the small group market or the largegroup market, or both markets, in a State, health insurancecoverage may be discontinued by the issuer only in accord-ance with applicable State law and ifÐ
``(i) the issuer provides notice to the applicable

State authority and to each plan sponsor (and partici-pants and beneficiaries covered under such coverage)of such discontinuation at least 180 days prior to thedate of the discontinuation of such coverage; and
``(ii) all health insurance issued or delivered for
issuance in the State in such market (or markets)are discontinued and coverage under such health insur-

110 STAT. 1966 PUBLIC LAW 104±191ÐAUG. 21, 1996
ance coverage in such market (or markets) is not
renewed.``(B) P
ROHIBITION ON MARKET REENTRY .ÐIn the case
of a discontinuation under subparagraph (A) in a market,the issuer may not provide for the issuance of any healthinsurance coverage in the market and State involved duringthe 5-year period beginning on the date of the discontinu-ation of the last health insurance coverage not so renewed.
``(d) E

``(d) E
XCEPTION FOR UNIFORM MODIFICATION OF COVERAGE .Ð
At the time of coverage renewal, a health insurance issuer maymodify the health insurance coverage for a product offered to agroup health planÐ
``(1) in the large group market; or``(2) in the small group market if, for coverage that is

available in such market other than only through one or morebona fide associations, such modification is consistent withState law and effective on a uniform basis among group healthplans with that product.``(e) A
PPLICATION TO COVERAGE OFFERED ONLY THROUGH
ASSOCIATIONS .ÐIn applying this section in the case of health insur-

ance coverage that is made available by a health insurance issuerin the small or large group market to employers only throughone or more associations, a reference to `plan sponsor' is deemed,with respect to coverage provided to an employer member of theassociation, to include a reference to such employer.
``SEC. 2713. DISCLOSURE OF INFORMATION.
``(a) D ISCLOSURE OF INFORMATION BY HEALTH PLAN ISSUERS .Ð

In connection with the offering of any health insurance coverageto a small employer, a health insurance issuerÐ
``(1) shall make a reasonable disclosure to such employer,
as part of its solicitation and sales materials, of the availabilityof information described in subsection (b), and
``(2) upon request of such a small employer, provide such
information.``(b) I
NFORMATION DESCRIBED .Ð
``(1) I N GENERAL .ÐSubject to paragraph (3), with respect

to a health insurance issuer offering health insurance coverage
to a small employer, information described in this subsectionis information concerningÐ
``(A) the provisions of such coverage concerning issuer's
right to change premium rates and the factors that mayaffect changes in premium rates;
``(B) the provisions of such coverage relating to renew-
ability of coverage;
``(C) the provisions of such coverage relating to any
preexisting condition exclusion; and

``(D) the benefits and premiums available under all
health insurance coverage for which the employer is quali-fied.``(2) F
ORM OF INFORMATION .ÐInformation under this sub-
section shall be provided to small employers in a manner deter-mined to be understandable by the average small employer,and shall be sufficient to reasonably inform small employersof their rights and obligations under the health insurance cov-erage.42 USC 300gg±
13.

110 STAT. 1967 PUBLIC LAW 104±191ÐAUG. 21, 1996
``(3) E XCEPTION .ÐAn issuer is not required under this sec-
tion to disclose any information that is proprietary and tradesecret information under applicable law.
``SEC. 2721. EXCLUSION OF CERTAIN PLANS.
``(a) E XCEPTION FOR CERTAIN SMALL GROUP HEALTH PLANS .Ð
The requirements of subparts 1 and 2 shall not apply to any

group health plan (and health insurance coverage offered in connec-tion with a group health plan) for any plan year if, on the firstday of such plan year, such plan has less than 2 participantswho are current employees.
``(b) L
IMITATION ON APPLICATION OF PROVISIONS RELATING TO
GROUP HEALTH PLANS .Ð
``(1) I N GENERAL .ÐThe requirements of subparts 1 and
2 shall apply with respect to group health plans onlyÐ
``(A) subject to paragraph (2), in the case of a plan

that is a nonfederal governmental plan, and
``(B) with respect to health insurance coverage offered
in connection with a group health plan (including sucha plan that is a church plan or a governmental plan).``(2) T
REATMENT OF NONFEDERAL GOVERNMENTAL PLANS .Ð
``(A) E LECTION TO BE EXCLUDED .ÐIf the plan sponsor

of a nonfederal governmental plan which is a group healthplan to which the provisions of subparts 1 and 2 otherwiseapply makes an election under this subparagraph (in suchform and manner as the Secretary may by regulationsprescribe), then the requirements of such subparts insofaras they apply directly to group health plans (and not merelyto group health insurance coverage) shall not apply tosuch governmental plans for such period except as providedin this paragraph.
``(B) P

``(B) P
ERIOD OF ELECTION .ÐAn election under subpara-
graph (A) shall applyÐ
``(i) for a single specified plan year, or``(ii) in the case of a plan provided pursuant to
a collective bargaining agreement, for the term of suchagreement.
An election under clause (i) may be extended through sub-sequent elections under this paragraph.
``(C) N
OTICE TO ENROLLEES .ÐUnder such an election,
the plan shall provide forÐ
``(i) notice to enrollees (on an annual basis and

at the time of enrollment under the plan) of the factand consequences of such election, and
``(ii) certification and disclosure of creditable cov-
erage under the plan with respect to enrollees inaccordance with section 2701(e).
``(c) E

subparts 1 and 2 shall not apply to any group health plan (orgroup health insurance coverage) in relation to its provision ofexcepted benefits described in section 2791(c)(1).
``(d) E
XCEPTION FOR CERTAIN BENEFITS IFCERTAIN CONDITIONS
MET.Ð
subparts 1 and 2 shall not apply to any group health plan42 USC 300gg±21.

110 STAT. 1968 PUBLIC LAW 104±191ÐAUG. 21, 1996
(and group health insurance coverage offered in connection
with a group health plan) in relation to its provision of exceptedbenefits described in section 2791(c)(2) if the benefitsÐ
``(2) N

ments of subparts 1 and 2 shall not apply to any group healthplan (and group health insurance coverage offered in connectionwith a group health plan) in relation to its provision of exceptedbenefits described in section 2791(c)(3) if all of the followingconditions are met:

ments of this part shall not apply to any group health plan(and group health insurance coverage) in relation to its provi-sion of excepted benefits described in section 27971(c)(4) ifthe benefits are provided under a separate policy, certificate,or contract of insurance.``(e) T

or program which would not be (but for this subsection) anemployee welfare benefit plan and which is established or main-tained by a partnership, to the extent that such plan, fund,or program provides medical care (including items and servicespaid for as medical care) to present or former partners inthe partnership or to their dependents (as defined under theterms of the plan, fund, or program), directly or through insur-

ance, reimbursement, or otherwise, shall be treated (subjectto paragraph (2)) as an employee welfare benefit plan whichis a group health plan.
``(2) E
term `employer' also includes the partnership in relation toany partner.
``(3) P
ARTICIPANTS OF GROUP HEALTH PLANS .ÐIn the case

``SEC. 2722. ENFORCEMENT.
``(a) S TATE ENFORCEMENT .Ð42 USC 2722.

110 STAT. 1969 PUBLIC LAW 104±191ÐAUG. 21, 1996
``(1) S TATE AUTHORITY .ÐSubject to section 2723, each State
may require that health insurance issuers that issue, sell,renew, or offer health insurance coverage in the State in thesmall or large group markets meet the requirements of thispart with respect to such issuers.
``(2) F
AILURE TO IMPLEMENT PROVISIONS .ÐIn the case of

a determination by the Secretary that a State has failed tosubstantially enforce a provision (or provisions) in this partwith respect to health insurance issuers in the State, the Sec-retary shall enforce such provision (or provisions) under sub-section (b) insofar as they relate to the issuance, sale, renewal,and offering of health insurance coverage in connection withgroup health plans in such State.``(b) S
ECRETARIAL ENFORCEMENT AUTHORITY .Ð

``(1) L IMITATION .ÐThe provisions of this subsection shall
apply to enforcement of a provision (or provisions) of this partonlyÐ
``(A) as provided under subsection (a)(2); and``(B) with respect to group health plans that are non-
Federal governmental plans.``(2) I
MPOSITION OF PENALTIES .ÐIn the cases described in
paragraph (1)Ð
``(A) I N GENERAL .ÐSubject to the succeeding provisions

of this subsection, any non-Federal governmental plan thatis a group health plan and any health insurance issuerthat fails to meet a provision of this part applicable tosuch plan or issuer is subject to a civil money penaltyunder this subsection.
``(B) L
IABILITY FOR PENALTY .ÐIn the case of a
failure byÐ
``(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 isÐ

``(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) A MOUNT OF PENALTY .Ð
``(i) I N GENERAL .ÐThe maximum amount of pen-
alty imposed under this paragraph is $100 for eachday for each individual with respect to which sucha failure occurs.
``(ii) C
ONSIDERATIONS IN IMPOSITION .ÐIn determin-

ing the amount of any penalty to be assessed underthis paragraph, the Secretary shall take into accountthe previous record of compliance of the entity beingassessed with the applicable provisions of this partand the gravity of the violation.
``(iii) L
IMITATIONS .Ð
``(I) P ENALTY NOT TO APPLY WHERE FAILURE
NOT DISCOVERED EXERCISING REASONABLE DILI -
GENCE .ÐNo civil money penalty shall be imposed

under this paragraph on any failure during anyperiod for which it is established to the satisfactionof the Secretary that none of the entities againstwhom the penalty would be imposed knew, or

110 STAT. 1970 PUBLIC LAW 104±191ÐAUG. 21, 1996
exercising reasonable diligence would have known,
that such failure existed.
``(II) P ENALTY NOT TO APPLY TO FAILURES COR -
RECTED WITHIN 30 DAYS .ÐNo civil money penalty

shall be imposed under this paragraph on anyfailure if such failure was due to reasonable causeand not to willful neglect, and such failure is cor-rected during the 30-day period beginning on thefirst day any of the entities against whom thepenalty would be imposed knew, or exercisingreasonable diligence would have known, that suchfailure existed.
``(D) A
DMINISTRATIVE REVIEW .Ð
``(i) O PPORTUNITY FOR HEARING .ÐThe entity

assessed shall be afforded an opportunity for hearingby the Secretary upon request made within 30 daysafter the date of the issuance of a notice of assessment.In such hearing the decision shall be made on therecord pursuant to section 554 of title 5, United StatesCode. If no hearing is requested, the assessment shallconstitute a final and unappealable order.
``(ii) H
EARING PROCEDURE .ÐIf a hearing is

requested, the initial agency decision shall be madeby an administrative law judge, and such decision shallbecome the final order unless the Secretary modifiesor vacates the decision. Notice of intent to modifyor vacate the decision of the administrative law judgeshall be issued to the parties within 30 days afterthe date of the decision of the judge. A final orderwhich takes effect under this paragraph shall besubject to review only as provided under subparagraph(E).``(E) J
UDICIAL REVIEW .Ð

``(i) F ILING OF ACTION FOR REVIEW .ÐAny entity

against whom an order imposing a civil money penaltyhas been entered after an agency hearing under thisparagraph may obtain review by the United Statesdistrict court for any district in which such entityis located or the United States District Court for theDistrict of Columbia by filing a notice of appeal insuch court within 30 days from the date of such order,and simultaneously sending a copy of such notice byregistered mail to the Secretary.

``(ii) C
ERTIFICATION OF ADMINISTRATIVE RECORD .Ð
The Secretary shall promptly certify and file in suchcourt the record upon which the penalty was imposed.
``(iii) S
TANDARD FOR REVIEW .ÐThe findings of the
Secretary shall be set aside only if found to be unsup-ported by substantial evidence as provided by section706(2)(E) of title 5, United States Code.
``(iv) A
PPEAL .ÐAny final decision, order, or judg-

ment of the district court concerning such review shallbe subject to appeal as provided in chapter 83 of title28 of such Code.``(F) F
AILURE TO PAY ASSESSMENT ; MAINTENANCE OF
ACTION .Ð

110 STAT. 1971 PUBLIC LAW 104±191ÐAUG. 21, 1996
``(i) F AILURE TO PAY ASSESSMENT .ÐIf any entity
fails to pay an assessment after it has become a finaland unappealable order, or after the court has enteredfinal judgment in favor of the Secretary, the Secretaryshall refer the matter to the Attorney General whoshall recover the amount assessed by action in theappropriate United States district court.
``(ii) N
ONREVIEWABILITY .ÐIn such action the valid-

ity and appropriateness of the final order imposingthe penalty shall not be subject to review.``(G) P
AYMENT OF PENALTIES .ÐExcept as otherwise pro-
vided, penalties collected under this paragraph shall bepaid to the Secretary (or other officer) imposing the penaltyand shall be available without appropriation and untilexpended for the purpose of enforcing the provisions withrespect to which the penalty was imposed.

``SEC. 2723. PREEMPTION; STATE FLEXIBILITY; CONSTRUCTION.

as provided in subsection (b), this part and part C insofaras it relates to this part shall not be construed to supersedeany provision of State law which establishes, implements, orcontinues in effect any standard or requirement solely relatingto health insurance issuers in connection with group healthinsurance coverage except to the extent that such standardor requirement prevents the application of a requirement ofthis part.
``(2) C

``(2) C
affect or modify the provisions of section 514 of the EmployeeRetirement Income Security Act of 1974 with respect to grouphealth plans.``(b) S
of this part relating to health insurance coverage offered bya health insurance issuer supersede any provision of State

law which establishes, implements, or continues in effect astandard or requirement applicable to imposition of a preexist-ing condition exclusion specifically governed by section 701which differs from the standards or requirements specifiedin such section.
``(2) E

``(i) substitutes for the reference to `6-month period'
in section 2701(a)(1) a reference to any shorter period oftime;
``(ii) substitutes for the reference to `12 months' and
`18 months' in section 2701(a)(2) a reference to any shorterperiod of time;
``(iii) substitutes for the references to `63' days in sec-
tions 2701(c)(2)(A) and 2701(d)(4)(A) a reference to anygreater number of days;42 USC 300gg±
23.

110 STAT. 1972 PUBLIC LAW 104±191ÐAUG. 21, 1996
``(iv) substitutes for the reference to `30-day period'
in sections 2701(b)(2) and 2701(d)(1) a reference to anygreater period;
``(v) prohibits the imposition of any preexisting condi-
tion exclusion in cases not described in section 2701(d)
or expands the exceptions described in such section;
``(vi) requires special enrollment periods in addition
to those required under section 2701(f); or
``(vii) reduces the maximum period permitted in an

affiliation period under section 2701(g)(1)(B).
``(c) R
``(d) D

``(2) S
TATE .ÐThe term `State' includes a State (including
the Northern Mariana Islands), any political subdivisions ofa State or such Islands, or any agency or instrumentalityof either.
``P
``SEC. 2791. DEFINITIONS.

``(a) G ROUP HEALTH PLAN.Ð
``(1) D EFINITION .ÐThe term `group health plan' means an
employee welfare benefit plan (as defined in section 3(1) ofthe Employee Retirement Income Security Act of 1974) to theextent that the plan provides medical care (as defined in para-graph (2)) and including items and services paid for as medicalcare) to employees or their dependents (as defined under theterms of the plan) directly or through insurance, reimburse-ment, or otherwise.

``(2) M
referred to in subparagraphs (A) and (B).``(3) T
REATMENT OF CERTAIN PLANS AS GROUP HEALTH PLAN

FOR NOTICE PROVISION .ÐA program under which creditable cov-
erage described in subparagraph (C), (D), (E), or (F) of section2701(c)(1) is provided shall be treated as a group health planfor purposes of applying section 2701(e).``(b) D
EFINITIONS RELATING TO HEALTH INSURANCE .Ð

insurance coverage' means benefits consisting of medical care(provided directly, through insurance or reimbursement, orotherwise and including items and services paid for as medical42 USC 300gg±91.

110 STAT. 1973 PUBLIC LAW 104±191ÐAUG. 21, 1996
care) under any hospital or medical service policy or certificate,
hospital or medical service plan contract, or health maintenanceorganization contract offered by a health insurance issuer.
``(2) H

ance issuer' means an insurance company, insurance service,or insurance organization (including a health maintenanceorganization, as defined in paragraph (3)) which is licensedto engage in the business of insurance in a State and whichis subject to State law which regulates insurance (within themeaning of section 514(b)(2) of the Employee RetirementIncome Security Act of 1974). Such term does not includea group health plan.
``(3) H

``(3) H
``(A) a Federally qualified health maintenance organiza-
tion (as defined in section 1301(a)),
for solvency in the same manner and to the same extentas such a health maintenance organization.``(4) G
ROUP HEALTH INSURANCE COVERAGE .ÐThe term

`group health insurance coverage' means, in connection witha group health plan, health insurance coverage offered inconnection with such plan.
``(5) I
NDIVIDUAL HEALTH INSURANCE COVERAGE .ÐThe term
`individual health insurance coverage' means health insurancecoverage offered to individuals in the individual market, butdoes not include short-term limited duration insurance.``(c) E
XCEPTED BENEFITS .ÐFor purposes of this title, the term

``(1) B
``(B) Coverage issued as a supplement to liability
insurance.

``(A) Coverage only for a specified disease or illness.

110 STAT. 1974 PUBLIC LAW 104±191ÐAUG. 21, 1996
``(B) Hospital indemnity or other fixed
indemnity insurance.``(4) B
THER DEFINITIONS .Ð

``(1) A PPLICABLE STATE AUTHORITY .ÐThe term `applicable
State authority' means, with respect to a health insuranceissuer in a State, the State insurance commissioner or officialor officials designated by the State to enforce the requirementsof this title for the State involved with respect to such issuer.
``(2) B
ENEFICIARY .ÐThe term `beneficiary' has the meaning
given such term under section 3(8) of the Employee RetirementIncome Security Act of 1974.
``(3) B

``(3) B
ONA FIDE ASSOCIATION .ÐThe term `bona fide associa-
tion' means, with respect to health insurance coverage offeredin a State, an association whichÐ
``(A) has been actively in existence for at least 5 years;``(B) has been formed and maintained in good faith
for purposes other than obtaining insurance;
``(C) does not condition membership in the association
on any health status-related factor relating to an individual(including an employee of an employer or a dependentof an employee);

``(D) makes health insurance coverage offered through
the association available to all members regardless of anyhealth status-related factor relating to such members (orindividuals eligible for coverage through a member);
``(E) does not make health insurance coverage offered
through the association available other than in connectionwith a member of the association; and
``(F) meets such additional requirements as may be
imposed under State law.``(4) COBRA

imposed under State law.``(4) COBRA 
CONTINUATION PROVISION .ÐThe term `COBRA
``(A) Section 4980B of the Internal Revenue Code of
``(B) Part 6 of subtitle B of title I of the Employee
Retirement Income Security Act of 1974, other than section609 of such Act.
``(C) Title XXII of this Act.
``(5) E
MPLOYEE .ÐThe term `employee' has the meaning

given such term under section 3(6) of the Employee RetirementIncome Security Act of 1974.
``(6) E
MPLOYER .ÐThe term `employer' has the meaning
given such term under section 3(5) of the Employee RetirementIncome Security Act of 1974, except that such term shall includeonly employers of two or more employees.
``(7) C
HURCH PLAN .ÐThe term `church plan' has the mean-

ing given such term under section 3(33) of the Employee Retire-ment Income Security Act of 1974.

110 STAT. 1975 PUBLIC LAW 104±191ÐAUG. 21, 1996
``(8) G OVERNMENTAL PLAN .Ð(A) The term `governmental
plan' has the meaning given such term under section 3(32)of the Employee Retirement Income Security Act of 1974 andany Federal governmental plan.
``(B) F
EDERAL GOVERNMENTAL PLAN .ÐThe term `Federal
governmental plan' means a governmental plan establishedor maintained for its employees by the Government of theUnited States or by any agency or instrumentality of suchGovernment.
``(C) N

``(C) N
ON-FEDERAL GOVERNMENTAL PLAN .ÐThe term `non-
Federal governmental plan' means a governmental plan thatis not a Federal governmental plan.
``(9) H
status-related factor' means any of the factors described insection 2702(a)(1).
``(10) N

health insurance coverage of a health insurance issuer underwhich the financing and delivery of medical care (includingitems and services paid for as medical care) are provided,in whole or in part, through a defined set of providers undercontract with the issuer.
``(11) P
ARTICIPANT .ÐThe term `participant' has the meaning
given such term under section 3(7) of the Employee RetirementIncome Security Act of 1974.
``(12) P

``(12) P
LACED FOR ADOPTION DEFINED .ÐThe term `place-
ment', or being `placed', for adoption, in connection with anyplacement for adoption of a child with any person, meansthe assumption and retention by such person of a legal obliga-tion for total or partial support of such child in anticipationof adoption of such child. The child's placement with suchperson terminates upon the termination of such legal obligation.
``(13) P
LAN SPONSOR .ÐThe term `plan sponsor' has the

meaning given such term under section 3(16)(B) of theEmployee Retirement Income Security Act of 1974.
``(14) S
TATE .ÐThe term `State' means each of the several
States, the District of Columbia, Puerto Rico, the Virgin Islands,Guam, American Samoa, and the Northern Mariana Islands.``(e) D
EFINITIONS RELATING TO MARKETS AND SMALL EM-
PLOYERS .ÐFor purposes of this title:
``(1) I NDIVIDUAL MARKET .Ð

``(A) I N GENERAL .ÐThe term `individual market' means
the market for health insurance coverage offered to individ-uals other than in connection with a group health plan.
``(B) T
REATMENT OF VERY SMALL GROUPS .Ð
``(i) I N GENERAL .ÐSubject to clause (ii), such terms
includes coverage offered in connection with a group
health plan that has fewer than two participants ascurrent employees on the first day of the plan year.
``(ii) S

``(ii) S
TATE EXCEPTION .ÐClause (i) shall not apply
in the case of a State that elects to regulate the cov-erage described in such clause as coverage in the smallgroup market.
``(2) L
ARGE EMPLOYER .ÐThe term `large employer' means,
in connection with a group health plan with respect to a cal-endar year and a plan year, an employer who employed anaverage of at least 51 employees on business days during the

110 STAT. 1976 PUBLIC LAW 104±191ÐAUG. 21, 1996
preceding calendar year and who employs at least 2 employees
on the first day of the plan year.
``(3) L ARGE GROUP MARKET .ÐThe term `large group market'
means the health insurance market under which individualsobtain health insurance coverage (directly or through anyarrangement) on behalf of themselves (and their dependents)through a group health plan maintained by a large employer.
``(4) S
MALL EMPLOYER .ÐThe term `small employer' means,

in connection with a group health plan with respect to a cal-endar year and a plan year, an employer who employed anaverage of at least 2 but not more than 50 employees onbusiness days during the preceding calendar year and whoemploys at least 2 employees on the first day of the planyear.
``(5) S
MALL GROUP MARKET .ÐThe term `small group market'

means the health insurance market under which individualsobtain health insurance coverage (directly or through anyarrangement) on behalf of themselves (and their dependents)through a group health plan maintained by a small employer.
``(6) A
PPLICATION OF CERTAIN RULES IN DETERMINATION OF
EMPLOYER SIZE .ÐFor purposes of this subsectionÐ
``(A) A PPLICATION OF AGGREGATION RULE FOR EMPLOY -
ERS.Ðall persons treated as a single employer under sub-

section (b), (c), (m), or (o) of section 414 of the InternalRevenue Code of 1986 shall be treated as 1 employer.
``(B) E
MPLOYERS NOT IN EXISTENCE IN PRECEDING
YEAR .ÐIn the case of an employer which was not in exist-
ence throughout the preceding calendar year, the deter-mination of whether such employer is a small or largeemployer shall be based on the average number of employ-ees that it is reasonably expected such employer willemploy on business days in the current calendar year.
``(C) P

``(C) P
REDECESSORS .ÐAny reference in this subsection
to an employer shall include a reference to any predecessorof such employer.
``SEC. 2792. REGULATIONS.
Portability and Accountability Act of 1996, may promulgate suchregulations as may be necessary or appropriate to carry out theprovisions of this title. The Secretary may promulgate any interimfinal rules as the Secretary determines are appropriate to carryout this title.''.

(b) A
PPLICATION OF RULES BY CERTAIN HEALTH MAINTENANCE
ORGANIZATIONS .ÐSection 1301 of such Act (42 U.S.C. 300e) is
amended by adding at the end the following new subsection:
``(d) An organization that offers health benefits coverage shall

not be considered as failing to meet the requirements of this sectionnotwithstanding that it provides, with respect to coverage offeredin connection with a group health plan in the small or large groupmarket (as defined in section 2791(e)), an affiliation period consist-ent with the provisions of section 2701(g).''.
(c) E
FFECTIVE DATE.Ð
(1) I N GENERAL .ÐExcept as provided in this subsection,

part A of title XXVII of the Public Health Service Act (asadded by subsection (a)) shall apply with respect to grouphealth plans, and health insurance coverage offered in connec-42 USC 300ggnote.42 USC 300gg±
92.

110 STAT. 1977 PUBLIC LAW 104±191ÐAUG. 21, 1996
tion with group health plans, for plan years beginning after
June 30, 1997.
(2) D ETERMINATION OF CREDITABLE COVERAGE .Ð
before July 1, 1996, shall be taken into account underpart A of title XXVII of the Public Health ServiceAct (as added by this section) in determining creditablecoverage.
(ii) S
PECIAL RULE FOR CERTAIN PERIODS .ÐThe Sec-

(ii) S
retary of Health and Human Services, consistent withsection 104, shall provide for a process whereby individ-uals who need to establish creditable coverage for peri-ods before July 1, 1996, and who would have suchcoverage credited but for clause (i) may be given creditfor creditable coverage for such periods through thepresentation of documents or other means.(B) C

subsection (e) of section 2701 of the Public HealthService Act (as added by this section) shall apply toevents occurring after June 30, 1996.
(ii) N
(iii) C

issuer shall not be subject to any penalty or enforce-ment action with respect to the plan's or issuer's credit-ing (or not crediting) such coverage if the plan orissuer has sought to comply in good faith with the
applicable requirements under the amendments madeby this section.
(3) S
MENTS .ÐExcept as provided in paragraph (2)(B), in the case

of a group health plan maintained pursuant to 1 or morecollective bargaining agreements between employee representa-tives and one or more employers ratified before the date ofthe enactment of this Act, part A of title XXVII of the PublicHealth Service Act (other than section 2701(e) thereof) shallnot apply to plan years beginning before the later ofÐ

110 STAT. 1978 PUBLIC LAW 104±191ÐAUG. 21, 1996

For purposes of subparagraph (A), any plan amendment madepursuant to a collective bargaining agreement relating to theplan which amends the plan solely to conform to any require-ment of such part shall not be treated as a termination ofsuch collective bargaining agreement.
(4) T
IMELY REGULATIONS .ÐThe Secretary of Health and
Human Services, consistent with section 104, shall first issueby not later than April 1, 1997, such regulations as may be

necessary to carry out the amendments made by this sectionand section 111.
(5) L

be taken, pursuant to the amendments made by this section,against a group health plan or health insurance issuer withrespect to a violation of a requirement imposed by such amend-ments before January 1, 1998, or, if later, the date of issuanceof regulations referred to in paragraph (4), if the plan or issuerhas sought to comply in good faith with such requirements.(d) M
ISCELLANEOUS CORRECTION .ÐSection 2208(1) of the Public

Health Service Act (42 U.S.C. 300bb±8(1)) is amended by striking``section 162(i)(2)'' and inserting ``5000(b)''.
SEC. 103. REFERENCE TO IMPLEMENTATION THROUGH THE
INTERNAL REVENUE CODE OF 1986.
For provisions amending the Internal Revenue Code of 1986
to provide for application and enforcement of rules for group healthplans similar to those provided under the amendments made bysection 101(a), see section 401.
SEC. 104. ASSURING COORDINATION.

The Secretary of the Treasury, the Secretary of Health and
Human Services, and the Secretary of Labor shall ensure, throughthe execution of an interagency memorandum of understandingamong such Secretaries, thatÐ
(1) regulations, rulings, and interpretations issued by such

Secretaries relating to the same matter over which two ormore such Secretaries have responsibility under this subtitle(and the amendments made by this subtitle and section 401)are administered so as to have the same effect at all times;and
(2) coordination of policies relating to enforcing the same
requirements through such Secretaries in order to have acoordinated enforcement strategy that avoids duplication ofenforcement efforts and assigns priorities in enforcement.

SEC. 111. AMENDMENT TO PUBLIC HEALTH SERVICE ACT.
(a) I NGENERAL .ÐTitle XXVII of the Public Health Service
Act, as added by section 102(a) of this Act, is amended by insertingafter part A the following new part:42 USC 300gg±92 note.

110 STAT. 1979 PUBLIC LAW 104±191ÐAUG. 21, 1996
``PARTBÐI NDIVIDUAL MARKET RULES
``SEC. 2741. GUARANTEED AVAILABILITY OF INDIVIDUAL HEALTH
INSURANCE COVERAGE TO CERTAIN INDIVIDUALS WITHPRIOR GROUP COVERAGE.
``(a) G UARANTEED AVAILABILITY .Ð
``(1) I N GENERAL .ÐSubject to the succeeding subsections

of this section and section 2744, each health insurance issuerthat offers health insurance coverage (as defined in section2791(b)(1)) in the individual market in a State may not, withrespect to an eligible individual (as defined in subsection (b))desiring to enroll in individual health insurance coverageÐ
``(A) decline to offer such coverage to, or deny enroll-
ment of, such individual; or
``(B) impose any preexisting condition exclusion (as

defined in section 2701(b)(1)(A)) with respect to such cov-erage.``(2) S
UBSTITUTION BY STATE OF ACCEPTABLE ALTERNATIVE
MECHANISM .ÐThe requirement of paragraph (1) shall not apply
to health insurance coverage offered in the individual marketin a State in which the State is implementing an acceptablealternative mechanism under section 2744.``(b) E
LIGIBLE INDIVIDUAL DEFINED .ÐIn this part, the term
`eligible individual' means an individualÐ

``(1)(A) for whom, as of the date on which the individual
seeks coverage under this section, the aggregate of the periodsof creditable coverage (as defined in section 2701(c)) is 18or more months and (B) whose most recent prior creditablecoverage was under a group health plan, governmental plan,or church plan (or health insurance coverage offered in connec-tion with any such plan);
``(2) who is not eligible for coverage under (A) a group

health plan, (B) part A or part B of title XVIII of the SocialSecurity Act, or (C) a State plan under title XIX of such Act(or any successor program), and does not have other healthinsurance coverage;
``(3) with respect to whom the most recent coverage within
the coverage period described in paragraph (1)(A) was notterminated based on a factor described in paragraph (1) or(2) of section 2712(b) (relating to nonpayment of premiumsor fraud);

``(4) if the individual had been offered the option of continu-
ation coverage under a COBRA continuation provision or undera similar State program, who elected such coverage; and
``(5) who, if the individual elected such continuation cov-
erage, has exhausted such continuation coverage under suchprovision or program.``(c) A
LTERNATIVE COVERAGE PERMITTED WHERE NOSTATE
MECHANISM .Ð
``(1) I N GENERAL .ÐIn the case of health insurance coverage

offered in the individual market in a State in which the State
is not implementing an acceptable alternative mechanism undersection 2744, the health insurance issuer may elect to limitthe coverage offered under subsection (a) so long as it offersat least two different policy forms of health insurance coverageboth of whichÐ42 USC 300gg±41.

110 STAT. 1980 PUBLIC LAW 104±191ÐAUG. 21, 1996
``(A) are designed for, made generally available to, and
actively marketed to, and enroll both eligible and otherindividuals by the issuer; and
``(B) meet the requirement of paragraph (2) or (3),
as elected by the issuer.
For purposes of this subsection, policy forms which have dif-ferent cost-sharing arrangements or different riders shall beconsidered to be different policy forms.
``(2) C
HOICE OF MOST POPULAR POLICY FORMS .ÐThe require-

ment of this paragraph is met, for health insurance coveragepolicy forms offered by an issuer in the individual market,if the issuer offers the policy forms for individual health insur-ance coverage with the largest, and next to largest, premiumvolume of all such policy forms offered by the issuer in theState or applicable marketing or service area (as may be pre-scribed in regulation) by the issuer in the individual marketin the period involved.
``(3) C

``(3) C
HOICE OF 2 POLICY FORMS WITH REPRESENTATIVE
COVERAGE .Ð
``(A) I N GENERAL .ÐThe requirement of this paragraph

is met, for health insurance coverage policy forms offeredby an issuer in the individual market, if the issuer offersa lower-level coverage policy form (as defined in subpara-graph (B)) and a higher-level coverage policy form (asdefined in subparagraph (C)) each of which includes bene-fits substantially similar to other individual health insur-ance coverage offered by the issuer in that State and eachof which is covered under a method described in section2744(c)(3)(A) (relating to risk

in section2744(c)(3)(A) (relating to risk adjustment, risk spreading,or financial subsidization).

``(B) L
OWER -LEVEL OF COVERAGE DESCRIBED .ÐA policy
form is described in this subparagraph if the actuarialvalue of the benefits under the coverage is at least 85percent but not greater than 100 percent of a weightedaverage (described in subparagraph (D)).
``(C) H
IGHER -LEVEL OF COVERAGE DESCRIBED .ÐA policy
form is described in this subparagraph ifÐ
``(i) the actuarial value of the benefits under the

coverage is at least 15 percent greater than the actuar-ial value of the coverage described in subparagraph(B) offered by the issuer in the area involved; and
``(ii) the actuarial value of the benefits under the
coverage is at least 100 percent but not greater than120 percent of a weighted average (described insubparagraph (D)).``(D) W
EIGHTED AVERAGE .ÐFor purposes of this

paragraph, the weighted average described in this subpara-graph is the average actuarial value of the benefits pro-vided by all the health insurance coverage issued (as electedby the issuer) either by that issuer or by all issuers inthe State in the individual market during the previousyear (not including coverage issued under this section),weighted by enrollment for the different coverage.``(4) E
LECTION .ÐThe issuer elections under this subsection

shall apply uniformly to all eligible individuals in the Statefor that issuer. Such an election shall be effective for policiesoffered during a period of not shorter than 2 years.

110 STAT. 1981 PUBLIC LAW 104±191ÐAUG. 21, 1996
``(5) A SSUMPTIONS .ÐFor purposes of paragraph (3), the
actuarial value of benefits provided under individual healthinsurance coverage shall be calculated based on a standardizedpopulation and a set of standardized utilization and cost factors.``(d) S
that offers health insurance coverage in the individual marketthrough a network plan, the issuer mayÐ

``(A) limit the individuals who may be enrolled under
such coverage to those who live, reside, or work withinthe service area for such network plan; and
coverage to such individuals if the issuer has demonstrated,if required, to the applicable State authority thatÐ

adequately to additional individual enrollees becauseof its obligations to existing group contract holdersand enrollees and individual enrollees, and
individuals without regard to any health status-relatedfactor of such individuals and without regard towhether the individuals are eligible individuals.
``(2) 180-

issuer, upon denying health insurance coverage in any servicearea in accordance with paragraph (1)(B), may not offer cov-erage in the individual market within such service area fora period of 180 days after such coverage is denied.``(e) A

health insurance coverage in the individual market to aneligible individual if the issuer has demonstrated, if required,to the applicable State authority thatÐ

individuals in the individual market in the State consistentwith applicable State law and without regard to any healthstatus-related factor of such individuals and without regardto whether the individuals are eligible individuals.``(2) 180-

issuer upon denying individual health insurance coverage inany service area in accordance with paragraph (1) may notoffer such coverage in the individual market within such servicearea for a period of 180 days after the date such coverageis denied or until the issuer has demonstrated, if requiredunder applicable State law, to the applicable State authoritythat the issuer has sufficient financial reserves to underwriteadditional coverage, whichever is later. A State may providefor the

whichever is later. A State may providefor the application of this paragraph on a service-area-specificbasis.``(e) M

ARKET REQUIREMENTS .Ð
``(1) I N GENERAL .ÐThe provisions of subsection (a) shall
not be construed to require that a health insurance issueroffering health insurance coverage only in connection withgroup health plans or through one or more bona fide associa-tions, or both, offer such health insurance coverage in theindividual market.

110 STAT. 1982 PUBLIC LAW 104±191ÐAUG. 21, 1996
``(2) C ONVERSION POLICIES .ÐA health insurance issuer
offering health insurance coverage in connection with grouphealth plans under this title shall not be deemed to be ahealth insurance issuer offering individual health insurancecoverage solely because such issuer offers a conversion policy.``(f) C
ONSTRUCTION .ÐNothing in this section shall be
``(1) to restrict the amount of the premium rates that an

issuer may charge an individual for health insurance coverageprovided in the individual market under applicable State law;or
``(2) to prevent a health insurance issuer offering health
insurance coverage in the individual market from establishingpremium discounts or rebates or modifying otherwise applicablecopayments or deductibles in return for adherence to programsof health promotion and disease prevention.
``SEC. 2742. GUARANTEED RENEWABILITY OF INDIVIDUAL HEALTH
INSURANCE COVERAGE.

``(a) I NGENERAL .ÐExcept as provided in this section, a health
insurance issuer that provides individual health insurance coverageto an individual shall renew or continue in force such coverageat the option of the individual.
``(b) G
nonrenew or discontinue health insurance coverage of an individualin the individual market based only on one or more of the following:
``(1) N
ONPAYMENT OF PREMIUMS .ÐThe individual has failed

to pay premiums or contributions in accordance with the termsof the health insurance coverage or the issuer has not receivedtimely premium payments.
``(2) F
RAUD .ÐThe individual has performed an act or prac-
tice that constitutes fraud or made an intentional misrepresen-tation of material fact under the terms of the coverage.
``(3) T
ERMINATION OF PLAN .ÐThe issuer is ceasing to offer

coverage in the individual market in accordance with subsection(c) and applicable State law.
``(4) M
OVEMENT OUTSIDE SERVICE AREA .ÐIn the case of

a health insurance issuer that offers health insurance coveragein the market through a network plan, the individual no longerresides, lives, or works in the service area (or in an areafor which the issuer is authorized to do business) but onlyif such coverage is terminated under this paragraph uniformlywithout regard to any health status-related factor of coveredindividuals.
``(5) A

health insurance coverage that is made available in the individ-ual market only through one or more bona fide associations,the membership of the individual in the association (on thebasis of which the coverage is provided) ceases but only ifsuch coverage is terminated under this paragraph uniformlywithout regard to any health status-related factor of coveredindividuals.``(c) R
ERAGE .Ð

ERAGE .Ð
case in which an issuer decides to discontinue offering a particu-lar type of health insurance coverage offered in the individual42 USC 300gg±42.

110 STAT. 1983 PUBLIC LAW 104±191ÐAUG. 21, 1996
market, coverage of such type may be discontinued by the
issuer only ifÐ
``(A) the issuer provides notice to each covered individ-
ual provided coverage of this type in such market of suchdiscontinuation at least 90 days prior to the date of thediscontinuation of such coverage;
``(B) the issuer offers to each individual in the individ-

ual market provided coverage of this type, the option topurchase any other individual health insurance coveragecurrently being offered by the issuer for individuals insuch market; and
of this type and in offering the option of coverage undersubparagraph (B), the issuer acts uniformly without regardto any health status-related factor of enrolled individualsor individuals who may become eligible for such coverage.``(2) D

``(A) I N GENERAL .ÐSubject to subparagraph (C), in any
case in which a health insurance issuer elects to dis-continue offering all health insurance coverage in theindividual market in a State, health insurance coveragemay be discontinued by the issuer only ifÐ
State authority and to each individual of such dis-continuation at least 180 days prior to the date ofthe expiration of such coverage, and

issuance in the State in such market are discontinuedand coverage under such health insurance coveragein such market is not renewed.``(B) P

of a discontinuation under subparagraph (A) in the individ-ual market, the issuer may not provide for the issuanceof any health insurance coverage in the market and Stateinvolved during the 5-year period beginning on the dateof the discontinuation of the last health insurance coveragenot so renewed.
``(d) E

At the time of coverage renewal, a health insurance issuer maymodify the health insurance coverage for a policy form offeredto individuals in the individual market so long as such modificationis consistent with State law and effective on a uniform basis amongall individuals with that policy form.
``(e) A

ance coverage that is made available by a health insurance issuerin the individual market to individuals only through one or moreassociations, a reference to an `individual' is deemed to includea reference to such an association (of which the individual is amember).
``SEC. 2743. CERTIFICATION OF COVERAGE.
``The provisions of section 2701(e) shall apply to health insur-

ance coverage offered by a health insurance issuer in the individualmarket in the same manner as it applies to health insurancecoverage offered by a health insurance issuer in connection witha group health plan in the small or large group market.42 USC 300gg±43.

110 STAT. 1984 PUBLIC LAW 104±191ÐAUG. 21, 1996
``SEC. 2744. STATE FLEXIBILITY IN INDIVIDUAL MARKET REFORMS.
``(a) W AIVER OF REQUIREMENTS WHERE IMPLEMENTATION OF
ACCEPTABLE ALTERNATIVE MECHANISM .Ð
``(1) I N GENERAL .ÐThe requirements of section 2741 shall

not apply with respect to health insurance coverage offeredin the individual market in the State so long as a State isfound to be implementing, in accordance with this section andconsistent with section 2746(b), an alternative mechanism (inthis section referred to as an `acceptable alternative mecha-nism')Ð
``(A) under which all eligible individuals are provided
a choice of health insurance coverage;
``(B) under which such coverage does not impose any

preexisting condition exclusion with respect to such cov-erage;
``(C) under which such choice of coverage includes at
least one policy form of coverage that is comparable tocomprehensive health insurance coverage offered in theindividual market in such State or that is comparableto a standard option of coverage available under the groupor individual health insurance laws of such State; and
``(D) in a State which is implementingÐ

``(i) a model act described in subsection (c)(1),``(ii) a qualified high risk pool described in sub-
section (c)(2), or
``(iii) a mechanism described in subsection (c)(3).
``(2) P
ERMISSIBLE FORMS OF MECHANISMS .ÐA private or

public individual health insurance mechanism (such as a healthinsurance coverage pool or programs, mandatory group conver-sion policies, guaranteed issue of one or more plans of individualhealth insurance coverage, or open enrollment by one or morehealth insurance issuers), or combination of such mechanisms,that is designed to provide access to health benefits for individ-uals in the individual market in the State in accordance withthis section may constitute an acceptable alternative

section may constitute an acceptable alternative mecha-nism.``(b) A

PPLICATION OF ACCEPTABLE ALTERNATIVE MECHANISMS .Ð
``(1) P RESUMPTION .Ð
of this subsection, a State is presumed to be implementingan acceptable alternative mechanism in accordance withthis section as of July 1, 1997, if, by not later than April1, 1997, the chief executive officer of a StateÐ
``(i) notifies the Secretary that the State has

enacted or intends to enact (by not later than January1, 1998, or July 1, 1998, in the case of a State describedin subparagraph (B)(ii)) any necessary legislation toprovide for the implementation of a mechanism reason-ably designed to be an acceptable alternative mecha-nism as of January 1, 1998, (or, in the case of aState described in subparagraph (B)(ii), July 1, 1998);and
``(ii) provides the Secretary with such information

as the Secretary may require to review the mechanismand its implementation (or proposed implementation)under this subsection.``(B) D
ELAY PERMITTED FOR CERTAIN STATES .Ð42 USC 300gg±44.

