Healthy America Act of 2005 - Patients First Act of 2005 - Sets forth provisions governing health care lawsuits, including provisions establishing a statute of limitations and limiting recovery of non-economic damages and punitive damages.
Amends the Public Health Service Act to establish an Office of the National Coordinator of Health Information Technology to develop a nationwide interoperable health information technology infrastructure. Requires the Secretary of Health and Human Services to: (1) establish the public-private American Health Information Collaborative; and (2) facilitate the electronic exchange of health information.
Amends title XVIII (Medicare) of the Social Security Act to require the Secretary to: (1) develop quality measurement systems to provide value-based payments to providers; (2) establish a value-based purchasing pilot program; and (3) authorize waivers for states to establish such programs for state Medicaid programs.
Patient Safety and Quality Improvement Act of 2005 - Requires the Secretary to maintain a patient safety network of databases to accept, aggregate, and analyze non-identifiable patient safety data voluntarily reported by patient safety organizations.
Amends the Internal Revenue Code to allow: (1) an advanceable credit for health insurance; (2) a deduction for premiums under a high deductible health plan; and (3) a credit for a small employer's contribution to an employee's health savings account.
Reauthorizes grants to states to create and operate high risk health insurance pools.
Covering Kids Act of 2005 - Amends Title XXI (State Children's Health Insurance) (SCHIP) of the Social Security Act to provide awards for innovative outreach and enrollment efforts.
Allows the Secretary to make grants for qualified integrated health care systems that provide care to medically underserved populations. Provides coverage under Medicare and Medicaid for integrated health center services.
Allows a forbearance on student loans for volunteering at a free clinic.
[Congressional Bills 109th Congress]
[From the U.S. Government Publishing Office]
[S. 4 Introduced in Senate (IS)]
109th CONGRESS
1st Session
S. 4
To reduce healthcare costs, expand access to affordable healthcare
coverage, and improve healthcare and strengthen the healthcare safety
net, and for other purposes.
_______________________________________________________________________
IN THE SENATE OF THE UNITED STATES
July 27, 2005
Mr. Frist (for himself, Mr. McConnell, Mr. Gregg, Mr. Enzi, Ms.
Murkowski, Mr. DeMint, Mr. Coburn, and Mr. Cornyn) introduced the
following bill; which was read twice and referred to the Committee on
Finance
_______________________________________________________________________
A BILL
To reduce healthcare costs, expand access to affordable healthcare
coverage, and improve healthcare and strengthen the healthcare safety
net, and for other purposes.
Be it enacted by the Senate and House of Representatives of the
United States of America in Congress assembled,
SECTION 1. SHORT TITLE; TABLE OF CONTENTS.
(a) Short Title.--This Act may be cited as the ``Healthy America
Act of 2005''.
(b) Table of Contents.--The table of contents of this Act is as
follows:
Sec. 1. Short title; table of contents.
Sec. 2. Findings.
TITLE I--MAKING HEALTH CARE MORE AFFORDABLE
Subtitle A--Medical Liability Reform
Sec. 101. Short title.
Sec. 102. Findings and purpose.
Sec. 103. Encouraging speedy resolution of claims.
Sec. 104. Compensating patient injury.
Sec. 105. Maximizing patient recovery.
Sec. 106. Additional health benefits.
Sec. 107. Punitive damages.
Sec. 108. Authorization of payment of future damages to claimants in
health care lawsuits.
Sec. 109. Definitions.
Sec. 110. Effect on other laws.
Sec. 111. State flexibility and protection of States rights.
Sec. 112. Applicability; effective date.
Subtitle B--Health Information Technology
Chapter 1--General Provisions
Sec. 121. Improving health care, quality, safety, and efficiency.
Sec. 122. HIPAA report.
Sec. 123. Study of reimbursement incentives.
Sec. 124. Reauthorization of incentive grants regarding telemedicine.
Sec. 125. Sense of the Senate on physician payment.
Sec. 126. Establishment of quality measurement systems for medicare
value-based purchasing programs.
Sec. 127. Exception to Federal anti-kickback and physician self
referral laws for the provision of
permitted support.
Chapter 2--Value Based Purchasing
Sec. 131. Value based purchasing programs.
Subtitle C--Patient Safety and Quality Improvement
Sec. 141. Short title.
Sec. 142. Findings and purposes.
Sec. 143. Amendments to Public Health Service Act.
Sec. 144. Studies and reports.
Subtitle D--Fraud and Abuse
Sec. 151. National expansion of the medicare-medicaid data match pilot
program.
Subtitle E--Miscellaneous Provisions
Sec. 161. Sense of the Senate on establishing a mandated benefits
commission.