110 STAT. 1985 PUBLIC LAW 104±191ÐAUG. 21, 1996
``(i) E FFECT OF DELAY .ÐIn the case of a State
described in clause (ii) that provides notice undersubparagraph (A)(i), for the presumption to continueon and after July 1, 1998, the chief executive officerof the State by April 1, 1998Ð
``(I) must notify the Secretary that the State

has enacted any necessary legislation to providefor the implementation of a mechanism reasonablydesigned to be an acceptable alternative mecha-nism as of July 1, 1998; and
``(II) must provide the Secretary with such
information as the Secretary may require to reviewthe mechanism and its implementation (or pro-posed implementation) under this subsection.``(ii) S
TATES DESCRIBED .ÐA State described in this

clause is a State that has a legislature that does notmeet within the 12-month period beginning on thedate of enactment of this Act.``(C) C
ONTINUED APPLICATION .ÐIn order for a mecha-
nism to continue to be presumed to be an acceptable alter-native mechanism, the State shall provide the Secretaryevery 3 years with information described in subparagraph(A)(ii) or (B)(i)(II) (as the case may be).``(2) N
OTICE .ÐIf the Secretary finds, after review of

information provided under paragraph (1) and in consultationwith the chief executive officer of the State and the insurancecommissioner or chief insurance regulatory official of the State,that such a mechanism is not an acceptable alternative mecha-nism or is not (or no longer) being implemented, the SecretaryÐ
``(A) shall notify the State ofÐ
``(i) such preliminary determination, and``(ii) the consequences under paragraph (3) of a

failure to implement such a mechanism; and``(B) shall permit the State a reasonable opportunity
in which to modify the mechanism (or to adopt anothermechanism) in a manner so that may be an acceptablealternative mechanism or to provide for implementationof such a mechanism.``(3) F
INAL DETERMINATION .ÐIf, after providing notice and

opportunity under paragraph (2), the Secretary finds that themechanism is not an acceptable alternative mechanism or theState is not implementing such a mechanism, the Secretaryshall notify the State that the State is no longer consideredto be implementing an acceptable alternative mechanism andthat the requirements of section 2741 shall apply to healthinsurance coverage offered in the individual market in theState, effective as of a date specified in the notice.
``(4) L

``(4) L
IMITATION ON SECRETARIAL AUTHORITY .ÐThe Sec-
retary shall not make a determination under paragraph (2)or (3) on any basis other than the basis that a mechanismis not an acceptable alternative mechanism or is not beingimplemented.
``(5) F
UTURE ADOPTION OF MECHANISMS .ÐIf a State, after

January 1, 1997, submits the notice and information describedin paragraph (1), unless the Secretary makes a findingdescribed in paragraph (3) within the 90-day period beginningon the date of submission of the notice and information, the

110 STAT. 1986 PUBLIC LAW 104±191ÐAUG. 21, 1996
mechanism shall be considered to be an acceptable alternative
mechanism for purposes of this section, effective 90 days afterthe end of such period, subject to the second sentence of para-graph (1).``(c) P
ROVISION RELATED TO RISK.Ð
``(1) A DOPTION OF NAIC MODELS .ÐThe model act referred

to in subsection (a)(1)(D)(i) is the Small Employer and Individ-ual Health Insurance Availability Model Act (adopted by theNational Association of Insurance Commissioners on June 3,1996) insofar as it applies to individual health insurance cov-erage or the Individual Health Insurance Portability ModelAct (also adopted by such Association on such date).
``(2) Q
UALIFIED HIGH RISK POOL .ÐFor purposes of subsection

(a)(1)(D)(ii), a `qualified high risk pool' described in this para-graph is a high risk pool thatÐ
``(A) provides to all eligible individuals health insurance
coverage (or comparable coverage) that does not imposeany preexisting condition exclusion with respect to suchcoverage for all eligible individuals, and
``(B) provides for premium rates and covered benefits

for such coverage consistent with standards included inthe NAIC Model Health Plan for Uninsurable IndividualsAct (as in effect as of the date of the enactment of thistitle).``(3) O
THER MECHANISMS .ÐFor purposes of subsection
(a)(1)(D)(iii), a mechanism described in this paragraphÐ
``(A) provides for risk adjustment, risk spreading, or

a risk spreading mechanism (among issuers or policiesof an issuer) or otherwise provides for some financial sub-sidization for eligible individuals, including through assist-ance to participating issuers; or
``(B) is a mechanism under which each eligible individ-
ual is provided a choice of all individual health insurancecoverage otherwise available.
``SEC. 2745. ENFORCEMENT.
``(a) S TATE ENFORCEMENT .Ð
``(1) S TATE AUTHORITY .ÐSubject to section 2746, each State

may require that health insurance issuers that issue, sell,renew, or offer health insurance coverage in the State in theindividual market meet the requirements established underthis part with respect to such issuers.
``(2) F
AILURE TO IMPLEMENT REQUIREMENTS .ÐIn the case

of a State that fails to substantially enforce the requirementsset forth in this part with respect to health insurance issuersin the State, the Secretary shall enforce the requirements ofthis part under subsection (b) insofar as they relate to theissuance, sale, renewal, and offering of health insurance cov-erage in the individual market in such State.``(b) S
ECRETARIAL ENFORCEMENT AUTHORITY .ÐThe Secretary

shall have the same authority in relation to enforcement of theprovisions of this part with respect to issuers of health insurancecoverage in the individual market in a State as the Secretaryhas under section 2722(b)(2) in relation to the enforcement of theprovisions of part A with respect to issuers of health insurancecoverage in the small group market in the State.42 USC 300gg±
45.

110 STAT. 1987 PUBLIC LAW 104±191ÐAUG. 21, 1996
``SEC. 2746. PREEMPTION.
``(a) I NGENERAL .ÐSubject to subsection (b), nothing in this
part (or part C insofar as it applies to this part) shall be construedto prevent a State from establishing, implementing, or continuingin effect standards and requirements unless such standards andrequirements prevent the application of a requirement of this part.
``(b) R
ULES OF CONSTRUCTION .ÐNothing in this part (or part

C insofar as it applies to this part) shall be construed to affector modify the provisions of section 514 of the Employee RetirementIncome Security Act of 1974 (29 U.S.C. 1144).
``SEC. 2747. GENERAL EXCEPTIONS.
``(a) E XCEPTION FOR CERTAIN BENEFITS .ÐThe requirements of
this part shall not apply to any health insurance coverage in relationto its provision of excepted benefits described in section 2791(c)(1).
``(b) E

MET.ÐThe requirements of this part shall not apply to any health
insurance coverage in relation to its provision of excepted benefitsdescribed in paragraph (2), (3), or (4) of section 2791(c) if thebenefits are provided under a separate policy, certificate, or contractof insurance.''.
(b) E

part B of title XXVII of the Public Health Service Act (asinserted by subsection (a)) shall apply with respect to healthinsurance coverage offered, sold, issued, renewed, in effect,or operated in the individual market after June 30, 1997,regardless of when a period of creditable coverage occurs.
(2) A
PPLICATION OF CERTIFICATION RULES .ÐThe provisions

of section 102(d)(2) of this Act shall apply to section 2743of the Public Health Service Act in the same manner as itapplies to section 2701(e) of such Act.
Subtitle CÐGeneral and Miscellaneous
Provisions
SEC. 191. HEALTH COVERAGE AVAILABILITY STUDIES.
(a) S TUDIES .Ð
(1) S TUDY ON EFFECTIVENESS OF REFORMS .ÐThe Secretary

of Health and Human Services shall provide for a study onthe effectiveness of the provisions of this title and the variousState laws, in ensuring the availability of reasonably pricedhealth coverage to employers purchasing group coverage andindividuals purchasing coverage on a non-group basis.
(2) S
TUDY ON ACCESS AND CHOICE .ÐThe Secretary also
shall provide for a study onÐ
(A) the extent to which patients have direct access

to, and choice of, health care providers, including specialtyproviders, within a network plan, as well as the opportunityto utilize providers outside of the network plan, underthe various types of coverage offered under the provisionsof this title; and
(B) the cost and cost-effectiveness to health insurance
issuers of providing access to out-of-network providers, andthe potential impact of providing such access on the cost42 USC 300ggnote.42 USC 300gg±
41 note.42 USC 300gg±
47.42 USC 300gg±
46.

110 STAT. 1988 PUBLIC LAW 104±191ÐAUG. 21, 1996
and quality of health insurance coverage offered under
provisions of this title.(3) C
ONSULTATION .ÐThe studies under this subsection shall
be conducted in consultation with the Secretary of Labor, rep-resentatives of State officials, consumers, and other representa-tives of individuals and entities that have expertise in healthinsurance and employee benefits.(b) R
EPORTS .ÐNot later than January 1, 2000, the Secretary

shall submit to the appropriate committees of Congress a reporton each of the studies under subsection (a).
SEC. 192. REPORT ON MEDICARE REIMBURSEMENT OF TELEMEDICINE.
The Health Care Financing Administration shall complete its
ongoing study of Medicare reimbursement of all telemedicine serv-ices and submit a report to Congress on Medicare reimbursementof telemedicine services by not later than March 1, 1997. Thereport shallÐ
(1) utilize data compiled from the current demonstration

projects already under review and gather data from other
ongoing telemedicine networks;
(2) include an analysis of the cost of services provided
via telemedicine; and
(3) include a proposal for Medicare reimbursement of such
services.
SEC. 193. ALLOWING FEDERALLY-QUALIFIED HMOS TO OFFER HIGH
DEDUCTIBLE PLANS.
Section 1301(b) of the Public Health Service Act (42 U.S.C.
300e(b)) is amended by adding at the end the following new para-graph:
``(6) A health maintenance organization that otherwise

meets the requirements of this title may offer a high-deductiblehealth plan (as defined in section 220(c)(2) of the InternalRevenue Code of 1986).''.
SEC. 194. VOLUNTEER SERVICES PROVIDED BY HEALTH PROFES-
SIONALS AT FREE CLINICS.
Section 224 of the Public Health Service Act (42 U.S.C. 233)
is amended by adding at the end the following subsection:
``(o)(1) For purposes of this section, a free clinic health profes-

sional shall in providing a qualifying health service to an individualbe deemed to be an employee of the Public Health Service fora calendar year that begins during a fiscal year for which a transferwas made under paragraph (6)(D). The preceding sentence is subjectto the provisions of this subsection.
``(2) In providing a health service to an individual, a health

care practitioner shall for purposes of this subsection be consideredto be a free clinic health professional if the following conditionsare met:
``(A) The service is provided to the individual at a free
clinic, or through offsite programs or events carried out bythe free clinic.
``(B) The free clinic is sponsoring the health care practi-
tioner pursuant to paragraph (5)(C).
``(C) The service is a qualifying health service (as defined
in paragraph (4)).

``(D) Neither the health care practitioner nor the free clinic
receives any compensation for the service from the individual

110 STAT. 1989 PUBLIC LAW 104±191ÐAUG. 21, 1996
or from any third-party payor (including reimbursement under
any insurance policy or health plan, or under any Federalor State health benefits program). With respect to compliancewith such condition:
``(i) The health care practitioner may receive repayment
from the free clinic for reasonable expenses incurred bythe health care practitioner in the provision of the serviceto the individual.
``(ii) The free clinic may accept voluntary donations

for the provision of the service by the health care practi-tioner to the individual.``(E) Before the service is provided, the health care practi-

tioner or the free clinic provides written notice to the individualof the extent to which the legal liability of the health carepractitioner is limited pursuant to this subsection (or in thecase of an emergency, the written notice is provided to theindividual as soon after the emergency as is practicable). Ifthe individual is a minor or is otherwise legally incompetent,the condition under this subparagraph is that the written noticebe provided to a legal guardian or other person with

provided to a legal guardian or other person with legalresponsibility for the care of the individual.

``(F) At the time the service is provided, the health care
practitioner is licensed or certified in accordance with applicablelaw regarding the provision of the service.``(3)(A) For purposes of this subsection, the term `free clinic'
means a health care facility operated by a nonprofit private entitymeeting the following requirements:
``(i) The entity does not, in providing health services

through the facility, accept reimbursement from any third-party payor (including reimbursement under any insurancepolicy or health plan, or under any Federal or State healthbenefits program).
``(ii) The entity, in providing health services through the
facility, either does not impose charges on the individuals towhom the services are provided, or imposes a charge accordingto the ability of the individual involved to pay the charge.
``(iii) The entity is licensed or certified in accordance with

applicable law regarding the provision of health services.``(B) With respect to compliance with the conditions under
subparagraph (A), the entity involved may accept voluntary dona-tions for the provision of services.
``(4) For purposes of this subsection, the term `qualifying health

service' means any medical assistance required or authorized tobe provided in the program under title XIX of the Social SecurityAct, without regard to whether the medical assistance is includedin the plan submitted under such program by the State in whichthe health care practitioner involved provides the medical assist-ance. References in the preceding sentence to such program shallas applicable be considered to be references to any successor tosuch program.

``(5) Subsection (g) (other than paragraphs (3) through (5))
and subsections (h), (i), and (l) apply to a health care practitionerfor purposes of this subsection to the same extent and in thesame manner as such subsections apply to an officer, governingboard member, employee, or contractor of an entity described insubsection (g)(4), subject to paragraph (6) and subject to thefollowing:

110 STAT. 1990 PUBLIC LAW 104±191ÐAUG. 21, 1996
``(A) The first sentence of paragraph (1) applies in lieu
of the first sentence of subsection (g)(1)(A).
``(B) This subsection may not be construed as deeming
any free clinic to be an employee of the Public Health Servicefor purposes of this section.
``(C) With respect to a free clinic, a health care practitioner

is not a free clinic health professional unless the free clinicsponsors the health care practitioner. For purposes of thissubsection, the free clinic shall be considered to be sponsoringthe health care practitioner ifÐ
``(i) with respect to the health care practitioner, the
free clinic submits to the Secretary an application meetingthe requirements of subsection (g)(1)(D); and
``(ii) the Secretary, pursuant to subsection (g)(1)(E),

determines that the health care practitioner is deemedto be an employee of the Public Health Service.``(D) In the case of a health care practitioner who is deter-

mined by the Secretary pursuant to subsection (g)(1)(E) tobe a free clinic health professional, this subsection appliesto the health care practitioner (with respect to the free clinicsponsoring the health care practitioner pursuant to subpara-graph (C)) for any cause of action arising from an act oromission of the health care practitioner occurring on or afterthe date on which the Secretary makes such determination.
``(E) Subsection (g)(1)(F) applies to a health care practi-

tioner for purposes of this subsection only to the extent that,in providing health services to an individual, each of the condi-tions specified in paragraph (2) is met.``(6)(A) For purposes of making payments for judgments against
the United States (together with related fees and expenses of wit-nesses) pursuant to this section arising from the acts or omissionsof free clinic health professionals, there is authorized to be appro-priated $10,000,000 for each fiscal year.

``(B) The Secretary shall establish a fund for purposes of this
subsection. Each fiscal year amounts appropriated under subpara-graph (A) shall be deposited in such fund.
``(C) Not later than May 1 of each fiscal year, the Attorney

General, in consultation with the Secretary, shall submit to theCongress a report providing an estimate of the amount of claims(together with related fees and expenses of witnesses) that, byreason of the acts or omissions of free clinic health professionals,will be paid pursuant to this section during the calendar yearthat begins in the following fiscal year. Subsection (k)(1)(B) appliesto the estimate under the preceding sentence regarding free clinichealth professionals to the same extent and

clinichealth professionals to the same extent and in the same manneras such subsection applies to the estimate under such subsectionregarding officers, governing board members, employees, and con-tractors of entities described in subsection (g)(4).

``(D) Not later than December 31 of each fiscal year, the Sec-
retary shall transfer from the fund under subparagraph (B) tothe appropriate accounts in the Treasury an amount equal to theestimate made under subparagraph (C) for the calendar year begin-ning in such fiscal year, subject to the extent of amounts in thefund.
``(7)(A) This subsection takes effect on the date of the enactment

of the first appropriations Act that makes an appropriation underparagraph (6)(A), except as provided in subparagraph (B)(i).
Effective date.Reports.

110 STAT. 1991 PUBLIC LAW 104±191ÐAUG. 21, 1996
``(B)(i) Effective on the date of the enactment of the Health
Insurance Portability and Accountability Act of 1996Ð
``(I) the Secretary may issue regulations for carrying out
this subsection, and the Secretary may accept and considerapplications submitted pursuant to paragraph (5)(C); and
``(II) reports under paragraph (6)(C) may be submitted to
the Congress.``(ii) For the first fiscal year for which an appropriation is

made under subparagraph (A) of paragraph (6), if an estimateunder subparagraph (C) of such paragraph has not been madefor the calendar year beginning in such fiscal year, the transferunder subparagraph (D) of such paragraph shall be made notwith-standing the lack of the estimate, and the transfer shall be madein an amount equal to the amount of such appropriation.''.
SEC. 195. FINDINGS; SEVERABILITY.
(a) F INDINGS RELATING TO EXERCISE OF COMMERCE CLAUSE

AUTHORITY .ÐCongress finds the following in relation to the provi-
sions of this title:
(1) Provisions in group health plans and health insurance
coverage that impose certain preexisting condition exclusionsimpact the ability of employees to seek employment in inter-state commerce, thereby impeding such commerce.
(2) Health insurance coverage is commercial in nature and
is in and affects interstate commerce.
(3) It is a necessary and proper exercise of Congressional

authority to impose requirements under this title on grouphealth plans and health insurance coverage (including coverageoffered to individuals previously covered under group healthplans) in order to promote commerce among the States.
(4) Congress, however, intends to defer to States, to the

maximum extent practicable, in carrying out such requirementswith respect to insurers and health maintenance organizationsthat are subject to State regulation, consistent with the provi-sions of the Employee Retirement Income Security Act of 1974.(b) S
EVERABILITY .ÐIf any provision of this title or the applica-

tion of such provision to any person or circumstance is held tobe unconstitutional, the remainder of this title and the applicationof the provisions of such to any person or circumstance shall notbe affected thereby.
TITLE IIÐPREVENTING HEALTH CARE
FRAUD AND ABUSE; ADMINISTRATIVESIMPLIFICATION
SEC. 200. REFERENCES IN TITLE.
Except as otherwise specifically provided, whenever in this

title an amendment is expressed in terms of an amendment toor repeal of a section or other provision, the reference shall beconsidered to be made to that section or other provision of theSocial Security Act.42 USC 300gg
note.

110 STAT. 1992 PUBLIC LAW 104±191ÐAUG. 21, 1996
Subtitle AÐFraud and Abuse Control
Program
SEC. 201. FRAUD AND ABUSE CONTROL PROGRAM.
(a) E STABLISHMENT OF PROGRAM .ÐTitle XI (42 U.S.C. 1301
et seq.) is amended by inserting after section 1128B the followingnew section:
``
FRAUD AND ABUSE CONTROL PROGRAM
``SEC. 1128C. (a) E STABLISHMENT OF PROGRAM .Ð
``(1) I N GENERAL .ÐNot later than January 1, 1997, the

Secretary, acting through the Office of the Inspector Generalof the Department of Health and Human Services, and theAttorney General shall establish a programÐ
``(A) to coordinate Federal, State, and local law enforce-
ment programs to control fraud and abuse with respectto health plans,
``(B) to conduct investigations, audits, evaluations, and
inspections relating to the delivery of and payment forhealth care in the United States,
``(C) to facilitate the enforcement of the provisions of

sections 1128, 1128A, and 1128B and other statutesapplicable to health care fraud and abuse,
``(D) to provide for the modification and establishment
of safe harbors and to issue advisory opinions and specialfraud alerts pursuant to section 1128D, and
``(E) to provide for the reporting and disclosure of cer-
tain final adverse actions against health care providers,suppliers, or practitioners pursuant to the data collectionsystem established under section 1128E.``(2) C

OORDINATION WITH HEALTH PLANS .ÐIn carrying out
the program established under paragraph (1), the Secretaryand the Attorney General shall consult with, and arrange forthe sharing of data with representatives of health plans.
``(3) G
UIDELINES .Ð
``(A) I N GENERAL .ÐThe Secretary and the Attorney
General shall issue guidelines to carry out the programunder paragraph (1). The provisions of sections 553, 556,and 557 of title 5, United States Code, shall not applyin the issuance of such guidelines.

``(B) I
NFORMATION GUIDELINES .Ð
``(i) I N GENERAL .ÐSuch guidelines shall include
guidelines relating to the furnishing of informationby health plans, providers, and others to enable theSecretary and the Attorney General to carry out theprogram (including coordination with health plansunder paragraph (2)).
``(ii) C
ONFIDENTIALITY .ÐSuch guidelines shall

``(ii) C
include procedures to assure that such informationis provided and utilized in a manner that appropriatelyprotects the confidentiality of the information and theprivacy of individuals receiving health care servicesand items.
``(iii) Q
UALIFIED IMMUNITY FOR PROVIDING
INFORMATION .ÐThe provisions of section 1157(a) (relat-42 USC 1320a±
7c.

110 STAT. 1993 PUBLIC LAW 104±191ÐAUG. 21, 1996
ing to limitation on liability) shall apply to a person
providing information to the Secretary or the AttorneyGeneral in conjunction with their performance of dutiesunder this section.
``(4) E
NSURING ACCESS TO DOCUMENTATION .ÐThe Inspector

General of the Department of Health and Human Servicesis authorized to exercise such authority described in paragraphs(3) through (9) of section 6 of the Inspector General Act of1978 (5 U.S.C. App.) as necessary with respect to the activitiesunder the fraud and abuse control program established underthis subsection.
``(5) A
UTHORITY OF INSPECTOR GENERAL .ÐNothing in this

Act shall be construed to diminish the authority of any Inspec-tor General, including such authority as provided in the Inspec-tor General Act of 1978 (5 U.S.C. App.).``(b) A
DDITIONAL USE OF FUNDS BY INSPECTOR GENERAL .Ð
``(1) R EIMBURSEMENTS FOR INVESTIGATIONS .ÐThe Inspector

General of the Department of Health and Human Servicesis authorized to receive and retain for current use reimburse-ment for the costs of conducting investigations and audits andfor monitoring compliance plans when such costs are orderedby a court, voluntarily agreed to by the payor, or otherwise.
``(2) C
REDITING .ÐFunds received by the Inspector General

under paragraph (1) as reimbursement for costs of conductinginvestigations shall be deposited to the credit of the appropria-tion from which initially paid, or to appropriations for similarpurposes currently available at the time of deposit, and shallremain available for obligation for 1 year from the date ofthe deposit of such funds.``(c) H
EALTH PLAN DEFINED .ÐFor purposes of this section, the

term `health plan' means a plan or program that provides healthbenefits, whether directly, through insurance, or otherwise, andincludesÐ
``(1) a policy of health insurance;``(2) a contract of a service benefit organization; and``(3) a membership agreement with a health maintenance
organization or other prepaid health plan.''.(b) E
STABLISHMENT OF HEALTH CARE FRAUD AND ABUSE CON-
TROL ACCOUNT IN FEDERAL HOSPITAL INSURANCE TRUST FUND.Ð

Section 1817 (42 U.S.C. 1395i) is amended by adding at the endthe following new subsection:
``(k) H
EALTH CARE FRAUD AND ABUSE CONTROL ACCOUNT .Ð
``(1) E STABLISHMENT .ÐThere is hereby established in the
Trust Fund an expenditure account to be known as the `HealthCare Fraud and Abuse Control Account' (in this subsectionreferred to as the `Account').
``(2) A
PPROPRIATED AMOUNTS TO TRUST FUND .Ð
``(A) I N GENERAL .ÐThere are hereby appropriated to
the Trust FundÐ

``(i) such gifts and bequests as may be made as
provided in subparagraph (B);
``(ii) such amounts as may be deposited in the
Trust Fund as provided in sections 242(b) and 249(c)of the Health Insurance Portability and AccountabilityAct of 1996, and title XI; and
``(iii) such amounts as are transferred to the Trust
Fund under subparagraph (C).

110 STAT. 1994 PUBLIC LAW 104±191ÐAUG. 21, 1996
``(B) A UTHORIZATION TO ACCEPT GIFTS .ÐThe Trust
Fund is authorized to accept on behalf of the United Statesmoney gifts and bequests made unconditionally to the TrustFund, for the benefit of the Account or any activity financedthrough the Account.
``(C) T
RANSFER OF AMOUNTS .ÐThe Managing Trustee

``(C) T
shall transfer to the Trust Fund, under rules similar tothe rules in section 9601 of the Internal Revenue Codeof 1986, an amount equal to the sum of the following:
``(i) Criminal fines recovered in cases involving
a Federal health care offense (as defined in section982(a)(6)(B) of title 18, United States Code).
``(ii) Civil monetary penalties and assessments

imposed in health care cases, including amounts recov-ered under titles XI, XVIII, and XIX, and chapter38 of title 31, United States Code (except as otherwiseprovided by law).
``(iii) Amounts resulting from the forfeiture of prop-
erty by reason of a Federal health care offense.
``(iv) Penalties and damages obtained and other-

wise creditable to miscellaneous receipts of the generalfund of the Treasury obtained under sections 3729through 3733 of title 31, United States Code (knownas the False Claims Act), in cases involving claimsrelated to the provision of health care items and serv-ices (other than funds awarded to a relator, for restitu-tion or otherwise authorized by law).``(D) A
PPLICATION .ÐNothing in subparagraph (C)(iii)

shall be construed to limit the availability of recoveriesand forfeitures obtained under title I of the EmployeeRetirement Income Security Act of 1974 for the purposeof providing equitable or remedial relief for employee wel-fare benefit plans, and for participants and beneficiariesunder such plans, as authorized under such title.``(3) A
PPROPRIATED AMOUNTS TO ACCOUNT FOR FRAUD AND
ABUSE CONTROL PROGRAM , ETC.Ð

``(A) D EPARTMENTS OF HEALTH AND HUMAN SERVICES
AND JUSTICE .Ð
``(i) I N GENERAL .ÐThere are hereby appropriated
to the Account from the Trust Fund such sums asthe Secretary and the Attorney General certify arenecessary to carry out the purposes described insubparagraph (C), to be available without furtherappropriation, in an amount not to exceedÐ
``(I) for fiscal year 1997, $104,000,000,``(II) for each of the fiscal years 1998 through

2003, the limit for the preceding fiscal year,increased by 15 percent; and
``(III) for each fiscal year after fiscal year 2003,
the limit for fiscal year 2003.``(ii) M
EDICARE AND MEDICAID ACTIVITIES .ÐFor
each fiscal year, of the amount appropriated in clause(i), the following amounts shall be available only forthe purposes of the activities of the Office of the Inspec-tor General of the Department of Health and HumanServices with respect to the Medicare and medicaidprogramsÐ

110 STAT. 1995 PUBLIC LAW 104±191ÐAUG. 21, 1996
``(I) for fiscal year 1997, not less than
$60,000,000 and not more than $70,000,000;
``(II) for fiscal year 1998, not less than
$80,000,000 and not more than $90,000,000;
``(III) for fiscal year 1999, not less than
$90,000,000 and not more than $100,000,000;
``(IV) for fiscal year 2000, not less than
$110,000,000 and not more than $120,000,000;
``(V) for fiscal year 2001, not less than
$120,000,000 and not more than $130,000,000;

``(VI) for fiscal year 2002, not less than
$140,000,000 and not more than $150,000,000; and
``(VII) for each fiscal year after fiscal year
2002, not less than $150,000,000 and not morethan $160,000,000.
``(B) F
EDERAL BUREAU OF INVESTIGATION .ÐThere are

hereby appropriated from the general fund of the UnitedStates Treasury and hereby appropriated to the Accountfor transfer to the Federal Bureau of Investigation to carryout the purposes described in subparagraph (C), to be avail-able without further appropriationÐ

``(i) for fiscal year 1997, $47,000,000;``(ii) for fiscal year 1998, $56,000,000;``(iii) for fiscal year 1999, $66,000,000;``(iv) for fiscal year 2000, $76,000,000;``(v) for fiscal year 2001, $88,000,000;``(vi) for fiscal year 2002, $101,000,000; and``(vii) for each fiscal year after fiscal year 2002,
$114,000,000.``(C) U
SE OF FUNDS .ÐThe purposes described in this

subparagraph are to cover the costs (including equipment,salaries and benefits, and travel and training) of theadministration and operation of the health care fraud andabuse control program established under section 1128C(a),including the costs ofÐ
``(i) prosecuting health care matters (through crimi-
nal, civil, and administrative proceedings);
``(ii) investigations;``(iii) financial and performance audits of health
care programs and operations;

``(iv) inspections and other evaluations; and``(v) provider and consumer education regarding
compliance with the provisions of title XI.
``(4) A
PPROPRIATED AMOUNTS TO ACCOUNT FOR MEDICARE
INTEGRITY PROGRAM .Ð

the Account from the Trust Fund for each fiscal year suchamounts as are necessary to carry out the Medicare Integ-rity Program under section 1893, subject to subparagraph(B) and to be available without further appropriation.
``(B) A
MOUNTS SPECIFIED .ÐThe amount appropriated
under subparagraph (A) for a fiscal year is as follows:
``(i) For fiscal year 1997, such amount shall be
not less than $430,000,000 and not more than$440,000,000.

110 STAT. 1996 PUBLIC LAW 104±191ÐAUG. 21, 1996
``(ii) For fiscal year 1998, such amount shall be
not less than $490,000,000 and not more than$500,000,000.
``(iii) For fiscal year 1999, such amount shall be
not less than $550,000,000 and not more than$560,000,000.
``(iv) For fiscal year 2000, such amount shall be
not less than $620,000,000 and not more than$630,000,000.
``(v) For fiscal year 2001, such amount shall be
not less than $670,000,000 and not more than$680,000,000.

``(vi) For fiscal year 2002, such amount shall be
not less than $690,000,000 and not more than$700,000,000.
``(vii) For each fiscal year after fiscal year 2002,
such amount shall be not less than $710,000,000 andnot more than $720,000,000.
``(5) A
NNUAL REPORT .ÐNot later than January 1, the Sec-
retary and the Attorney General shall submit jointly a reportto Congress which identifiesÐ
``(A) the amounts appropriated to the Trust Fund for

the previous fiscal year under paragraph (2)(A) and thesource of such amounts; and
``(B) the amounts appropriated from the Trust Fund
for such year under paragraph (3) and the justificationfor the expenditure of such amounts.``(6) GAO 
REPORT .ÐNot later than January 1 of 2000, 2002,
and 2004, the Comptroller General of the United States shallsubmit a report to Congress whichÐ
``(A) identifiesÐ
``(i) the amounts appropriated to the Trust Fund

for the previous two fiscal years under paragraph (2)(A)and the source of such amounts; and
``(ii) the amounts appropriated from the Trust
Fund for such fiscal years under paragraph (3) andthe justification for the expenditure of such amounts;``(B) identifies any expenditures from the Trust Fund
with respect to activities not involving the Medicare pro-gram under title XVIII;
``(C) identifies any savings to the Trust Fund, and

any other savings, resulting from expenditures from theTrust Fund; and
``(D) analyzes such other aspects of the operation of
the Trust Fund as the Comptroller General of the UnitedStates considers appropriate.''.
SEC. 202. MEDICARE INTEGRITY PROGRAM.
(a) E STABLISHMENT OF MEDICARE INTEGRITY PROGRAM .ÐTitle
XVIII is amended by adding at the end the following new section:
``MEDICARE INTEGRITY PROGRAM
``SEC. 1893. (a) E STABLISHMENT OF PROGRAM .ÐThere is hereby

established the Medicare Integrity Program (in this section referredto as the `Program') under which the Secretary shall promote theintegrity of the Medicare program by entering into contracts in42 USC 1395ddd.

110 STAT. 1997 PUBLIC LAW 104±191ÐAUG. 21, 1996
accordance with this section with eligible entities to carry out
the activities described in subsection (b).
``(b) A CTIVITIES DESCRIBED .ÐThe activities described in this
subsection are as follows:
``(1) Review of activities of providers of services or other

individuals and entities furnishing items and services for whichpayment may be made under this title (including skilled nurs-ing facilities and home health agencies), including medical andutilization review and fraud review (employing similar stand-ards, processes, and technologies used by private health plans,including equipment and software technologies which surpassthe capability of the equipment and technologies used in thereview of claims under this title as of the date of the enactmentof

``(2) Audit of cost reports.``(3) Determinations as to whether payment should not
be, or should not have been, made under this title by reasonof section 1862(b), and recovery of payments that should nothave been made.
``(4) Education of providers of services, beneficiaries, and
other persons with respect to payment integrity and benefitquality assurance issues.
``(5) Developing (and periodically updating) a list of items

of durable medical equipment in accordance with section1834(a)(15) which are subject to prior authorization under suchsection.``(c) E
LIGIBILITY OF ENTITIES .ÐAn entity is eligible to enter
into a contract under the Program to carry out any of the activitiesdescribed in subsection (b) ifÐ
``(1) the entity has demonstrated capability to carry out
such activities;
``(2) in carrying out such activities, the entity agrees to

cooperate with the Inspector General of the Department ofHealth and Human Services, the Attorney General, and otherlaw enforcement agencies, as appropriate, in the investigationand deterrence of fraud and abuse in relation to this titleand in other cases arising out of such activities;
``(3) the entity complies with such conflict of interest stand-
ards as are generally applicable to Federal acquisition andprocurement; and
``(4) the entity meets such other requirements as the Sec-

retary may impose.
In the case of the activity described in subsection (b)(5), an entityshall be deemed to be eligible to enter into a contract under theProgram to carry out the activity if the entity is a carrier witha contract in effect under section 1842.
``(d) P
ROCESS FOR ENTERING INTO CONTRACTS .ÐThe Secretary

shall enter into contracts under the Program in accordance withsuch procedures as the Secretary shall by regulation establish,except that such procedures shall include the following:
``(1) Procedures for identifying, evaluating, and resolving
organizational conflicts of interest that are generally applicableto Federal acquisition and procurement.
``(2) Competitive procedures to be usedÐ
``(A) when entering into new contracts under this
section;Regulations.

110 STAT. 1998 PUBLIC LAW 104±191ÐAUG. 21, 1996
``(B) when entering into contracts that may result in
the elimination of responsibilities of an individual fiscalintermediary or carrier under section 202(b) of the HealthInsurance Portability and Accountability Act of 1996; and
``(C) at any other time considered appropriate by the
Secretary,

except that the Secretary may continue to contract with entitiesthat are carrying out the activities described in this sectionpursuant to agreements under section 1816 or contracts undersection 1842 in effect on the date of the enactment of thissection.
``(3) Procedures under which a contract under this section

may be renewed without regard to any provision of law requir-ing competition if the contractor has met or exceeded theperformance requirements established in the current contract.
The Secretary may enter into such contracts without regard tofinal rules having been promulgated.
``(e) L
IMITATION ON CONTRACTOR LIABILITY .ÐThe Secretary

shall by regulation provide for the limitation of a contractor's liabil-ity for actions taken to carry out a contract under the Program,and such regulation shall, to the extent the Secretary finds appro-priate, employ the same or comparable standards and other sub-stantive and procedural provisions as are contained in section1157.''.
(b) E
LIMINATION OF FI AND CARRIER RESPONSIBILITY FOR
CARRYING OUTACTIVITIES SUBJECT TO PROGRAM .Ð

(1) R ESPONSIBILITIES OF FISCAL INTERMEDIARIES UNDER
PART A .ÐSection 1816 (42 U.S.C. 1395h) is amended by adding
at the end the following new subsection:``(l) No agency or organization may carry out (or receive pay-
ment for carrying out) any activity pursuant to an agreement underthis section to the extent that the activity is carried out pursuantto a contract under the Medicare Integrity Program undersection 1893.''.
(2) R

(2) R
ESPONSIBILITIES OF CARRIERS UNDER PART B .ÐSection
1842(c) (42 U.S.C. 1395u(c)) is amended by adding at the end
the following new paragraph:``(6) No carrier may carry out (or receive payment for carrying

out) any activity pursuant to a contract under this subsectionto the extent that the activity is carried out pursuant to a contractunder the Medicare Integrity Program under section 1893. Theprevious sentence shall not apply with respect to the activitydescribed in section 1893(b)(5) (relating to prior authorization ofcertain items of durable medical equipment under section1834(a)(15)).''.
SEC. 203. BENEFICIARY INCENTIVE PROGRAMS.
(a) C LARIFICATION OF REQUIREMENT TO PROVIDE EXPLANATION

ices (in this section referred to as the ``Secretary'') shall providean explanation of benefits under the Medicare program under titleXVIII of the Social Security Act with respect to each item orservice for which payment may be made under the program whichis furnished to an individual, without regard to whether or nota deductible or coinsurance may be imposed against the individualwith respect to the item or service.42 USC 1395b±5.Regulations.

110 STAT. 1999 PUBLIC LAW 104±191ÐAUG. 21, 1996
(b) P ROGRAM TOCOLLECT INFORMATION ON FRAUD AND
ABUSE .Ð
(1) E STABLISHMENT OF PROGRAM .ÐNot later than 3 months

after the date of the enactment of this Act, the Secretaryshall establish a program under which the Secretary shallencourage individuals to report to the Secretary informationon individuals and entities who are engaging in or who haveengaged in acts or omissions which constitute grounds for theimposition of a sanction under section 1128, 1128A, or 1128Bof the Social Security Act, or who have otherwise engagedin fraud and abuse against the Medicare program under titleXVIII of such act for which

program under titleXVIII of such act for which there is a sanction provided underlaw. The program shall discourage provision of, and not con-sider, information which is frivolous or otherwise not relevantor material to the imposition of such a sanction.

individual reports information to the Secretary under the pro-gram established under paragraph (1) which serves as thebasis for the collection by the Secretary or the Attorney Generalof any amount of at least $100 (other than any amount paidas a penalty under section 1128B of the Social Security Act),the Secretary may pay a portion of the amount collected tothe individual (under procedures similar to those applicableunder section 7623 of the Internal Revenue Code of 1986 topayments to

the Internal Revenue Code of 1986 topayments to individuals providing information on violationsof such Code).(c) P

ROGRAM TOCOLLECT INFORMATION ON PROGRAM
EFFICIENCY .Ð
after the date of the enactment of this Act, the Secretaryshall establish a program under which the Secretary shallencourage individuals to submit to the Secretary suggestionson methods to improve the efficiency of the Medicare program.
(2) P
AYMENT OF PORTION OF PROGRAM SAVINGS .ÐIf an

individual submits a suggestion to the Secretary under theprogram established under paragraph (1) which is adopted
by the Secretary and which results in savings to the program,the Secretary may make a payment to the individual of suchamount as the Secretary considers appropriate.
SEC. 204. APPLICATION OF CERTAIN HEALTH ANTIFRAUD AND ABUSE
SANCTIONS TO FRAUD AND ABUSE AGAINST FEDERALHEALTH CARE PROGRAMS.

(a) I NGENERAL .ÐSection 1128B (42 U.S.C. 1320a±7b) is
amended as follows:
(1) In the heading, by striking ``M EDICARE OR STATE HEALTH
CARE PROGRAMS '' and inserting `` FEDERAL HEALTH CARE PRO -
GRAMS ''.
(2) In subsection (a)(1), by striking ``a program under title
XVIII or a State health care program (as defined in section1128(h))'' and inserting ``a Federal health care program (asdefined in subsection (f))''.
(3) In subsection (a)(5), by striking ``a program under title

XVIII or a State health care program'' and inserting ``a Federalhealth care program''.
(4) In the second sentence of subsection (a)Ð

110 STAT. 2000 PUBLIC LAW 104±191ÐAUG. 21, 1996
(A) by striking ``a State plan approved under title
XIX'' and inserting ``a Federal health care program'', and
(B) by striking ``the State may at its option (notwith-
standing any other provision of that title or of such plan)''and inserting ``the administrator of such program may atits option (notwithstanding any other provision of suchprogram)''.(5) In subsection (b), by striking ``title XVIII or a State

health care program'' each place it appears and inserting ``aFederal health care program''.
(6) In subsection (c), by inserting ``(as defined in section
1128(h))'' after ``a State health care program''.
(7) By adding at the end the following new subsection:
``(f) For purposes of this section, the term `Federal health care
program' meansÐ
``(1) any plan or program that provides health benefits,

whether directly, through insurance, or otherwise, which isfunded directly, in whole or in part, by the United StatesGovernment (other than the health insurance program underchapter 89 of title 5, United States Code); or
``(2) any State health care program, as defined in section
1128(h).''.(b) E
FFECTIVE DATE.ÐThe amendments made by this section
shall take effect on January 1, 1997.
SEC. 205. GUIDANCE REGARDING APPLICATION OF HEALTH CARE
FRAUD AND ABUSE SANCTIONS.

Title XI (42 U.S.C. 1301 et seq.), as amended by section 201,
is amended by inserting after section 1128C the following newsection:
``
GUIDANCE REGARDING APPLICATION OF HEALTH CARE FRAUD AND
ABUSE SANCTIONS
``SEC. 1128D. (a) S OLICITATION AND PUBLICATION OF MODIFICA -
TIONS TO EXISTING SAFE HARBORS AND NEWSAFE HARBORS .Ð
``(1) I N GENERAL .Ð
``(A) S OLICITATION OF PROPOSALS FOR SAFE HARBORS .Ð

Not later than January 1, 1997, and not less than annuallythereafter, the Secretary shall publish a notice in the Fed-eral Register soliciting proposals, which will be acceptedduring a 60-day period, forÐ
``(i) modifications to existing safe harbors issued
pursuant to section 14(a) of the Medicare and MedicaidPatient and Program Protection Act of 1987 (42 U.S.C.1320a±7b note);
``(ii) additional safe harbors specifying payment

practices that shall not be treated as a criminal offenseunder section 1128B(b) and shall not serve as thebasis for an exclusion under section 1128(b)(7);
``(iii) advisory opinions to be issued pursuant to
subsection (b); and
``(iv) special fraud alerts to be issued pursuant
to subsection (c).``(B) P
UBLICATION OF PROPOSED MODIFICATIONS AND
PROPOSED ADDITIONAL SAFE HARBORS .ÐAfter considering

the proposals described in clauses (i) and (ii) of subpara-graph (A), the Secretary, in consultation with the AttorneyFederal Register,publication.Federal Register,
publication.42 USC 1320a±
7d.42 USC 1320a±
7b note.

110 STAT. 2001 PUBLIC LAW 104±191ÐAUG. 21, 1996
General, shall publish in the Federal Register proposed
modifications to existing safe harbors and proposed addi-tional safe harbors, if appropriate, with a 60-day commentperiod. After considering any public comments receivedduring this period, the Secretary shall issue final rulesmodifying the existing safe harbors and establishing newsafe harbors, as appropriate.
``(C) R
EPORT .ÐThe Inspector General of the Depart-

ment of Health and Human Services (in this sectionreferred to as the `Inspector General') shall, in an annualreport to Congress or as part of the year-end semiannualreport required by section 5 of the Inspector General Actof 1978 (5 U.S.C. App.), describe the proposals receivedunder clauses (i) and (ii) of subparagraph (A) and explainwhich proposals were included in the publication describedin subparagraph (B), which proposals were not includedin that publication, and the reasons for the

that publication, and the reasons for the rejection ofthe proposals that were not included.``(2) C

RITERIA FOR MODIFYING AND ESTABLISHING SAFE HAR -
BORS .ÐIn modifying and establishing safe harbors under para-
graph (1)(B), the Secretary may consider the extent to whichproviding a safe harbor for the specified payment practice mayresult in any of the following:
``(A) An increase or decrease in access to health care
services.
``(B) An increase or decrease in the quality of health
care services.
``(C) An increase or decrease in patient freedom of
choice among health care providers.

``(D) An increase or decrease in competition among
health care providers.
``(E) An increase or decrease in the ability of health
care facilities to provide services in medically underservedareas or to medically underserved populations.
``(F) An increase or decrease in the cost to Federal
health care programs (as defined in section 1128B(f)).
``(G) An increase or decrease in the potential overutili-
zation of health care services.

``(H) The existence or nonexistence of any potential
financial benefit to a health care professional or providerwhich may vary based on their decisions ofÐ
``(i) whether to order a health care item or
service; or
``(ii) whether to arrange for a referral of health
care items or services to a particular practitioner orprovider.``(I) Any other factors the Secretary deems appropriate

in the interest of preventing fraud and abuse in Federalhealth care programs (as so defined).
``(b) A
DVISORY OPINIONS .Ð
``(1) I SSUANCE OF ADVISORY OPINIONS .ÐThe Secretary, in
consultation with the Attorney General, shall issue writtenadvisory opinions as provided in this subsection.
``(2) M
ATTERS SUBJECT TO ADVISORY OPINIONS .ÐThe Sec-
retary shall issue advisory opinions as to the following matters:
``(A) What constitutes prohibited remuneration within
the meaning of section 1128B(b).

110 STAT. 2002 PUBLIC LAW 104±191ÐAUG. 21, 1996
``(B) Whether an arrangement or proposed arrangement
satisfies the criteria set forth in section 1128B(b)(3) foractivities which do not result in prohibited remuneration.
``(C) Whether an arrangement or proposed arrangement
satisfies the criteria which the Secretary has established,or shall establish by regulation for activities which donot result in prohibited remuneration.
``(D) What constitutes an inducement to reduce or limit

services to individuals entitled to benefits under title XVIIIor title XIX within the meaning of section 1128B(b).
``(E) Whether any activity or proposed activity con-
stitutes grounds for the imposition of a sanction undersection 1128, 1128A, or 1128B.``(3) M
ATTERS NOT SUBJECT TO ADVISORY OPINIONS .ÐSuch
advisory opinions shall not address the following matters:
``(A) Whether the fair market value shall be, or was
paid or received for any goods, services or property.

``(B) Whether an individual is a bona fide employee
within the requirements of section 3121(d)(2) of theInternal Revenue Code of 1986.``(4) E
FFECT OF ADVISORY OPINIONS .Ð
``(A) B INDING AS TO SECRETARY AND PARTIES
INVOLVED .ÐEach advisory opinion issued by the Secretary
shall be binding as to the Secretary and the party orparties requesting the opinion.
``(B) F
AILURE TO SEEK OPINION .ÐThe failure of a party

to seek an advisory opinion may not be introduced intoevidence to prove that the party intended to violate theprovisions of sections 1128, 1128A, or 1128B.``(5) R
EGULATIONS .Ð
``(A) I N GENERAL .ÐNot later than 180 days after the
date of the enactment of this section, the Secretary shallissue regulations to carry out this section. Such regulationsshall provide forÐ
``(i) the procedure to be followed by a party apply-
ing for an advisory opinion;

``(ii) the procedure to be followed by the Secretary
in responding to a request for an advisory opinion;
``(iii) the interval in which the Secretary shall
respond;
``(iv) the reasonable fee to be charged to the party
requesting an advisory opinion; and
``(v) the manner in which advisory opinions will
be made available to the public.``(B) S
PECIFIC CONTENTS .ÐUnder the regulations
promulgated pursuant to subparagraph (A)Ð

``(i) the Secretary shall be required to issue to
a party requesting an advisory opinion by not laterthan 60 days after the request is received; and
``(ii) the fee charged to the party requesting an
advisory opinion shall be equal to the costs incurredby the Secretary in responding to the request.
``(6) A
PPLICATION OF SUBSECTION .ÐThis subsection shall

apply to requests for advisory opinions made on or after thedate which is 6 months after the date of enactment of thissection and before the date which is 4 years after such dateof enactment.

110 STAT. 2003 PUBLIC LAW 104±191ÐAUG. 21, 1996
``(c) S PECIAL FRAUD ALERTS .Ð
``(A) R EQUEST FOR SPECIAL FRAUD ALERTS .ÐAny person

may present, at any time, a request to the Inspector Gen-eral for a notice which informs the public of practiceswhich the Inspector General considers to be suspect orof particular concern under the Medicare program undertitle XVIII or a State health care program, as definedin section 1128(h) (in this subsection referred to as a `spe-cial fraud alert').
``(B) I
SSUANCE AND PUBLICATION OF SPECIAL FRAUD
ALERTS .ÐUpon receipt of a request described in subpara-

graph (A), the Inspector General shall investigate the sub-ject matter of the request to determine whether a specialfraud alert should be issued. If appropriate, the InspectorGeneral shall issue a special fraud alert in response tothe request. All special fraud alerts issued pursuant tothis subparagraph shall be published in the Federal Reg-ister.``(2) C
RITERIA FOR SPECIAL FRAUD ALERTS .ÐIn determining

whether to issue a special fraud alert upon a request describedin paragraph (1), the Inspector General may considerÐ
``(A) whether and to what extent the practices that
would be identified in the special fraud alert may resultin any of the consequences described in subsection (a)(2);and
``(B) the volume and frequency of the conduct that
would be identified in the special fraud alert.''.
Subtitle BÐRevisions to Current Sanctions

for Fraud and Abuse
SEC. 211. MANDATORY EXCLUSION FROM PARTICIPATION IN MEDI-
CARE AND STATE HEALTH CARE PROGRAMS.
(a) I NDIVIDUAL CONVICTED OF FELONY RELATING TO HEALTH
CAREFRAUD .Ð
(1) I N GENERAL .ÐSection 1128(a) (42 U.S.C. 1320a±7(a))
is amended by adding at the end the following new paragraph:
``(3) F ELONY CONVICTION RELATING TO HEALTH CARE
FRAUD .ÐAny individual or entity that has been convicted for

an offense which occurred after the date of the enactmentof the Health Insurance Portability and Accountability Act of1996, under Federal or State law, in connection with the deliv-ery of a health care item or service or with respect to anyact or omission in a health care program (other than thosespecifically described in paragraph (1)) operated by or financedin whole or in part by any Federal, State, or local governmentagency, of a criminal offense consisting of a felony relatingto fraud,

offense consisting of a felony relatingto fraud, theft, embezzlement, breach of fiduciary responsibility,or other financial misconduct.''.

(2) C
ONFORMING AMENDMENT .ÐParagraph (1) of section
1128(b) (42 U.S.C. 1320a±7(b)) is amended to read as follows:
``(1) C ONVICTION RELATING TO FRAUD .ÐAny individual or
entity that has been convicted for an offense which occurredafter the date of the enactment of the Health Insurance Port-

110 STAT. 2004 PUBLIC LAW 104±191ÐAUG. 21, 1996
ability and Accountability Act of 1996, under Federal or State
lawÐ
``(A) of a criminal offense consisting of a misdemeanor
relating to fraud, theft, embezzlement, breach of fiduciaryresponsibility, or other financial misconductÐ
``(i) in connection with the delivery of a health
care item or service, or
``(ii) with respect to any act or omission in a health

care program (other than those specifically describedin subsection (a)(1)) operated by or financed in wholeor in part by any Federal, State, or local governmentagency; or``(B) of a criminal offense relating to fraud, theft,
embezzlement, breach of fiduciary responsibility, or otherfinancial misconduct with respect to any act or omissionin a program (other than a health care program) operatedby or financed in whole or in part by any Federal, State,or local government agency.''.
(b) I

(b) I
NDIVIDUAL CONVICTED OF FELONY RELATING TO CON-
TROLLED SUBSTANCE .Ð
(1) I N GENERAL .ÐSection 1128(a) (42 U.S.C. 1320a±7(a)),
as amended by subsection (a), is amended by adding at theend the following new paragraph:
``(4) F
ELONY CONVICTION RELATING TO CONTROLLED SUB -
STANCE .ÐAny individual or entity that has been convicted for

an offense which occurred after the date of the enactmentof the Health Insurance Portability and Accountability Act of1996, under Federal or State law, of a criminal offense consist-ing of a felony relating to the unlawful manufacture, distribu-tion, prescription, or dispensing of a controlled substance.''.
(2) C
ONFORMING AMENDMENT .ÐSection 1128(b)(3) (42
U.S.C. 1320a±7(b)(3)) is amendedÐ
(A) in the heading, by striking ``C ONVICTION '' and
inserting ``M ISDEMEANOR CONVICTION ''; and

(B) by striking ``criminal offense'' and inserting
``criminal offense consisting of a misdemeanor''.
SEC. 212. ESTABLISHMENT OF MINIMUM PERIOD OF EXCLUSION FOR
CERTAIN INDIVIDUALS AND ENTITIES SUBJECT TOPERMISSIVE EXCLUSION FROM MEDICARE AND STATEHEALTH CARE PROGRAMS.
Section 1128(c)(3) (42 U.S.C. 1320a±7(c)(3)) is amended by add-
ing at the end the following new subparagraphs:
``(D) In the case of an exclusion of an individual or entity

under paragraph (1), (2), or (3) of subsection (b), the period ofthe exclusion shall be 3 years, unless the Secretary determinesin accordance with published regulations that a shorter periodis appropriate because of mitigating circumstances or that a longerperiod is appropriate because of aggravating circumstances.
``(E) In the case of an exclusion of an individual or entity

under subsection (b)(4) or (b)(5), the period of the exclusion shallnot be less than the period during which the individual's or entity'slicense to provide health care is revoked, suspended, or surrendered,or the individual or the entity is excluded or suspended from aFederal or State health care program.

110 STAT. 2005 PUBLIC LAW 104±191ÐAUG. 21, 1996
``(F) In the case of an exclusion of an individual or entity
under subsection (b)(6)(B), the period of the exclusion shall benot less than 1 year.''.
SEC. 213. PERMISSIVE EXCLUSION OF INDIVIDUALS WITH OWNERSHIP
OR CONTROL INTEREST IN SANCTIONED ENTITIES.
Section 1128(b) (42 U.S.C. 1320a±7(b)) is amended by adding
at the end the following new paragraph:
``(15) I NDIVIDUALS CONTROLLING A SANCTIONED ENTITY .Ð
(A) Any individualÐ

``(i) who has a direct or indirect ownership or control
interest in a sanctioned entity and who knows or shouldknow (as defined in section 1128A(i)(6)) of the action con-stituting the basis for the conviction or exclusion describedin subparagraph (B); or
``(ii) who is an officer or managing employee (as defined
in section 1126(b)) of such an entity.``(B) For purposes of subparagraph (A), the term `sanctioned
entity' means an entityÐ

``(i) that has been convicted of any offense described
in subsection (a) or in paragraph (1), (2), or (3) of thissubsection; or
``(ii) that has been excluded from participation under
a program under title XVIII or under a State health careprogram.''.
SEC. 214. SANCTIONS AGAINST PRACTITIONERS AND PERSONS FOR
FAILURE TO COMPLY WITH STATUTORY OBLIGATIONS.
(a) M INIMUM PERIOD OF EXCLUSION FOR PRACTITIONERS AND
PERSONS FAILING TOMEETSTATUTORY OBLIGATIONS .Ð

(1) I N GENERAL .ÐThe second sentence of section 1156(b)(1)
(42 U.S.C. 1320c±5(b)(1)) is amended by striking ``may pre-scribe)'' and inserting ``may prescribe, except that such periodmay not be less than 1 year)''.
(2) C
ONFORMING AMENDMENT .ÐSection 1156(b)(2) (42
U.S.C. 1320c±5(b)(2)) is amended by striking ``shall remain''and inserting ``shall (subject to the minimum period specifiedin the second sentence of paragraph (1)) remain''.(b) R

EPEAL OF ``UNWILLING OR UNABLE '' CONDITION FOR IMPOSI -
TION OF SANCTION .ÐSection 1156(b)(1) (42 U.S.C. 1320c±5(b)(1))
(1) in the second sentence, by striking ``and determines''
and all that follows through ``such obligations,''; and
(2) by striking the third sentence.
SEC. 215. INTERMEDIATE SANCTIONS FOR MEDICARE HEALTH
MAINTENANCE ORGANIZATIONS.
(a) A PPLICATION OF INTERMEDIATE SANCTIONS FOR ANY PRO-
GRAM VIOLATIONS .Ð
(1) I N GENERAL .ÐSection 1876(i)(1) (42 U.S.C.

1395mm(i)(1)) is amended by striking ``the Secretary may termi-nate'' and all that follows and inserting ``in accordance withprocedures established under paragraph (9), the Secretary mayat any time terminate any such contract or may impose theintermediate sanctions described in paragraph (6)(B) or (6)(C)(whichever is applicable) on the eligible organization if theSecretary determines that the organizationÐ

110 STAT. 2006 PUBLIC LAW 104±191ÐAUG. 21, 1996
``(B) is carrying out the contract in a manner substantially
inconsistent with the efficient and effective administration ofthis section; or
``(C) no longer substantially meets the applicable conditions
of subsections (b), (c), (e), and (f).''.
(2) O
THER INTERMEDIATE SANCTIONS FOR MISCELLANEOUS
PROGRAM VIOLATIONS .ÐSection 1876(i)(6) (42 U.S.C.

1395mm(i)(6)) is amended by adding at the end the followingnew subparagraph:``(C) In the case of an eligible organization for which the Sec-
retary makes a determination under paragraph (1), the basis ofwhich is not described in subparagraph (A), the Secretary mayapply the following intermediate sanctions:
``(i) Civil money penalties of not more than $25,000 for

each determination under paragraph (1) if the deficiency thatis the basis of the determination has directly adversely affected(or has the substantial likelihood of adversely affecting) anindividual covered under the organization's contract.
``(ii) Civil money penalties of not more than $10,000 for
each week beginning after the initiation of procedures by theSecretary under paragraph (9) during which the deficiencythat is the basis of a determination under paragraph (1) exists.

``(iii) Suspension of enrollment of individuals under this
section after the date the Secretary notifies the organizationof a determination under paragraph (1) and until the Secretaryis satisfied that the deficiency that is the basis for the deter-mination has been corrected and is not likely to recur.''.
(3) P
ROCEDURES FOR IMPOSING SANCTIONS .ÐSection 1876(i)

(42 U.S.C. 1395mm(i)) is amended by adding at the end thefollowing new paragraph:``(9) The Secretary may terminate a contract with an eligible
organization under this section or may impose the intermediatesanctions described in paragraph (6) on the organization in accord-ance with formal investigation and compliance procedures estab-lished by the Secretary under whichÐ
``(A) the Secretary first provides the organization with the

reasonable opportunity to develop and implement a correctiveaction plan to correct the deficiencies that were the basis ofthe Secretary's determination under paragraph (1) and the
organization fails to develop or implement such a plan;
``(B) in deciding whether to impose sanctions, the Secretary
considers aggravating factors such as whether an organizationhas a history of deficiencies or has not taken action to correctdeficiencies the Secretary has brought to the organization'sattention;

``(C) there are no unreasonable or unnecessary delays
between the finding of a deficiency and the imposition of sanc-tions; and
``(D) the Secretary provides the organization with reason-
able notice and opportunity for hearing (including the rightto appeal an initial decision) before imposing any sanctionor terminating the contract.''.
(4) C
ONFORMING AMENDMENTS .ÐSection 1876(i)(6)(B) (42
U.S.C. 1395mm(i)(6)(B)) is amended by striking the secondsentence.

110 STAT. 2007 PUBLIC LAW 104±191ÐAUG. 21, 1996
(b) A GREEMENTS WITHPEER REVIEW ORGANIZATIONS .ÐSection
1876(i)(7)(A) (42 U.S.C. 1395mm(i)(7)(A)) is amended by striking``an agreement'' and inserting ``a written agreement''.
(c) E
shall apply with respect to contract years beginning on or afterJanuary 1, 1997.
SEC. 216. ADDITIONAL EXCEPTION TO ANTI-KICKBACK PENALTIES
FOR RISK-SHARING ARRANGEMENTS.

(a) I NGENERAL .ÐSection 1128B(b)(3) (42 U.S.C. 1320a±
7b(b)(3)) is amendedÐ
(1) by striking ``and'' at the end of subparagraph (D);(2) by striking the period at the end of subparagraph (E)
and inserting ``; and''; and
(3) by adding at the end the following new subparagraph:``(F) any remuneration between an organization and an

individual or entity providing items or services, or a combina-tion thereof, pursuant to a written agreement between theorganization and the individual or entity if the organizationis an eligible organization under section 1876 or if the writtenagreement, through a risk-sharing arrangement, places theindividual or entity at substantial financial risk for the costor utilization of the items or services, or a combination thereof,which the individual or entity is obligated to provide.''.(b) N

EGOTIATED RULEMAKING FOR RISK-SHARING EXCEPTION .Ð
(1) E STABLISHMENT .Ð
(A) I N GENERAL .ÐThe Secretary of Health and Human

Services (in this subsection referred to as the ``Secretary'')shall establish, on an expedited basis and using a nego-tiated rulemaking process under subchapter 3 of chapter5 of title 5, United States Code, standards relating tothe exception for risk-sharing arrangements to the anti-kickback penalties described in section 1128B(b)(3)(F) ofthe Social Security Act, as added by subsection (a).
(B) F
ACTORS TO CONSIDER .ÐIn establishing standards

relating to the exception for risk-sharing arrangementsto the anti-kickback penalties under subparagraph (A), theSecretaryÐ
(i) shall consult with the Attorney General and
representatives of the hospital, physician, other healthpractitioner, and health plan communities, and otherinterested parties; and
(ii) shall take into accountÐ
(I) the level of risk appropriate to the size
and type of arrangement;
(II) the frequency of assessment and distribu-

tion of incentives;
(III) the level of capital contribution; and(IV) the extent to which the risk-sharing
arrangement provides incentives to control the costand quality of health care services.
(2) P
UBLICATION OF NOTICE .ÐIn carrying out the rule-

making process under this subsection, the Secretary shall pub-lish the notice provided for under section 564(a) of title 5,United States Code, by not later than 45 days after the dateof the enactment of this Act.42 USC 1320a±
7b note.42 USC 1395mm
note.

110 STAT. 2008 PUBLIC LAW 104±191ÐAUG. 21, 1996
(3) T ARGET DATE FOR PUBLICATION OF RULE .ÐAs part of
the notice under paragraph (2), and for purposes of this sub-section, the ``target date for publication'' (referred to in section564(a)(5) of such title) shall be January 1, 1997.
(4) A
BBREVIATED PERIOD FOR SUBMISSION OF COMMENTS .Ð
In applying section 564(c) of such title under this subsection,``15 days'' shall be substituted for ``30 days''.
(5) A
PPOINTMENT OF NEGOTIATED RULEMAKING COMMITTEE

AND FACILITATOR .ÐThe Secretary shall provide forÐ
(A) the appointment of a negotiated rulemaking
committee under section 565(a) of such title by not laterthan 30 days after the end of the comment period providedfor under section 564(c) of such title (as shortened underparagraph (4)), and
(B) the nomination of a facilitator under section 566(c)
of such title by not later than 10 days after the dateof appointment of the committee.(6) P

making committee appointed under paragraph (5) shall reportto the Secretary, by not later than October 1, 1996, regardingthe committee's progress on achieving a consensus with regardto the rulemaking proceeding and whether such consensus islikely to occur before one month before the target date forpublication of the rule. If the committee reports that thecommittee has failed to make significant progress toward suchconsensus or is unlikely to reach such consensus by the targetdate, the Secretary

such consensus by the targetdate, the Secretary may terminate such process and providefor the publication of a rule under this subsection throughsuch other methods as the Secretary may provide.

(7) F
INAL COMMITTEE REPORT .ÐIf the committee is not
terminated under paragraph (6), the rulemaking committeeshall submit a report containing a proposed rule by not laterthan one month before the target publication date.
(8) I
NTERIM , FINAL EFFECT .ÐThe Secretary shall publish

a rule under this subsection in the Federal Register by notlater than the target publication date. Such rule shall be effec-tive and final immediately on an interim basis, but is subjectto change and revision after public notice and opportunityfor a period (of not less than 60 days) for public comment.In connection with such rule, the Secretary shall specify theprocess for the timely review and approval of applications ofentities to be certified as provider-sponsored organizationspursuant to

as provider-sponsored organizationspursuant to such rules and consistent with this subsection.

(9) P
UBLICATION OF RULE AFTER PUBLIC COMMENT .ÐThe
Secretary shall provide for consideration of such commentsand republication of such rule by not later than 1 year afterthe target publication date.(c) E
FFECTIVE DATE.ÐThe amendments made by subsection
(a) shall apply to written agreements entered into on or afterJanuary 1, 1997, without regard to whether regulations have beenissued to implement such amendments.
SEC. 217. CRIMINAL PENALTY FOR FRAUDULENT DISPOSITION OF

ASSETS IN ORDER TO OBTAIN MEDICAID BENEFITS.
Section 1128B(a) (42 U.S.C. 1320a±7b(a)) is amendedÐ
(1) by striking ``or'' at the end of paragraph (4);(2) by adding ``or'' at the end of paragraph (5); and42 USC 1320a±7b note.Federal Register,
publication.

110 STAT. 2009 PUBLIC LAW 104±191ÐAUG. 21, 1996
(3) by inserting after paragraph (5) the following new para-
graph:
``(6) knowingly and willfully disposes of assets (including
by any transfer in trust) in order for an individual to becomeeligible for medical assistance under a State plan under titleXIX, if disposing of the assets results in the imposition ofa period of ineligibility for such assistance under section1917(c),''.
SEC. 218. EFFECTIVE DATE.

Except as otherwise provided, the amendments made by this
subtitle shall take effect January 1, 1997.
SEC. 221. ESTABLISHMENT OF THE HEALTH CARE FRAUD AND ABUSE
DATA COLLECTION PROGRAM.
(a) I NGENERAL .ÐTitle XI (42 U.S.C. 1301 et seq.), as amended
by sections 201 and 205, is amended by inserting after section1128D the following new section:
``
HEALTH CARE FRAUD AND ABUSE DATA COLLECTION PROGRAM

``SEC. 1128E. (a) G ENERAL PURPOSE .ÐNot later than January
1, 1997, the Secretary shall establish a national health care fraudand abuse data collection program for the reporting of final adverseactions (not including settlements in which no findings of liabilityhave been made) against health care providers, suppliers, orpractitioners as required by subsection (b), with access as set forthin subsection (c), and shall maintain a database of the informationcollected under this section.
``(b) R

``(b) R
EPORTING OF INFORMATION .Ð
``(1) I N GENERAL .ÐEach Government agency and health
plan shall report any final adverse action (not including settle-ments in which no findings of liability have been made) takenagainst a health care provider, supplier, or practitioner.
``(2) I
NFORMATION TO BE REPORTED .ÐThe information to
be reported under paragraph (1) includes:
``(A) The name and TIN (as defined in section

7701(a)(41) of the Internal Revenue Code of 1986) of anyhealth care provider, supplier, or practitioner who is thesubject of a final adverse action.
``(B) The name (if known) of any health care entity
with which a health care provider, supplier, or practitioner,who is the subject of a final adverse action, is affiliatedor associated.
``(C) The nature of the final adverse action and whether
such action is on appeal.

``(D) A description of the acts or omissions and injuries
upon which the final adverse action was based, and suchother information as the Secretary determines by regula-tion is required for appropriate interpretation of informa-tion reported under this section.``(3) C
ONFIDENTIALITY .ÐIn determining what information

is required, the Secretary shall include procedures to assurethat the privacy of individuals receiving health care servicesis appropriately protected.42 USC 1320a±7e.42 USC 1320a±7
note.

110 STAT. 2010 PUBLIC LAW 104±191ÐAUG. 21, 1996
``(4) T IMING AND FORM OF REPORTING .ÐThe information
required to be reported under this subsection shall be reportedregularly (but not less often than monthly) and in such formand manner as the Secretary prescribes. Such information shallfirst be required to be reported on a date specified by theSecretary.
``(5) T
O WHOM REPORTED .ÐThe information required to be
reported under this subsection shall be reported to the Sec-retary.``(c) D

ISCLOSURE AND CORRECTION OF INFORMATION .Ð
``(1) D ISCLOSURE .ÐWith respect to the information about
final adverse actions (not including settlements in which nofindings of liability have been made) reported to the Secretaryunder this section with respect to a health care provider, sup-plier, or practitioner, the Secretary shall, by regulation, provideforÐ
``(A) disclosure of the information, upon request, to
the health care provider, supplier, or licensed practitioner,and

``(B) procedures in the case of disputed accuracy of
the information.``(2) C
ORRECTIONS .ÐEach Government agency and health
plan shall report corrections of information already reportedabout any final adverse action taken against a health careprovider, supplier, or practitioner, in such form and mannerthat the Secretary prescribes by regulation.``(d) A
CCESS TO REPORTED INFORMATION .Ð
``(1) A VAILABILITY .ÐThe information in the database main-

tained under this section shall be available to Federal andState government agencies and health plans pursuant to proce-dures that the Secretary shall provide by regulation.
``(2) F
EES FOR DISCLOSURE .ÐThe Secretary may establish

or approve reasonable fees for the disclosure of informationin such database (other than with respect to requests by Federalagencies). The amount of such a fee shall be sufficient torecover the full costs of operating the database. Such feesshall be available to the Secretary or, in the Secretary's discre-tion to the agency designated under this section to cover suchcosts.``(e) P
ROTECTION FROM LIABILITY FOR REPORTING .ÐNo person

or entity, including the agency designated by the Secretary insubsection (b)(5) shall be held liable in any civil action with respectto any report made as required by this section, without knowledgeof the falsity of the information contained in the report.
``(f) C
OORDINATION WITH NATIONAL PRACTITIONER DATA
BANK.ÐThe Secretary shall implement this section in such a man-

ner as to avoid duplication with the reporting requirements estab-lished for the National Practitioner Data Bank under the HealthCare Quality Improvement Act of 1986 (42 U.S.C. 11101 et seq.).
``(g) D
EFINITIONS AND SPECIAL RULES .ÐFor purposes of this
section:
``(1) F INAL ADVERSE ACTION .Ð
``(A) I N GENERAL .ÐThe term `final adverse action'
includes:
``(i) Civil judgments against a health care provider,

supplier, or practitioner in Federal or State courtrelated to the delivery of a health care item or service.

110 STAT. 2011 PUBLIC LAW 104±191ÐAUG. 21, 1996
``(ii) Federal or State criminal convictions related
to the delivery of a health care item or service.
``(iii) Actions by Federal or State agencies respon-
sible for the licensing and certification of health careproviders, suppliers, and licensed health carepractitioners, includingÐ
``(I) formal or official actions, such as revoca-
tion or suspension of a license (and the lengthof any such suspension), reprimand, censure orprobation,

``(II) any other loss of license or the right to
apply for, or renew, a license of the provider, sup-plier, or practitioner, whether by operation of law,voluntary surrender, non-renewability, or other-wise, or
``(III) any other negative action or finding by
such Federal or State agency that is publicly avail-able information.``(iv) Exclusion from participation in Federal or
State health care programs (as defined in sections1128B(f) and 1128(h), respectively).

``(v) Any other adjudicated actions or decisions that
the Secretary shall establish by regulation.``(B) E
XCEPTION .ÐThe term does not include any action
with respect to a malpractice claim.``(2) P
RACTITIONER .ÐThe terms `licensed health care practi-

tioner', `licensed practitioner', and `practitioner' mean, withrespect to a State, an individual who is licensed or otherwiseauthorized by the State to provide health care services (orany individual who, without authority holds himself or herselfout to be so licensed or authorized).
``(3) G
OVERNMENT AGENCY .ÐThe term `Government agency'
shall include:
``(A) The Department of Justice.``(B) The Department of Health and Human Services.``(C) Any other Federal agency that either administers

or provides payment for the delivery of health care services,including, but not limited to the Department of Defenseand the Veterans' Administration.
``(D) State law enforcement agencies.``(E) State medicaid fraud control units.``(F) Federal or State agencies responsible for the
licensing and certification of health care providers andlicensed health care practitioners.``(4) H
EALTH PLAN .ÐThe term `health plan' has the meaning
given such term by section 1128C(c).

``(5) D ETERMINATION OF CONVICTION .ÐFor purposes of para-
graph (1), the existence of a conviction shall be determinedunder paragraph (4) of section 1128(i).''.(b) I
MPROVED PREVENTION IN ISSUANCE OF MEDICARE PROVIDER
NUMBERS .ÐSection 1842(r) (42 U.S.C. 1395u(r)) is amended by

adding at the end the following new sentence: ``Under such system,the Secretary may impose appropriate fees on such physicians tocover the costs of investigation and recertification activities withrespect to the issuance of the identifiers.''.

110 STAT. 2012 PUBLIC LAW 104±191ÐAUG. 21, 1996
SEC. 231. SOCIAL SECURITY ACT CIVIL MONETARY PENALTIES.
(a) G ENERAL CIVIL MONETARY PENALTIES .ÐSection 1128A (42
U.S.C. 1320a±7a) is amended as follows:
(1) In the third sentence of subsection (a), by striking
``programs under title XVIII'' and inserting ``Federal healthcare programs (as defined in section 1128B(f)(1))''.
(2) In subsection (f)Ð
(A) by redesignating paragraph (3) as paragraph
(4); and

(4); and
(B) by inserting after paragraph (2) the following new
paragraph:``(3) With respect to amounts recovered arising out of a
claim under a Federal health care program (as defined insection 1128B(f)), the portion of such amounts as is determinedto have been paid by the program shall be repaid to the pro-gram, and the portion of such amounts attributable to theamounts recovered under this section by reason of the amend-

ments made by the Health Insurance Portability and Account-ability Act of 1996 (as estimated by the Secretary) shall bedeposited into the Federal Hospital Insurance Trust Fundpursuant to section 1817(k)(2)(C).''.
(3) In subsection (i)Ð
(A) in paragraph (2), by striking ``title V, XVIII, XIX,
or XX of this Act'' and inserting ``a Federal health careprogram (as defined in section 1128B(f))'',
(B) in paragraph (4), by striking ``a health insurance

or medical services program under title XVIII or XIX ofthis Act'' and inserting ``a Federal health care program(as so defined)'', and
(C) in paragraph (5), by striking ``title V, XVIII, XIX,
or XX'' and inserting ``a Federal health care program (asso defined)''.(4) By adding at the end the following new subsection:
``(m)(1) For purposes of this section, with respect to a Federal

health care program not contained in this Act, references to theSecretary in this section shall be deemed to be references to theSecretary or Administrator of the department or agency with juris-diction over such program and references to the Inspector Generalof the Department of Health and Human Services in this sectionshall be deemed to be references to the Inspector General of theapplicable department or agency.
``(2)(A) The Secretary and Administrator of the departments

and agencies referred to in paragraph (1) may include in anyaction pursuant to this section, claims within the jurisdiction ofother Federal departments or agencies as long as the followingconditions are satisfied:
``(i) The case involves primarily claims submitted to the
Federal health care programs of the department or agencyinitiating the action.
``(ii) The Secretary or Administrator of the department

or agency initiating the action gives notice and an opportunityto participate in the investigation to the Inspector Generalof the department or agency with primary jurisdiction over

110 STAT. 2013 PUBLIC LAW 104±191ÐAUG. 21, 1996
the Federal health care programs to which the claims were
submitted.``(B) If the conditions specified in subparagraph (A) are fulfilled,

the Inspector General of the department or agency initiating theaction is authorized to exercise all powers granted under the Inspec-tor General Act of 1978 (5 U.S.C. App.) with respect to the claimssubmitted to the other departments or agencies to the same mannerand extent as provided in that Act with respect to claims submittedto such departments or agencies.''.
(b) E
XCLUDED INDIVIDUAL RETAINING OWNERSHIP OR CONTROL
INTEREST IN PARTICIPATING ENTITY .ÐSection 1128A(a) (42 U.S.C.

1320a±7a(a)) is amendedÐ
(1) by striking ``or'' at the end of paragraph (1)(D);(2) by striking ``, or'' at the end of paragraph (2) and
inserting a semicolon;
(3) by striking the semicolon at the end of paragraph (3)
and inserting ``; or''; and
(4) by inserting after paragraph (3) the following new para-
graph:
``(4) in the case of a person who is not an organization,

agency, or other entity, is excluded from participating in aprogram under title XVIII or a State health care programin accordance with this subsection or under section 1128 andwho, at the time of a violation of this subsectionÐ
``(A) retains a direct or indirect ownership or control
interest in an entity that is participating in a programunder title XVIII or a State health care program, andwho knows or should know of the action constituting thebasis for the exclusion; or

``(B) is an officer or managing employee (as defined
in section 1126(b)) of such an entity;''.
(c) M
ODIFICATIONS OF AMOUNTS OF PENALTIES AND ASSESS -
MENTS .ÐSection 1128A(a) (42 U.S.C. 1320a±7a(a)), as amended by
subsection (b), is amended in the matter following paragraph (4)Ð
(1) by striking ``$2,000'' and inserting ``$10,000'';(2) by inserting ``; in cases under paragraph (4), $10,000
for each day the prohibited relationship occurs'' after ``falseor misleading information was given''; and

(3) by striking ``twice the amount'' and inserting ``3 times
the amount''.(d) C
LARIFICATION OF LEVEL OF KNOWLEDGE REQUIRED FOR
IMPOSITION OF CIVILMONETARY PENALTIES .Ð
(1) I N GENERAL .ÐSection 1128A(a) (42 U.S.C. 1320a±7a(a))
(A) in paragraphs (1) and (2), by inserting ``knowingly''
before ``presents'' each place it appears; and
(B) in paragraph (3), by striking ``gives'' and inserting
``knowingly gives or causes to be given''.(2) D

EFINITION OF STANDARD .ÐSection 1128A(i) (42 U.S.C.
1320a±7a(i)), as amended by subsection (h)(2), is amended byadding at the end the following new paragraph:
``(7) The term `should know' means that a person, with
respect to informationÐ
``(A) acts in deliberate ignorance of the truth or falsity
of the information; or
``(B) acts in reckless disregard of the truth or falsity
of the information,

110 STAT. 2014 PUBLIC LAW 104±191ÐAUG. 21, 1996
and no proof of specific intent to defraud is required.''.
(e) C LAIM FOR ITEM OR SERVICE BASED ON INCORRECT CODING
ORMEDICALLY UNNECESSARY SERVICES .ÐSection 1128A(a)(1) (42
U.S.C. 1320a±7a(a)(1)), as amended by subsection (b), is amendedÐ
(1) in subparagraph (A) by striking ``claimed,'' and inserting

``claimed, including any person who engages in a pattern orpractice of presenting or causing to be presented a claim foran item or service that is based on a code that the personknows or should know will result in a greater payment tothe person than the code the person knows or should knowis applicable to the item or service actually provided,'';
(2) in subparagraph (C), by striking ``or'' at the end;(3) in subparagraph (D), by striking the semicolon and
inserting ``, or''; and

(4) by inserting after subparagraph (D) the following new
subparagraph:
``(E) is for a pattern of medical or other items or serv-
ices that a person knows or should know are not medicallynecessary;''.
(f) S
ANCTIONS AGAINST PRACTITIONERS AND PERSONS FOR FAIL-
URE TOCOMPLY WITHSTATUTORY OBLIGATIONS .ÐSection 1156(b)(3)
(42 U.S.C. 1320c±5(b)(3)) is amended by striking ``the actual orestimated cost'' and inserting ``up to $10,000 for each instance''.
(g) P

(g) P
ROCEDURAL PROVISIONS .ÐSection 1876(i)(6) (42 U.S.C.
1395mm(i)(6)), as amended by section 215(a)(2), is amended byadding at the end the following new subparagraph:
``(D) The provisions of section 1128A (other than subsections
(a) and (b)) shall apply to a civil money penalty under subparagraph(B)(i) or (C)(i) in the same manner as such provisions apply toa civil money penalty or proceeding under section 1128A(a).''.
(h) P
ROHIBITION AGAINST OFFERING INDUCEMENTS TO INDIVID -

UALS ENROLLED UNDER PROGRAMS OR PLANS .Ð
(1) O FFER OF REMUNERATION .ÐSection 1128A(a) (42 U.S.C.
1320a±7a(a)), as amended by subsection (b), is amendedÐ
(A) by striking ``or'' at the end of paragraph (3);(B) by striking the semicolon at the end of paragraph
(4) and inserting ``; or''; and
(C) by inserting after paragraph (4) the following new
paragraph:``(5) offers to or transfers remuneration to any individual

eligible for benefits under title XVIII of this Act, or undera State health care program (as defined in section 1128(h))that such person knows or should know is likely to influencesuch individual to order or receive from a particular provider,practitioner, or supplier any item or service for which paymentmay be made, in whole or in part, under title XVIII, or a
State health care program (as so defined);''.
(2) R
EMUNERATION DEFINED .ÐSection 1128A(i) (42 U.S.C.

1320a±7a(i)) is amended by adding at the end the followingnew paragraph:
``(6) The term `remuneration' includes the waiver of coinsur-
ance and deductible amounts (or any part thereof), and trans-fers of items or services for free or for other than fair marketvalue. The term `remuneration' does not includeÐ
``(A) the waiver of coinsurance and deductible amounts
by a person, ifÐ

110 STAT. 2015 PUBLIC LAW 104±191ÐAUG. 21, 1996
``(i) the waiver is not offered as part of any
advertisement or solicitation;
``(ii) the person does not routinely waive coinsur-
ance or deductible amounts; and
``(iii) the personÐ
``(I) waives the coinsurance and deductible
amounts after determining in good faith that theindividual is in financial need;
``(II) fails to collect coinsurance or deductible
amounts after making reasonable collectionefforts; or

``(III) provides for any permissible waiver as
specified in section 1128B(b)(3) or in regulationsissued by the Secretary;
``(B) differentials in coinsurance and deductible

amounts as part of a benefit plan design as long as thedifferentials have been disclosed in writing to allbeneficiaries, third party payers, and providers, to whomclaims are presented and as long as the differentials meetthe standards as defined in regulations promulgatedby the Secretary not later than 180 days after the dateof the enactment of the Health Insurance Portability andAccountability Act of 1996; or

``(C) incentives given to individuals to promote the
delivery of preventive care as determined by the Secretaryin regulations so promulgated.''.
(i) E
shall apply to acts or omissions occurring on or after January1, 1997.
SEC. 232. PENALTY FOR FALSE CERTIFICATION FOR HOME HEALTH
SERVICES.
(a) I NGENERAL .ÐSection 1128A(b) (42 U.S.C. 1320a±7a(b)) is
amended by adding at the end the following new paragraph:

``(3)(A) Any physician who executes a document described in
subparagraph (B) with respect to an individual knowing that allof the requirements referred to in such subparagraph are not metwith respect to the individual shall be subject to a civil monetarypenalty of not more than the greater ofÐ
``(i) $5,000, or``(ii) three times the amount of the payments under title

XVIII for home health services which are made pursuant tosuch certification.``(B) A document described in this subparagraph is any docu-
ment that certifies, for purposes of title XVIII, that an individualmeets the requirements of section 1814(a)(2)(C) or 1835(a)(2)(A)in the case of home health services furnished to the individual.''.
(b) E
FFECTIVE DATE.ÐThe amendment made by subsection (a)
shall apply to certifications made on or after the date of the enact-ment of this Act.42 USC 1320a±

110 STAT. 2016 PUBLIC LAW 104±191ÐAUG. 21, 1996
SEC. 241. DEFINITIONS RELATING TO FEDERAL HEALTH CARE
OFFENSE.
(a) I NGENERAL .ÐChapter 1 of title 18, United States Code,
is amended by adding at the end the following:
``§ 24. Definitions relating to Federal health care offense
``(a) As used in this title, the term `Federal health care offense'
means a violation of, or a criminal conspiracy to violateÐ

``(1) section 669, 1035, 1347, or 1518 of this title;``(2) section 287, 371, 664, 666, 1001, 1027, 1341, 1343,
or 1954 of this title, if the violation or conspiracy relates toa health care benefit program.``(b) As used in this title, the term `health care benefit program'

means any public or private plan or contract, affecting commerce,under which any medical benefit, item, or service is provided toany individual, and includes any individual or entity who is provid-ing a medical benefit, item, or service for which payment maybe made under the plan or contract.''.
(b) C
LERICAL AMENDMENT .ÐThe table of sections at the begin-
ning of chapter 2 of title 18, United States Code, is amendedby inserting after the item relating to section 23 the followingnew item:

``24. Definitions relating to Federal health care offense.''.
SEC. 242. HEALTH CARE FRAUD.
(a) O FFENSE .Ð
(1) I N GENERAL .ÐChapter 63 of title 18, United States
Code, is amended by adding at the end the following:
``§ 1347. Health care fraud
``Whoever knowingly and willfully executes, or attempts to exe-
cute, a scheme or artificeÐ
``(1) to defraud any health care benefit program; or``(2) to obtain, by means of false or fraudulent pretenses,

representations, or promises, any of the money or propertyowned by, or under the custody or control of, any health carebenefit program,

in connection with the delivery of or payment for health care bene-fits, items, or services, shall be fined under this title or imprisonednot more than 10 years, or both. If the violation results in seriousbodily injury (as defined in section 1365 of this title), such personshall be fined under this title or imprisoned not more than 20years, or both; and if the violation results in death, such personshall be fined under this title, or imprisoned for any term of yearsor for life, or both.''.