Sec. 162. Enforcement of reimbursement provisions by fiduciaries.
TITLE II--EXPANDING ACCESS TO AFFORDABLE HEALTH COVERAGE THROUGH TAX
INCENTIVES AND OTHER INITIATIVES
Subtitle A--Refundable Health Insurance Credit
Sec. 201. Refundable health insurance costs credit.
Sec. 202. Advance payment of credit to issuers of qualified health
insurance.
Subtitle B--High Deductible Health Plans and Health Savings Accounts
Sec. 211. Deduction of premiums for high deductible health plans.
Sec. 212. Refundable credit for contributions to health savings
accounts of small business employees.
Subtitle C--Improvement of the Health Coverage Tax Credit
Sec. 221. Change in State-based coverage rules related to preexisting
conditions.
Sec. 222. Eligibility of spouse of certain individuals entitled to
medicare.
Sec. 223. Eligible PBGC pension recipient.
Sec. 224. Application of option to offer State-based coverage to Puerto
Rico, Northern Mariana Islands, American
Samoa, Guam, and the United States Virgin
Islands.
Sec. 225. Clarification of disclosure rules.
Sec. 226. Clarification that State-based COBRA continuation coverage is
subject to same rules as Federal COBRA.
Sec. 227. Application of rules for other specified coverage to eligible
alternative taa recipients consistent with
rules for other eligible individuals.
Subtitle D--Long-Term Care Insurance
Sec. 231. Sense of the Senate concerning long-term care.
Subtitle E--Other Provisions
Sec. 241. Disposition of unused health benefits in cafeteria plans and
flexible spending arrangements.
Sec. 242. Microentrepreneurs.
Sec. 243. Study on access to affordable health insurance for full-time
college and university students.
Sec. 244. Extension of funding for operation of State high risk health
insurance pools.
Sec. 245. Sense of the senate on affordable health coverage for small
employers.
Subtitle F--Covering Kids
Sec. 251. Short title.
Sec. 252. Grants to promote innovative outreach and enrollment under
medicaid and SCHIP.
Sec. 253. State option to provide for simplified determinations of a
child's financial eligibility for medical
assistance under medicaid or child health
assistance under SCHIP.
TITLE III--IMPROVING CARE AND STRENGTHENING THE SAFETY NET
Subtitle A--High Needs Areas
Sec. 301. Purpose.
Sec. 302. High need community health centers.
Sec. 303. Grant application process.
Subtitle B--Qualified Integrated Health Care Systems
Sec. 321. Grants to qualified integrated health care systems.
Subtitle C--Miscellaneous Provisions
Sec. 331. Community health center collaborative access expansion.
Sec. 332. Improvements to section 340B program.
Sec. 333. Forbearance for student loans for physicians providing
services in free clinics.
Sec. 334. Amendments to the Public Health Service Act relating to
liability.
Sec. 335. Sense of the Senate concerning health disparities.
SEC. 2. FINDINGS.
Congress makes the following findings:
(1) Health care costs are growing rapidly, putting health
insurance and needed care out of reach for too many Americans.
(2) Rapidly growing health care costs pose a threat to the
United States economy, as they make American businesses less
competitive and make it more difficult to create new jobs.
(3) Growing health care costs are compromising the
stability of health care safety net and entitlement programs.
(4) There are a series of steps Congress can and should
take to slow the growth of health care costs, expand access to
health coverage, and improve access to quality health care for
millions of Americans.
TITLE I--MAKING HEALTH CARE MORE AFFORDABLE
Subtitle A--Medical Liability Reform
SEC. 101. SHORT TITLE.
This subtitle may be cited as the ``Patients First Act of 2005''.
SEC. 102. FINDINGS AND PURPOSE.
(a) Findings.--
(1) Effect on health care access and costs.--Congress finds
that our current civil justice system is adversely affecting
patient access to health care services, better patient care,
and cost-efficient health care, in that the current health care
liability system is a costly and ineffective mechanism for
resolving claims of health care liability and compensating
injured patients, and is a deterrent to the sharing of
information among health care professionals which impedes
efforts to improve patient safety and quality of care.
(2) Effect on interstate commerce.--Congress finds that the
health care and insurance industries are industries affecting
interstate commerce and the health care liability litigation
systems existing throughout the United States are activities
that affect interstate commerce by contributing to the high
costs of health care and premiums for health care liability
insurance purchased by health care system providers.
(3) Effect on federal spending.--Congress finds that the
health care liability litigation systems existing throughout
the United States have a significant effect on the amount,
distribution, and use of Federal funds because of--
(A) the large number of individuals who receive
health care benefits under programs operated or
financed by the Federal Government;
(B) the large number of individuals who benefit
because of the exclusion from Federal taxes of the
amounts spent to provide them with health insurance
benefits; and
(C) the large number of health care providers who
provide items or services for which the Federal
Government makes payments.
(b) Purpose.--It is the purpose of this subtitle to implement
reasonable, comprehensive, and effective health care liability reforms
designed to--
(1) improve the availability of health care services in
cases in which health care liability actions have been shown to
be a factor in the decreased availability of services;
(2) reduce the incidence of ``defensive medicine'' and
lower the cost of health care liability insurance, all of which
contribute to the escalation of health care costs;
(3) ensure that persons with meritorious health care injury
claims receive fair and adequate compensation, including
reasonable noneconomic damages;
(4) improve the fairness and cost-effectiveness of our
current health care liability system to resolve disputes over,
and provide compensation for, health care liability by reducing
uncertainty in the amount of compensation provided to injured
individuals;
(5) provide an increased sharing of information in the
health care system which will reduce unintended injury and
improve patient care.
SEC. 103. ENCOURAGING SPEEDY RESOLUTION OF CLAIMS.
The time for the commencement of a health care lawsuit shall be 3
years after the date of manifestation of injury or 1 year after the
claimant discovers, or through the use of reasonable diligence should
have discovered, the injury, whichever occurs first. In no event shall
the time for commencement of a health care lawsuit exceed 3 years after
the date of manifestation of injury unless tolled for any of the
following:
(1) Upon proof of fraud;
(2) Intentional concealment; or
(3) The presence of a foreign body, which has no
therapeutic or diagnostic purpose or effect, in the person of
the injured person.
Actions by a minor shall be commenced within 3 years from the date of
the alleged manifestation of injury except that actions by a minor
under the full age of 6 years shall be commenced within 3 years of
manifestation of injury or prior to the minor's 8th birthday, whichever
provides a longer period. Such time limitation shall be tolled for
minors for any period during which a parent or guardian and a health
care provider or health care organization have committed fraud or
collusion in the failure to bring an action on behalf of the injured
minor.
SEC. 104. COMPENSATING PATIENT INJURY.
(a) Unlimited Amount of Damages for Actual Economic Losses in
Health Care Lawsuits.--In any health care lawsuit, the full amount of a
claimant's economic loss may be fully recovered without limitation.
(b) Additional Noneconomic Damages.--In any health care lawsuit,
the amount of noneconomic damages recovered may be as much as $250,000,
regardless of the number of parties against whom the action is brought
or the number of separate claims or actions brought with respect to the
same occurrence.
(c) No Discount of Award for Noneconomic Damages.--In any health
care lawsuit, an award for future noneconomic damages shall not be
discounted to present value. The jury shall not be informed about the
maximum award for noneconomic damages. An award for noneconomic damages
in excess of $250,000 shall be reduced either before the entry of
judgment, or by amendment of the judgment after entry of judgment, and
such reduction shall be made before accounting for any other reduction
in damages required by law. If separate awards are rendered for past
and future noneconomic damages and the combined awards exceed $250,000,
the future noneconomic damages shall be reduced first.
(d) Fair Share Rule.--In any health care lawsuit, each party shall
be liable for that party's several share of any damages only and not
for the share of any other person. Each party shall be liable only for
the amount of damages allocated to such party in direct proportion to
such party's percentage of responsibility. A separate judgment shall be
rendered against each such party for the amount allocated to such
party. For purposes of this section, the trier of fact shall determine
the proportion of responsibility of each party for the claimant's harm.
SEC. 105. MAXIMIZING PATIENT RECOVERY.
(a) Court Supervision of Share of Damages Actually Paid to
Claimants.--In any health care lawsuit, the court shall supervise the
arrangements for payment of damages to protect against conflicts of
interest that may have the effect of reducing the amount of damages
awarded that are actually paid to claimants. In particular, in any
health care lawsuit in which the attorney for a party claims a
financial stake in the outcome by virtue of a contingent fee, the court
shall have the power to restrict the payment of a claimant's damage
recovery to such attorney, and to redirect such damages to the claimant
based upon the interests of justice and principles of equity. In no
event shall the total of all contingent fees for representing all
claimants in a health care lawsuit exceed the following limits:
(1) 40 percent of the first $50,000 recovered by the
claimant(s).
(2) 33\1/3\ percent of the next $50,000 recovered by the
claimant(s).
(3) 25 percent of the next $500,000 recovered by the
claimant(s).