(2) C
LERICAL AMENDMENT .ÐThe table of sections at the
beginning of chapter 63 of title 18, United States Code, isamended by adding at the end the following:
``1347. Health care fraud.''.
(b) C RIMINAL FINES DEPOSITED IN FEDERAL HOSPITAL INSUR -
ANCE TRUST FUND.ÐThe Secretary of the Treasury shall deposit
into the Federal Hospital Insurance Trust Fund pursuant to section1817(k)(2)(C) of the Social Security Act (42 U.S.C. 1395i) an amount42 USC 1395inote.

110 STAT. 2017 PUBLIC LAW 104±191ÐAUG. 21, 1996
equal to the criminal fines imposed under section 1347 of title
18, United States Code (relating to health care fraud).
SEC. 243. THEFT OR EMBEZZLEMENT.
(a) I NGENERAL .ÐChapter 31 of title 18, United States Code,
``§ 669. Theft or embezzlement in connection with health care
``(a) Whoever knowingly and willfully embezzles, steals, or

otherwise without authority converts to the use of any personother than the rightful owner, or intentionally misapplies any ofthe moneys, funds, securities, premiums, credits, property, or otherassets of a health care benefit program, shall be fined under thistitle or imprisoned not more than 10 years, or both; but if thevalue of such property does not exceed the sum of $100 the defend-ant shall be fined under this title or imprisoned not more thanone year, or both.

``(b) As used in this section, the term `health care benefit
program' has the meaning given such term in section 24(b) ofthis title.''.
(b) C
ning of chapter 31 of title 18, United States Code, is amendedby adding at the end the following:
``669. Theft or embezzlement in connection with health care.''.
SEC. 244. FALSE STATEMENTS.
(a) I NGENERAL .ÐChapter 47 of title 18, United States Code,

``§ 1035. False statements relating to health care matters
``(a) Whoever, in any matter involving a health care benefit
program, knowingly and willfullyÐ
``(1) falsifies, conceals, or covers up by any trick, scheme,
or device a material fact; or
``(2) makes any materially false, fictitious, or fraudulent

statements or representations, or makes or uses any materiallyfalse writing or document knowing the same to contain anymaterially false, fictitious, or fraudulent statement or entry,
in connection with the delivery of or payment for health care bene-fits, items, or services, shall be fined under this title or imprisonednot more than 5 years, or both.
(b) C

(b) C
ning of chapter 47 of title 18, United States Code, is amended
by adding at the end the following new item:
``1035. False statements relating to health care matters.''.
SEC. 245. OBSTRUCTION OF CRIMINAL INVESTIGATIONS OF HEALTH
CARE OFFENSES.
(a) I NGENERAL .ÐChapter 73 of title 18, United States Code,

110 STAT. 2018 PUBLIC LAW 104±191ÐAUG. 21, 1996
``§ 1518. Obstruction of criminal investigations of health care
offenses
``(a) Whoever willfully prevents, obstructs, misleads, delays or
attempts to prevent, obstruct, mislead, or delay the communicationof information or records relating to a violation of a Federal healthcare offense to a criminal investigator shall be fined under thistitle or imprisoned not more than 5 years, or both.
``(b) As used in this section the term `criminal investigator'

means any individual duly authorized by a department, agency,or armed force of the United States to conduct or engage in inves-tigations for prosecutions for violations of health care offenses.''.
(b) C
ning of chapter 73 of title 18, United States Code, is amendedby adding at the end the following new item:
``1518. Obstruction of criminal investigations of health care offenses.''.
SEC. 246. LAUNDERING OF MONETARY INSTRUMENTS.

Section 1956(c)(7) of title 18, United States Code, is amended
``(F) Any act or activity constituting an offense involv-
ing a Federal health care offense.''.
SEC. 247. INJUNCTIVE RELIEF RELATING TO HEALTH CARE OFFENSES.
(a) I NGENERAL .ÐSection 1345(a)(1) of title 18, United States
Code, is amendedÐ

(1) by striking ``or'' at the end of subparagraph (A);(2) by inserting ``or'' at the end of subparagraph (B); and(3) by adding at the end the following:``(C) committing or about to commit a Federal health care
offense.''.(b) F
REEZING OF ASSETS .ÐSection 1345(a)(2) of title 18, United
States Code, is amended by inserting ``or a Federal health careoffense'' after ``title)''.
SEC. 248. AUTHORIZED INVESTIGATIVE DEMAND PROCEDURES.

(a) I NGENERAL .ÐChapter 223 of title 18, United States Code,
is amended by adding after section 3485 the following:
``§ 3486. Authorized investigative demand procedures
``(a) A UTHORIZATION .Ð(1) In any investigation relating to any
act or activity involving a Federal health care offense, the AttorneyGeneral or the Attorney General's designee may issue in writingand cause to be served a subpoenaÐ
``(A) requiring the production of any records (including any

books, papers, documents, electronic media, or other objectsor tangible things), which may be relevant to an authorizedlaw enforcement inquiry, that a person or legal entity maypossess or have care, custody, or control; or
``(B) requiring a custodian of records to give testimony
concerning the production and authentication of such records.``(2) A subpoena under this subsection shall describe the objects

required to be produced and prescribe a return date within areasonable period of time within which the objects can be assembledand made available.
``(3) The production of records shall not be required under
this section at any place more than 500 miles distant from the

110 STAT. 2019 PUBLIC LAW 104±191ÐAUG. 21, 1996
place where the subpoena for the production of such records is
served.
``(4) Witnesses summoned under this section shall be paid the
same fees and mileage that are paid witnesses in the courts ofthe United States.
``(b) S
ERVICE .ÐA subpoena issued under this section may be

served by any person who is at least 18 years of age and isdesignated in the subpoena to serve it. Service upon a naturalperson may be made by personal delivery of the subpoena to him.Service may be made upon a domestic or foreign corporation orupon a partnership or other unincorporated association which issubject to suit under a common name, by delivering the subpoenato an officer, to a managing or general agent, or to any otheragent authorized by appointment or by law to receive service

by appointment or by law to receive service ofprocess. The affidavit of the person serving the subpoena enteredon a true copy thereof by the person serving it shall be proofof service.

to obey a subpoena issued to any person, the Attorney Generalmay invoke the aid of any court of the United States within thejurisdiction of which the investigation is carried on or of whichthe subpoenaed person is an inhabitant, or in which he carrieson business or may be found, to compel compliance with the sub-poena. The court may issue an order requiring the subpoenaedperson to appear before the Attorney General to produce records,if so ordered, or to give testimony concerning the production

or to give testimony concerning the production andauthentication of such records. Any failure to obey the order ofthe court may be punished by the court as a contempt thereof.All process in any such case may be served in any judicial districtin which such person may be found.

``(d) I
MMUNITY FROM CIVIL LIABILITY .ÐNotwithstanding any
Federal, State, or local law, any person, including officers, agents,and employees, receiving a summons under this section, who com-plies in good faith with the summons and thus produces the mate-rials sought, shall not be liable in any court of any State or theUnited States to any customer or other person for such productionor for nondisclosure of that production to the customer.
``(e) L

individual that is disclosed under this section may not be usedin, or disclosed to any person for use in, any administrative, civil,or criminal action or investigation directed against the individualwho is the subject of the information unless the action or investiga-tion arises out of and is directly related to receipt of health careor payment for health care or action involving a fraudulent claimrelated to health; or if authorized by an appropriate order of acourt of competent jurisdiction,

order of acourt of competent jurisdiction, granted after application showing

good cause therefor.
``(2) In assessing good cause, the court shall weigh the public
interest and the need for disclosure against the injury to the patient,to the physician-patient relationship, and to the treatment services.
``(3) Upon the granting of such order, the court, in determining
the extent to which any disclosure of all or any part of any recordis necessary, shall impose appropriate safeguards against unauthor-ized disclosure.''.
(b) C

(b) C
ning of chapter 223 of title 18, United States Code, is amended

110 STAT. 2020 PUBLIC LAW 104±191ÐAUG. 21, 1996
by inserting after the item relating to section 3485 the following
new item:
``3486. Authorized investigative demand procedures.''.
(c) C ONFORMING AMENDMENT .ÐSection 1510(b)(3)(B) of title
18, United States Code, is amended by inserting ``or a Departmentof Justice subpoena (issued under section 3486 of title 18),'' after``subpoena''.
SEC. 249. FORFEITURES FOR FEDERAL HEALTH CARE OFFENSES.

(a) I NGENERAL .ÐSection 982(a) of title 18, United States Code,
is amended by adding after paragraph (5) the following new para-graph:
``(6) The court, in imposing sentence on a person convicted
of a Federal health care offense, shall order the person to forfeitproperty, real or personal, that constitutes or is derived, directlyor indirectly, from gross proceeds traceable to the commission ofthe offense.''.
(b) C
ONFORMING AMENDMENT .ÐSection 982(b)(1)(A) of title 18,

United States Code, is amended by inserting ``or (a)(6)'' after ``(a)(1)''.
(c) P ROPERTY FORFEITED DEPOSITED IN FEDERAL HOSPITAL
INSURANCE TRUST FUND.Ð
(1) I N GENERAL .ÐAfter the payment of the costs of asset

forfeiture has been made and after all restoration payments(if any) have been made, and notwithstanding any other provi-sion of law, the Secretary of the Treasury shall deposit intothe Federal Hospital Insurance Trust Fund pursuant to section1817(k)(2)(C) of the Social Security Act, as added by section301(b), an amount equal to the net amount realized from the
forfeiture of property by reason of a Federal health care offensepursuant to section 982(a)(6) of title 18, United States Code.
(2) C

(2) C
OSTS OF ASSET FORFEITURE .ÐFor purposes of para-
graph (1), the term ``payment of the costs of asset forfeiture''meansÐ
(A) the payment, at the discretion of the Attorney
General, of any expenses necessary to seize, detain, inven-tory, safeguard, maintain, advertise, sell, or dispose of prop-erty under seizure, detention, or forfeited, or of any othernecessary expenses incident to the seizure, detention, for-feiture, or disposal of such property, including paymentforÐ

(i) contract services;(ii) the employment of outside contractors to oper-
ate and manage properties or provide other specializedservices necessary to dispose of such properties in aneffort to maximize the return from such properties;and
(iii) reimbursement of any Federal, State, or local
agency for any expenditures made to perform the func-tions described in this subparagraph;(B) at the discretion of the Attorney General, the pay-

ment of awards for information or assistance leading toa civil or criminal forfeiture involving any Federal agencyparticipating in the Health Care Fraud and Abuse ControlAccount;
(C) the compromise and payment of valid liens and
mortgages against property that has been forfeited, subjectto the discretion of the Attorney General to determine42 USC 1395inote.

110 STAT. 2021 PUBLIC LAW 104±191ÐAUG. 21, 1996
the validity of any such lien or mortgage and the amount
of payment to be made, and the employment of attorneysand other personnel skilled in State real estate law asnecessary;
(D) payment authorized in connection with remission
or mitigation procedures relating to property forfeited; and
(E) the payment of State and local property taxes on

forfeited real property that accrued between the date ofthe violation giving rise to the forfeiture and the dateof the forfeiture order.(3) R
ESTORATION PAYMENT .ÐNotwithstanding any other

provision of law, if the Federal health care offense referredto in paragraph (1) resulted in a loss to an employee welfarebenefit plan within the meaning of section 3(1) of the EmployeeRetirement Income Security Act of 1974, the Secretary of theTreasury shall transfer to such employee welfare benefit plan,from the amount realized from the forfeiture of propertyreferred to in paragraph (1), an amount equal to such loss.For purposes of paragraph (1), the term ``restoration payment''means the

(1), the term ``restoration payment''means the amount transferred to an employee welfare benefitplan pursuant to this paragraph.

SEC. 250. RELATION TO ERISA AUTHORITY.
Nothing in this subtitle shall be construed as affecting the
authority of the Secretary of Labor under section 506(b)of the Employee Retirement Income Security Act of 1974, includingthe Secretary's authority with respect to violations of title 18,United States Code (as amended by this subtitle).
SEC. 261. PURPOSE.
It is the purpose of this subtitle to improve the Medicare

program under title XVIII of the Social Security Act, the medicaidprogram under title XIX of such Act, and the efficiency and effective-ness of the health care system, by encouraging the developmentof a health information system through the establishment of stand-ards and requirements for the electronic transmission of certainhealth information.
SEC. 262. ADMINISTRATIVE SIMPLIFICATION.
(a) I NGENERAL .ÐTitle XI (42 U.S.C. 1301 et seq.) is amended

``PARTCÐA DMINISTRATIVE SIMPLIFICATION
``DEFINITIONS
``SEC. 1171. For purposes of this part:
``(1) C ODE SET .ÐThe term `code set' means any set of codes
used for encoding data elements, such as tables of terms, medi-cal concepts, medical diagnostic codes, or medical procedurecodes.
``(2) H
EALTH CARE CLEARINGHOUSE .ÐThe term `health care

clearinghouse' means a public or private entity that processesor facilitates the processing of nonstandard data elements ofhealth information into standard data elements.42 USC 1320d.42 USC 1320d
note.29 USC 1136
note.

110 STAT. 2022 PUBLIC LAW 104±191ÐAUG. 21, 1996
``(3) H EALTH CARE PROVIDER .ÐThe term `health care pro-
vider' includes a provider of services (as defined in section1861(u)), a provider of medical or other health services (asdefined in section 1861(s)), and any other person furnishinghealth care services or supplies.
``(4) H
EALTH INFORMATION .ÐThe term `health information'
means any information, whether oral or recorded in any formor medium, thatÐ

``(A) is created or received by a health care provider,
health plan, public health authority, employer, life insurer,school or university, or health care clearinghouse; and
``(B) relates to the past, present, or future physical
or mental health or condition of an individual, the provisionof health care to an individual, or the past, present, orfuture payment for the provision of health care to anindividual.``(5) H
EALTH PLAN .ÐThe term `health plan' means an

individual or group plan that provides, or pays the cost of,medical care (as such term is defined in section 2791 of thePublic Health Service Act). Such term includes the following,and any combination thereof:
``(A) A group health plan (as defined in section 2791(a)
of the Public Health Service Act), but only if the planÐ
``(i) has 50 or more participants (as defined in
section 3(7) of the Employee Retirement Income Secu-rity Act of 1974); or

``(ii) is administered by an entity other than the
employer who established and maintains the plan.``(B) A health insurance issuer (as defined in section
2791(b) of the Public Health Service Act).
``(C) A health maintenance organization (as defined
in section 2791(b) of the Public Health Service Act).
``(D) Part A or part B of the Medicare program under
title XVIII.
``(E) The medicaid program under title XIX.``(F) A Medicare supplemental policy (as defined in
section 1882(g)(1)).

``(G) A long-term care policy, including a nursing home
fixed indemnity policy (unless the Secretary determinesthat such a policy does not provide sufficiently comprehen-sive coverage of a benefit so that the policy should betreated as a health plan).
``(H) An employee welfare benefit plan or any other
arrangement which is established or maintained for thepurpose of offering or providing health benefits to theemployees of 2 or more employers.

``(I) The health care program for active military person-
nel under title 10, United States Code.
``(J) The veterans health care program under chapter
17 of title 38, United States Code.
``(K) The Civilian Health and Medical Program of the
Uniformed Services (CHAMPUS), as defined in section1072(4) of title 10, United States Code.
``(L) The Indian health service program under the
Indian Health Care Improvement Act (25 U.S.C. 1601 etseq.).

110 STAT. 2023 PUBLIC LAW 104±191ÐAUG. 21, 1996
``(M) The Federal Employees Health Benefit Plan under
chapter 89 of title 5, United States Code.``(6) I
NDIVIDUALLY IDENTIFIABLE HEALTH INFORMATION .Ð
The term `individually identifiable health information' meansany information, including demographic information collectedfrom an individual, thatÐ
health plan, employer, or health care clearinghouse; and

or mental health or condition of an individual, the provisionof health care to an individual, or the past, present, orfuture payment for the provision of health care to anindividual, andÐ
``(i) identifies the individual; or``(ii) with respect to which there is a reasonable
basis to believe that the information can be used toidentify the individual.
``(7) S
TANDARD .ÐThe term `standard', when used with ref-

erence to a data element of health information or a transactionreferred to in section 1173(a)(1), means any such data elementor transaction that meets each of the standards andimplementation specifications adopted or established by theSecretary with respect to the data element or transaction undersections 1172 through 1174.
``(8) S
TANDARD SETTING ORGANIZATION .ÐThe term `standard

setting organization' means a standard setting organizationaccredited by the American National Standards Institute,including the National Council for Prescription Drug Programs,that develops standards for information transactions, data ele-ments, or any other standard that is necessary to, or willfacilitate, the implementation of this part.
``
GENERAL REQUIREMENTS FOR ADOPTION OF STANDARDS

``
``SEC. 1172. (a) A PPLICABILITY .ÐAny standard adopted under
this part shall apply, in whole or in part, to the following persons:
``(1) A health plan.``(2) A health care clearinghouse.``(3) A health care provider who transmits any health
information in electronic form in connection with a transactionreferred to in section 1173(a)(1).``(b) R
EDUCTION OF COSTS .ÐAny standard adopted under this

part shall be consistent with the objective of reducing the adminis-trative costs of providing and paying for health care.
``(c) R
OLE OF STANDARD SETTING ORGANIZATIONS .Ð
``(1) I N GENERAL .ÐExcept as provided in paragraph (2),
any standard adopted under this part shall be a standardthat has been developed, adopted, or modified by a standardsetting organization.
``(2) S
PECIAL RULES .Ð
``(A) D IFFERENT STANDARDS .ÐThe Secretary may adopt

a standard that is different from any standard developed,adopted, or modified by a standard setting organization,ifÐ
``(i) the different standard will substantially reduce
administrative costs to health care providers andhealth plans compared to the alternatives; and42 USC 1320d±1.

110 STAT. 2024 PUBLIC LAW 104±191ÐAUG. 21, 1996
``(ii) the standard is promulgated in accordance
with the rulemaking procedures of subchapter III ofchapter 5 of title 5, United States Code.``(B) N
O STANDARD BY STANDARD SETTING ORGANIZA -
TION .ÐIf no standard setting organization has developed,
adopted, or modified any standard relating to a standardthat the Secretary is authorized or required to adopt underthis partÐ
``(i) paragraph (1) shall not apply; and
``(ii) subsection (f) shall apply.

``(3) C
ONSULTATION REQUIREMENT .Ð
``(A) I N GENERAL .ÐA standard may not be adopted
under this part unlessÐ
``(i) in the case of a standard that has been devel-
oped, adopted, or modified by a standard settingorganization, the organization consulted with each ofthe organizations described in subparagraph (B) inthe course of such development, adoption, or modifica-tion; and
``(ii) in the case of any other standard, the Sec-

retary, in complying with the requirements of sub-section (f), consulted with each of the organizationsdescribed in subparagraph (B) before adopting thestandard.``(B) O
RGANIZATIONS DESCRIBED .ÐThe organizations
referred to in subparagraph (A) are the following:
``(i) The National Uniform Billing Committee.``(ii) The National Uniform Claim Committee.``(iii) The Workgroup for Electronic Data Inter-
change.
``(iv) The American Dental Association.
``(d) I

``(d) I
MPLEMENTATION SPECIFICATIONS .ÐThe Secretary shall
establish specifications for implementing each of the standardsadopted under this part.
``(e) P
ROTECTION OF TRADE SECRETS .ÐExcept as otherwise
required by law, a standard adopted under this part shall notrequire disclosure of trade secrets or confidential commercialinformation by a person required to comply with this part.
``(f) A
SSISTANCE TO THE SECRETARY .ÐIn complying with the

requirements of this part, the Secretary shall rely on the rec-ommendations of the National Committee on Vital and HealthStatistics established under section 306(k) of the Public HealthService Act (42 U.S.C. 242k(k)), and shall consult with appropriateFederal and State agencies and private organizations. The Secretaryshall publish in the Federal Register any recommendation of theNational Committee on Vital and Health Statistics regarding theadoption of a standard under this part.
``(g) A

``(g) A
PPLICATION TO MODIFICATIONS OF STANDARDS .ÐThis sec-
tion shall apply to a modification to a standard (including anaddition to a standard) adopted under section 1174(b) in the samemanner as it applies to an initial standard adopted under section1174(a).
``
STANDARDS FOR INFORMATION TRANSACTIONS AND DATA ELEMENTS
``SEC. 1173. (a) S TANDARDS TOENABLE ELECTRONIC
EXCHANGE .Ð42 USC 1320d±2.Federal Register,

110 STAT. 2025 PUBLIC LAW 104±191ÐAUG. 21, 1996
``(1) I N GENERAL .ÐThe Secretary shall adopt standards for
transactions, and data elements for such transactions, to enablehealth information to be exchanged electronically, that areappropriate forÐ
``(A) the financial and administrative transactions
described in paragraph (2); and
``(B) other financial and administrative transactions

determined appropriate by the Secretary, consistent withthe goals of improving the operation of the health caresystem and reducing administrative costs.``(2) T
RANSACTIONS .ÐThe transactions referred to in para-
graph (1)(A) are transactions with respect to the following:
``(A) Health claims or equivalent encounter informa-
tion.

tion.
``(B) Health claims attachments.``(C) Enrollment and disenrollment in a health plan.``(D) Eligibility for a health plan.``(E) Health care payment and remittance advice.``(F) Health plan premium payments.``(G) First report of injury.``(H) Health claim status.``(I) Referral certification and authorization.
``(3) A
CCOMMODATION OF SPECIFIC PROVIDERS .ÐThe
standards adopted by the Secretary under paragraph (1) shallaccommodate the needs of different types of health care provid-ers.``(b) U

NIQUE HEALTH IDENTIFIERS .Ð
``(1) I N GENERAL .ÐThe Secretary shall adopt standards
providing for a standard unique health identifier for eachindividual, employer, health plan, and health care providerfor use in the health care system. In carrying out the precedingsentence for each health plan and health care provider, theSecretary shall take into account multiple uses for identifiersand multiple locations and specialty classifications for healthcare providers.
``(2) U

``(2) U
SE OF IDENTIFIERS .ÐThe standards adopted under
paragraph (1) shall specify the purposes for which a uniquehealth identifier may be used.``(c) C
ODE SETS.Ð
thatÐ
``(A) select code sets for appropriate data elements
for the transactions referred to in subsection (a)(1) fromamong the code sets that have been developed by privateand public entities; or
``(B) establish code sets for such data elements if no

code sets for the data elements have been developed.``(2) D
ISTRIBUTION .ÐThe Secretary shall establish efficient
and low-cost procedures for distribution (including electronicdistribution) of code sets and modifications made to such codesets under section 1174(b).``(d) S
ECURITY STANDARDS FOR HEALTH INFORMATION .Ð
``(1) S ECURITY STANDARDS .ÐThe Secretary shall adopt secu-
rity standards thatÐ
``(A) take into accountÐ
``(i) the technical capabilities of record systems

110 STAT. 2026 PUBLIC LAW 104±191ÐAUG. 21, 1996
``(ii) the costs of security measures;
``(iii) the need for training persons who have access
to health information;
``(iv) the value of audit trails in computerized
record systems; and
``(v) the needs and capabilities of small health care
providers and rural health care providers (as suchproviders are defined by the Secretary); and``(B) ensure that a health care clearinghouse, if it is

part of a larger organization, has policies and securityprocedures which isolate the activities of the health careclearinghouse with respect to processing information ina manner that prevents unauthorized access to suchinformation by such larger organization.``(2) S
AFEGUARDS .ÐEach person described in section
1172(a) who maintains or transmits health information shallmaintain reasonable and appropriate administrative, technical,and physical safeguardsÐ

``(A) to ensure the integrity and confidentiality of the
information;
``(B) to protect against any reasonably anticipatedÐ
``(i) threats or hazards to the security or integrity
of the information; and
``(ii) unauthorized uses or disclosures of the
information; and``(C) otherwise to ensure compliance with this part
by the officers and employees of such person.
``(e) E
LECTRONIC SIGNATURE .Ð
``(1) S TANDARDS .ÐThe Secretary, in coordination with the

Secretary of Commerce, shall adopt standards specifying proce-dures for the electronic transmission and authentication ofsignatures with respect to the transactions referred to in sub-section (a)(1).
``(2) E
FFECT OF COMPLIANCE .ÐCompliance with the stand-
ards adopted under paragraph (1) shall be deemed to satisfyFederal and State statutory requirements for written signatureswith respect to the transactions referred to in subsection (a)(1).``(f) T

RANSFER OF INFORMATION AMONG HEALTH PLANS .ÐThe
Secretary shall adopt standards for transferring among health plansappropriate standard data elements needed for the coordinationof benefits, the sequential processing of claims, and other dataelements for individuals who have more than one health plan.
``
TIMETABLES FOR ADOPTION OF STANDARDS
``SEC. 1174. (a) I NITIAL STANDARDS .ÐThe Secretary shall carry

out section 1173 not later than 18 months after the date of theenactment of the Health Insurance Portability and AccountabilityAct of 1996, except that standards relating to claims attachmentsshall be adopted not later than 30 months after such date.
``(b) A
DDITIONS AND MODIFICATIONS TO STANDARDS .Ð

the Secretary shall review the standards adopted under section1173, and shall adopt modifications to the standards (includingadditions to the standards), as determined appropriate, butnot more frequently than once every 12 months. Any addition
or modification to a standard shall be completed in a mannerwhich minimizes the disruption and cost of compliance.42 USC 1320d±3.

110 STAT. 2027 PUBLIC LAW 104±191ÐAUG. 21, 1996
``(2) S PECIAL RULES .Ð
``(A) F IRST 12 -MONTH PERIOD .ÐExcept with respect to
additions and modifications to code sets under subpara-graph (B), the Secretary may not adopt any modificationto a standard adopted under this part during the 12-monthperiod beginning on the date the standard is initiallyadopted, unless the Secretary determines that the modifica-tion is necessary in order to permit compliance with thestandard.
``(B) A

``(B) A
DDITIONS AND MODIFICATIONS TO CODE SETS .Ð
``(i) I N GENERAL .ÐThe Secretary shall ensure that
procedures exist for the routine maintenance, testing,enhancement, and expansion of code sets.
``(ii) A
DDITIONAL RULES .ÐIf a code set is modified

under this subsection, the modified code set shallinclude instructions on how data elements of healthinformation that were encoded prior to the modificationmay be converted or translated so as to preserve theinformational value of the data elements that existedbefore the modification. Any modification to a codeset under this subsection shall be implemented in amanner that minimizes the disruption and cost ofcomplying with such modification.
``

``
``SEC. 1175. (a) C ONDUCT OF TRANSACTIONS BY PLANS .Ð
``(1) I N GENERAL .ÐIf a person desires to conduct a trans-
action referred to in section 1173(a)(1) with a health planas a standard transactionÐ
``(A) the health plan may not refuse to conduct such
transaction as a standard transaction;
``(B) the insurance plan may not delay such transaction,

or otherwise adversely affect, or attempt to adversely affect,the person or the transaction on the ground that the trans-action is a standard transaction; and
``(C) the information transmitted and received in
connection with the transaction shall be in the form ofstandard data elements of health information.``(2) S
ATISFACTION OF REQUIREMENTS .ÐA health plan may
satisfy the requirements under paragraph (1) byÐ
``(A) directly transmitting and receiving standard data

elements of health information; or
``(B) submitting nonstandard data elements to a health
care clearinghouse for processing into standard data ele-ments and transmission by the health care clearinghouse,and receiving standard data elements through the healthcare clearinghouse.``(3) T
IMETABLE FOR COMPLIANCE .ÐParagraph (1) shall not

be construed to require a health plan to comply with anystandard, implementation specification, or modification to astandard or specification adopted or established by the Sec-retary under sections 1172 through 1174 at any time priorto the date on which the plan is required to comply withthe standard or specification under subsection (b).``(b) C
OMPLIANCE WITHSTANDARDS .Ð
``(1) I NITIAL COMPLIANCE .Ð42 USC 1320d±4.

110 STAT. 2028 PUBLIC LAW 104±191ÐAUG. 21, 1996
``(A) I N GENERAL .ÐNot later than 24 months after the
date on which an initial standard or implementation speci-fication is adopted or established under sections 1172 and1173, each person to whom the standard or implementationspecification applies shall comply with the standard orspecification.
``(B) S
PECIAL RULE FOR SMALL HEALTH PLANS .ÐIn the

case of a small health plan, paragraph (1) shall be appliedby substituting `36 months' for `24 months'. For purposes
of this subsection, the Secretary shall determine the plansthat qualify as small health plans.``(2) C
OMPLIANCE WITH MODIFIED STANDARDS .ÐIf the Sec-

retary adopts a modification to a standard or implementationspecification under this part, each person to whom the standardor implementation specification applies shall comply with themodified standard or implementation specification at such timeas the Secretary determines appropriate, taking into accountthe time needed to comply due to the nature and extent ofthe modification. The time determined appropriate under thepreceding sentence may not be earlier than the last day ofthe 180-day period

be earlier than the last day ofthe 180-day period beginning on the date such modificationis adopted. The Secretary may extend the time for compliancefor small health plans, if the Secretary determines that suchextension is appropriate.

``(3) C
ONSTRUCTION .ÐNothing in this subsection shall be
construed to prohibit any person from complying with a stand-ard or specification byÐ
``(A) submitting nonstandard data elements to a health
care clearinghouse for processing into standard data ele-ments and transmission by the health care clearing-house; or
``(B) receiving standard data elements through a health
care clearinghouse.
``
GENERAL PENALTY FOR FAILURE TO COMPLY WITH REQUIREMENTS
AND STANDARDS

``SEC. 1176. (a) G ENERAL PENALTY .Ð
``(1) I N GENERAL .ÐExcept as provided in subsection (b),
the Secretary shall impose on any person who violates a provi-sion of this part a penalty of not more than $100 for eachsuch violation, except that the total amount imposed on theperson for all violations of an identical requirement or prohibi-tion during a calendar year may not exceed $25,000.
``(2) P
ROCEDURES .ÐThe provisions of section 1128A (other

than subsections (a) and (b) and the second sentence of sub-section (f)) shall apply to the imposition of a civil money penaltyunder this subsection in the same manner as such provisionsapply to the imposition of a penalty under such section 1128A.``(b) L
``(1) O FFENSES OTHERWISE PUNISHABLE .ÐA penalty may
not be imposed under subsection (a) with respect to an actif the act constitutes an offense punishable under section 1177.
``(2) N

``(2) N
ONCOMPLIANCE NOT DISCOVERED .ÐA penalty may not
be imposed under subsection (a) with respect to a provisionof this part if it is established to the satisfaction of the Secretarythat the person liable for the penalty did not know, and by42 USC 1320d±5.

110 STAT. 2029 PUBLIC LAW 104±191ÐAUG. 21, 1996
exercising reasonable diligence would not have known, that
such person violated the provision.
``(3) F AILURES DUE TO REASONABLE CAUSE .Ð
``(A) I N GENERAL .ÐExcept as provided in subparagraph
(B), a penalty may not be imposed under subsection(a) ifÐ
``(i) the failure to comply was due to reasonable
cause and not to willful neglect; and
``(ii) the failure to comply is corrected during the

30-day period beginning on the first date the personliable for the penalty knew, or by exercising reasonablediligence would have known, that the failure to complyoccurred.``(B) E
XTENSION OF PERIOD .Ð
``(i) N O PENALTY .ÐThe period referred to in
subparagraph (A)(ii) may be extended as determinedappropriate by the Secretary based on the nature andextent of the failure to comply.
``(ii) A
SSISTANCE .ÐIf the Secretary determines that

a person failed to comply because the person wasunable to comply, the Secretary may provide technicalassistance to the person during the period describedin subparagraph (A)(ii). Such assistance shall be pro-vided in any manner determined appropriate by theSecretary.
``(4) R
EDUCTION .ÐIn the case of a failure to comply which

is due to reasonable cause and not to willful neglect, anypenalty under subsection (a) that is not entirely waived underparagraph (3) may be waived to the extent that the paymentof such penalty would be excessive relative to the compliancefailure involved.
``
WRONGFUL DISCLOSURE OF INDIVIDUALLY IDENTIFIABLE HEALTH
INFORMATION
``SEC. 1177. (a) O FFENSE .ÐA person who knowingly and in
violation of this partÐ

``(1) uses or causes to be used a unique health identifier;``(2) obtains individually identifiable health information
relating to an individual; or
``(3) discloses individually identifiable health information
to another person,
shall be punished as provided in subsection (b).
``(b) P
ENALTIES .ÐA person described in subsection (a) shallÐ
``(1) be fined not more than $50,000, imprisoned not more
than 1 year, or both;

``(2) if the offense is committed under false pretenses, be
fined not more than $100,000, imprisoned not more than 5years, or both; and
``(3) if the offense is committed with intent to sell, transfer,
or use individually identifiable health information for commer-cial advantage, personal gain, or malicious harm, be fined notmore than $250,000, imprisoned not more than 10 years, orboth.
``
EFFECT ON STATE LAW

``
``SEC. 1178. (a) G ENERAL EFFECT .Ð 42 USC 1320d±7.42 USC 1320d±6.

110 STAT. 2030 PUBLIC LAW 104±191ÐAUG. 21, 1996
``(1) G ENERAL RULE .ÐExcept as provided in paragraph (2),
a provision or requirement under this part, or a standardor implementation specification adopted or established undersections 1172 through 1174, shall supersede any contrary provi-sion of State law, including a provision of State law thatrequires medical or health plan records (including billinginformation) to be maintained or transmitted in written ratherthan electronic form.
``(2) E

``(2) E
XCEPTIONS .ÐA provision or requirement under this
part, or a standard or implementation specification adoptedor established under sections 1172 through 1174, shall notsupersede a contrary provision of State law, if the provisionof State lawÐ
``(A) is a provision the Secretary determinesÐ
``(i) is necessaryÐ
``(I) to prevent fraud and abuse;``(II) to ensure appropriate State regulation
of insurance and health plans;
``(III) for State reporting on health care deliv-
ery or costs; or

``(IV) for other purposes; or
``(ii) addresses controlled substances; or
``(B) subject to section 264(c)(2) of the Health Insurance
Portability and Accountability Act of 1996, relates to theprivacy of individually identifiable health information.
``(b) P
UBLIC HEALTH .ÐNothing in this part shall be construed

to invalidate or limit the authority, power, or procedures establishedunder any law providing for the reporting of disease or injury,child abuse, birth, or death, public health surveillance, or publichealth investigation or intervention.
``(c) S
TATE REGULATORY REPORTING .ÐNothing in this part shall

limit the ability of a State to require a health plan to report,or to provide access to, information for management audits, financialaudits, program monitoring and evaluation, facility licensure orcertification, or individual licensure or certification.
``
PROCESSING PAYMENT TRANSACTIONS BY FINANCIAL INSTITUTIONS
``SEC. 1179. To the extent that an entity is engaged in activities

of a financial institution (as defined in section 1101 of the Rightto Financial Privacy Act of 1978), or is engaged in authorizing,processing, clearing, settling, billing, transferring, reconciling, orcollecting payments, for a financial institution, this part, and anystandard adopted under this part, shall not apply to the entitywith respect to such activities, including the following:
``(1) The use or disclosure of information by the entity

for authorizing, processing, clearing, settling, billing, transfer-ring, reconciling or collecting, a payment for, or related to,health plan premiums or health care, where such paymentis made by any means, including a credit, debit, or otherpayment card, an account, check, or electronic funds transfer.
``(2) The request for, or the use or disclosure of, information
by the entity with respect to a payment described in para-graph (1)Ð
``(A) for transferring receivables;``(B) for auditing;

``(C) in connection withÐ
``(i) a customer dispute; or42 USC 1320d±8.

110 STAT. 2031 PUBLIC LAW 104±191ÐAUG. 21, 1996
``(ii) an inquiry from, or to, a customer;
``(D) in a communication to a customer of the entity
regarding the customer's transactions, payment card,account, check, or electronic funds transfer;
``(E) for reporting to consumer reporting agencies; or``(F) for complying withÐ
``(i) a civil or criminal subpoena; or``(ii) a Federal or State law regulating the entity.''.
(b) C
(1) R EQUIREMENT FOR MEDICARE PROVIDERS .ÐSection

1866(a)(1) (42 U.S.C. 1395cc(a)(1)) is amendedÐ
(A) by striking ``and'' at the end of subparagraph (P);(B) by striking the period at the end of subparagraph
(Q) and inserting ``; and''; and
(C) by inserting immediately after subparagraph (Q)
the following new subparagraph:``(R) to contract only with a health care clearinghouse (as

defined in section 1171) that meets each standard andimplementation specification adopted or established under partC of title XI on or after the date on which the health careclearinghouse is required to comply with the standard or speci-fication.''.
(2) T
ITLE HEADING .ÐTitle XI (42 U.S.C. 1301 et seq.) is
amended by striking the title heading and inserting thefollowing:
``TITLE XIÐGENERAL PROVISIONS, PEER REVIEW, AND
ADMINISTRATIVE SIMPLIFICATION''.

SEC. 263. CHANGES IN MEMBERSHIP AND DUTIES OF NATIONAL
COMMITTEE ON VITAL AND HEALTH STATISTICS.
Section 306(k) of the Public Health Service Act (42 U.S.C.
242k(k)) is amendedÐ
(1) in paragraph (1), by striking ``16'' and inserting ``18'';(2) by amending paragraph (2) to read as follows:
``(2) The members of the Committee shall be appointed from

among persons who have distinguished themselves in the fieldsof health statistics, electronic interchange of health care informa-tion, privacy and security of electronic information, population-based public health, purchasing or financing health care services,integrated computerized health information systems, health servicesresearch, consumer interests in health information, health datastandards, epidemiology, and the provision of health services. Mem-bers of the Committee shall be appointed

Mem-bers of the Committee shall be appointed for terms of 4 years.'';

(3) by redesignating paragraphs (3) through (5) as para-
graphs (4) through (6), respectively, and inserting after para-graph (2) the following:``(3) Of the members of the CommitteeÐ
``(A) 1 shall be appointed, not later than 60 days after
the date of the enactment of the Health Insurance Portabilityand Accountability Act of 1996, by the Speaker of the Houseof Representatives after consultation with the Minority Leaderof the House of Representatives;

``(B) 1 shall be appointed, not later than 60 days after
the date of the enactment of the Health Insurance Portabilityand Accountability Act of 1996, by the President pro tempore

110 STAT. 2032 PUBLIC LAW 104±191ÐAUG. 21, 1996
of the Senate after consultation with the Minority Leader of
the Senate; and
``(C) 16 shall be appointed by the Secretary.'';(4) by amending paragraph (5) (as so redesignated) to read
as follows:``(5) The CommitteeÐ
``(A) shall assist and advise the SecretaryÐ
``(i) to delineate statistical problems bearing on health
and health services which are of national or internationalinterest;
``(ii) to stimulate studies of such problems by other

organizations and agencies whenever possible or to makeinvestigations of such problems through subcommittees;
``(iii) to determine, approve, and revise the terms,

definitions, classifications, and guidelines for assessinghealth status and health services, their distribution andcosts, for use (I) within the Department of Health andHuman Services, (II) by all programs administered orfunded by the Secretary, including the Federal-State-localcooperative health statistics system referred to in sub-section (e), and (III) to the extent possible as determinedby the head of the agency involved, by the Departmentof Veterans Affairs, the Department of Defense, and

Veterans Affairs, the Department of Defense, and otherFederal agencies concerned with health and health services;

``(iv) with respect to the design of and approval of
health statistical and health information systems concernedwith the collection, processing, and tabulation of healthstatistics within the Department of Health and HumanServices, with respect to the Cooperative Health StatisticsSystem established under subsection (e), and with respectto the standardized means for the collection of healthinformation and statistics to be established by the Sec-retary under subsection (j)(1);

``(v) to review and comment on findings and proposals
developed by other organizations and agencies and to makerecommendations for their adoption or implementation bylocal, State, national, or international agencies;
``(vi) to cooperate with national committees of other
countries and with the World Health Organization andother national agencies in the studies of problems of mutualinterest;
``(vii) to issue an annual report on the state of the

Nation's health, its health services, their costs and distribu-tions, and to make proposals for improvement of theNation's health statistics and health information systems;and
``(viii) in complying with the requirements imposed on
the Secretary under part C of title XI of the Social SecurityAct;``(B) shall study the issues related to the adoption of uni-
form data standards for patient medical record informationand the electronic exchange of such information;

``(C) shall report to the Secretary not later than 4 years
after the date of the enactment of the Health Insurance Port-ability and Accountability Act of 1996 recommendations andlegislative proposals for such standards and electronicexchange; and
Reports.Reports.

110 STAT. 2033 PUBLIC LAW 104±191ÐAUG. 21, 1996
``(D) shall be responsible generally for advising the Sec-
retary and the Congress on the status of the implementationof part C of title XI of the Social Security Act.''; and
(5) by adding at the end the following:
``(7) Not later than 1 year after the date of the enactment

of the Health Insurance Portability and Accountability Act of 1996,and annually thereafter, the Committee shall submit to the Con-gress, and make public, a report regarding the implementationof part C of title XI of the Social Security Act. Such report shalladdress the following subjects, to the extent that the Committeedetermines appropriate:
``(A) The extent to which persons required to comply with

part C of title XI of the Social Security Act are cooperatingin implementing the standards adopted under such part.
``(B) The extent to which such entities are meeting the
security standards adopted under such part and the typesof penalties assessed for noncompliance with such standards.
``(C) Whether the Federal and State Governments are
receiving information of sufficient quality to meet their respon-sibilities under such part.
``(D) Any problems that exist with respect to implementa-

tion of such part.
``(E) The extent to which timetables under such part are
being met.''.
SEC. 264. RECOMMENDATIONS WITH RESPECT TO PRIVACY OF CER-
TAIN HEALTH INFORMATION.
(a) I NGENERAL .ÐNot later than the date that is 12 months

after the date of the enactment of this Act, the Secretary ofHealth and Human Services shall submit to the Committee onLabor and Human Resources and the Committee on Finance ofthe Senate and the Committee on Commerce and the Committeeon Ways and Means of the House of Representatives detailedrecommendations on standards with respect to the privacy ofindividually identifiable health information.
(b) S
UBJECTS FOR RECOMMENDATIONS .ÐThe recommendations

under subsection (a) shall address at least the following:
(1) The rights that an individual who is a subject of individ-
ually identifiable health information should have.
(2) The procedures that should be established for the exer-
cise of such rights.
(3) The uses and disclosures of such information that should
be authorized or required.(c) R
(1) I N GENERAL .ÐIf legislation governing standards with

respect to the privacy of individually identifiable healthinformation transmitted in connection with the transactionsdescribed in section 1173(a) of the Social Security Act (as addedby section 262) is not enacted by the date that is 36 monthsafter the date of the enactment of this Act, the Secretaryof Health and Human Services shall promulgate final regula-tions containing such standards not later than the date thatis 42 months after the date of the enactment of this Act.Such regulations shall

the enactment of this Act.Such regulations shall address at least the subjects describedin subsection (b).

(2) P
REEMPTION .ÐA regulation promulgated under para-
graph (1) shall not supercede a contrary provision of StateRegulations.42 USC 1320d±2
note.Reports.

110 STAT. 2034 PUBLIC LAW 104±191ÐAUG. 21, 1996
law, if the provision of State law imposes requirements, stand-
ards, or implementation specifications that are more stringentthan the requirements, standards, or implementation specifica-tions imposed under the regulation.(d) C
ONSULTATION .ÐIn carrying out this section, the Secretary
of Health and Human Services shall consult withÐ
(1) the National Committee on Vital and Health Statistics

established under section 306(k) of the Public Health ServiceAct (42 U.S.C. 242k(k)); and
(2) the Attorney General.
Subtitle GÐDuplication and Coordination
of Medicare-Related Plans
SEC. 271. DUPLICATION AND COORDINATION OF MEDICARE-RELATED
PLANS.
(a) T REATMENT OF CERTAIN HEALTH INSURANCE POLICIES AS
NONDUPLICATIVE .ÐSection 1882(d)(3)(A) (42 U.S.C. 1395ss(d)(3)(A))
(1) in clause (iii), by striking ``clause (i)'' and inserting
``clause (i)(II)''; and

(2) by adding at the end the following:
``(iv) For purposes of this subparagraph, a health insurance

policy (other than a Medicare supplemental policy) providing forbenefits which are payable to or on behalf of an individual withoutregard to other health benefit coverage of such individual is notconsidered to `duplicate' any health benefits under this title, undertitle XIX, or under a health insurance policy, and subclauses (I)and (III) of clause (i) do not apply to such a policy.
``(v) For purposes of this subparagraph, a health insurance

policy (or a rider to an insurance contract which is not a healthinsurance policy) is not considered to `duplicate' health benefitsunder this title or under another health insurance policy if itÐ
``(I) provides health care benefits only for long-term care,
nursing home care, home health care, or community-based care,or any combination thereof,
``(II) coordinates against or excludes items and services
available or paid for under this title or under another healthinsurance policy, and

``(III) for policies sold or issued on or after the end of
the 90-day period beginning on the date of enactment of theHealth Insurance Portability and Accountability Act of 1996discloses such coordination or exclusion in the policy's outlineof coverage.

For purposes of this clause, the terms `coordinates' and `coordination'mean, with respect to a policy in relation to health benefits underthis title or under another health insurance policy, that the policyunder its terms is secondary to, or excludes from payment, itemsand services to the extent available or paid for under this titleor under another health insurance policy.
``(vi)(I) An individual entitled to benefits under part A or

enrolled under part B of this title who is applying for a healthinsurance policy (other than a policy described in subclause (III))shall be furnished a disclosure statement described in clause (vii)for the type of policy being applied for. Such statement shall be

110 STAT. 2035 PUBLIC LAW 104±191ÐAUG. 21, 1996
furnished as a part of (or together with) the application for such
policy.
``(II) Whoever issues or sells a health insurance policy (other

than a policy described in subclause (III)) to an individual describedin subclause (I) and fails to furnish the appropriate disclosurestatement as required under such subclause shall be fined undertitle 18, United States Code, or imprisoned not more than 5 years,or both, and, in addition to or in lieu of such a criminal penalty,is subject to a civil money penalty of not to exceed $25,000 (or$15,000 in the case of a person other than the issuer of the policy)for each such violation.

``(III) A policy described in this subclause (to which subclauses
(I) and (II) do not apply) is a Medicare supplemental policy ora health insurance policy identified under 60 Federal Register 30880(June 12, 1995) as a policy not required to have a disclosure state-ment.
``(IV) Any reference in this section to the revised NAIC model

regulation (referred to in subsection (m)(1)(A)) is deemed a referenceto such regulation as revised by section 171(m)(2) of the SocialSecurity Act Amendments of 1994 (Public Law 103±432) and asmodified by substituting, for the disclosure required under section16D(2), disclosure under subclause (I) of an appropriate disclosurestatement under clause (vii).
``(vii) The disclosure statement described in this clause for

a type of policy is the statement specified under subparagraph(D) of this paragraph (as in effect before the date of the enactmentof the Health Insurance Portability and Accountability Act of 1996)for that type of policy, as revised as follows:
``(I) In each statement, amend the second line to read
as follows:
`THIS IS NOT MEDICARE SUPPLEMENT INSURANCE '.
``(II) In each statement, strike the third line and insert
the following: ` Some health care services paid for by Medi-

care may also trigger the payment of benefits underthis policy. '.
``(III) In each statement not described in subclause (V),
strike the boldface matter that begins ` This insurance ' and
all that follows up to the next paragraph that begins ` Medi-
care '.
``(IV) In each statement not described in subclause (V),
insert before the boxed matter (that states ` Before You Buy
This Insurance ') the following: ` This policy must pay bene-

fits without regard to other health benefit coverage towhich you may be entitled under Medicare or otherinsurance. '.
``(V) In a statement relating to policies providing both nurs-

ing home and non-institutional coverage, to policies providingnursing home benefits only, or policies providing home carebenefits only, amend the sentence that begins `Federal law'to read as follows: `Federal law requires us to inform youthat in certain situations this insurance may pay for somecare also covered by Medicare.'.``(viii)(I) Subject to subclause (II), nothing in this subparagraph
shall restrict or preclude a State's ability to regulate health insur-

110 STAT. 2036 PUBLIC LAW 104±191ÐAUG. 21, 1996
ance policies, including any health insurance policy that is described
in clause (iv), (v), or (vi)(III).
``(II) A State may not declare or specify, in statute, regulation,

or otherwise, that a health insurance policy (other than a Medicaresupplemental policy) or rider to an insurance contract which isnot a health insurance policy, that is described in clause (iv),(v), or (vi)(III) and that is sold, issued, or renewed to an individualentitled to benefits under part A or enrolled under part B `dupli-cates' health benefits under this title or under a Medicare supple-mental policy.''.
(b) C
ONFORMING AMENDMENTS .ÐSection 1882(d)(3) (42 U.S.C.

1395ss(d)(3)) is amendedÐ
(1) in subparagraph (C)Ð
(A) by striking ``with respect to (i)'' and inserting ``with
respect to'', and
(B) by striking ``, (ii) the sale'' and all that follows
up to the period at the end; and(2) by striking subparagraph (D).
(c) T
RANSITIONAL PROVISION .Ð
(1) N O PENALTIES .ÐSubject to paragraph (3), no criminal

or civil money penalty may be imposed under section1882(d)(3)(A) of the Social Security Act for any act or omissionthat occurred during the transition period (as defined in para-graph (4)) and that relates to any health insurance policythat is described in clause (iv) or (v) of such section (as amendedby subsection (a)).
(2) L
IMITATION ON LEGAL ACTION .ÐSubject to paragraph
(3), no legal action shall be brought or continued in any Federalor State court insofar as such actionÐ

(A) includes a cause of action which arose, or which
is based on or evidenced by any act or omission whichoccurred, during the transition period; and
(B) relates to the application of section 1882(d)(3)(A)
of the Social Security Act to any act or omission withrespect to the sale, issuance, or renewal of any healthinsurance policy that is described in clause (iv) or (v) ofsuch section (as amended by subsection (a)).(3) D
ISCLOSURE CONDITION .ÐIn the case of a policy

described in clause (iv) of section 1882(d)(3)(A) of the Social

Security Act that is sold or issued on or after the effectivedate of statements under section 171(d)(3)(C) of the SocialSecurity Act Amendments of 1994 and before the end of the30-day period beginning on the date of the enactment of thisAct, paragraphs (1) and (2) shall only apply if disclosure wasmade in accordance with section 1882(d)(3)(C)(ii) of the SocialSecurity Act (as in effect before the date of the enactmentof this Act).
(4) T
RANSITION PERIOD .ÐIn this subsection, the term

``transition period'' means the period beginning on November5, 1991, and ending on the date of the enactment of thisAct.(d) E
FFECTIVE DATE.Ð(1) Except as provided in this subsection,
the amendment made by subsection (a) shall be effective as ifincluded in the enactment of section 4354 of the Omnibus BudgetReconciliation Act of 1990.42 USC 1395ss
note.42 USC 1395ss
note.

110 STAT. 2037 PUBLIC LAW 104±191ÐAUG. 21, 1996
(2)(A) Clause (vi) of section 1882(d)(3)(A) of the Social Security
Act, as added by subsection (a), shall only apply to individualsapplying forÐ
(i) a health insurance policy described in section
1882(d)(3)(A)(iv) of such Act (as added by subsection (a)), afterthe date of the enactment of this Act, or
(ii) another health insurance policy after the end of the

30-day period beginning on the date of the enactment of thisAct.(B) A seller or issuer of a health insurance policy may sub-
stitute, for the disclosure statement described in clause (vii) ofsuch section, the statement specified under section 1882(d)(3)(D)of the Social Security Act (as in effect before the date of theenactment of this Act), without the revision specified in such clause.
TITLE IIIÐTAX-RELATED HEALTH
PROVISIONS
SEC. 300. AMENDMENT OF 1986 CODE.

Except as otherwise expressly provided, whenever in this title
an amendment or repeal is expressed in terms of an amendmentto, or repeal of, a section or other provision, the reference shallbe considered to be made to a section or other provision of theInternal Revenue Code of 1986.
SEC. 301. MEDICAL SAVINGS ACCOUNTS.
(a) I NGENERAL .ÐPart VII of subchapter B of chapter 1 (relating

to additional itemized deductions for individuals) is amended byredesignating section 220 as section 221 and by inserting aftersection 219 the following new section:
``SEC. 220. MEDICAL SAVINGS ACCOUNTS.
``(a) D EDUCTION ALLOWED .ÐIn 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 anamount equal to the aggregate amount paid in cash during suchtaxable year by such individual to a medical savings account ofsuch individual.
``(b) L
``(1) I N GENERAL .ÐThe amount allowable as a deduction

under subsection (a) to an individual for the taxable year shallnot exceed the sum of the monthly limitations for monthsduring such taxable year that the individual is an eligibleindividual.
``(2) M
ONTHLY LIMITATION .ÐThe monthly limitation for any
month is the amount equal to 1¤12ofÐ
``(A) in the case of an individual who has self-only
coverage under the high deductible health plan as of thefirst day of such month, 65 percent of the annual deductibleunder such coverage, and

``(B) in the case of an individual who has family cov-
erage under the high deductible health plan as of the

110 STAT. 2038 PUBLIC LAW 104±191ÐAUG. 21, 1996
first day of such month, 75 percent of the annual deductible
under such coverage.``(3) S
PECIAL RULE FOR MARRIED INDIVIDUALS .ÐIn the case
of individuals who are married to each other, if either spousehas family coverageÐ
``(A) both spouses shall be treated as having only such
family coverage (and if such spouses each have familycoverage under different plans, as having the family cov-erage with the lowest annual deductible), and

``(B) the limitation under paragraph (1) (after the
application of subparagraph (A) of this paragraph) shallbe divided equally between them unless they agree ona different division.``(4) D
EDUCTION NOT TO EXCEED COMPENSATION .Ð
``(A) E MPLOYEES .ÐThe deduction allowed under sub-

section (a) for contributions as an eligible individualdescribed in subclause (I) of subsection (c)(1)(A)(iii) shallnot exceed such individual's wages, salaries, tips, and otheremployee compensation which are attributable to suchindividual's employment by the employer referred to insuch subclause.
``(B) S
ELF-EMPLOYED INDIVIDUALS .ÐThe deduction

``(B) S
allowed under subsection (a) for contributions as an eligibleindividual described in subclause (II) of subsection(c)(1)(A)(iii) shall not exceed such individual's earnedincome (as defined in section 401(c)(1)) derived by thetaxpayer from the trade or business with respect to whichthe high deductible health plan is established.
``(C) C
OMMUNITY PROPERTY LAWS NOT TO APPLY .ÐThe

``(C) C
limitations under this paragraph shall be determined with-out regard to community property laws.``(5) C
OORDINATION WITH EXCLUSION FOR EMPLOYER CON -
TRIBUTIONS .ÐNo deduction shall be allowed under this section
for any amount paid for any taxable year to a medical savingsaccount of an individual ifÐ
``(A) any amount is contributed to any medical savings

account of such individual for such year which is excludablefrom gross income under section 106(b), or
``(B) if such individual's spouse is covered under the
high deductible health plan covering such individual, anyamount is contributed for such year to any medical savingsaccount of such spouse which is so excludable.``(6) D
ENIAL OF DEDUCTION TO DEPENDENTS .ÐNo deduction

shall be allowed under this section to any individual withrespect to whom a deduction under section 151 is allowableto another taxpayer for a taxable year beginning in the calendar
year in which such individual's taxable year begins.``(c) D
``(1) E LIGIBLE INDIVIDUAL .Ð
``(A) I N GENERAL .ÐThe term `eligible individual' means,
with respect to any month, any individual ifÐ

``(i) such individual is covered under a high deduct-
ible health plan as of the 1st day of such month,
``(ii) such individual is not, while covered under
a high deductible health plan, covered under anyhealth planÐ

110 STAT. 2039 PUBLIC LAW 104±191ÐAUG. 21, 1996
``(I) which is not a high deductible health plan,
and
``(II) which provides coverage for any benefit
which is covered under the high deductible healthplan, and``(iii)(I) the high deductible health plan covering
such individual is established and maintained bythe employer of such individual or of the spouse ofsuch individual and such employer is a small employer,
or
``(II) such individual is an employee (within the

meaning of section 401(c)(1)) or the spouse of suchan employee and the high deductible health plan cover-ing such individual is not established or maintainedby any employer of such individual or spouse.``(B) C
ERTAIN COVERAGE DISREGARDED .ÐSubparagraph
(A)(ii) shall be applied without regard toÐ
``(i) coverage for any benefit provided by permitted
insurance, and
``(ii) coverage (whether through insurance or other-

wise) for accidents, disability, dental care, vision care,or long-term care.``(C) C
ONTINUED ELIGIBILITY OF EMPLOYEE AND SPOUSE
ESTABLISHING MEDICAL SAVINGS ACCOUNTS .ÐIf, while an
employer is a small employerÐ
``(i) any amount is contributed to a medical savings
account of an individual who is an employee of suchemployer or the spouse of such an employee, and
``(ii) such amount is excludable from gross income
under section 106(b) or allowable as a deduction underthis section,

such individual shall not cease to meet the requirementof subparagraph (A)(iii)(I) by reason of such employer ceas-ing to be a small employer so long as such employee contin-ues to be an employee of such employer.
``(D) L
IMITATIONS ON ELIGIBILITY .Ð
``For limitations on number of taxpayers who are eligible to have
medical savings accounts, see subsection (i).
``(2) H IGH DEDUCTIBLE HEALTH PLAN .Ð
``(A) I N GENERAL .ÐThe term `high deductible health
plan' means a health planÐ

``(i) in the case of self-only coverage, which has
an annual deductible which is not less than $1,500and not more than $2,250,
``(ii) in the case of family coverage, which has
an annual deductible which is not less than $3,000and not more than $4,500, and
``(iii) the annual out-of-pocket expenses required
to be paid under the plan (other than for premiums)for covered benefits does not exceedÐ
``(I) $3,000 for self-only coverage, and``(II) $5,500 for family coverage.

``(B) S
``(i) E XCLUSION OF CERTAIN PLANS .ÐSuch term does
not include a health plan if substantially all of itscoverage is coverage described in paragraph (1)(B).

110 STAT. 2040 PUBLIC LAW 104±191ÐAUG. 21, 1996
``(ii) S AFE HARBOR FOR ABSENCE OF PREVENTIVE
CARE DEDUCTIBLE .ÐA plan shall not fail to be treated
as a high deductible health plan by reason of failingto have a deductible for preventive care if the absenceof a deductible for such care is required by State law.
``(3) P
ERMITTED INSURANCE .ÐThe term `permitted insur-
ance' meansÐ
``(A) Medicare supplemental insurance,``(B) insurance if substantially all of the coverage pro-

vided under such insurance relates toÐ
``(i) liabilities incurred under workers' compensa-
tion laws,
``(ii) tort liabilities,``(iii) liabilities relating to ownership or use of prop-
erty, or
``(iv) such other similar liabilities as the Secretary
may specify by regulations,``(C) insurance for a specified disease or illness, and``(D) insurance paying a fixed amount per day (or other
period) of hospitalization.``(4) S
MALL EMPLOYER .Ð
``(A) I N GENERAL .ÐThe term `small employer' means,

with respect to any calendar year, any employer if suchemployer employed an average of 50 or fewer employeeson business days during either of the 2 preceding calendaryears. For purposes of the preceding sentence, a precedingcalendar year may be taken into account only if theemployer was in existence throughout such year.
``(B) E

ence throughout the 1st preceding calendar year, the deter-mination under subparagraph (A) shall be based on theaverage number of employees that it is reasonably expectedsuch employer will employ on business days in the currentcalendar year.
``(C) C
ERTAIN GROWING EMPLOYERS RETAIN TREATMENT
AS SMALL EMPLOYER .ÐThe term `small employer' includes,
with respect to any calendar year, any employer ifÐ
``(i) such employer met the requirement of subpara-

graph (A) (determined without regard to subparagraph(B)) for any preceding calendar year after 1996,
``(ii) any amount was contributed to the medical
savings account of any employee of such employer withrespect to coverage of such employee under a highdeductible health plan of such employer during suchpreceding calendar year and such amount was exclud-
able from gross income under section 106(b) or allow-able as a deduction under this section, and

``(iii) such employer employed an average of 200
or fewer employees on business days during eachpreceding calendar year after 1996.``(D) S
``(i) C ONTROLLED GROUPS .ÐFor purposes of this
paragraph, all persons treated as a single employerunder subsection (b), (c), (m), or (o) of section 414shall be treated as 1 employer.

110 STAT. 2041 PUBLIC LAW 104±191ÐAUG. 21, 1996
``(ii) P REDECESSORS .ÐAny reference in this para-
graph to an employer shall include a reference to anypredecessor of such employer.``(5) F
AMILY COVERAGE .ÐThe term `family coverage'
means any coverage other than self-only coverage.
``(d) M EDICAL SAVINGS ACCOUNT .ÐFor purposes of this
sectionÐ
``(1) M EDICAL SAVINGS ACCOUNT .ÐThe term `medical sav-

ings account' means a trust created or organized in the UnitedStates exclusively for the purpose of paying the qualified medi-cal expenses of the account holder, but only if the writtengoverning instrument creating the trust meets the followingrequirements:
``(A) Except in the case of a rollover contribution
described in subsection (f)(5), no contribution will beacceptedÐ
``(i) unless it is in cash, or``(ii) to the extent such contribution, when added

to previous contributions to the trust for the calendaryear, exceeds 75 percent of the highest annual limitdeductible permitted under subsection (c)(2)(A)(ii) forsuch calendar year.``(B) The trustee is a bank (as defined in section 408(n)),
an insurance company (as defined in section 816), oranother person who demonstrates to the satisfaction ofthe Secretary that the manner in which such person willadminister the trust will be consistent with the require-ments 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 orcommon investment fund.
``(E) The interest of an individual in the balance in
his account is nonforfeitable.``(2) Q
UALIFIED MEDICAL EXPENSES .Ð
``(A) I N GENERAL .ÐThe term `qualified medical

expenses' means, with respect to an account holder,amounts paid by such holder for medical care (as definedin section 213(d)) for such individual, the spouse of suchindividual, and any dependent (as defined in section 152)of such individual, but only to the extent such amountsare not compensated for by insurance or otherwise.
``(B) H
EALTH INSURANCE MAY NOT BE PURCHASED FROM
ACCOUNT .Ð
``(i) I N GENERAL .ÐSubparagraph (A) shall not

apply to any payment for insurance.
``(ii) E XCEPTIONS .ÐClause (i) shall not apply to
any expense for coverage underÐ
``(I) a health plan during any period of continu-
ation coverage required under any Federal law,
``(II) a qualified long-term care insurance con-
tract (as defined in section 7702B(b)), or
``(III) a health plan during a period in which
the individual is receiving unemployment com-pensation under any Federal or State law.

110 STAT. 2042 PUBLIC LAW 104±191ÐAUG. 21, 1996
``(C) M EDICAL EXPENSES OF INDIVIDUALS WHO ARE NOT
ELIGIBLE INDIVIDUALS .ÐSubparagraph (A) shall apply to

an amount paid by an account holder for medical careof an individual who is not an eligible individual for themonth in which the expense for such care is incurredonly if no amount is contributed (other than a rollovercontribution) to any medical savings account of suchaccount holder for the taxable year which includes suchmonth. This subparagraph shall not apply to any expensefor coverage described in subclause (I) or (III) of subpara-graph (B)(ii).``(3) A

CCOUNT HOLDER .ÐThe term `account holder' means
the individual on whose behalf the medical savings accountwas established.
``(4) C
ERTAIN RULES TO APPLY .ÐRules similar to the follow-
ing rules shall apply for purposes of this section:
``(A) Section 219(d)(2) (relating to no deduction for roll-
overs).
``(B) Section 219(f)(3) (relating to time when contribu-
tions deemed made).
``(C) Except as provided in section 106(b), 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) T AXTREATMENT OF ACCOUNTS .Ð
``(1) I N GENERAL .ÐA medical savings account is exempt

from taxation under this subtitle unless such account hasceased to be a medical savings account. Notwithstanding thepreceding sentence, any such account is subject to the taxesimposed by section 511 (relating to imposition of tax on unre-lated business income of charitable, etc. organizations).
``(2) A
CCOUNT TERMINATIONS .ÐRules similar to the rules

of paragraphs (2) and (4) of section 408(e) shall apply to medicalsavings accounts, and any amount treated as distributed undersuch rules shall be treated as not used to pay qualified medicalexpenses.``(f) T
AXTREATMENT OF DISTRIBUTIONS .Ð
``(1) A MOUNTS USED FOR QUALIFIED MEDICAL EXPENSES .Ð

Any amount paid or distributed out of a medical savings accountwhich is used exclusively to pay qualified medical expensesof any account holder shall not be includible in gross income.
``(2) I
NCLUSION OF AMOUNTS NOT USED FOR QUALIFIED MEDI -
CAL EXPENSES .ÐAny amount paid or distributed out of a medi-
cal savings account which is not used exclusively to pay thequalified medical expenses of the account holder shall be
included in the gross income of such holder.
``(3) E

``(3) E
XCESS CONTRIBUTIONS RETURNED BEFORE DUE DATE
OF RETURN .Ð
``(A) I N GENERAL .ÐIf any excess contribution is contrib-
uted for a taxable year to any medical savings accountof an individual, paragraph (2) shall not apply to distribu-tions from the medical savings accounts of such individual(to the extent such distributions do not exceed the aggre-gate excess contributions to all such accounts of suchindividual for such year) ifÐ

110 STAT. 2043 PUBLIC LAW 104±191ÐAUG. 21, 1996
``(i) such distribution is received by the individual
on or before the last day prescribed by law (includingextensions of time) for filing such individual's returnfor such taxable year, and
``(ii) such distribution is accompanied by the
amount of net income attributable to such excess con-tribution.
Any net income described in clause (ii) shall be includedin the gross income of the individual for the taxable yearin which it is received.
``(B) E

``(B) E
XCESS CONTRIBUTION .ÐFor purposes of subpara-
graph (A), the term `excess contribution' means any con-tribution (other than a rollover contribution) which is nei-ther excludable from gross income under section 106(b)nor deductible under this section.``(4) A
DDITIONAL TAX ON DISTRIBUTIONS NOT USED FOR
QUALIFIED MEDICAL EXPENSES .Ð
``(A) I N GENERAL .ÐThe tax imposed by this chapter

on the account holder for any taxable year in which thereis a payment or distribution from a medical savings accountof such holder which is includible in gross income underparagraph (2) shall be increased by 15 percent of theamount which is so includible.
``(B) E
XCEPTION FOR DISABILITY OR DEATH .ÐSubpara-
graph (A) shall not apply if the payment or distributionis made after the account holder becomes disabled withinthe meaning of section 72(m)(7) or dies.
``(C) E

``(C) E
XCEPTION FOR DISTRIBUTIONS AFTER MEDICARE
ELIGIBILITY .ÐSubparagraph (A) shall not apply to any pay-
ment or distribution after the date on which the accountholder attains the age specified in section 1811 of theSocial Security Act.``(5) R
OLLOVER CONTRIBUTION .ÐAn amount is described in
this paragraph as a rollover contribution if it meets the require-ments of subparagraphs (A) and (B).
``(A) I
N GENERAL .ÐParagraph (2) shall not apply to

any amount paid or distributed from a medical savingsaccount to the account holder to the extent the amountreceived is paid into a medical savings account for thebenefit of such holder not later than the 60th day afterthe day on which the holder receives the payment or dis-tribution.
``(B) L
IMITATION .ÐThis paragraph shall not apply to

any amount described in subparagraph (A) received byan individual from a medical savings account if, at anytime during the 1-year period ending on the day of suchreceipt, such individual received any other amountdescribed in subparagraph (A) from a medical savingsaccount which was not includible in the individual's grossincome because of the application of this paragraph.``(6) C
OORDINATION WITH MEDICAL EXPENSE DEDUCTION .Ð

For purposes of determining the amount of the deduction undersection 213, any payment or distribution out of a medical sav-ings account for qualified medical expenses shall not be treatedas an expense paid for medical care.
``(7) T
RANSFER OF ACCOUNT INCIDENT TO DIVORCE .ÐThe
transfer of an individual's interest in a medical savings account

110 STAT. 2044 PUBLIC LAW 104±191ÐAUG. 21, 1996
to an individual's spouse or former spouse under a divorce
or separation instrument described in subparagraph (A) of sec-tion 71(b)(2) shall not be considered a taxable transfer madeby such individual notwithstanding any other provision of thissubtitle, and such interest shall, after such transfer, be treatedas a medical savings account with respect to which such spouseis the account holder.
``(8) T
REATMENT AFTER DEATH OF ACCOUNT HOLDER .Ð

``(8) T
``(A) T REATMENT IF DESIGNATED BENEFICIARY IS
SPOUSE .ÐIf the account holder's surviving spouse acquires
such holder's interest in a medical savings account byreason of being the designated beneficiary of such accountat the death of the account holder, such medical savingsaccount shall be treated as if the spouse were the accountholder.
``(B) O
THER CASES .Ð
``(i) I N GENERAL .ÐIf, by reason of the death of

the account holder, any person acquires the accountholder's interest in a medical savings account in acase to which subparagraph (A) does not applyÐ
``(I) such account shall cease to be a medical
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 shallbe includible if such person is not the estate ofsuch holder, in such person's gross income for thetaxable year which includes such date, or if suchperson is the estate of such holder, in such holder'sgross income for the last taxable year of suchholder.``(ii) S
``(I) R EDUCTION OF INCLUSION FOR PRE -DEATH
EXPENSES .ÐThe amount includible in gross income

under clause (i) by any person (other than theestate) shall be reduced by the amount of qualifiedmedical expenses which were incurred by thedecedent before the date of the decedent's deathand paid by such person within 1 year after suchdate.
``(II) D
EDUCTION FOR ESTATE TAXES .ÐAn

``(II) D
appropriate deduction shall be allowed under sec-tion 691(c) to any person (other than the decedentor the decedent's spouse) with respect to amountsincluded in gross income under clause (i) by suchperson.
``(g) C
OST-OF-LIVING ADJUSTMENT .ÐIn the case of any taxable
year beginning in a calendar year after 1998, each dollar amountin subsection (c)(2) shall be increased by an amount equal toÐ

``(1) such dollar amount, multiplied by``(2) the cost-of-living adjustment determined under section
1(f)(3) for the calendar year in which such taxable year beginsby substituting `calendar year 1997' for `calendar year 1992'in subparagraph (B) thereof.
If any increase under the preceding sentence is not a multipleof $50, such increase shall be rounded to the nearest multipleof $50.

110 STAT. 2045 PUBLIC LAW 104±191ÐAUG. 21, 1996
``(h) R EPORTS .ÐThe Secretary may require the trustee of a

medical savings account to make such reports regarding suchaccount to the Secretary and to the account holder with respectto contributions, distributions, and such other matters as the Sec-retary determines appropriate. The reports required by this sub-section shall be filed at such time and in such manner and furnishedto such individuals at such time and in such manner as maybe required by the Secretary.
``(i) L
IMITATION ON NUMBER OF TAXPAYERS HAVING MEDICAL
SAVINGS ACCOUNTS .Ð

``(1) I N GENERAL .ÐExcept as provided in paragraph (5),
no individual shall be treated as an eligible individual forany taxable year beginning after the cut-off year unlessÐ
``(A) such individual was an active MSA participant
for any taxable year ending on or before the close of thecut-off year, or
``(B) such individual first became an active MSA partici-

pant for a taxable year ending after the cut-off year byreason of coverage under a high deductible health planof an MSA±participating employer.``(2) C
UT-OFF YEAR .ÐFor purposes of paragraph (1), the
term `cut-off year' means the earlier ofÐ
``(A) calendar year 2000, or``(B) the first calendar year before 2000 for which the
Secretary determines under subsection (j) that the numeri-cal limitation for such year has been exceeded.``(3) A
CTIVE MSA PARTICIPANT .ÐFor purposes of this sub-
sectionÐ

sectionÐ
``(A) I N GENERAL .ÐThe term `active MSA participant'
means, with respect to any taxable year, any individualwho is the account holder of any medical savings accountinto which any contribution was made which was exclud-able from gross income under section 106(b), or allowableas a deduction under this section, for such taxable year.
``(B) S
PECIAL RULE FOR CUT -OFF YEARS BEFORE 2000 .Ð
In the case of a cut-off year before 2000Ð
``(i) an individual shall not be treated as an eligible

individual for any month of such year or an activeMSA participant under paragraph (1)(A) unless suchindividual is, on or before the cut-off date, coveredunder a high deductible health plan, and
``(ii) an employer shall not be treated as an MSA-
participating employer unless the employer, on orbefore the cut-off date, offered coverage under a highdeductible health plan to any employee.``(C) C
UT-OFF DATE .ÐFor purposes of subpara-
graph (B)Ð
``(i) I N GENERAL .ÐExcept as otherwise provided

in this subparagraph, the cut-off date is October 1of the cut-off year.
``(ii) E
MPLOYEES WITH ENROLLMENT PERIODS AFTER
OCTOBER 1 .ÐIn the case of an individual described
in subclause (I) of subsection (c)(1)(A)(iii), if the regu-larly scheduled enrollment period for health plans ofthe individual's employer occurs during the last 3months of the cut-off year, the cut-off date is December31 of the cut-off year.

110 STAT. 2046 PUBLIC LAW 104±191ÐAUG. 21, 1996
``(iii) S ELF-EMPLOYED INDIVIDUALS .ÐIn the case of
an individual described in subclause (II) of subsection(c)(1)(A)(iii), the cut-off date is November 1 of the cut-off year.
``(iv) S
PECIAL RULES FOR 1997 .ÐIf 1997 is a cut-
off year by reason of subsection (j)(1)(A)Ð
``(I) each of the cut-off dates under clauses
(i) and (iii) shall be 1 month earlier than thedate determined without regard to this clause, and

``(II) clause (ii) shall be applied by substituting
`4 months' for `3 months'.
``(4) MSA-
PARTICIPATING EMPLOYER .ÐFor purposes of this
subsection, the term `MSA-participating employer' means anysmall employer ifÐ
``(A) such employer made any contribution to the medi-
cal savings account of any employee during the cut-offyear or any preceding calendar year which was excludablefrom gross income under section 106(b), or
``(B) at least 20 percent of the employees of such

employer who are eligible individuals for any month ofthe cut-off year by reason of coverage under a high deduct-ible health plan of such employer each made a contributionof at least $100 to their medical savings accounts for anytaxable year ending with or within the cut-off year whichwas allowable as a deduction under this section.``(5) A
DDITIONAL ELIGIBILITY AFTER CUT -OFF YEAR .ÐIf the

Secretary determines under subsection (j)(2)(A) that thenumerical limit for the calendar year following a cut-off yeardescribed in paragraph (2)(B) has not been exceededÐ
``(A) this subsection shall not apply to any otherwise

eligible individual who is covered under a high deductiblehealth plan during the first 6 months of the second calendaryear following the cut-off year (and such individual shallbe treated as an active MSA participant for purposes ofthis subsection if a contribution is made to any medicalsavings account with respect to such coverage), and
``(B) any employer who offers coverage under a high
deductible health plan to any employee during such 6-month period shall be treated as an MSA-participating

employer for purposes of this subsection if the requirementsof paragraph (4) are met with respect to such coverage.
For purposes of this paragraph, subsection (j)(2)(A) shall beapplied for 1998 by substituting `750,000' for `600,000'.``(j) D
ETERMINATION OF WHETHER NUMERICAL LIMITS ARE
EXCEEDED .Ð
``(1) D ETERMINATION OF WHETHER LIMIT EXCEEDED FOR
1997.ÐThe numerical limitation for 1997 is exceeded if, based

on the reports required under paragraph (4), the number ofmedical savings accounts established as ofÐ
``(A) April 30, 1997, exceeds 375,000, or``(B) June 30, 1997, exceeds 525,000.
``(2) D
ETERMINATION OF WHETHER LIMIT EXCEEDED FOR 1998
OR 1999 .Ð
``(A) I N GENERAL .ÐThe numerical limitation for 1998
or 1999 is exceeded if the sum ofÐ

110 STAT. 2047 PUBLIC LAW 104±191ÐAUG. 21, 1996
``(i) the number of MSA returns filed on or before
April 15 of such calendar year for taxable years endingwith or within the preceding calendar year, plus
``(ii) the Secretary's estimate (determined on the
basis of the returns described in clause (i)) of thenumber of MSA returns for such taxable years whichwill be filed after such date,

exceeds 600,000 (750,000 in the case of 1999). For purposesof the preceding sentence, the term `MSA return' meansany return on which any exclusion is claimed under section106(b) or any deduction is claimed under this section.
``(B) A
LTERNATIVE COMPUTATION OF LIMITATION .ÐThe
numerical limitation for 1998 or 1999 is also exceededif the sum ofÐ
``(i) 90 percent of the sum determined under
subparagraph (A) for such calendar year, plus
``(ii) the product of 2.5 and the number of medical

savings accounts established during the portion of suchyear preceding July 1 (based on the reports requiredunder paragraph (4)) for taxable years beginning insuch year,
exceeds 750,000.``(3) P
REVIOUSLY UNINSURED INDIVIDUALS NOT INCLUDED
IN DETERMINATION .Ð
``(A) I N GENERAL .ÐThe determination of whether any
calendar year is a cut-off year shall be made by not count-ing the medical savings account of any previously unin-sured individual.
``(B) P
REVIOUSLY UNINSURED INDIVIDUAL .ÐFor pur-

``(B) P
poses of this subsection, the term `previously uninsuredindividual' means, with respect to any medical savingsaccount, any individual who had no health plan coverage(other than coverage referred to in subsection (c)(1)(B))at any time during the 6-month period before the datesuch individual's coverage under the high deductible healthplan commences.``(4) R
EPORTING BY MSA TRUSTEES .Ð
``(A) I N GENERAL .ÐNot later than August 1 of 1997,

1998, and 1999, each person who is the trustee of a medicalsavings account established before July 1 of such calendaryear shall make a report to the Secretary (in such formand manner as the Secretary shall specify) which speci-fiesÐ
``(i) the number of medical savings accounts estab-
lished before such July 1 (for taxable years beginningin such calendar year) of which such person is thetrustee,
``(ii) the name and TIN of the account holder of
each such account, and

``(iii) the number of such accounts which are
accounts of previously uninsured individuals.``(B) A
DDITIONAL REPORT FOR 1997 .ÐNot later than
June 1, 1997, each person who is the trustee of a medicalsavings account established before May 1, 1997, shall makean additional report described in subparagraph (A) butonly with respect to accounts established before May 1,1997.

110 STAT. 2048 PUBLIC LAW 104±191ÐAUG. 21, 1996
``(C) P ENALTY FOR FAILURE TO FILE REPORT .ÐThe pen-
alty provided in section 6693(a) shall apply to any reportrequired by this paragraph, except thatÐ
``(i) such section shall be applied by substituting
`$25' for `$50', and
``(ii) the maximum penalty imposed on any trustee
shall not exceed $5,000.``(D) A
GGREGATION OF ACCOUNTS .ÐTo the extent prac-

ticable, in determining the number of medical savingsaccounts on the basis of the reports under this paragraph,all medical savings accounts of an individual shall betreated as 1 account and all accounts of individuals whoare married to each other shall be treated as 1 account.``(5) D
ATE OF MAKING DETERMINATIONS .ÐAny determination

under this subsection that a calendar year is a cut-off yearshall be made by the Secretary and shall be published notlater than October 1 of such year.''.(b) D
EDUCTION ALLOWED WHETHER OR NOT INDIVIDUAL
ITEMIZES OTHER DEDUCTIONS .ÐSubsection (a) of section 62 is
amended by inserting after paragraph (15) the following new para-graph:
``(16) M
EDICAL SAVINGS ACCOUNTS .ÐThe deduction allowed
by section 220.''.(c) E

XCLUSIONS FOR EMPLOYER CONTRIBUTIONS TO MEDICAL
(1) E XCLUSION FROM INCOME TAX .ÐThe text of section 106
(relating to contributions by employer to accident and healthplans) is amended to read as follows:``(a) G
ENERAL RULE.ÐExcept as otherwise provided in this sec-
tion, gross income of an employee does not include employer-pro-vided coverage under an accident or health plan.
``(b) C
ONTRIBUTIONS TO MEDICAL SAVINGS ACCOUNTS .Ð

``(1) I N GENERAL .ÐIn the case of an employee who is an
eligible individual, amounts contributed by such employee'semployer to any medical savings account of such employeeshall be treated as employer-provided coverage for medicalexpenses under an accident or health plan to the extent suchamounts do not exceed the limitation under section 220(b)(1)(determined without regard to this subsection) which isapplicable to such employee for such taxable year.

``(2) N
O CONSTRUCTIVE RECEIPT .ÐNo amount shall be
included in the gross income of any employee solely becausethe employee may choose between the contributions referredto in paragraph (1) and employer contributions to anotherhealth plan of the employer.
``(3) S
PECIAL RULE FOR DEDUCTION OF EMPLOYER CONTRIBU -
TIONS .ÐAny employer contribution to a medical savings
account, if otherwise allowable as a deduction under this chap-ter, shall be allowed only for the taxable year in which paid.

``(4) E
MPLOYER MSA CONTRIBUTIONS REQUIRED TO BE SHOWN
ON RETURN .ÐEvery individual required to file a return under
section 6012 for the taxable year shall include on such returnthe aggregate amount contributed by employers to the medicalsavings accounts of such individual or such individual's spousefor such taxable year.
``(5) MSA 
CONTRIBUTIONS NOT PART OF COBRA COVERAGE .Ð
Paragraph (1) shall not apply for purposes of section 4980B.

110 STAT. 2049 PUBLIC LAW 104±191ÐAUG. 21, 1996
``(6) D EFINITIONS .ÐFor purposes of this subsection, the
terms `eligible individual' and `medical savings account' havethe respective meanings given to such terms by section 220.
``(7) C
ROSS REFERENCE .Ð
``For penalty on failure by employer to make comparable con-
tributions to the medical savings accounts of comparable employ-ees, see section 4980E.'' .
(2) E XCLUSION FROM EMPLOYMENT TAXES .Ð
(A) R AILROAD RETIREMENT TAX .ÐSubsection (e) of sec-

tion 3231 is amended by adding at the end the followingnew paragraph:``(10) M
EDICAL SAVINGS ACCOUNT CONTRIBUTIONS .ÐThe
term `compensation' shall not include any payment made toor for the benefit of an employee if at the time of such paymentit is reasonable to believe that the employee will be able toexclude such payment from income under section 106(b).''.
(B) U
NEMPLOYMENT TAX .ÐSubsection (b) of section

(B) U
3306 is amended by striking ``or'' at the end of paragraph(15), by striking the period at the end of paragraph (16)and inserting ``; or'', and by inserting after paragraph (16)the following new paragraph:``(17) any payment made to or for the benefit of an employee
if at the time of such payment it is reasonable to believethat the employee will be able to exclude such payment fromincome under section 106(b).''.
(C) W

(C) W
ITHHOLDING TAX .ÐSubsection (a) of section 3401
is amended by striking ``or'' at the end of paragraph (19),by striking the period at the end of paragraph (20) andinserting ``; or'', and by inserting after paragraph (20) thefollowing new paragraph:``(21) any payment made to or for the benefit of an employee
if at the time of such payment it is reasonable to believethat the employee will be able to exclude such payment fromincome under section 106(b).''
(3) E

(3) E
MPLOYER CONTRIBUTIONS REQUIRED TO BE SHOWN ON
W±2.ÐSubsection (a) of section 6051 is amended by striking
``and'' at the end of paragraph (9), by striking the period atthe end of paragraph (10) and inserting ``, and'', and by insertingafter paragraph (10) the following new paragraph:
``(11) the amount contributed to any medical savings
account (as defined in section 220(d)) of such employee orsuch employee's spouse.''.
(4) P
ENALTY FOR FAILURE OF EMPLOYER TO MAKE COM -

PARABLE MSA CONTRIBUTIONS .Ð
(A) I N GENERAL .ÐChapter 43 is amended by adding
after section 4980D the following new section:
``SEC. 4980E. FAILURE OF EMPLOYER TO MAKE COMPARABLE
MEDICAL SAVINGS ACCOUNT CONTRIBUTIONS.
``(a) G ENERAL RULE.ÐIn the case of an employer who makes

a contribution to the medical savings account of any employeewith respect to coverage under a high deductible health plan ofthe employer during a calendar year, there is hereby imposeda tax on the failure of such employer to meet the requirementsof subsection (d) for such calendar year.
``(b) A
MOUNT OF TAX.ÐThe amount of the tax imposed by
subsection (a) on any failure for any calendar year is the amount

110 STAT. 2050 PUBLIC LAW 104±191ÐAUG. 21, 1996
equal to 35 percent of the aggregate amount contributed by the
employer to medical savings accounts of employees for taxableyears of such employees ending with or within such calendar year.
``(c) W
AIVER BY SECRETARY .ÐIn the case of a failure which

is due to reasonable cause and not to willful neglect, the Secretarymay waive part or all of the tax imposed by subsection (a) tothe extent that the payment of such tax would be excessive relativeto the failure involved.
``(d) E
MPLOYER REQUIRED TOMAKE COMPARABLE MSA C ON-
TRIBUTIONS FOR ALLPARTICIPATING EMPLOYEES .Ð
``(1) I N GENERAL .ÐAn employer meets the requirements

of this subsection for any calendar year if the employer makesavailable comparable contributions to the medical savingsaccounts of all comparable participating employees for eachcoverage period during such calendar year.
``(2) C
OMPARABLE CONTRIBUTIONS .Ð
``(A) I N GENERAL .ÐFor purposes of paragraph (1), the
term `comparable contributions' means contributionsÐ
``(i) which are the same amount, or``(ii) which are the same percentage of the annual

deductible limit under the high deductible health plancovering the employees.``(B) P
ART-YEAR EMPLOYEES .ÐIn the case of an
employee who is employed by the employer for only aportion of the calendar year, a contribution to the medicalsavings account of such employee shall be treated as com-parable if it is an amount which bears the same ratioto the comparable amount (determined without regard tothis subparagraph) as such portion bears to the entirecalendar year.``(3) C

OMPARABLE PARTICIPATING EMPLOYEES .ÐFor purposes
of paragraph (1), the term `comparable participating employees'means all employeesÐ
``(A) who are eligible individuals covered under any
high deductible health plan of the employer, and
``(B) who have the same category of coverage.
For purposes of subparagraph (B), the categories of coverageare self-only and family coverage.
``(4) P
ART-TIME EMPLOYEES .Ð
``(A) I N GENERAL .ÐParagraph (3) shall be applied sepa-

rately with respect to part-time employees and otheremployees.
``(B) P
ART-TIME EMPLOYEE .ÐFor purposes of subpara-
graph (A), the term `part-time employee' means anyemployee who is customarily employed for fewer than 30hours per week.
``(e) C
ONTROLLED GROUPS .ÐFor purposes of this section, all
persons treated as a single employer under subsection (b), (c),(m), or (o) of section 414 shall be treated as 1 employer.
``(f) D
EFINITIONS .ÐTerms used in this section which are also

used in section 220 have the respective meanings given such termsin section 220.''.
(B) C
LERICAL AMENDMENT .ÐThe table of sections for
chapter 43 is amended by adding after the item relatingto section 4980D the following new item:
``Sec. 4980E. Failure of employer to make comparable medical savings account con-
tributions.''.

110 STAT. 2051 PUBLIC LAW 104±191ÐAUG. 21, 1996
(d) M EDICAL SAVINGS ACCOUNT CONTRIBUTIONS NOTAVAILABLE
UNDER CAFETERIA PLANS .ÐSubsection (f) of section 125 of such
Code is amended by inserting ``106(b),'' before ``117''.
(e) T AX ON EXCESS CONTRIBUTIONS .ÐSection 4973 (relating
to tax on excess contributions to individual retirement accounts,certain section 403(b) contracts, and certain individual retirementannuities) is amendedÐ
(1) by inserting ``
MEDICAL SAVINGS ACCOUNTS ,'' after

``ACCOUNTS ,'' in the heading of such section,
(2) by striking ``or'' at the end of paragraph (1) of sub-
section (a),
(3) by redesignating paragraph (2) of subsection (a) as
paragraph (3) and by inserting after paragraph (1) the follow-ing:
``(2) a medical savings account (within the meaning of sec-
tion 220(d)), or'', and
(4) by adding at the end the following new subsection:
``(d) E
XCESS CONTRIBUTIONS TO MEDICAL SAVINGS ACCOUNTS .Ð

For purposes of this section, in the case of medical savings accounts(within the meaning of section 220(d)), the term `excess contribu-tions' means the sum ofÐ
``(1) the aggregate amount contributed for the taxable year
to the accounts (other than rollover contributions describedin section 220(f)(5)) which is neither excludable from grossincome under section 106(b) nor allowable as a deduction undersection 220 for such year, and
``(2) the amount determined under this subsection for the

preceding taxable year, reduced by the sum ofÐ
``(A) the distributions out of the accounts which were
included in gross income under section 220(f)(2), and
``(B) the excess (if any) ofÐ
``(i) the maximum amount allowable as a deduction
under section 220(b)(1) (determined without regard tosection 106(b)) for the taxable year, over
``(ii) the amount contributed to the accounts for
the taxable year.

For purposes of this subsection, any contribution which is distrib-uted out of the medical savings account in a distribution to whichsection 220(f)(3) applies shall be treated as an amount not contrib-uted.''.
(f) T
AX ON PROHIBITED TRANSACTIONS .Ð
(1) Section 4975 (relating to tax on prohibited transactions)
is amended by adding at the end of subsection (c) the followingnew paragraph:
``(4) S
PECIAL RULE FOR MEDICAL SAVINGS ACCOUNTS .ÐAn

individual for whose benefit a medical savings account (within
the meaning of section 220(d)) is established shall be exemptfrom the tax imposed by this section with respect to any trans-action concerning such account (which would otherwise be tax-able under this section) if, with respect to such transaction,the account ceases to be a medical savings account by reasonof the application of section 220(e)(2) to such account.''.

(2) Paragraph (1) of section 4975(e) is amended to read
``(1) P
LAN.ÐFor purposes of this section, the term `plan'
meansÐ

110 STAT. 2052 PUBLIC LAW 104±191ÐAUG. 21, 1996
``(A) a trust described in section 401(a) which forms
a part of a plan, or a plan described in section 403(a),which trust or plan is exempt from tax under section 501(a),
``(B) an individual retirement account described in sec-
tion 408(a),
``(C) an individual retirement annuity described in sec-
tion 408(b),
``(D) a medical savings account described in section
220(d), or
``(E) a trust, plan, account, or annuity which, at any

time, has been determined by the Secretary to be describedin any preceding subparagraph of this paragraph.''.
(g) F
AILURE TOPROVIDE REPORTS ON MEDICAL SAVINGS
ACCOUNTS .Ð
(1) Subsection (a) of section 6693 (relating to failure to
provide reports on individual retirement accounts or annuities)is amended to read as follows:``(a) R
EPORTS .Ð
``(1) I N GENERAL .ÐIf a person required to file a report

under a provision referred to in paragraph (2) fails to filesuch report at the time and in the manner required by suchprovision, such person shall pay a penalty of $50 for eachfailure unless it is shown that such failure is due to reasonablecause.
``(2) P
ROVISIONS .ÐThe provisions referred to in this para-
graph areÐ
``(A) subsections (i) and (l) of section 408 (relating
to individual retirement plans), and
``(B) section 220(h) (relating to medical savings
accounts).''.

(h) E XCEPTION FROM CAPITALIZATION OF POLICY ACQUISITION
EXPENSES .ÐSubparagraph (B) of section 848(e)(1) (defining speci-
fied insurance contract) is amended by striking ``and'' at the endof clause (ii), by striking the period at the end of clause (iii)and inserting ``, and'', and by adding at the end the followingnew clause:
``(iv) any contract which is a medical savings
account (as defined in section 220(d)).''.
(i) C
LERICAL AMENDMENT .ÐThe table of sections for part VII

of subchapter B of chapter 1 is amended by striking the lastitem and inserting the following:
``Sec. 220. Medical savings accounts.``Sec. 221. Cross reference.''.
(j) E FFECTIVE DATE.ÐThe amendments made by this section
shall apply to taxable years beginning after December 31, 1996.
(k) M ONITORING OF PARTICIPATION IN MEDICAL SAVINGS
ACCOUNTS .ÐThe Secretary of the Treasury or his delegate shallÐ
(1) during 1997, 1998, 1999, and 2000, regularly evaluate

the number of individuals who are maintaining medical savingsaccounts and the reduction in revenues to the United Statesby reason of such accounts, and
(2) provide such reports of such evaluations to Congress
as such Secretary determines appropriate.(l) S
TUDY OF EFFECTS OF MEDICAL SAVINGS ACCOUNTS ON
SMALL GROUP MARKET .ÐThe Comptroller General of the United

States shall enter into a contract with an organization with exper-tise in health economics, health insurance markets, and actuarial26 USC 220 note.26 USC 220 note.26 USC 62 note.

110 STAT. 2053 PUBLIC LAW 104±191ÐAUG. 21, 1996
science to conduct a comprehensive study regarding the effects
of medical savings accounts in the small group market onÐ
(1) selection, including adverse selection,(2) health costs, including any impact on premiums of
individuals with comprehensive coverage,
(3) use of preventive care,(4) consumer choice,(5) the scope of coverage of high deductible plans purchased
in conjunction with such accounts, and
(6) other relevant items.

A report on the results of the study conducted under this subsectionshall be submitted to the Congress no later than January 1, 1999.
Subtitle BÐIncrease in Deduction for
Health Insurance Costs of Self-EmployedIndividuals
SEC. 311. INCREASE IN DEDUCTION FOR HEALTH INSURANCE COSTS
OF SELF-EMPLOYED INDIVIDUALS.
(a) I NGENERAL .ÐParagraph (1) of section 162(l) is amended
to read as follows:
``(1) A LLOWANCE OF DEDUCTION .Ð

``(A) I N GENERAL .ÐIn the case of an individual who
is an employee within the meaning of section 401(c)(1),there shall be allowed as a deduction under this sectionan amount equal to the applicable percentage of the amountpaid during the taxable year for insurance which con-stitutes medical care for the taxpayer, his spouse, anddependents.
``(B) A
PPLICABLE PERCENTAGE .ÐFor purposes of

``(B) A
subparagraph (A), the applicable percentage shall be deter-mined under the following table:
``For taxable years beginning 
in calendar yearÐThe applicable percentage isÐ
1997 ............................................................................ 40 percent

1998 through 2002 .................................................... 45 percent2003 ............................................................................ 50 percent2004 ............................................................................ 60 percent2005 ............................................................................ 70 percent2006 or thereafter ..................................................... 80 percent.''.

(b) E XCLUSION FOR AMOUNTS RECEIVED UNDER CERTAIN SELF-
INSURED PLANS .ÐParagraph (3) of section 104(a) is amended by
inserting ``(or through an arrangement having the effect of accidentor health insurance)'' after ``health insurance''.
(c) E
shall apply to taxable years beginning after December 31, 1996.26 USC 104 note.Reports.

110 STAT. 2054 PUBLIC LAW 104±191ÐAUG. 21, 1996
Subtitle CÐLong-Term Care Services and
Contracts
PART IÐGENERAL PROVISIONS
SEC. 321. TREATMENT OF LONG-TERM CARE INSURANCE.
(a) G ENERAL RULE.ÐChapter 79 (relating to definitions) is
amended by inserting after section 7702A the following new section:
``SEC. 7702B. TREATMENT OF QUALIFIED LONG-TERM CARE INSUR-
ANCE.
``(a) I NGENERAL .ÐFor purposes of this titleÐ
``(1) a qualified long-term care insurance contract shall

be treated as an accident and health insurance contract,
``(2) amounts (other than policyholder dividends, as defined
in section 808, or premium refunds) received under a qualifiedlong-term care insurance contract shall be treated as amountsreceived for personal injuries and sickness and shall be treatedas reimbursement for expenses actually incurred for medicalcare (as defined in section 213(d)),
``(3) any plan of an employer providing coverage under

a qualified long-term care insurance contract shall be treatedas an accident and health plan with respect to such coverage,
``(4) except as provided in subsection (e)(3), amounts paid
for a qualified long-term care insurance contract providing thebenefits described in subsection (b)(2)(A) shall be treated aspayments made for insurance for purposes of section213(d)(1)(D), and
``(5) a qualified long-term care insurance contract shall

be treated as a guaranteed renewable contract subject to therules of section 816(e).``(b) Q
UALIFIED LONG-TERM CARE INSURANCE CONTRACT .ÐFor
purposes of this titleÐ
``(1) I N GENERAL .ÐThe term `qualified long-term care insur-
ance contract' means any insurance contract ifÐ
``(A) the only insurance protection provided under such
contract is coverage of qualified long-term care services,
``(B) such contract does not pay or reimburse expenses

incurred for services or items to the extent that suchexpenses are reimbursable under title XVIII of the SocialSecurity Act or would be so reimbursable but for theapplication of a deductible or coinsurance amount,
``(C) such contract is guaranteed renewable,``(D) such contract does not provide for a cash surrender
value or other money that can beÐ
``(i) paid, assigned, or pledged as collateral for a
loan, or
``(ii) borrowed,
other than as provided in subparagraph (E) or paragraph(2)(C),

``(E) all refunds of premiums, and all policyholder divi-
dends or similar amounts, under such contract are to beapplied as a reduction in future premiums or to increasefuture benefits, and
``(F) such contract meets the requirements of subsection
(g).

110 STAT. 2055 PUBLIC LAW 104±191ÐAUG. 21, 1996
``(A) P ER DIEM , ETC. PAYMENTS PERMITTED .ÐA contract
shall not fail to be described in subparagraph (A) or (B)of paragraph (1) by reason of payments being made ona per diem or other periodic basis without regard to theexpenses incurred during the period to which the paymentsrelate.
``(B) S
PECIAL RULES RELATING TO MEDICARE .Ð
``(i) Paragraph (1)(B) shall not apply to expenses

which are reimbursable under title XVIII of the SocialSecurity Act only as a secondary payor.
``(ii) No provision of law shall be construed or
applied so as to prohibit the offering of a qualifiedlong-term care insurance contract on the basis thatthe contract coordinates its benefits with those pro-vided under such title.``(C) R
EFUNDS OF PREMIUMS .ÐParagraph (1)(E) shall

not apply to any refund on the death of the insured, oron a complete surrender or cancellation of the contract,which cannot exceed the aggregate premiums paid underthe contract. Any refund on a complete surrender or can-cellation of the contract shall be includible in gross incometo the extent that any deduction or exclusion was allowablewith respect to the premiums.
``(c) Q
UALIFIED LONG-TERM CARE SERVICES .ÐFor purposes of
this sectionÐ

``(1) I N GENERAL .ÐThe term `qualified long-term care
services' means necessary diagnostic, preventive, therapeutic,curing, treating, mitigating, and rehabilitative services, andmaintenance or personal care services, whichÐ
``(A) are required by a chronically ill individual, and``(B) are provided pursuant to a plan of care prescribed
by a licensed health care practitioner.``(2) C
HRONICALLY ILL INDIVIDUAL .Ð
``(A) I N GENERAL .ÐThe term `chronically ill individual'

means any individual who has been certified by a licensedhealth care practitioner asÐ
``(i) being unable to perform (without substantial
assistance from another individual) at least 2 activitiesof daily living for a period of at least 90 days dueto a loss of functional capacity,
``(ii) having a level of disability similar (as deter-

mined under regulations prescribed by the Secretaryin consultation with the Secretary of Health andHuman Services) to the level of disability describedin clause (i), or
``(iii) requiring substantial supervision to protect
such individual from threats to health and safety dueto severe cognitive impairment.

Such term shall not include any individual otherwise meet-ing the requirements of the preceding sentence unlesswithin the preceding 12-month period a licensed healthcare practitioner has certified that such individual meetssuch requirements.
``(B) A
CTIVITIES OF DAILY LIVING .ÐFor purposes of
subparagraph (A), each of the following is an activity ofdaily living:

110 STAT. 2056 PUBLIC LAW 104±191ÐAUG. 21, 1996
``(i) Eating.
``(ii) Toileting.``(iii) Transferring.``(iv) Bathing.``(v) Dressing.``(vi) Continence.
A contract shall not be treated as a qualified long-termcare insurance contract unless the determination ofwhether an individual is a chronically ill individual takesinto account at least 5 of such activities.``(3) M
AINTENANCE OR PERSONAL CARE SERVICES .ÐThe term

`maintenance or personal care services' means any care theprimary purpose of which is the provision of needed assistancewith any of the disabilities as a result of which the individualis a chronically ill individual (including the protection fromthreats to health and safety due to severe cognitive impair-ment).
``(4) L
ICENSED HEALTH CARE PRACTITIONER .ÐThe term

`licensed health care practitioner' means any physician (asdefined in section 1861(r)(1) of the Social Security Act) andany registered professional nurse, licensed social worker, orother individual who meets such requirements as may be pre-scribed by the Secretary.``(d) A
GGREGATE PAYMENTS IN EXCESS OF LIMITS .Ð
``(1) I N GENERAL .ÐIf the aggregate ofÐ
``(A) the periodic payments received for any period

under all qualified long-term care insurance contractswhich are treated as made for qualified long-term careservices for an insured, and
``(B) the periodic payments received for such period
which are treated under section 101(g) as paid by reasonof the death of such insured,

exceeds the per diem limitation for such period, such excessshall be includible in gross income without regard to section72. A payment shall not be taken into account under subpara-graph (B) if the insured is a terminally ill individual (as definedin section 101(g)) at the time the payment is received.
``(2) P
ER DIEM LIMITATION .ÐFor purposes of paragraph (1),
the per diem limitation for any period is an amount equalto the excess (if any) ofÐ
``(A) the greater ofÐ

``(i) the dollar amount in effect for such period
under paragraph (4), or
``(ii) the costs incurred for qualified long-term care
services provided for the insured for such period, over``(B) the aggregate payments received as reimburse-
ments (through insurance or otherwise) for qualified long-term care services provided for the insured during suchperiod.``(3) A
GGREGATION RULES .ÐFor purposes of this sub-
sectionÐ
``(A) all persons receiving periodic payments described

in paragraph (1) with respect to the same insured shallbe treated as 1 person, and
``(B) the per diem limitation determined under para-
graph (2) shall be allocated first to the insured and anyremaining limitation shall be allocated among the other

110 STAT. 2057 PUBLIC LAW 104±191ÐAUG. 21, 1996
such persons in such manner as the Secretary shall pre-
scribe.``(4) D
OLLAR AMOUNT .ÐThe dollar amount in effect under
this subsection shall be $175 per day (or the equivalent amountin the case of payments on another periodic basis).
``(5) I
NFLATION ADJUSTMENT .ÐIn the case of a calendar

year after 1997, the dollar amount contained in paragraph(4) shall be increased at the same time and in the same manneras amounts are increased pursuant to section 213(d)(10).
``(6) P
ERIODIC PAYMENTS .ÐFor purposes of this subsection,
the term `periodic payment' means any payment (whether ona periodic basis or otherwise) made without regard to theextent of the costs incurred by the payee for qualified long-term care services.``(e) T

REATMENT OF COVERAGE PROVIDED AS PART OF A LIFE
INSURANCE CONTRACT .ÐExcept as otherwise provided in regulations
prescribed by the Secretary, in the case of any long-term careinsurance coverage (whether or not qualified) provided by a rideron or as part of a life insurance contractÐ
``(1) I
N GENERAL .ÐThis section shall apply as if the portion
of the contract providing such coverage is a separate contract.
``(2) A PPLICATION OF 7702 .ÐSection 7702(c)(2) (relating to

the guideline premium limitation) shall be applied by increasingthe guideline premium limitation with respect to a life insur-ance contract, as of any dateÐ
``(A) by the sum of any charges (but not premium
payments) against the life insurance contract's cash surren-der value (within the meaning of section 7702(f)(2)(A)) forsuch coverage made to that date under the contract, less
``(B) any such charges the imposition of which reduces

the premiums paid for the contract (within the meaningof section 7702(f)(1)).``(3) A
PPLICATION OF SECTION 213 .ÐNo deduction shall be
allowed under section 213(a) for charges against the life insur-ance contract's cash surrender value described in paragraph(2), unless such charges are includible in income as a resultof the application of section 72(e)(10) and the rider is a qualifiedlong-term care insurance contract under subsection (b).
``(4) P

``(4) P
ORTION DEFINED .ÐFor purposes of this subsection,
the term `portion' means only the terms and benefits undera life insurance contract that are in addition to the termsand benefits under the contract without regard to long-termcare insurance coverage.``(f) T
REATMENT OF CERTAIN STATE -MAINTAINED PLANS .Ð
``(1) I N GENERAL .ÐIfÐ
``(A) an individual receives coverage for qualified long-
term care services under a State long-term care plan, and

``(B) the terms of such plan would satisfy the require-
ments of subsection (b) were such plan an insurance con-tract,
such plan shall be treated as a qualified long-term care insur-ance contract for purposes of this title.
``(2) S
TATE LONG -TERM CARE PLAN .ÐFor purposes of para-
graph (1), the term `State long-term care plan' means anyplanÐ
``(A) which is established and maintained by a State
or an instrumentality of a State,

110 STAT. 2058 PUBLIC LAW 104±191ÐAUG. 21, 1996
``(B) which provides coverage only for qualified long-
term care services, and
``(C) under which such coverage is provided only toÐ
``(i) employees and former employees of a State
(or any political subdivision or instrumentality of aState),
``(ii) the spouses of such employees, and``(iii) individuals bearing a relationship to such
employees or spouses which is described in any ofparagraphs (1) through (8) of section 152(a).''.
(b) R

(b) R
ESERVE METHOD .ÐClause (iii) of section 807(d)(3)(A) is
amended by inserting ``(other than a qualified long-term care insur-ance contract, as defined in section 7702B(b))'' after ``insurancecontract''.
(c) L
ONG-TERM CAREINSURANCE NOTPERMITTED UNDER CAFE-
TERIA PLANS OR FLEXIBLE SPENDING ARRANGEMENTS .Ð
(1) C AFETERIA PLANS .ÐSection 125(f) is amended by adding

at the end the following new sentence: ``Such term shall notinclude any product which is advertised, marketed, or offeredas long-term care insurance.''.
(2) F
LEXIBLE SPENDING ARRANGEMENTS .ÐSection 106
(relating to contributions by employer to accident and healthplans), as amended by section 301(c), is amended by addingat the end the following new subsection:``(c) I
NCLUSION OF LONG-TERM CARE BENEFITS PROVIDED
THROUGH FLEXIBLE SPENDING ARRANGEMENTS .Ð

``(1) I N GENERAL .ÐEffective on and after January 1, 1997,
gross income of an employee shall include employer-providedcoverage for qualified long-term care services (as defined insection 7702B(c)) to the extent that such coverage is providedthrough a flexible spending or similar arrangement.
``(2) F
LEXIBLE SPENDING ARRANGEMENT .ÐFor purposes of

this subsection, a flexible spending arrangement is a benefitprogram which provides employees with coverage underwhichÐ
``(A) specified incurred expenses may be reimbursed
(subject to reimbursement maximums and other reasonableconditions), and
``(B) the maximum amount of reimbursement which
is reasonably available to a participant for such coverageis less than 500 percent of the value of such coverage.

In the case of an insured plan, the maximum amount reason-ably available shall be determined on the basis of the underly-ing coverage.''(d) C
ONTINUATION COVERAGE RULES NOTTOAPPLY .Ð
(1) Paragraph (2) of section 4980B(g) is amended by adding
at the end the following new sentence: ``Such term shall notinclude any plan substantially all of the coverage under whichis for qualified long-term care services (as defined in section7702B(c)).''
(2) Paragraph (1) of section 607 of the Employee Retirement

Income Security Act of 1974 is amended by adding at theend the following new sentence: ``Such term shall not includeany plan substantially all of the coverage under which is forqualified long-term care services (as defined in section 7702B(c)of such Code).''
29 USC 1167.

110 STAT. 2059 PUBLIC LAW 104±191ÐAUG. 21, 1996
(3) Paragraph (1) of section 2208 of the Public Health
Service Act is amended by adding at the end the followingnew sentence: ``Such term shall not include any plan substan-tially all of the coverage under which is for qualified long-term care services (as defined in section 7702B(c) of suchCode).''(e) C
LERICAL AMENDMENT .ÐThe table of sections for chapter
79 is amended by inserting after the item relating to section 7702Athe following new item:

``Sec. 7702B. Treatment of qualified long-term care insurance.''.
(f) E FFECTIVE DATES .Ð
(1) G ENERAL EFFECTIVE DATE .Ð
(A) I N GENERAL .ÐExcept as provided in subparagraph
(B), the amendments made by this section shall applyto contracts issued after December 31, 1996.
(B) R
ESERVE METHOD .ÐThe amendment made by sub-
section (b) shall apply to contracts issued after December31, 1997.(2) C
ONTINUATION OF EXISTING POLICIES .ÐIn the case of

any contract issued before January 1, 1997, which met thelong-term care insurance requirements of the State in whichthe contract was sitused at the time the contract was issuedÐ
(A) such contract shall be treated for purposes of the
Internal Revenue Code of 1986 as a qualified long-termcare insurance contract (as defined in section 7702B(b)of such Code), and
(B) services provided under, or reimbursed by, such

contract shall be treated for such purposes as qualifiedlong-term care services (as defined in section 7702B(c) ofsuch Code).
In the case of an individual who is covered on December 31,1996, under a State long-term care plan (as defined in section7702B(f)(2) of such Code), the terms of such plan on suchdate shall be treated for purposes of the preceding sentenceas a contract issued on such date which met the long-termcare insurance requirements of such State.
(3) E

of enactment of this Act and before January 1, 1998, a contractproviding for long-term care insurance coverage is exchangedsolely for a qualified long-term care insurance contract (asdefined in section 7702B(b) of such Code), no gain or lossshall be recognized on the exchange. If, in addition to a qualifiedlong-term care insurance contract, money or other propertyis received in the exchange, then any gain shall be recognizedto the extent of the sum of the money and the fair marketvalue of the

sum of the money and the fair marketvalue of the other property received. For purposes of this para-graph, the cancellation of a contract providing for long-termcare insurance coverage and reinvestment of the cancellationproceeds in a qualified long-term care insurance contract within60 days thereafter shall be treated as an exchange.

(4) I
SSUANCE OF CERTAIN RIDERS PERMITTED .ÐFor purposes
of applying sections 101(f), 7702, and 7702A of the InternalRevenue Code of 1986 to any contractÐ
(A) the issuance of a rider which is treated as a quali-
fied long-term care insurance contract under section 7702B,and26 USC 1702Bnote.42 USC 300bb±8.

110 STAT. 2060 PUBLIC LAW 104±191ÐAUG. 21, 1996
(B) the addition of any provision required to conform
any other long-term care rider to be so treated,
shall not be treated as a modification or material change ofsuch contract.
(5) A
PPLICATION OF PER DIEM LIMITATION TO EXISTING CON -
TRACTS .ÐThe amount of per diem payments made under a

contract issued on or before July 31, 1996, with respect toan insured which are excludable from gross income by reasonof section 7702B of the Internal Revenue Code of 1986 (asadded by this section) shall not be reduced under subsection(d)(2)(B) thereof by reason of reimbursements received undera contract issued on or before such date. The preceding sentenceshall cease to apply as of the date (after July 31, 1996) suchcontract is exchanged or there is any contract modificationwhich results in an

is any contract modificationwhich results in an increase in the amount of such per diempayments or the amount of such reimbursements.(g) L

Committee on Ways and Means of the House of Representativesand the Chairman of the Committee on Finance of the Senateshall jointly request the National Association of Insurance Commis-sioners, in consultation with representatives of the insurance indus-try and consumer organizations, to formulate, develop, and conducta study to determine the marketing and other effects of per diemlimits on certain types of long-term care policies. If the NationalAssociation of Insurance Commissioners agrees to

of Insurance Commissioners agrees to the study request,the National Association of Insurance Commissioners shall reportthe results of its study to such committees not later than 2 yearsafter accepting the request.

SEC. 322. QUALIFIED LONG-TERM CARE SERVICES TREATED AS MEDI-
CAL CARE.
(a) G ENERAL RULE.ÐParagraph (1) of section 213(d) (defining
medical care) is amended by striking ``or'' at the end of subpara-graph (B), by redesignating subparagraph (C) as subparagraph(D), and by inserting after subparagraph (B) the following newsubparagraph:
``(C) for qualified long-term care services (as defined
in section 7702B(c)), or''.
(b) T
ECHNICAL AMENDMENTS .Ð

(b) T
(1) Subparagraph (D) of section 213(d)(1) (as redesignated
by subsection (a)) is amended by inserting before the period``or for any qualified long-term care insurance contract (asdefined in section 7702B(b))''.
(2)(A) Paragraph (1) of section 213(d) is amended by adding

at the end the following new flush sentence:``In the case of a qualified long-term care insurance contract(as defined in section 7702B(b)), only eligible long-term carepremiums (as defined in paragraph (10)) shall be taken intoaccount under subparagraph (D).''
(B) Paragraph (2) of section 162(l) is amended by adding
at the end the following new subparagraph:
``(C) L
ONG-TERM CARE PREMIUMS .ÐIn the case of a

``(C) L
qualified long-term care insurance contract (as defined insection 7702B(b)), only eligible long-term care premiums(as defined in section 213(d)(10)) shall be taken into accountunder paragraph (1).''Reports.26 USC 7702B
note.

110 STAT. 2061 PUBLIC LAW 104±191ÐAUG. 21, 1996
(C) Subsection (d) of section 213 is amended by adding
at the end the following new paragraphs:
``(10) E LIGIBLE LONG -TERM CARE PREMIUMS .Ð
``(A) I N GENERAL .ÐFor purposes of this section, the

term `eligible long-term care premiums' means the amountpaid during a taxable year for any qualified long-termcare insurance contract (as defined in section 7702B(b))covering an individual, to the extent such amount doesnot exceed the limitation determined under the followingtable:
``In the case of an individual
with an attained age before the The limitationclose of the taxable year of: is:

40 or less .................................................................... $ 200More than 40 but not more than 50 ........................ 375More than 50 but not more than 60 ........................ 750More than 60 but not more than 70 ........................ 2,000More than 70 ............................................................. 2,500 .
``(B) I NDEXING .Ð
``(i) I N GENERAL .ÐIn the case of any taxable year

beginning in a calendar year after 1997, each dollaramount contained in subparagraph (A) shall beincreased by the medical care cost adjustment of suchamount for such calendar year. If any increase deter-mined under the preceding sentence is not a multipleof $10, such increase shall be rounded to the nearestmultiple of $10.
``(ii) M
EDICAL CARE COST ADJUST -
MENT .ÐFor purposes of clause (i), the medical care
cost adjustment for any calendar year is the percentage(if any) by whichÐ

``(I) the medical care component of the
Consumer Price Index (as defined in section 1(f)(5))for August of the preceding calendar year, exceeds
``(II) such component for August of 1996.

The Secretary shall, in consultation with the Secre-tary of Health and Human Services, prescribe anadjustment which the Secretary determines is moreappropriate for purposes of this paragraph than theadjustment described in the preceding sentence, andthe adjustment so prescribed shall apply in lieu ofthe adjustment described in the preceding sentence.
``(11) C
ERTAIN PAYMENTS TO RELATIVES TREATED AS NOT

PAID FOR MEDICAL CARE .ÐAn amount paid for a qualified long-
term care service (as defined in section 7702B(c)) providedto an individual shall be treated as not paid for medical careif such service is providedÐ
``(A) by the spouse of the individual or by a relative
(directly or through a partnership, corporation, or otherentity) unless the service is provided by a licensed profes-sional with respect to such service, or

``(B) by a corporation or partnership which is related
(within the meaning of section 267(b) or 707(b)) to theindividual.
For purposes of this paragraph, the term `relative' means anindividual bearing a relationship to the individual which isdescribed in any of paragraphs (1) through (8) of section 152(a).

110 STAT. 2062 PUBLIC LAW 104±191ÐAUG. 21, 1996
This paragraph shall not apply for purposes of section 105(b)
with respect to reimbursements through insurance.''.
(3) Paragraph (6) of section 213(d) is amendedÐ
(A) by striking ``subparagraphs (A) and (B)'' and insert-
ing ``subparagraphs (A), (B), and (C)'', and
(B) by striking ``paragraph (1)(C)'' in subparagraph (A)
and inserting ``paragraph (1)(D)''.(4) Paragraph (7) of section 213(d) is amended by striking

``subparagraphs (A) and (B)'' and inserting ``subparagraphs (A),(B), and (C)''.(c) E
SEC. 323. REPORTING REQUIREMENTS.
(a) I NGENERAL .ÐSubpart B of part III of subchapter A of
chapter 61 is amended by adding at the end the following newsection:
``SEC. 6050Q. CERTAIN LONG-TERM CARE BENEFITS.
``(a) R EQUIREMENT OF REPORTING .ÐAny person who pays long-

term care benefits shall make a return, according to the formsor regulations prescribed by the Secretary, setting forthÐ
``(1) the aggregate amount of such benefits paid by such
person to any individual during any calendar year,
``(2) whether or not such benefits are paid in whole or
in part on a per diem or other periodic basis without regardto the expenses incurred during the period to which the pay-ments relate,

``(3) the name, address, and TIN of such individual, and``(4) the name, address, and TIN of the chronically ill or
terminally ill individual on account of whose condition suchbenefits are paid.``(b) S
TATEMENTS TOBEFURNISHED TO PERSONS WITHRESPECT
TOWHOM INFORMATION ISREQUIRED .ÐEvery person required to
make a return under subsection (a) shall furnish to each individualwhose name is required to be set forth in such return a writtenstatement showingÐ

``(1) the name of the person making the payments, and``(2) the aggregate amount of long-term care benefits paid
to the individual which are required to be shown on suchreturn.
The written statement required under the preceding sentence shallbe furnished to the individual on or before January 31 of theyear following the calendar year for which the return under sub-section (a) was required to be made.
``(c) L
ONG-TERM CARE BENEFITS .ÐFor purposes of this section,

the term `long-term care benefit' meansÐ
``(1) any payment under a product which is advertised,
marketed, or offered as long-term care insurance, and
``(2) any payment which is excludable from gross income
by reason of section 101(g).''.(b) P
ENALTIES .Ð
(1) Subparagraph (B) of section 6724(d)(1) is amended by
redesignating clauses (ix) through (xiv) as clauses (x) through(xv), respectively, and by inserting after clause (viii) the follow-ing new clause:

``(ix) section 6050Q (relating to certain long-term
care benefits),''.26 USC 162 note.

110 STAT. 2063 PUBLIC LAW 104±191ÐAUG. 21, 1996
(2) Paragraph (2) of section 6724(d) is amended by
redesignating subparagraphs (Q) through (T) as subparagraphs(R) through (U), respectively, and by inserting after subpara-graph (P) the following new subparagraph:
``(Q) section 6050Q(b) (relating to certain long-term
care benefits),''.
(c) C
LERICAL AMENDMENT .ÐThe table of sections for subpart
B of part III of subchapter A of chapter 61 is amended by addingat the end the following new item:

``Sec. 6050Q. Certain long-term care benefits.''.
(d) E FFECTIVE DATE.ÐThe amendments made by this section
shall apply to benefits paid after December 31, 1996.
PART IIÐCONSUMER PROTECTION
SEC. 325. POLICY REQUIREMENTS.
Section 7702B (as added by section 321) is amended by adding
at the end the following new subsection:
``(g) C ONSUMER PROTECTION PROVISIONS .Ð
``(1) I N GENERAL .ÐThe requirements of this subsection are
met with respect to any contract if the contract meetsÐ

``(A) the requirements of the model regulation and
model Act described in paragraph (2),
``(B) the disclosure requirement of paragraph (3), and``(C) the requirements relating to nonforfeitability
under paragraph (4).``(2) R
EQUIREMENTS OF MODEL REGULATION AND ACT .Ð
``(A) I N GENERAL .ÐThe requirements of this paragraph
are met with respect to any contract if such contractmeetsÐ
``(i) M
ODEL REGULATION .ÐThe following require-
ments of the model regulation:

``(I) Section 7A (relating to guaranteed renewal
or noncancellability), and the requirements ofsection 6B of the model Act relating to such section7A.
``(II) Section 7B (relating to prohibitions on
limitations and exclusions).
``(III) Section 7C (relating to extension of bene-
fits).
``(IV) Section 7D (relating to continuation or
conversion of coverage).
``(V) Section 7E (relating to discontinuance and
replacement of policies).

``(VI) Section 8 (relating to unintentional
lapse).
``(VII) Section 9 (relating to disclosure), other
than section 9F thereof.
``(VIII) Section 10 (relating to prohibitions
against post-claims underwriting).
``(IX) Section 11 (relating to minimum stand-
ards).
``(X) Section 12 (relating to requirement to
offer inflation protection), except that any require-ment for a signature on a rejection of inflation26 USC 6050Qnote.

110 STAT. 2064 PUBLIC LAW 104±191ÐAUG. 21, 1996
protection shall permit the signature to be on an
application or on a separate form.
``(XI) Section 23 (relating to prohibition against
preexisting conditions and probationary periods inreplacement policies or certificates).``(ii) M
ODEL ACT .ÐThe following requirements of
the model Act:
``(I) Section 6C (relating to preexisting condi-
tions).
``(II) Section 6D (relating to prior hospitaliza-
tion).

tion).
``(B) D EFINITIONS .ÐFor purposes of this paragraphÐ
``(i) M ODEL PROVISIONS .ÐThe terms `model regula-
tion' and `model Act' mean the long-term care insur-ance model regulation, and the long-term care insur-ance model Act, respectively, promulgated by theNational Association of Insurance Commissioners (asadopted as of January 1993).
``(ii) C
OORDINATION .ÐAny provision of the model

``(ii) C
regulation or model Act listed under clause (i) or (ii)of subparagraph (A) shall be treated as including anyother provision of such regulation or Act necessaryto implement the provision.
``(iii) D
ETERMINATION .ÐFor purposes of this section
and section 4980C, the determination of whether anyrequirement of a model regulation or the model Acthas been met shall be made by the Secretary.
``(3) D
ISCLOSURE REQUIREMENT .ÐThe requirement of this

paragraph is met with respect to any contract if such contractmeets the requirements of section 4980C(d).
``(4) N
ONFORFEITURE REQUIREMENTS .Ð
are met with respect to any level premium contract,if the issuer of such contract offers to the policyholder,including any group policyholder, a nonforfeiture provisionmeeting the requirements of subparagraph (B).
``(B) R

``(B) R
EQUIREMENTS OF PROVISION .ÐThe nonforfeiture
provision required under subparagraph (A) shall meet thefollowing requirements:
``(i) The nonforfeiture provision shall be appro-
priately captioned.
``(ii) The nonforfeiture provision shall provide for
a benefit available in the event of a default in thepayment of any premiums and the amount of the bene-fit may be adjusted subsequent to being initiallygranted only as necessary to reflect changes in claims,

persistency, and interest as reflected in changes inrates for premium paying contracts approved by theSecretary for the same contract form.
``(iii) The nonforfeiture provision shall provide at
least one of the following:
``(I) Reduced paid-up insurance.``(II) Extended term insurance.``(III) Shortened benefit period.``(IV) Other similar offerings approved by the

110 STAT. 2065 PUBLIC LAW 104±191ÐAUG. 21, 1996
``(5) C ROSS REFERENCE .Ð
``For coordination of the requirements of this subsection with
State requirements, see section 4980C(f).''.
SEC. 326. REQUIREMENTS FOR ISSUERS OF QUALIFIED LONG-TERM
CARE INSURANCE CONTRACTS.
(a) I NGENERAL .ÐChapter 43 is amended by adding at the
end the following new section:
``SEC. 4980C. REQUIREMENTS FOR ISSUERS OF QUALIFIED LONG-TERM
``(a) G ENERAL RULE.ÐThere is hereby imposed on any person

failing to meet the requirements of subsection (c) or (d) a taxin the amount determined under subsection (b).
``(b) A
MOUNT .Ð
``(1) I N GENERAL .ÐThe amount of the tax imposed by sub-
section (a) shall be $100 per insured for each day any require-ment of subsection (c) or (d) is not met with respect to eachqualified long-term care insurance contract.
``(2) W
AIVER .ÐIn the case of a failure which is due to

reasonable cause and not to willful neglect, the Secretary maywaive part or all of the tax imposed by subsection (a) to theextent that payment of the tax would be excessive relativeto the failure involved.``(c) R
ESPONSIBILITIES .ÐThe requirements of this subsection are
``(1) R EQUIREMENTS OF MODEL PROVISIONS .Ð
``(A) M ODEL REGULATION .ÐThe following requirements
of the model regulation must be met:

``(i) Section 13 (relating to application forms and
replacement coverage).
``(ii) Section 14 (relating to reporting require-
ments), except that the issuer shall also report atleast annually the number of claims denied duringthe reporting period for each class of business(expressed as a percentage of claims denied), otherthan claims denied for failure to meet the waitingperiod or because of any applicable preexisting condi-tion.

``(iii) Section 20 (relating to filing requirements
for marketing).
``(iv) Section 21 (relating to standards for market-
ing), including inaccurate completion of medical his-tories, other than sections 21C(1) and 21C(6) thereof,except thatÐ
``(I) in addition to such requirements, no per-
son shall, in selling or offering to sell a qualifiedlong-term care insurance contract, misrepresenta material fact; and
``(II) no such requirements shall include a

requirement to inquire or identify whether aprospective applicant or enrollee for long-term careinsurance has accident and sickness insurance.``(v) Section 22 (relating to appropriateness of
recommended purchase).
``(vi) Section 24 (relating to standard format outline
of coverage).

110 STAT. 2066 PUBLIC LAW 104±191ÐAUG. 21, 1996
``(vii) Section 25 (relating to requirement to deliver
shopper's guide).``(B) M
ODEL ACT .ÐThe following requirements of the
model Act must be met:
``(i) Section 6F (relating to right to return), except
that such section shall also apply to denials of applica-
tions and any refund shall be made within 30 daysof the return or denial.
``(ii) Section 6G (relating to outline of coverage).``(iii) Section 6H (relating to requirements for cer-

tificates under group plans).
``(iv) Section 6I (relating to policy summary).``(v) Section 6J (relating to monthly reports on
accelerated death benefits).
``(vi) Section 7 (relating to incontestability period).
``(C) D
EFINITIONS .ÐFor purposes of this paragraph, the
terms `model regulation' and `model Act' have the meaningsgiven such terms by section 7702B(g)(2)(B).``(2) D
ELIVERY OF POLICY .ÐIf an application for a qualified

long-term care insurance contract (or for a certificate undersuch a contract for a group) is approved, the issuer shall deliverto the applicant (or policyholder or certificateholder) the con-tract (or certificate) of insurance not later than 30 days afterthe date of the approval.
``(3) I
NFORMATION ON DENIALS OF CLAIMS .ÐIf a claim under

a qualified long-term care insurance contract is denied, theissuer shall, within 60 days of the date of a written requestby the policyholder or certificateholder (or representative)Ð
``(A) provide a written explanation of the reasons for
the denial, and
``(B) make available all information directly relating
to such denial.
``(d) D
ISCLOSURE .ÐThe requirements of this subsection are met

if the issuer of a long-term care insurance policy discloses in suchpolicy and in the outline of coverage required under subsection(c)(1)(B)(ii) that the policy is intended to be a qualified long-termcare insurance contract under section 7702B(b).
``(e) Q
UALIFIED LONG-TERM CARE INSURANCE CONTRACT
DEFINED .ÐFor purposes of this section, the term `qualified long-
term care insurance contract' has the meaning given such termby section 7702B.
``(f) C

``(f) C
OORDINATION WITH STATE REQUIREMENTS .ÐIf a State
imposes any requirement which is more stringent than the analo-gous requirement imposed by this section or section 7702B(g), therequirement imposed by this section or section 7702B(g) shall betreated as met if the more stringent State requirement is met.''.
(b) C
ONFORMING AMENDMENT .ÐThe table of sections for chapter
43 is amended by adding at the end the following new item:

``Sec. 4980C. Requirements for issuers of qualified long-term care insurance con-
tracts.''.
SEC. 327. EFFECTIVE DATES.
(a) I NGENERAL .ÐThe provisions of, and amendments made
by, this part shall apply to contracts issued after December 31,1996. The provisions of section 321(f) (relating to transition rule)shall apply to such contracts.26 USC 4980C
note.

110 STAT. 2067 PUBLIC LAW 104±191ÐAUG. 21, 1996
(b) I SSUERS .ÐThe amendments made by section 326 shall apply
to actions taken after December 31, 1996.
Subtitle DÐTreatment of Accelerated
Death Benefits
SEC. 331. TREATMENT OF ACCELERATED DEATH BENEFITS BY
RECIPIENT.
(a) I NGENERAL .ÐSection 101 (relating to certain death bene-
fits) is amended by adding at the end the following new subsection:
``(g) T REATMENT OF CERTAIN ACCELERATED DEATH BENEFITS .Ð

``(1) I N GENERAL .ÐFor purposes of this section, the follow-
ing amounts shall be treated as an amount paid by reasonof the death of an insured:
``(A) Any amount received under a life insurance con-
tract on the life of an insured who is a terminally illindividual.
``(B) Any amount received under a life insurance con-
tract on the life of an insured who is a chronically illindividual.``(2) T
REATMENT OF VIATICAL SETTLEMENTS .Ð
``(A) I N GENERAL .ÐIf any portion of the death benefit

under a life insurance contract on the life of an insureddescribed in paragraph (1) is sold or assigned to a viaticalsettlement provider, the amount paid for the sale or assign-ment of such portion shall be treated as an amount paidunder the life insurance contract by reason of the deathof such insured.
``(B) V
IATICAL SETTLEMENT PROVIDER .Ð
``(i) I N GENERAL .ÐThe term `viatical settlement

provider' means any person regularly engaged in thetrade or business of purchasing, or taking assignmentsof, life insurance contracts on the lives of insuredsdescribed in paragraph (1) ifÐ
``(I) such person is licensed for such purposes
(with respect to insureds described in the samesubparagraph of paragraph (1) as the insured) inthe State in which the insured resides, or
``(II) in the case of an insured who resides

in a State not requiring the licensing of such per-sons for such purposes with respect to suchinsured, such person meets the requirements ofclause (ii) or (iii), whichever applies to suchinsured.``(ii) T
ERMINALLY ILL INSUREDS .ÐA person meets
the requirements of this clause with respect to aninsured who is a terminally ill individual if suchpersonÐ
``(I) meets the requirements of sections 8 and

9 of the Viatical Settlements Model Act of theNational Association of Insurance Commissioners,and
``(II) meets the requirements of the Model
Regulations of the National Association of Insur-ance Commissioners (relating to standards forevaluation of reasonable payments) in determining

110 STAT. 2068 PUBLIC LAW 104±191ÐAUG. 21, 1996
amounts paid by such person in connection with
such purchases or assignments.``(iii) C
HRONICALLY ILL INSUREDS .ÐA person meets
the requirements of this clause with respect to aninsured who is a chronically ill individual if suchpersonÐ
``(I) meets requirements similar to the require-
ments referred to in clause (ii)(I), and
``(II) meets the standards (if any) of the

National Association of Insurance Commissionersfor evaluating the reasonableness of amounts paidby such person in connection with such purchasesor assignments with respect to chronically illindividuals.
``(3) S
PECIAL RULES FOR CHRONICALLY ILL INSUREDS .ÐIn
the case of an insured who is a chronically ill individualÐ
``(A) I N GENERAL .ÐParagraphs (1) and (2) shall not
apply to any payment received for any period unlessÐ

``(i) such payment is for costs incurred by the payee
(not compensated for by insurance or otherwise) forqualified long-term care services provided for theinsured for such period, and
``(ii) the terms of the contract giving rise to such
payment satisfyÐ
``(I) the requirements of section 7702B(b)(1)(B),
and
``(II) the requirements (if any) applicable under
subparagraph (B).
For purposes of the preceding sentence, the rule of section7702B(b)(2)(B) shall apply.
``(B) O

``(B) O
THER REQUIREMENTS .ÐThe requirements
applicable under this subparagraph areÐ
``(i) those requirements of section 7702B(g) and
section 4980C which the Secretary specifies as applyingto such a purchase, assignment, or other arrangement,
``(ii) standards adopted by the National Association
of Insurance Commissioners which specifically applyto chronically ill individuals (and, if such standardsare adopted, the analogous requirements specifiedunder clause (i) shall cease to apply), and

``(iii) standards adopted by the State in which the
policyholder resides (and if such standards are adopted,the analogous requirements specified under clause (i)and (subject to section 4980C(f)) standards underclause (ii), shall cease to apply).``(C) P
ER DIEM PAYMENTS .ÐA payment shall not fail
to be described in subparagraph (A) by reason of beingmade on a per diem or other periodic basis without regardto the expenses incurred during the period to which thepayment relates.
``(D) L

``(D) L
IMITATION ON EXCLUSION FOR PERIODIC PAY -
MENTS .Ð
``For limitation on amount of periodic payments which are
treated as described in paragraph (1), see section 7702B(d).''.
``(4) D EFINITIONS .ÐFor purposes of this subsectionÐ
``(A) T ERMINALLY ILL INDIVIDUAL .ÐThe term `termi-
nally ill individual' means an individual who has been

110 STAT. 2069 PUBLIC LAW 104±191ÐAUG. 21, 1996
certified by a physician as having an illness or physical
condition which can reasonably be expected to result indeath in 24 months or less after the date of the certification.
``(B) C
HRONICALLY ILL INDIVIDUAL .ÐThe term `chron-
ically ill individual' has the meaning given such term bysection 7702B(c)(2); except that such term shall not includea terminally ill individual.
``(C) Q
UALIFIED LONG -TERM CARE SERVICES .ÐThe term

`qualified long-term care services' has the meaning givensuch term by section 7702B(c).
``(D) P
HYSICIAN .ÐThe term `physician' has the meaning
given to such term by section 1861(r)(1) of the Social Secu-rity Act (42 U.S.C. 1395x(r)(1)).``(5) E
XCEPTION FOR BUSINESS -RELATED POLICIES .ÐThis sub-

section shall not apply in the case of any amount paid toany taxpayer other than the insured if such taxpayer hasan insurable interest with respect to the life of the insuredby reason of the insured being a director, officer, or employeeof the taxpayer or by reason of the insured being financiallyinterested in any trade or business carried on by the taxpayer.''.(b) E
shall apply to amounts received after December 31, 1996.

SEC. 332. TAX TREATMENT OF COMPANIES ISSUING QUALIFIED
ACCELERATED DEATH BENEFIT RIDERS.
(a) Q UALIFIED ACCELERATED DEATH BENEFIT RIDERS TREATED
ASLIFEINSURANCE .ÐSection 818 (relating to other definitions and
special rules) is amended by adding at the end the following newsubsection:
``(g) Q
UALIFIED ACCELERATED DEATH BENEFIT RIDERS TREATED
ASLIFEINSURANCE .ÐFor purposes of this partÐ
``(1) I N GENERAL .ÐAny reference to a life insurance contract

shall be treated as including a reference to a qualified acceler-ated death benefit rider on such contract.
``(2) Q
UALIFIED ACCELERATED DEATH BENEFIT RIDERS .ÐFor
purposes of this subsection, the term `qualified accelerateddeath benefit rider' means any rider on a life insurance contractif the only payments under the rider are payments meeting
the requirements of section 101(g).
``(3) E
XCEPTION FOR LONG -TERM CARE RIDERS .ÐParagraph

(1) shall not apply to any rider which is treated as a long-term care insurance contract under section 7702B.''.(b) E
(1) I N GENERAL .ÐThe amendment made by this section
(2) I SSUANCE OF RIDER NOT TREATED AS MATERIAL
CHANGE .ÐFor purposes of applying sections 101(f), 7702, and
7702A of the Internal Revenue Code of 1986 to any contractÐ
(A) the issuance of a qualified accelerated death benefit

rider (as defined in section 818(g) of such Code (as addedby this Act)), and
an accelerated death benefit rider to the requirements ofsuch section 818(g),
shall not be treated as a modification or material change ofsuch contract.26 USC 818 note.26 USC 101 note.

110 STAT. 2070 PUBLIC LAW 104±191ÐAUG. 21, 1996
SEC. 341. EXEMPTION FROM INCOME TAX FOR STATE-SPONSORED
ORGANIZATIONS PROVIDING HEALTH COVERAGE FORHIGH-RISK INDIVIDUALS.
(a) I NGENERAL .ÐSubsection (c) of section 501 (relating to
list of exempt organizations) is amended by adding at the endthe following new paragraph:
``(26) Any membership organization ifÐ
``(A) such organization is established by a State exclu-

sively to provide coverage for medical care (as definedin section 213(d)) on a not-for-profit basis to individuals
described in subparagraph (B) throughÐ
``(i) insurance issued by the organization, or``(ii) a health maintenance organization under an
arrangement with the organization,``(B) the only individuals receiving such coverage
through the organization are individualsÐ
``(i) who are residents of such State, and``(ii) who, by reason of the existence or history
of a medical conditionÐ

``(I) are unable to acquire medical care cov-
erage for such condition through insurance or froma health maintenance organization, or
``(II) are able to acquire such coverage only
at a rate which is substantially in excess of therate for such coverage through the membershiporganization,
``(C) the composition of the membership in such
organization is specified by such State, and
``(D) no part of the net earnings of the organization

inures to the benefit of any private shareholder or indi-vidual.''.
(b) E
FFECTIVE DATE.ÐThe amendment made by this section
SEC. 342. EXEMPTION FROM INCOME TAX FOR STATE-SPONSORED
WORKMEN'S COMPENSATION REINSURANCE ORGANIZA-TIONS.
list of exempt organizations), as amended by section 341, is amendedby adding at the end the following new paragraph:

``(27) Any membership organization ifÐ
``(A) such organization is established before June 1,
1996, by a State exclusively to reimburse its membersfor losses arising under workmen's compensation acts,
``(B) such State requires that the membership of such
organization consist ofÐ
``(i) all persons who issue insurance covering work-
men's compensation losses in such State, and
``(ii) all persons and governmental entities who

self-insure against such losses, and``(C) such organization operates as a non-profit
organization byÐ26 USC 501 note.

110 STAT. 2071 PUBLIC LAW 104±191ÐAUG. 21, 1996
``(i) returning surplus income to its members or
workmen's compensation policyholders on a periodicbasis, and
``(ii) reducing initial premiums in anticipation of
investment income.''.
(b) E
shall apply to taxable years ending after the date of the enactmentof this Act.
Subtitle FÐOrganizations Subject to
Section 833
SEC. 351. ORGANIZATIONS SUBJECT TO SECTION 833.

(a) I NGENERAL .ÐSection 833(c) (relating to organization to
which section applies) is amended by adding at the end the followingnew paragraph:
``(4) T
REATMENT AS EXISTING BLUE CROSS OR BLUE SHIELD
ORGANIZATION .Ð
``(A) I N GENERAL .ÐParagraph (2) shall be applied to
an organization described in subparagraph (B) as if it werea Blue Cross or Blue Shield organization.
``(B) A
PPLICABLE ORGANIZATION .ÐAn organization is

described in this subparagraph if itÐ
``(i) is organized under, and governed by, State
laws which are specifically and exclusively applicableto not-for-profit health insurance or health service typeorganizations, and
``(ii) is not a Blue Cross or Blue Shield organization
or health maintenance organization.''.
(b) E
shall apply to taxable years ending after December 31, 1996.

Subtitle GÐIRA Distributions to the
Unemployed
SEC. 361. DISTRIBUTIONS FROM CERTAIN PLANS MAY BE USED WITH-
OUT ADDITIONAL TAX TO PAY FINANCIALLY DEVASTATINGMEDICAL EXPENSES.
(a) I NGENERAL .ÐSection 72(t)(3)(A) is amended by striking
``(B),''.
(b) D ISTRIBUTIONS FOR PAYMENT OF HEALTH INSURANCE PRE-
MIUMS OF CERTAIN UNEMPLOYED INDIVIDUALS .ÐParagraph (2) of
section 72(t) is amended by adding at the end the following newsubparagraph:
``(D) D
ISTRIBUTIONS TO UNEMPLOYED INDIVIDUALS FOR

HEALTH INSURANCE PREMIUMS .Ð
``(i) I N GENERAL .ÐDistributions from an individual
retirement plan to an individual after separation fromemploymentÐ
``(I) if such individual has received unemploy-
ment compensation for 12 consecutive weeks underany Federal or State unemployment compensationlaw by reason of such separation,26 USC 833 note.26 USC 501 note.

110 STAT. 2072 PUBLIC LAW 104±191ÐAUG. 21, 1996
``(II) if such distributions are made during any
taxable year during which such unemploymentcompensation is paid or the succeeding taxableyear, and
``(III) to the extent such distributions do not
exceed the amount paid during the taxable yearfor insurance described in section 213(d)(1)(D) withrespect to the individual and the individual'sspouse and dependents (as defined in section 152).``(ii) D
ISTRIBUTIONS AFTER REEMPLOYMENT .Ð

Clause (i) shall not apply to any distribution madeafter the individual has been employed for at least60 days after the separation from employment to whichclause (i) applies.
``(iii) S
ELF-EMPLOYED INDIVIDUALS .ÐTo the extent

provided in regulations, a self-employed individualshall be treated as meeting the requirements of clause(i)(I) if, under Federal or State law, the individualwould have received unemployment compensation butfor the fact the individual was self-employed.''.
(c) C
ONFORMING AMENDMENT .ÐSubparagraph (B) of section
72(t)(2) is amended by striking ``or (C)'' and inserting ``, (C), or(D)''.
(d) E

shall apply to distributions after December 31, 1996.
Subtitle HÐOrgan and Tissue Donation
Information Included With Income TaxRefund Payments
SEC. 371. ORGAN AND TISSUE DONATION INFORMATION INCLUDED
WITH INCOME TAXREFUND PAYMENTS.
(a) I NGENERAL .ÐThe Secretary of the Treasury shall, to the

extent practicable, include with the mailing of any payment ofa refund of individual income tax made during the period beginningon February 1, 1997, and ending on June 30, 1997, a copy ofthe document described in subsection (b).
(b) T
EXT OF DOCUMENT .ÐThe Secretary of the Treasury shall,

after consultation with the Secretary of Health and Human Servicesand organizations promoting organ and tissue (including eye) dona-tion, prepare a document suitable for inclusion with individualincome tax refund payments whichÐ
(1) encourages organ and tissue donation;(2) includes a detachable organ and tissue donor
card; and
(3) urges recipients toÐ
(A) sign the organ and tissue donor card;(B) discuss organ and tissue donation with family mem-

bers and tell family members about the recipient's desireto be an organ and tissue donor if the occasion arises;and
(C) encourage family members to request or authorize
organ and tissue donation if the occasion arises.26 USC 6042
note.26 USC 72 note.

110 STAT. 2073 PUBLIC LAW 104±191ÐAUG. 21, 1996
TITLE IVÐAPPLICATION AND ENFORCE-
MENT OF GROUP HEALTH PLANREQUIREMENTS
Subtitle AÐApplication and Enforcement
of Group Health Plan Requirements
SEC. 401. GROUP HEALTH PLAN PORTABILITY, ACCESS, AND RENEW-
ABILITY REQUIREMENTS.
(a) I NGENERAL .ÐThe Internal Revenue Code of 1986 is
amended by adding at the end the following new subtitle:
``Subtitle KÐGroup Health Plan Port-
ability, Access, and RenewabilityRequirements

``Chapter 100. Group health plan portability, access, and renewability requirements.
``CHAPTER 100ÐGROUP HEALTH PLAN PORTABILITY,
ACCESS, AND RENEWABILITY REQUIREMENTS
``Sec. 9801. Increased portability through limitation on preexisting condition exclu-
sions.
``Sec. 9802. Prohibiting discrimination against individual participants and bene-

``Sec. 9803. Guaranteed renewability in multiemployer plans and certain multiple
employer welfare arrangements.
``Sec. 9804. General exceptions.``Sec. 9805. Definitions.``Sec. 9806. Regulations.
``SEC. 9801. INCREASED PORTABILITY THROUGH LIMITATION ON

section (d), a group health plan may, with respect to a participantor beneficiary, impose a preexisting condition exclusion only ifÐ

is reduced by the length of the aggregate of the periods ofcreditable coverage (if any) applicable to the participant orbeneficiary as of the enrollment date.``(b) D

exclusion' means, with respect to coverage, a limitationor exclusion of benefits relating to a condition based on

110 STAT. 2074 PUBLIC LAW 104±191ÐAUG. 21, 1996
the fact that the condition was present before the date
of enrollment for such coverage, whether or not any medicaladvice, diagnosis, care, or treatment was recommendedor received before such date.
``(B) T
REATMENT OF GENETIC INFORMATION .ÐFor pur-
poses of this section, genetic information shall not betreated as a condition described in subsection (a)(1) inthe absence of a diagnosis of the condition related to suchinformation.``(2) E

means, with respect to an individual covered under a grouphealth plan, the date of enrollment of the individual in theplan or, if earlier, the first day of the waiting period for suchenrollment.
``(3) L

``(4) W

Such term does not include coverage consisting solely of cov-erage of excepted benefits (as defined in section 9805(c)).
``(2) N

110 STAT. 2075 PUBLIC LAW 104±191ÐAUG. 21, 1996
``(B) W AITING PERIOD NOT TREATED AS A BREAK IN
COVERAGE .ÐFor purposes of subparagraph (A) and sub-
section (d)(4), any period that an individual is in a waitingperiod for any coverage under a group health plan or isin an affiliation period shall not be taken into accountin determining the continuous period under subpara-graph (A).
``(C) A
``(i) I N GENERAL .ÐFor purposes of this section, the

term `affiliation period' means a period which, underthe terms of the health insurance coverage offeredby the health maintenance organization, must expirebefore the health insurance coverage becomes effective.During such an affiliation period, the organization isnot required to provide health care services or benefitsand no premium shall be charged to the participantor beneficiary.
``(ii) B
EGINNING .ÐSuch period shall begin on the
enrollment date.
``(iii) R UNS CONCURRENTLY WITH WAITING PERI -

ODS.ÐAny such affiliation period shall run concur-
rently with any waiting period under the plan.
``(3) M ETHOD OF CREDITING COVERAGE .Ð
under subparagraph (B), for purposes of applying sub-section (a)(3), a group health plan shall count a periodof creditable coverage without regard to the specific benefitsfor which coverage is offered during the period.
``(B) E

health plan may elect to apply subsection (a)(3) basedon coverage of any benefits within each of several classesor categories of benefits specified in regulations ratherthan as provided under subparagraph (A). Such electionshall be made on a uniform basis for all participants andbeneficiaries. Under such election a group health plan shallcount a period of creditable coverage with respect to anyclass or category of benefits if any level of benefits iscovered within such class or category.

``(C) P
respect to a group health plan under subparagraph (B),the plan shallÐ
``(4) E

Subject to paragraph (4), a group health plan may not imposeany preexisting condition exclusion in the case of an individualwho, as of the last day of the 30-day period beginning withthe date of birth, is covered under creditable coverage.

110 STAT. 2076 PUBLIC LAW 104±191ÐAUG. 21, 1996
``(2) E XCLUSION NOT APPLICABLE TO CERTAIN ADOPTED CHIL -
DREN .ÐSubject to paragraph (4), a group health plan may

not impose any preexisting condition exclusion in the caseof a child who is adopted or placed for adoption before attaining18 years of age and who, as of the last day of the 30-dayperiod beginning on the date of the adoption or placementfor adoption, is covered under creditable coverage. The previoussentence shall not apply to coverage before the date of suchadoption or placement for adoption.
``(3) E
XCLUSION NOT APPLICABLE TO PREGNANCY .ÐFor pur-

poses of this section, a group health plan may not imposeany preexisting condition exclusion relating to pregnancy asa preexisting condition.
``(4) L

``(1) R EQUIREMENT FOR CERTIFICATION OF PERIOD OF
CREDITABLE COVERAGE .Ð
``(A) I N GENERAL .ÐA group health plan shall provide
the certification described in subparagraph (B)Ð

The certification under clause (i) may be provided, to theextent practicable, at a time consistent with noticesrequired under any applicable COBRA continuationprovision.
``(B) C

``(B) C
ual under such plan and the coverage under suchCOBRA continuation provision, and
care under a group health plan consists of health insurance

coverage offered in connection with the plan, the planis deemed to have satisfied the certification requirementunder this paragraph if the issuer provides for such certifi-cation in accordance with this paragraph.``(2) D
``(A) I N GENERAL .ÐIn the case of an election described

in subsection (c)(3)(B) by a group health plan, if the planenrolls an individual for coverage under the plan and theindividual provides a certification of coverage of the individ-ual under paragraph (1)Ð

110 STAT. 2077 PUBLIC LAW 104±191ÐAUG. 21, 1996
``(i) upon request of such plan, the entity which
issued the certification provided by the individual shallpromptly disclose to such requesting plan informationon coverage of classes and categories of health benefitsavailable under such entity's plan, and
``(ii) such entity may charge the requesting plan
or issuer for the reasonable cost of disclosing suchinformation.
``(3) R

plan shall permit an employee who is eligible, but not enrolled,for coverage under the terms of the plan (or a dependentof such an employee if the dependent is eligible, but notenrolled, for coverage under such terms) to enroll for coverageunder the terms of the plan if each of the following conditionsis met:
a group health plan or had health insurance coverage atthe time coverage was previously offered to the employeeor individual.

coverage under a group health plan or health insurancecoverage was the reason for declining enrollment, but onlyif the plan sponsor (or the health insurance issuer offeringhealth insurance coverage in connection with the plan)required such a statement at such time and provided theemployee with notice of such requirement (and the con-sequences of such requirement) at such time.

``(i) was under a COBRA continuation provi-
sion and the coverage under such provision wasexhausted; or

(or has met any waiting period applicable to becoming

110 STAT. 2078 PUBLIC LAW 104±191ÐAUG. 21, 1996
a participant under the plan and is eligible to be
enrolled under the plan but for a failure to enrollduring a previous enrollment period), and

``(B) D
EPENDENT SPECIAL ENROLLMENT PERIOD .ÐThe

``(B) D
``(i) the date dependent coverage is made avail-
able, or
O WAITING PERIOD .ÐIf an individual seeks cov-

erage of a dependent during the first 30 days of sucha dependent special enrollment period, the coverage of thedependent shall become effectiveÐ

ment for adoption, the date of such adoption orplacement for adoption.
``SEC. 9802. PROHIBITING DISCRIMINATION AGAINST INDIVIDUAL
``(a) I NELIGIBILITY TO ENROLL .Ð

plan may not establish rules for eligibility (including continuedeligibility) of any individual to enroll under the terms of theplan based on any of the following factors in relation to theindividual or a dependent of the individual:

110 STAT. 2079 PUBLIC LAW 104±191ÐAUG. 21, 1996
``(2) N O APPLICATION TO BENEFITS OR EXCLUSIONS .ÐTo the
extent consistent with section 9801, paragraph (1) shall notbe construedÐ
``(A) to require a group health plan to provide particular
benefits (or benefits with respect to a specific procedure,treatment, or service) other than those provided underthe terms of such plan; or
``(B) to prevent such a plan from establishing limita-

tions or restrictions on the amount, level, extent, or natureof the benefits or coverage for similarly situated individualsenrolled in the plan or coverage.``(3) C
``(1) I N GENERAL .ÐA group health plan may not require

any individual (as a condition of enrollment or continued enroll-ment under the plan) to pay a premium or contribution whichis greater than such premium or contribution for a similarlysituated individual enrolled in the plan on the basis of anyfactor described in subsection (a)(1) in relation to the individualor to an individual enrolled under the plan as a dependentof the individual.
``(2) C

``(B) to prevent a group health plan from establishing
premium discounts or rebates or modifying otherwiseapplicable copayments or deductibles in return for adher-ence to programs of health promotion and disease preven-tion.
``SEC. 9803. GUARANTEED RENEWABILITY IN MULTIEMPLOYER PLANS
AND CERTAIN MULTIPLE EMPLOYER WELFAREARRANGEMENTS.

``(a) I NGENERAL .ÐA group health plan which is a multiem-
ployer plan (as defined in section 414(f)) or which is a multiple
employer welfare arrangement may not deny an employer continuedaccess to the same or different coverage under such plan, otherthanÐ

a network plan, because there is no longer any individualenrolled through the employer who lives, resides, or worksin the service area of the network plan and the plan appliesthis paragraph uniformly without regard to the claims experi-ence of employers or a factor described in section 9802(a)(1)in relation to such individuals or their dependents; or

110 STAT. 2080 PUBLIC LAW 104±191ÐAUG. 21, 1996
agreement requiring or authorizing contributions to the plan,
or to employ employees covered by such an agreement.``(b) M
ULTIPLE EMPLOYER WELFARE ARRANGEMENT .ÐFor pur-
poses of subsection (a), the term `multiple employer welfare arrange-ment' has the meaning given such term by section 3(40) of theEmployee Retirement Income Security Act of 1974, as in effecton the date of the enactment of this section.
``SEC. 9804. GENERAL EXCEPTIONS.

``(a) E XCEPTION FOR CERTAIN PLANS .ÐThe requirements of this
chapter shall not apply toÐ
``(1) any governmental plan, and``(2) any group health plan for any plan year if, on the
first day of such plan year, such plan has less than 2 partici-pants who are current employees.``(b) E

this chapter shall not apply to any group health plan in relationto its provision of excepted benefits described in section 9805(c)(1).
``(c) E
MET.Ð
this chapter shall not apply to any group health plan in relationto its provision of excepted benefits described in section9805(c)(2) if the benefitsÐ

``(2) N
ments of this chapter shall not apply to any group healthplan in relation to its provision of excepted benefits describedin section 9805(c)(3) if all of the following conditions are met:

ments of this chapter shall not apply to any group healthplan in relation to its provision of excepted benefits describedin section 9805(c)(4) if the benefits are provided under a sepa-rate policy, certificate, or contract of insurance.
``SEC. 9805. DEFINITIONS.
``(a) G ROUP HEALTH PLAN.ÐFor purposes of this chapter, the
term `group health plan' has the meaning given to such term
by section 5000(b)(1).

``(b) D EFINITIONS RELATING TO HEALTH INSURANCE .ÐFor pur-
poses of this chapterÐ
``(1) H EALTH INSURANCE COVERAGE .Ð
(B), the term `health insurance coverage' means benefitsconsisting of medical care (provided directly, through insur-ance or reimbursement, or otherwise) under any hospitalor medical service policy or certificate, hospital or medical

110 STAT. 2081 PUBLIC LAW 104±191ÐAUG. 21, 1996
service plan contract, or health maintenance organization
contract offered by a health insurance issuer.
``(B) N O APPLICATION TO CERTAIN EXCEPTED BENEFITS .Ð
In applying subparagraph (A), excepted benefits describedin subsection (c)(1) shall not be treated as benefits consist-ing of medical care.``(2) H

ance issuer' means an insurance company, insurance service,or insurance organization (including a health maintenanceorganization, as defined in paragraph (3)) which is licensedto engage in the business of insurance in a State and whichis subject to State law which regulates insurance (within themeaning of section 514(b)(2) of the Employee RetirementIncome Security Act of 1974, as in effect on the date of theenactment of this section). Such term does not include a grouphealth plan.
``(3) H

``(3) H
for solvency in the same manner and to the same extentas such a health maintenance organization.
``(c) E

``(c) E
XCEPTED BENEFITS .ÐFor purposes of this chapter, the
term `excepted benefits' means benefits under one or more (orany combination thereof) of the following:
``(1) B
``(B) Coverage issued as a supplement to liability in-
surance.

``(A) Limited scope dental or vision benefits.

``(B) Benefits for long-term care, nursing home care,
``(A) Coverage only for a specified disease or illness.``(B) Hospital indemnity or other fixed indemnity in-
surance.

110 STAT. 2082 PUBLIC LAW 104±191ÐAUG. 21, 1996
``(4) B ENEFITS NOT SUBJECT TO REQUIREMENTS IF OFFERED
THER DEFINITIONS .ÐFor purposes of this chapterÐ

``(A) Section 4980B, other than subsection (f)(1) thereof
insofar as it relates to pediatric vaccines.
Retirement Income Security Act of 1974 (29 U.S.C. 1161et seq.), other than section 609 of such Act.
``(2) G

``(2) G
OVERNMENTAL PLAN .ÐThe term `governmental plan'
has the meaning given such term by section 414(d).
``(3) M EDICAL CARE .ÐThe term `medical care' has the mean-
ing given such term by section 213(d) determined withoutregard toÐ
``(A) paragraph (1)(C) thereof, and``(B) so much of paragraph (1)(D) thereof as relates
to qualified long-term care insurance.``(4) N

health insurance coverage of a health insurance issuer underwhich the financing and delivery of medical care are provided,in whole or in part, through a defined set of providers undercontract with the issuer.
``(5) P
LACED FOR ADOPTION DEFINED .ÐThe term `placement',

or being `placed', for adoption, in connection with any placementfor adoption of a child with any person, means the assumptionand retention by such person of a legal obligation for totalor partial support of such child in anticipation of adoptionof such child. The child's placement with such person termi-nates upon the termination of such legal obligation.
``SEC. 9806. REGULATIONS.

Portability and Accountability Act of 1996, may promulgate suchregulations as may be necessary or appropriate to carry out theprovisions of this chapter. The Secretary may promulgate anyinterim final rules as the Secretary determines are appropriateto carry out this chapter.''.
(b) C
LERICAL AMENDMENT .ÐThe table of subtitles of such Code
is amended by adding at the end the following new item:
``Subtitle K. Group health plan portability, access, and renewability requirements.''.

(c) E FFECTIVE DATE.Ð
(1) I N GENERAL .ÐThe amendments made by this section
shall apply to plan years beginning after June 30, 1997.
before July 1, 1996, shall be taken into account underchapter 100 of the Internal Revenue Code of 1986(as added by this section) in determining creditablecoverage.26 USC 9801note.

110 STAT. 2083 PUBLIC LAW 104±191ÐAUG. 21, 1996
retary of the Treasury, consistent with section 104,shall provide for a process whereby individuals whoneed to establish creditable coverage for periods beforeJuly 1, 1996, and who would have such coverage cred-ited but for clause (i) may be given credit for creditablecoverage for such periods through the presentationof documents or other means.(B) C

subsection (e) of section 9801 of the Internal RevenueCode of 1986 (as added by this section) shall applyto events occurring after June 30, 1996.
(ii) N
(iii) C

a group health plan maintained pursuant to 1 or more collectivebargaining agreements between employee representatives andone or more employers ratified before the date of the enactmentof this Act, the amendments made by this section shall notapply to plan years beginning before the later ofÐ

For purposes of subparagraph (A), any plan amendment madepursuant to a collective bargaining agreement relating to theplan which amends the plan solely to conform to any require-ment added by this section shall not be treated as a terminationof such collective bargaining agreement.

110 STAT. 2084 PUBLIC LAW 104±191ÐAUG. 21, 1996
(4) T IMELY REGULATIONS .ÐThe Secretary of the Treasury,
consistent with section 104, shall first issue by not later thanApril 1, 1997, such regulations as may be necessary to carryout the amendments made by this section.
(5) L

SEC. 402. PENALTY ON FAILURE TO MEET CERTAIN GROUP HEALTH
PLAN REQUIREMENTS.

(a) I NGENERAL .ÐChapter 43 of the Internal Revenue Code
of 1986 (relating to qualified pension, etc., plans) is amended byadding after section 4980C the following new section:
``SEC. 4980D. FAILURE TO MEET CERTAIN GROUP HEALTH PLAN
REQUIREMENTS.
``(a) G ENERAL RULE.ÐThere is hereby imposed a tax on any
failure of a group health plan to meet the requirements of chapter100 (relating to group health plan portability, access, and renewabil-ity requirements).
``(b) A

``(b) A
MOUNT OF TAX.Ð
section (a) on any failure shall be $100 for each day in thenoncompliance period with respect to each individual to whomsuch failure relates.
``(2) N
ONCOMPLIANCE PERIOD .ÐFor purposes of this section,
the term `noncompliance period' means, with respect to anyfailure, the periodÐ
``(A) beginning on the date such failure first
occurs, and
``(B) ending on the date such failure is corrected.
``(3) M

``(3) M
INIMUM TAX FOR NONCOMPLIANCE PERIOD WHERE
FAILURE DISCOVERED AFTER NOTICE OF EXAMINATION .ÐNotwith-
standing paragraphs (1) and (2) of subsection (c)Ð
``(A) I N GENERAL .ÐIn the case of 1 or more failures
with respect to an individualÐ
``(i) which are not corrected before the date a notice
of examination of income tax liability is sent to theemployer, and
``(ii) which occurred or continued during the period
under examination,

the amount of tax imposed by subsection (a) by reasonof such failures with respect to such individual shall notbe less than the lesser of $2,500 or the amount of taxwhich would be imposed by subsection (a) without regardto such paragraphs.
``(B) H
IGHER MINIMUM TAX WHERE VIOLATIONS ARE
MORE THAN DE MINIMIS .ÐTo the extent violations for which

any person is liable under subsection (e) for any yearare more than de minimis, subparagraph (A) shall beapplied by substituting `$15,000' for `$2,500' with respectto such person.

110 STAT. 2085 PUBLIC LAW 104±191ÐAUG. 21, 1996
``(C) E XCEPTION FOR CHURCH PLANS .ÐThis paragraph
shall not apply to any failure under a church plan (asdefined in section 414(e)).
``(c) L
IMITATIONS ON AMOUNT OF TAX.Ð
``(1) T AX NOT TO APPLY WHERE FAILURE NOT DISCOVERED
EXERCISING REASONABLE DILIGENCE .ÐNo tax shall be imposed

by subsection (a) on any failure during any period for whichit is established to the satisfaction of the Secretary that theperson otherwise liable for such tax did not know, and exercis-ing reasonable diligence would not have known, that such fail-ure existed.
``(2) T
AX NOT TO APPLY TO FAILURES CORRECTED WITHIN
CERTAIN PERIODS .ÐNo tax shall be imposed by subsection (a)
on any failure ifÐ
``(A) such failure was due to reasonable cause and
not to willful neglect, and

``(B)(i) in the case of a plan other than a church plan
(as defined in section 414(e)), such failure is correctedduring the 30-day period beginning on the first date theperson otherwise liable for such tax knew, or exercisingreasonable diligence would have known, that such failureexisted, and
``(ii) in the case of a church plan (as so defined), such

failure is corrected before the close of the correction period(determined under the rules of section 414(e)(4)(C)).``(3) O
VERALL LIMITATION FOR UNINTENTIONAL FAILURES .Ð
In the case of failures which are due to reasonable causeand not to willful neglectÐ
``(A) S
INGLE EMPLOYER PLANS .Ð
``(i) I N GENERAL .ÐIn the case of failures with

respect to plans other than specified multiple employerhealth plans, the tax imposed by subsection (a) forfailures during the taxable year of the employer shallnot exceed the amount equal to the lesser ofÐ
``(I) 10 percent of the aggregate amount paid
or incurred by the employer (or predecessoremployer) during the preceding taxable year forgroup health plans, or
``(II) $500,000.
``(ii) T
AXABLE YEARS IN THE CASE OF CERTAIN CON -

TROLLED GROUPS .ÐFor purposes of this subparagraph,
if not all persons who are treated as a single employerfor purposes of this section have the same taxableyear, the taxable years taken into account shall bedetermined under principles similar to the principlesof section 1561.
``(B) S
PECIFIED MULTIPLE EMPLOYER HEALTH PLANS .Ð

respect to a specified multiple employer health plan,the tax imposed by subsection (a) for failures duringthe taxable year of the trust forming part of suchplan shall not exceed the amount equal to thelesser ofÐ
``(I) 10 percent of the amount paid or incurred
by such trust during such taxable year to providemedical care (as defined in section 9805(d)(3))

110 STAT. 2086 PUBLIC LAW 104±191ÐAUG. 21, 1996
directly or through insurance, reimbursement, or
otherwise, or
For purposes of the preceding sentence, all plans ofwhich the same trust forms a part shall be treatedas one plan.
``(ii) S
PECIAL RULE FOR EMPLOYERS REQUIRED TO
PAY TAX .ÐIf an employer is assessed a tax imposed

by subsection (a) by reason of a failure with respectto a specified multiple employer health plan, the limitshall be determined under subparagraph (A) (and notunder this subparagraph) and as if such plan werenot a specified multiple employer health plan.
``(4) W

is due to reasonable cause and not to willful neglect, the Sec-retary may waive part or all of the tax imposed by subsection(a) to the extent that the payment of such tax would be exces-sive relative to the failure involved.``(d) T
AXNOTTOAPPLY TO CERTAIN INSURED SMALL EMPLOYER
PLANS .Ð
``(1) I N GENERAL .ÐIn the case of a group health plan of

a small employer which provides health insurance coveragesolely through a contract with a health insurance issuer, notax shall be imposed by this section on the employer on anyfailure which is solely because of the health insurance coverageoffered by such issuer.
``(2) S

term `small employer' means, with respect to a calendaryear and a plan year, an employer who employed an aver-age of at least 2 but not more than 50 employees onbusiness days during the preceding calendar year and whoemploys at least 2 employees on the first day of the planyear. For purposes of the preceding sentence, all personstreated as a single employer under subsection (b), (c), (m),or (o) of section 414 shall be treated as one employer.
``(B) E

``(B) E
ence throughout the preceding calendar year, the deter-
mination of whether such employer is a small employershall be based on the average number of employees thatit is reasonably expected such employer will employ onbusiness days in the current calendar year.
``(C) P
REDECESSORS .ÐAny reference in this paragraph

to an employer shall include a reference to any predecessorof such employer.``(3) H
EALTH INSURANCE COVERAGE ; HEALTH INSURANCE
ISSUER .ÐFor purposes of paragraph (1), the terms `health insur-
ance coverage' and `health insurance issuer' have the respectivemeanings given such terms by section 9805.``(e) L
IABILITY FOR TAX.ÐThe following shall be liable for the
tax imposed by subsection (a) on a failure:

``(1) Except as otherwise provided in this subsection, the
employer.
``(2) In the case of a multiemployer plan, the plan.

110 STAT. 2087 PUBLIC LAW 104±191ÐAUG. 21, 1996
``(3) In the case of a failure under section 9803 (relating
to guaranteed renewability) with respect to a plan describedin subsection (f)(2)(B), the plan.``(f) D
``(1) G ROUP HEALTH PLAN .ÐThe term `group health plan'
has the meaning given such term by section 9805(a).
``(2) S PECIFIED MULTIPLE EMPLOYER HEALTH PLAN .ÐThe
term `specified multiple employer health plan' means a grouphealth plan which isÐ

``(A) any multiemployer plan, or``(B) any multiple employer welfare arrangement (as
defined in section 3(40) of the Employee Retirement IncomeSecurity Act of 1974, as in effect on the date of the enact-ment of this section).``(3) C
ORRECTION .ÐA failure of a group health plan shall
be treated as corrected ifÐ
``(A) such failure is retroactively undone to the extent
possible, and
``(B) the person to whom the failure relates is placed

in a financial position which is as good as such personwould have been in had such failure not occurred.''.
(b) C
43 of such Code is amended by adding after the item relatingto section 4980C the following new item:
``Sec. 4980D. Failure to meet certain group health plan requirements.''.
(c) E FFECTIVE DATE.ÐThe amendments made by this section

shall apply to failures under chapter 100 of the Internal RevenueCode of 1986 (as added by section 401 of this Act).
Subtitle BÐClarification of Certain
Continuation Coverage Requirements
SEC. 421. COBRA CLARIFICATIONS.
(a) P UBLIC HEALTH SERVICE ACT.Ð
(1) P ERIOD OF COVERAGE .ÐSection 2202(2) of the Public
Health Service Act (42 U.S.C. 300bb±2(2)) is amendedÐ
(A) in subparagraph (A)Ð
(i) by transferring the sentence immediately

preceding clause (iv) so as to appear immediately fol-lowing such clause (iv); and
(ii) in the last sentence (as so transferred)Ð
(I) by striking ``an individual'' and inserting
``a qualified beneficiary'';
(II) by striking ``at the time of a qualifying
event described in section 2203(2)'' and inserting``at any time during the first 60 days of continu-ation coverage under this title'';
(III) by striking ``with respect to such event,'';
and

and
(IV) by inserting ``(with respect to all qualified
beneficiaries)'' after ``29 months'';
(B) in subparagraph (D)(i), by inserting before ``, or''
the following: ``(other than such an exclusion or limitationwhich does not apply to (or is satisfied by) such beneficiaryby reason of chapter 100 of the Internal Revenue Code26 USC 4980Dnote.

110 STAT. 2088 PUBLIC LAW 104±191ÐAUG. 21, 1996
of 1986, part 7 of subtitle B of title I of the Employee
Retirement Income Security Act of 1974, or title XXVIIof this Act)''; and
(C) in subparagraph (E), by striking ``at the time of
a qualifying event described in section 2203(2)'' and insert-ing ``at any time during the first 60 days of continuation
coverage under this title''.(2) N
OTICES .ÐSection 2206(3) of the Public Health Service

Act (42 U.S.C. 300bb±6(3)) is amended by striking ``at thetime of a qualifying event described in section 2203(2)'' andinserting ``at any time during the first 60 days of continuationcoverage under this title''.
(3) B
IRTH OR ADOPTION OF A CHILD .ÐSection 2208(3)(A)
of the Public Health Service Act (42 U.S.C. 300bb±8(3)(A))is amended by adding at the end thereof the following newflush sentence:
``Such term shall also include a child who is born to or placed

for adoption with the covered employee during the period ofcontinuation coverage under this title.''.(b) E
MPLOYEE RETIREMENT INCOME SECURITY ACT OF 1974.Ð
(1) P ERIOD OF COVERAGE .ÐSection 602(2) of the Employee
Retirement Income Security Act of 1974 (29 U.S.C. 1162(2))is amendedÐ
(A) in the last sentence of subparagraph (A)Ð
(i) by striking ``an individual'' and inserting ``a
qualified beneficiary'';
(ii) by striking ``at the time of a qualifying event

described in section 603(2)'' and inserting ``at any timeduring the first 60 days of continuation coverage underthis part'';
(iii) by striking ``with respect to such event''; and(iv) by inserting ``(with respect to all qualified bene-
ficiaries)'' after ``29 months'';(B) in subparagraph (D)(i), by inserting before ``, or''

the following: ``(other than such an exclusion or limitationwhich does not apply to (or is satisfied by) such beneficiaryby reason of chapter 100 of the Internal Revenue Codeof 1986, part 7 of this subtitle, or title XXVII of the PublicHealth Service Act)''; and
a qualifying event described in section 603(2)'' and inserting``at any time during the first 60 days of continuation cov-erage under this part''.(2) N

OTICES .ÐSection 606(a)(3) of the Employee Retirement
Income Security Act of 1974 (29 U.S.C. 1166(a)(3)) is amendedby striking ``at the time of a qualifying event described insection 603(2)'' and inserting ``at any time during the first60 days of continuation coverage under this part''.
(3) B
IRTH OR ADOPTION OF A CHILD .ÐSection 607(3)(A) of
the Employee Retirement Income Security Act of 1974 (29U.S.C. 1167(3)) is amended by adding at the end thereof thefollowing new flush sentence:

for adoption with the covered employee during the period ofcontinuation coverage under this part.''.(c) I
NTERNAL REVENUE CODE OF 1986.Ð

110 STAT. 2089 PUBLIC LAW 104±191ÐAUG. 21, 1996
(1) P ERIOD OF COVERAGE .ÐSection 4980B(f)(2)(B) of the
Internal Revenue Code of 1986 is amendedÐ
(A) in the last sentence of clause (i)Ð
(i) by striking ``at the time of a qualifying event
described in paragraph (3)(B)'' and inserting ``at anytime during the first 60 days of continuation coverageunder this section'';
(ii) by striking ``with respect to such event''; and(iii) by inserting ``(with respect to all qualified

beneficiaries)'' after ``29 months'';(B) in clause (iv)(I), by inserting before ``, or'' the follow-
ing: ``(other than such an exclusion or limitation whichdoes not apply to (or is satisfied by) such beneficiary byreason of chapter 100 of this title, part 7 of subtitle Bof title I of the Employee Retirement Income SecurityAct of 1974, or title XXVII of the Public Health ServiceAct)''; and
(C) in clause (v), by striking ``at the time of a qualifying

event described in paragraph (3)(B)'' and inserting ``at anytime during the first 60 days of continuation coverageunder this section''.(2) N
OTICES .ÐSection 4980B(f)(6)(C) of the Internal
Revenue Code of 1986 is amended by striking ``at the timeof a qualifying event described in paragraph (3)(B)'' and insert-ing ``at any time during the first 60 days of continuation cov-erage under this section''.
(3) B
IRTH OR ADOPTION OF A CHILD .ÐSection 4980B(g)(1)(A)

of the Internal Revenue Code of 1986 is amended by addingat the end thereof the following new flush sentence:
``Such term shall also include a child who is bornto or placed for adoption with the covered employeeduring the period of continuation coverage under thissection.''.
(d) E
shall become effective on January 1, 1997, regardless of whetherthe qualifying event occurred before, on, or after such date.
(e) N

(e) N
OTIFICATION OF CHANGES .ÐNot later than November 1,
1996, each group health plan (covered under title XXII of thePublic Health Service Act, part 6 of subtitle B of title I of theEmployee Retirement Income Security Act of 1974, and section4980B(f) of the Internal Revenue Code of 1986) shall notify eachqualified beneficiary who has elected continuation coverage undersuch title, part or section of the amendments made by this section.
SEC. 500. AMENDMENT OF 1986 CODE.

an amendment or repeal is expressed in terms of an amendmentto, or repeal of, a section or other provision, the reference shallbe considered to be made to a section or other provision of theInternal Revenue Code of 1986.26 USC 4980B
note.26 USC 4980B
note.

110 STAT. 2090 PUBLIC LAW 104±191ÐAUG. 21, 1996
Subtitle AÐCompany-Owned Life
Insurance
SEC. 501. DENIAL OF DEDUCTION FOR INTEREST ON LOANS WITH
RESPECT TO COMPANY-OWNED LIFE INSURANCE.
(a) I NGENERAL .ÐParagraph (4) of section 264(a) is amendedÐ
(1) by inserting ``, or any endowment or annuity contracts
owned by the taxpayer covering any individual,'' after ``thelife of any individual'', and
(2) by striking all that follows ``carried on by the taxpayer''
and inserting a period.(b) E

XCEPTION FOR CONTRACTS RELATING TO KEYPERSONS ;
PERMISSIBLE INTEREST RATES .ÐSection 264 is amendedÐ
(1) by striking ``Any'' in subsection (a)(4) and inserting
``Except as provided in subsection (d), any'', and
(2) by adding at the end the following new subsection:
``(d) S PECIAL RULES FORAPPLICATION OF SUBSECTION (a)(4).Ð
``(1) E XCEPTION FOR KEY PERSONS .ÐSubsection (a)(4) shall

not apply to any interest paid or accrued on any indebtednesswith respect to policies or contracts covering an individualwho is a key person to the extent that the aggregate amountof such indebtedness with respect to policies and contractscovering such individual does not exceed $50,000.
``(2) I
NTEREST RATE CAP ON KEY PERSONS AND PRE -1986
CONTRACTS .Ð
``(A) I N GENERAL .ÐNo deduction shall be allowed by

reason of paragraph (1) or the last sentence of subsection(a) with respect to interest paid or accrued for any monthbeginning after December 31, 1995, to the extent theamount of such interest exceeds the amount which wouldhave been determined if the applicable rate of interestwere used for such month.
``(B) A
PPLICABLE RATE OF INTEREST .ÐFor purposes of
subparagraph (A)Ð
``(i) I N GENERAL .ÐThe applicable rate of interest

for any month is the rate of interest described asMoody's Corporate Bond Yield Average-Monthly Aver-age Corporates as published by Moody's InvestorsService, Inc., or any successor thereto, for such month.
``(ii) P
RE-1986 CONTRACTS .ÐIn the case of indebted-
ness on a contract purchased on or before June 20,1986Ð
``(I) which is a contract providing a fixed rate

of interest, the applicable rate of interest for anymonth shall be the Moody's rate described inclause (i) for the month in which the contractwas purchased, or
``(II) which is a contract providing a variable
rate of interest, the applicable rate of interest forany month in an applicable period shall be suchMoody's rate for the third month preceding thefirst month in such period.

For purposes of subclause (II), the taxpayer shall electan applicable period for such contract on its returnof tax imposed by this chapter for its first taxable
year ending on or after October 13, 1995. Such

110 STAT. 2091 PUBLIC LAW 104±191ÐAUG. 21, 1996
applicable period shall be for any number of months
(not greater than 12) specified in the election andmay not be changed by the taxpayer without the con-sent of the Secretary.
``(3) K
EY PERSON .ÐFor purposes of paragraph (1), the term
`key person' means an officer or 20-percent owner, except thatthe number of individuals who may be treated as key personswith respect to any taxpayer shall not exceed the greater ofÐ

``(A) 5 individuals, or``(B) the lesser of 5 percent of the total officers and
employees of the taxpayer or 20 individuals.``(4) 20-
PERCENT OWNER .ÐFor purposes of this subsection,
the term `20-percent owner' meansÐ
``(A) if the taxpayer is a corporation, any person who
owns directly 20 percent or more of the outstanding stockof the corporation or stock possessing 20 percent or moreof the total combined voting power of all stock of thecorporation, or

``(B) if the taxpayer is not a corporation, any person
who owns 20 percent or more of the capital or profitsinterest in the employer.``(5) A
GGREGATION RULES .Ð
``(A) I N GENERAL .ÐFor purposes of paragraph (4)(A)
and applying the $50,000 limitation in paragraph (1)Ð
``(i) all members of a controlled group shall be
treated as one taxpayer, and
``(ii) such limitation shall be allocated among the
members of such group in such manner as the Sec-retary may prescribe.``(B) C

ONTROLLED GROUP .ÐFor purposes of this para-
graph, all persons treated as a single employer under sub-section (a) or (b) of section 52 or subsection (m) or (o)of section 414 shall be treated as members of a controlledgroup.''.
(c) E
FFECTIVE DATES .Ð
shall apply to interest paid or accrued after October 13, 1995.
(2) T RANSITION RULE FOR EXISTING INDEBTEDNESS .Ð
(A) I N GENERAL .ÐIn the case ofÐ
(i) indebtedness incurred before January 1,

1996, or
(ii) indebtedness incurred before January 1, 1997
with respect to any contract or policy entered intoin 1994 or 1995,
the amendments made by this section shall not apply toqualified interest paid or accrued on such indebtedness
after October 13, 1995, and before January 1, 1999.
(B) Q
UALIFIED INTEREST .ÐFor purposes of subpara-

graph (A), the qualified interest with respect to any indebt-edness for any month is the amount of interest (otherwisedeductible) which would be paid or accrued for such monthon such indebtedness ifÐ
(i) in the case of any interest paid or accrued
after December 31, 1995, indebtedness with respectto no more than 20,000 insured individuals were takeninto account, and26 USC 264 note.

110 STAT. 2092 PUBLIC LAW 104±191ÐAUG. 21, 1996
(ii) the lesser of the following rates of interest
were used for such month:
(I) The rate of interest specified under the
terms of the indebtedness as in effect on October13, 1995 (and without regard to modification ofsuch terms after such date).
(II) The applicable percentage of the rate of

interest described as Moody's Corporate BondYield Average-Monthly Average Corporates as pub-lished by Moody's Investors Service, Inc., or anysuccessor thereto, for such month.

For purposes of clause (i), all persons treated as a singleemployer under subsection (a) or (b) of section 52 of theInternal Revenue Code of 1986 or subsection (m) or (o)of section 414 of such Code shall be treated as 1 person.Subclause (II) of clause (ii) shall not apply to any monthbefore January 1, 1996.
(C) A
PPLICABLE PERCENTAGE .ÐFor purposes of sub-
paragraph (B), the applicable percentage is as follows:
For calendar year: The percentage is:

1996 .......................................................................................... 100 percent1997 .......................................................................................... 90 percent1998 .......................................................................................... 80 percent.
(3) S PECIAL RULE FOR GRANDFATHERED CONTRACTS .ÐThis

section shall not apply to any contract purchased on or beforeJune 20, 1986, except that section 264(d)(2) of the InternalRevenue Code of 1986 shall apply to interest paid or accruedafter October 13, 1995.(d) S
PREAD OF INCOME INCLUSION ON SURRENDER , E TC. OF
(1) I N GENERAL .ÐIf any amount is received under any
life insurance policy or endowment or annuity contractdescribed in paragraph (4) of section 264(a) of the InternalRevenue Code of 1986Ð

(A) on the complete surrender, redemption, or maturity
of such policy or contract during calendar year 1996, 1997,or 1998, or
(B) in full discharge during any such calendar year
of the obligation under the policy or contract which isin the nature of a refund of the consideration paid forthe policy or contract,

then (in lieu of any other inclusion in gross income) suchamount shall be includible in gross income ratably over the4-taxable year period beginning with the taxable year suchamount would (but for this paragraph) be includible. Thepreceding sentence shall only apply to the extent the amount
is includible in gross income for the taxable year in whichthe event described in subparagraph (A) or (B) occurs.
(2) S
PECIAL RULES FOR APPLYING SECTION 264 .ÐA contract
shall not be treated asÐ

(A) failing to meet the requirement of section 264(c)(1)
of the Internal Revenue Code of 1986, or
(B) a single premium contract under section 264(b)(1)
of such Code,
solely by reason of an occurrence described in subparagraph(A) or (B) of paragraph (1) of this subsection or solely by26 USC 264 note.

110 STAT. 2093 PUBLIC LAW 104±191ÐAUG. 21, 1996
reason of no additional premiums being received under the
contract by reason of a lapse occurring after October 13, 1995.
(3) S PECIAL RULE FOR DEFERRED ACQUISITION COSTS .ÐIn
the case of the occurrence of any event described in subpara-graph (A) or (B) of paragraph (1) of this subsection with respectto any policy or contractÐ
(A) section 848 of the Internal Revenue Code of 1986

shall not apply to the unamortized balance (if any) ofthe specified policy acquisition expenses attributable tosuch policy or contract immediately before the insurancecompany's taxable year in which such event occurs, and
(B) there shall be allowed as a deduction to such com-
pany for such taxable year under chapter 1 of such Codean amount equal to such unamortized balance.
Subtitle BÐTreatment of Individuals Who
Lose United States Citizenship

SEC. 511. REVISION OF INCOME, ESTATE, AND GIFT TAXES ON
INDIVIDUALS WHO LOSE UNITED STATES CITIZENSHIP.
(a) I NGENERAL .ÐSubsection (a) of section 877 is amended
``(a) T REATMENT OF EXPATRIATES .Ð
``(1) I N GENERAL .ÐEvery nonresident alien individual who,

within the 10-year period immediately preceding the close ofthe taxable year, lost United States citizenship, unless suchloss did not have for one of its principal purposes the avoidanceof taxes under this subtitle or subtitle B, shall be taxablefor such taxable year in the manner provided in subsection(b) if the tax imposed pursuant to such subsection exceedsthe tax which, without regard to this section, is imposed pursu-ant to section 871.
``(2) C

``(2) C
ERTAIN INDIVIDUALS TREATED AS HAVING TAX AVOID -
ANCE PURPOSE .ÐFor purposes of paragraph (1), an individual
shall be treated as having a principal purpose to avoid suchtaxes ifÐ
``(A) the average annual net income tax (as defined
in section 38(c)(1)) of such individual for the period of5 taxable years ending before the date of the loss of UnitedStates citizenship is greater than $100,000, or
``(B) the net worth of the individual as of such date
is $500,000 or more.

In the case of the loss of United States citizenship in anycalendar year after 1996, such $100,000 and $500,000 amountsshall be increased by an amount equal to such dollar amountmultiplied by the cost-of-living adjustment determined undersection 1(f)(3) for such calendar year by substituting `1994'for `1992' in subparagraph (B) thereof. Any increase underthe preceding sentence shall be rounded to the nearest multiple
of $1,000.''.(b) E

(1) I N GENERAL .ÐSection 877 is amended by striking sub-
section (d), by redesignating subsection (c) as subsection (d),and by inserting after subsection (b) the following new sub-section:``(c) T
AXAVOIDANCE NOTPRESUMED IN CERTAIN CASES .Ð

110 STAT. 2094 PUBLIC LAW 104±191ÐAUG. 21, 1996
``(1) I N GENERAL .ÐSubsection (a)(2) shall not apply to an
individual ifÐ
``(A) such individual is described in a subparagraph
of paragraph (2) of this subsection, and
``(B) within the 1-year period beginning on the date

of the loss of United States citizenship, such individualsubmits a ruling request for the Secretary's determinationas to whether such loss has for one of its principal purposesthe avoidance of taxes under this subtitle or subtitle B.``(2) I
NDIVIDUALS DESCRIBED .Ð
``(A) D UAL CITIZENSHIP , ETC.ÐAn individual is
described in this subparagraph ifÐ
``(i) the individual became at birth a citizen

of the United States and a citizen of another countryand continues to be a citizen of such other country,or
``(ii) the individual becomes (not later than the
close of a reasonable period after loss of United Statescitizenship) a citizen of the country in whichÐ
``(I) such individual was born,``(II) if such individual is married, such indi-
vidual's spouse was born, or
``(III) either of such individual's parents were
born.
``(B) L

born.
``(B) L
ONG-TERM FOREIGN RESIDENTS .ÐAn individual
is described in this subparagraph if, for each year in the10-year period ending on the date of loss of United Statescitizenship, the individual was present in the United Statesfor 30 days or less. The rule of section 7701(b)(3)(D)(ii)shall apply for purposes of this subparagraph.
``(C) R
ENUNCIATION UPON REACHING AGE OF MAJOR -
ITY.ÐAn individual is described in this subparagraph if

the individual's loss of United States citizenship occursbefore such individual attains age 18
1¤2.
``(D) I NDIVIDUALS SPECIFIED IN REGULATIONS .ÐAn
individual is described in this subparagraph if the indi-vidual is described in a category of individuals prescribedby regulation by the Secretary.''.(2) T
ECHNICAL AMENDMENT .ÐParagraph (1) of section
877(b) of such Code is amended by striking ``subsection (c)''and inserting ``subsection (d)''.(c) T

REATMENT OF PROPERTY DISPOSED OF IN NONRECOGNITION
TRANSACTIONS ; TREATMENT OF DISTRIBUTIONS FROM CERTAIN CON-
TROLLED FOREIGN CORPORATIONS .ÐSubsection (d) of section 877,
as redesignated by subsection (b), is amended to read as follows:
``(d) S PECIAL RULES FOR SOURCE , ETC.ÐFor purposes of sub-
section (b)Ð
``(1) S OURCE RULES .ÐThe following items of gross income
shall be treated as income from sources within the UnitedStates:
``(A) S
ALE OF PROPERTY .ÐGains on the sale or exchange

of property (other than stock or debt obligations) locatedin the United States.
``(B) S
TOCK OR DEBT OBLIGATIONS .ÐGains on the sale
or exchange of stock issued by a domestic corporation ordebt obligations of United States persons or of the United

110 STAT. 2095 PUBLIC LAW 104±191ÐAUG. 21, 1996
States, a State or political subdivision thereof, or the Dis-
trict of Columbia.
``(C) I NCOME OR GAIN DERIVED FROM CONTROLLED
FOREIGN CORPORATION .ÐAny income or gain derived from
stock in a foreign corporation but onlyÐ
``(i) if the individual losing United States citizen-

ship owned (within the meaning of section 958(a)),or is considered as owning (by applying the ownershiprules of section 958(b)), at any time during the 2-year period ending on the date of the loss of UnitedStates citizenship, more than 50 percent ofÐ
``(I) the total combined voting power of all
classes of stock entitled to vote of such corpora-tion, or
``(II) the total value of the stock of such cor-
poration, and``(ii) to the extent such income or gain does not

exceed the earnings and profits attributable to suchstock which were earned or accumulated before theloss of citizenship and during periods that the owner-ship requirements of clause (i) are met.
``(2) G
AIN RECOGNITION ON CERTAIN EXCHANGES .Ð
``(A) I N GENERAL .ÐIn the case of any exchange of prop-

erty to which this paragraph applies, notwithstanding anyother provision of this title, such property shall be treatedas sold for its fair market value on the date of suchexchange, and any gain shall be recognized for the taxableyear which includes such date.
``(B) E
XCHANGES TO WHICH PARAGRAPH APPLIES .ÐThis
paragraph shall apply to any exchange during the 10-year period described in subsection (a) ifÐ
``(i) gain would not (but for this paragraph) be

recognized on such exchange in whole or in part forpurposes of this subtitle,
``(ii) income derived from such property was from
sources within the United States (or, if no incomewas so derived, would have been from such sources),and
``(iii) income derived from the property acquired
in the exchange would be from sources outside theUnited States.``(C) E
XCEPTION .ÐSubparagraph (A) shall not apply

if the individual enters into an agreement with the Sec-retary which specifies that any income or gain derivedfrom the property acquired in the exchange (or any otherproperty which has a basis determined in whole or part

by reference to such property) during such 10-year periodshall be treated as from sources within the United States.If the property transferred in the exchange is disposedof by the person acquiring such property, such agreementshall terminate and any gain which was not recognizedby reason of such agreement shall be recognized as ofthe date of such disposition.
``(D) S
ECRETARY MAY EXTEND PERIOD .ÐTo the extent

provided in regulations prescribed by the Secretary,subparagraph (B) shall be applied by substituting the 15-

110 STAT. 2096 PUBLIC LAW 104±191ÐAUG. 21, 1996
year period beginning 5 years before the loss of United
States citizenship for the 10-year period referred to therein.
``(E) S ECRETARY MAY REQUIRE RECOGNITION OF GAIN
IN CERTAIN CASES .ÐTo the extent provided in regulations
prescribed by the SecretaryÐ
``(i) the removal of appreciated tangible personal
property from the United States, and
``(ii) any other occurrence which (without recogni-

tion of gain) results in a change in the source of theincome or gain from property from sources within theUnited States to sources outside the United States,
shall be treated as an exchange to which this paragraphapplies.``(3) S
UBSTANTIAL DIMINISHING OF RISKS OF OWNERSHIP .Ð

For purposes of determining whether this section applies toany gain on the sale or exchange of any property, the runningof the 10-year period described in subsection (a) shall besuspended for any period during which the individual's riskof loss with respect to the property is substantially diminishedbyÐ
``(A) the holding of a put with respect to such property
(or similar property),
``(B) the holding by another person of a right to acquire

the property, or
``(C) a short sale or any other transaction.
``(4) T
REATMENT OF PROPERTY CONTRIBUTED TO CONTROLLED
FOREIGN CORPORATIONS .Ð
``(i) an individual losing United States citizenship
contributes property to any corporation which, at thetime of the contribution, is described in subparagraph(B), and
sources within the United States (or, if no incomewas so derived, would have been from such sources),

during the 10-year period referred to in subsection (a),any income or gain on such property (or any other propertywhich has a basis determined in whole or part by referenceto such property) received or accrued by the corporationshall be treated as received or accrued directly by suchindividual and not by such corporation. The preceding sen-tence shall not apply to the extent the property has beentreated under subparagraph (C) as having been sold bysuch corporation.
``(B) C

``(B) C
ORPORATION DESCRIBED .ÐA corporation is
described in this subparagraph with respect to an individ-ual if, were such individual a United States citizenÐ
``(i) such corporation would be a controlled foreign
corporation (as defined in 957), and
``(ii) such individual would be a United States
shareholder (as defined in section 951(b)) with respectto such corporation.``(C) D
ISPOSITION OF STOCK IN CORPORATION .ÐIf stock

in the corporation referred to in subparagraph (A) (or anyother stock which has a basis determined in whole orpart by reference to such stock) is disposed of during the10-year period referred to in subsection (a) and while the

110 STAT. 2097 PUBLIC LAW 104±191ÐAUG. 21, 1996
property referred to in subparagraph (A) is held by such
corporation, a pro rata share of such property (determinedon the basis of the value of such stock) shall be treatedas sold by the corporation immediately before such disposi-tion.
``(D) A
NTI-ABUSE RULES .ÐThe Secretary shall prescribe
such regulations as may be necessary to prevent the avoid-ance of the purposes of this paragraph, including whereÐ

``(i) the property is sold to the corporation, and``(ii) the property taken into account under
subparagraph (A) is sold by the corporation.``(E) I
NFORMATION REPORTING .ÐThe Secretary shall
require such information reporting as is necessary to carryout the purposes of this paragraph.''.
(d) C
REDIT FOR FOREIGN TAXES IMPOSED ON UNITED STATES
SOURCE INCOME .Ð
(1) Subsection (b) of section 877 is amended by adding

at the end the following new sentence: ``The tax imposed solelyby reason of this section shall be reduced (but not below zero)by the amount of any income, war profits, and excess profitstaxes (within the meaning of section 903) paid to any foreigncountry or possession of the United States on any incomeof the taxpayer on which tax is imposed solely by reason ofthis section.''
(2) Subsection (a) of section 877, as amended by subsection

(a), is amended by inserting ``(after any reduction in suchtax under the last sentence of such subsection)'' after ``suchsubsection''.(e) C
OMPARABLE ESTATE AND GIFTTAXTREATMENT .Ð
(1) E STATE TAX .Ð
(A) I N GENERAL .ÐSubsection (a) of section 2107 is
amended to read as follows:
``(1) R ATE OF TAX .ÐA tax computed in accordance with

the table contained in section 2001 is hereby imposed on thetransfer of the taxable estate, determined as provided in section2106, of every decedent nonresident not a citizen of the UnitedStates if, within the 10-year period ending with the date ofdeath, such decedent lost United States citizenship, unlesssuch loss did not have for one of its principal purposes theavoidance of taxes under this subtitle or subtitle A.
``(2) C
ERTAIN INDIVIDUALS TREATED AS HAVING TAX
AVOIDANCE PURPOSE .Ð

``(A) I N GENERAL .ÐFor purposes of paragraph (1), an
individual shall be treated as having a principal purposeto avoid such taxes if such individual is so treated undersection 877(a)(2).
``(B) E
to a decedent meeting the requirements of section877(c)(1).''.
(B) C
REDIT FOR FOREIGN DEATH TAXES .ÐSubsection (c)

of section 2107 is amended by redesignating paragraph(2) as paragraph (3) and by inserting after paragraph (1)the following new paragraph:``(2) C
REDIT FOR FOREIGN DEATH TAXES .Ð
``(A) I N GENERAL .ÐThe tax imposed by subsection (a)
shall be credited with the amount of any estate, inherit-

110 STAT. 2098 PUBLIC LAW 104±191ÐAUG. 21, 1996
ance, legacy, or succession taxes actually paid to any foreign
country in respect of any property which is included inthe gross estate solely by reason of subsection (b).
``(B) L
IMITATION ON CREDIT .ÐThe credit allowed by
subparagraph (A) for such taxes paid to a foreign countryshall not exceed the lesser ofÐ
``(i) the amount which bears the same ratio to

the amount of such taxes actually paid to such foreigncountry in respect of property included in the grossestate as the value of the property included in thegross estate solely by reason of subsection (b) bearsto the value of all property subjected to such taxesby such foreign country, or
``(ii) such property's proportionate share of the
excess ofÐ
``(I) the tax imposed by subsection (a), over``(II) the tax which would be imposed by section

2101 but for this section.
``(C) P
ROPORTIONATE SHARE .ÐFor purposes of subpara-
graph (B), a property's proportionate share is the percent-age of the value of the property which is included in thegross estate solely by reason of subsection (b) bears tothe total value of the gross estate.''.
(C) E
XPANSION OF INCLUSION IN GROSS ESTATE OF
STOCK OF FOREIGN CORPORATIONS .ÐParagraph (2) of section

2107(b) is amended by striking ``more than 50 per-cent of'' and all that follows and inserting ``more than50 percent ofÐ
``(A) the total combined voting power of all classes
of stock entitled to vote of such corporation, or
``(B) the total value of the stock of such corporation,''.
(2) G
IFT TAX .Ð
(A) I N GENERAL .ÐParagraph (3) of section 2501(a) is
amended to read as follows:``(3) E
XCEPTION .Ð
``(A) C ERTAIN INDIVIDUALS .ÐParagraph (2) shall not

apply in the case of a donor who, within the 10-year periodending with the date of transfer, lost United States citizen-ship, unless such loss did not have for one of its principalpurposes the avoidance of taxes under this subtitle or sub-title A.
``(B) C
AVOIDANCE PURPOSE .ÐFor purposes of subparagraph (A),
an individual shall be treated as having a principal purposeto avoid such taxes if such individual is so treated undersection 877(a)(2).
``(C) E

``(C) E
XCEPTION FOR CERTAIN INDIVIDUALS .ÐSubpara-
graph (B) shall not apply to a decedent meeting the require-ments of section 877(c)(1).
``(D) C
REDIT FOR FOREIGN GIFT TAXES .ÐThe tax
imposed by this section solely by reason of this paragraphshall be credited with the amount of any gift tax actuallypaid to any foreign country in respect of any gift whichis taxable under this section solely by reason of this para-graph.''.
(f) C
OMPARABLE TREATMENT OF LAWFUL PERMANENT RESIDENTS

WHOCEASE TOBETAXED AS RESIDENTS .Ð

110 STAT. 2099 PUBLIC LAW 104±191ÐAUG. 21, 1996
(1) I N GENERAL .ÐSection 877 is amended by redesignating
subsection (e) as subsection (f) and by inserting after subsection(d) the following new subsection:``(e) C
OMPARABLE TREATMENT OF LAWFUL PERMANENT RESI-
DENTS WHOCEASE TOBETAXED AS RESIDENTS .Ð
``(1) I N GENERAL .ÐAny long-term resident of the United
States whoÐ
``(A) ceases to be a lawful permanent resident of
the United States (within the meaning of section7701(b)(6)), or

``(B) commences to be treated as a resident of a foreign
country under the provisions of a tax treaty between theUnited States and the foreign country and who does notwaive the benefits of such treaty applicable to residentsof the foreign country,
shall be treated for purposes of this section and sections 2107,2501, and 6039F in the same manner as if such resident werea citizen of the United States who lost United States citizenshipon the date of such cessation or commencement.
``(2) L

the term `long-term resident' means any individual (other thana citizen of the United States) who is a lawful permanentresident of the United States in at least 8 taxable years duringthe period of 15 taxable years ending with the taxable yearduring which the event described in subparagraph (A) or (B)of paragraph (1) occurs. For purposes of the preceding sentence,an individual shall not be treated as a lawful permanent resi-dent for any taxable year if such individual is treated as aresident of

if such individual is treated as aresident of a foreign country for the taxable year under theprovisions of a tax treaty between the United States and theforeign country and does not waive the benefits of such treatyapplicable to residents of the foreign country.

``(3) S
``(A) E XCEPTIONS NOT TO APPLY .ÐSubsection (c) shall
not apply to an individual who is treated as providedin paragraph (1).
``(B) S
TEP-UP IN BASIS .ÐSolely for purposes of deter-

mining any tax imposed by reason of this subsection, prop-erty which was held by the long-term resident on thedate the individual first became a resident of the UnitedStates shall be treated as having a basis on such dateof not less than the fair market value of such propertyon such date. The preceding sentence shall not apply ifthe individual elects not to have such sentence apply. Suchan election, once made, shall be irrevocable.``(4) A

UTHORITY TO EXEMPT INDIVIDUALS .ÐThis subsection
shall not apply to an individual who is described in a categoryof individuals prescribed by regulation by the Secretary.
``(5) R
EGULATIONS .ÐThe Secretary shall prescribe such

regulations as may be appropriate to carry out this subsection,including regulations providing for the application of this sub-section in cases where an alien individual becomes a residentof the United States during the 10-year period after beingtreated as provided in paragraph (1).''.
(2) C
(A) Section 2107 is amended by striking subsection
(d), by redesignating subsection (e) as subsection (d), and

110 STAT. 2100 PUBLIC LAW 104±191ÐAUG. 21, 1996
by inserting after subsection (d) (as so redesignated) the
following new subsection:
``(e) C ROSS REFERENCE .Ð
``For comparable treatment of long-term lawful permanent residents who
ceased to be taxed as residents, see section 877(e).''.
(B) Paragraph (3) of section 2501(a) (as amended by
subsection (e)) is amended by adding at the end the follow-ing new subparagraph:
``(E) C

``(E) C
(g) E FFECTIVE DATE.Ð
shall apply toÐ
(A) individuals losing United States citizenship (within
the meaning of section 877 of the Internal Revenue Codeof 1986) on or after February 6, 1995, and
(B) long-term residents of the United States with

respect to whom an event described in subparagraph (A)or (B) of section 877(e)(1) of such Code occurs on or afterFebruary 6, 1995.(2) R
ULING REQUESTS .ÐIn no event shall the 1-year period
referred to in section 877(c)(1)(B) of such Code, as amendedby this section, expire before the date which is 90 days afterthe date of the enactment of this Act.
(3) S
PECIAL RULE .Ð
(A) I N GENERAL .ÐIn the case of an individual who

performed an act of expatriation specified in paragraph(1), (2), (3), or (4) of section 349(a) of the Immigrationand Nationality Act (8 U.S.C. 1481(a)(1)±(4)) before Feb-ruary 6, 1995, but who did not, on or before such date,furnish to the United States Department of State a signedstatement of voluntary relinquishment of United Statesnationality confirming the performance of such act, theamendments made by this section and section 512 shallapply to such individual except that the 10-year

to such individual except that the 10-year perioddescribed in section 877(a) of such Code shall not expirebefore the end of the 10-year period beginning on thedate such statement is so furnished.

(B) E
XCEPTION .ÐSubparagraph (A) shall not apply if
the individual establishes to the satisfaction of the Sec-retary of the Treasury that such loss of United Statescitizenship occurred before February 6, 1994.
SEC. 512. INFORMATION ON INDIVIDUALS LOSING UNITED STATES
CITIZENSHIP.
(a) I NGENERAL .ÐSubpart A of part III of subchapter A of
chapter 61 is amended by inserting after section 6039E the followingnew section:
``SEC. 6039F. INFORMATION ON INDIVIDUALS LOSING UNITED STATES

``(a) I NGENERAL .ÐNotwithstanding any other provision of law,
any individual who loses United States citizenship (withinthe meaning of section 877(a)) shall provide a statement which26 USC 877 note.

110 STAT. 2101 PUBLIC LAW 104±191ÐAUG. 21, 1996
includes the information described in subsection (b). Such statement
shall beÐ
``(1) provided not later than the earliest date of any act
referred to in subsection (c), and
``(2) provided to the person or court referred to in subsection
(c) with respect to such act.``(b) I
NFORMATION TOBEPROVIDED .ÐInformation required
under subsection (a) shall includeÐ
``(1) the taxpayer's TIN,``(2) the mailing address of such individual's principal for-

eign residence,
``(3) the foreign country in which such individual is residing,``(4) the foreign country of which such individual is a citizen,``(5) in the case of an individual having a net worth of
at least the dollar amount applicable under section 877(a)(2)(B),information detailing the assets and liabilities of such individ-ual, and
``(6) such other information as the Secretary may prescribe.
``(c) A
CTS DESCRIBED .ÐFor purposes of this section, the acts
referred to in this subsection areÐ

``(1) the individual's renunciation of his United States
nationality before a diplomatic or consular officer of the UnitedStates pursuant to paragraph (5) of section 349(a) of theImmigration and Nationality Act (8 U.S.C. 1481(a)(5)),
``(2) the individual's furnishing to the United States Depart-

ment of State a signed statement of voluntary relinquishmentof United States nationality confirming the performance ofan act of expatriation specified in paragraph (1), (2), (3), or(4) of section 349(a) of the Immigration and Nationality Act(8 U.S.C. 1481(a)(1)±(4)),
``(3) the issuance by the United States Department of State
of a certificate of loss of nationality to the individual, or
``(4) the cancellation by a court of the United States of

a naturalized citizen's certificate of naturalization.``(d) P
ENALTY .ÐAny individual failing to provide a statement
required under subsection (a) shall be subject to a penalty foreach year (of the 10-year period beginning on the date of lossof United States citizenship) during any portion of which suchfailure continues in an amount equal to the greater ofÐ
``(1) 5 percent of the tax required to be paid under section
877 for the taxable year ending during such year, or
``(2) $1,000,

unless it is shown that such failure is due to reasonable causeand not to willful neglect.
``(e) I
NFORMATION TOBEPROVIDED TO SECRETARY .ÐNotwith-
standing any other provision of lawÐ
``(1) any Federal agency or court which collects (or is
required to collect) the statement under subsection (a) shallprovide to the SecretaryÐ
``(A) a copy of any such statement, and``(B) the name (and any other identifying information)

of any individual refusing to comply with the provisionsof subsection (a),``(2) the Secretary of State shall provide to the Secretary
a copy of each certificate as to the loss of American nationalityunder section 358 of the Immigration and Nationality Act whichis approved by the Secretary of State, and

110 STAT. 2102 PUBLIC LAW 104±191ÐAUG. 21, 1996
``(3) the Federal agency primarily responsible for admin-
istering the immigration laws shall provide to the Secretarythe name of each lawful permanent resident of the UnitedStates (within the meaning of section 7701(b)(6)) whose statusas such has been revoked or has been administratively orjudicially determined to have been abandoned.

Notwithstanding any other provision of law, not later than 30days after the close of each calendar quarter, the Secretary shallpublish in the Federal Register the name of each individual losingUnited States citizenship (within the meaning of section 877(a))with respect to whom the Secretary receives information underthe preceding sentence during such quarter.
``(f) R
EPORTING BY LONG-TERM LAWFUL PERMANENT RESIDENTS
WHOCEASE TOBETAXED AS RESIDENTS .ÐIn lieu of applying the

last sentence of subsection (a), any individual who is requiredto provide a statement under this section by reason of section877(e)(1) shall provide such statement with the return of taximposed by chapter 1 for the taxable year during which the eventdescribed in such section occurs.
``(g) E
XEMPTION .ÐThe Secretary may by regulations exempt

any class of individuals from the requirements of this section ifhe determines that applying this section to such individuals isnot necessary to carry out the purposes of this section.''.
(b) C
LERICAL AMENDMENT .ÐThe table of sections for such sub-
part A is amended by inserting after the item relating to section6039E the following new item:
``Sec. 6039F. Information on individuals losing United States citizenship.''.

(1) individuals losing United States citizenship (within the
meaning of section 877 of the Internal Revenue Code of 1986)on or after February 6, 1995, and
(2) long-term residents of the United States with respect
to whom an event described in subparagraph (A) or (B) ofsection 877(e)(1) of such Code occurs on or after such date.
In no event shall any statement required by such amendmentsbe due before the 90th day after the date of the enactment ofthis Act.

SEC. 513. REPORT ON TAX COMPLIANCE BY UNITED STATES CITIZENS
AND RESIDENTS LIVING ABROAD.
Not later than 90 days after the date of the enactment of
this Act, the Secretary of the Treasury shall prepare and submitto the Committee on Ways and Means of the House of Representa-tives and the Committee on Finance of the Senate a reportÐ
(1) describing the compliance with subtitle A of the Internal

Revenue Code of 1986 by citizens and lawful permanent resi-dents of the United States (within the meaning of section7701(b)(6) of such Code) residing outside the United States,and
(2) recommending measures to improve such compliance
(including improved coordination between executive branchagencies).26 USC 6039F
note.

110 STAT. 2103 PUBLIC LAW 104±191ÐAUG. 21, 1996
LEGISLATIVE HISTORYÐH.R. 3103 (S. 1028) (S. 1698):
HOUSE REPORTS: Nos. 104±496, Pt. 1 (Comm. on Ways and Means) and 104±736
(Comm. of Conference).
SENATE REPORTS: No. 104±156 accompanying S. 1028 (Comm. on Labor and
Human Resources).
CONGRESSIONAL RECORD, Vol. 142 (1996):

Mar. 28, considered and passed House.Apr. 18, 23, considered and passed Senate, amended, in lieu of S. 1028.Aug. 1, House agreed to conference report.Aug. 2, Senate agreed to conference report.
WEEKLY COMPILATION OF PRESIDENTIAL DOCUMENTS, Vol. 32 (1996):
Aug. 21, Presidential remarks and statement.
ﬁSubtitle CÐRepeal of Financial Institution
Transition Rule to Interest AllocationRules
SEC. 521. REPEAL OF FINANCIAL INSTITUTION TRANSITION RULE TO

INTEREST ALLOCATION RULES.
(a) I NGENERAL .ÐParagraph (5) of section 1215(c) of the Tax
Reform Act of 1986 (Public Law 99±514, 100 Stat. 2548) is herebyrepealed.
(b) E
shall apply to taxable years beginning after December 31, 1995.
(2) S PECIAL RULE .ÐIn the case of the first taxable year

beginning after December 31, 1995, the pre-effective date por-tion of the interest expense of the corporation referred to insuch paragraph (5) of such section 1215(c) for such taxableyear shall be allocated and apportioned without regard to suchamendment. For purposes of the preceding sentence, the pre-effective date portion is the amount which bears the sameratio to the interest expense for such taxable year as thenumber of days during such taxable year before the date ofthe enactment of this