(4) 15 percent of any amount by which the recovery by the
claimant(s) is in excess of $600,000.
(b) Applicability.--The limitations in subsection (a) shall apply
whether the recovery is by judgment, settlement, mediation,
arbitration, or any other form of alternative dispute resolution. In a
health care lawsuit involving a minor or incompetent person, a court
retains the authority to authorize or approve a fee that is less than
the maximum permitted under this section.
(c) Expert Witnesses.--
(1) Requirement.--No individual shall be qualified to
testify as an expert witness concerning issues of negligence in
any health care lawsuit against a defendant unless such
individual--
(A) except as required under paragraph (2), is a
health care professional who--
(i) is appropriately credentialed or
licensed in 1 or more States to deliver health
care services; and
(ii) typically treats the diagnosis or
condition or provides the type of treatment
under review; and
(B) can demonstrate by competent evidence that, as
a result of training, education, knowledge, and
experience in the evaluation, diagnosis, and treatment
of the disease or injury which is the subject matter of
the lawsuit against the defendant, the individual was
substantially familiar with applicable standards of
care and practice as they relate to the act or omission
which is the subject of the lawsuit on the date of the
incident.
(2) Physician review.--In a health care lawsuit, if the
claim of the plaintiff involved treatment that is recommended
or provided by a physician (allopathic or osteopathic), an
individual shall not be qualified to be an expert witness under
this subsection with respect to issues of negligence concerning
such treatment unless such individual is a physician.
(3) Specialties and subspecialties.--With respect to a
lawsuit described in paragraph (1), a court shall not permit an
expert in one medical specialty or subspecialty to testify
against a defendant in another medical specialty or
subspecialty unless, in addition to a showing of substantial
familiarity in accordance with paragraph (1)(B), there is a
showing that the standards of care and practice in the two
specialty or subspecialty fields are similar.
(4) Limitation.--The limitations in this subsection shall
not apply to expert witnesses testifying as to the degree or
permanency of medical or physical impairment.
SEC. 106. ADDITIONAL HEALTH BENEFITS.
(a) In General.--The amount of any damages received by a claimant
in any health care lawsuit shall be reduced by the court by the amount
of any collateral source benefits to which the claimant is entitled,
less any insurance premiums or other payments made by the claimant (or
by the spouse, parent, child, or legal guardian of the claimant) to
obtain or secure such benefits.
(b) Preservation of Current Law.--Where a payor of collateral
source benefits has a right of recovery by reimbursement or subrogation
and such right is permitted under Federal or State law, subsection (a)
shall not apply.
(c) Application of Provision.--This section shall apply to any
health care lawsuit that is settled or resolved by a fact finder.
SEC. 107. PUNITIVE DAMAGES.
(a) In General.--Punitive damages may, if otherwise permitted by
applicable State or Federal law, be awarded against any person in a
health care lawsuit only if it is proven by clear and convincing
evidence that such person acted with malicious intent to injure the
claimant, or that such person deliberately failed to avoid unnecessary
injury that such person knew the claimant was substantially certain to
suffer. In any health care lawsuit where no judgment for compensatory
damages is rendered against such person, no punitive damages may be
awarded with respect to the claim in such lawsuit. No demand for
punitive damages shall be included in a health care lawsuit as
initially filed. A court may allow a claimant to file an amended
pleading for punitive damages only upon a motion by the claimant and
after a finding by the court, upon review of supporting and opposing
affidavits or after a hearing, after weighing the evidence, that the
claimant has established by a substantial probability that the claimant
will prevail on the claim for punitive damages. At the request of any
party in a health care lawsuit, the trier of fact shall consider in a
separate proceeding--
(1) whether punitive damages are to be awarded and the
amount of such award; and
(2) the amount of punitive damages following a
determination of punitive liability.
If a separate proceeding is requested, evidence relevant only to the
claim for punitive damages, as determined by applicable State law,
shall be inadmissible in any proceeding to determine whether
compensatory damages are to be awarded.
(b) Determining Amount of Punitive Damages.--
(1) Factors considered.--In determining the amount of
punitive damages, if awarded, in a health care lawsuit, the
trier of fact shall consider only the following:
(A) the severity of the harm caused by the conduct
of such party;
(B) the duration of the conduct or any concealment
of it by such party;
(C) the profitability of the conduct to such party;
(D) the number of products sold or medical
procedures rendered for compensation, as the case may
be, by such party, of the kind causing the harm
complained of by the claimant;
(E) any criminal penalties imposed on such party,
as a result of the conduct complained of by the
claimant; and
(F) the amount of any civil fines assessed against
such party as a result of the conduct complained of by
the claimant.
(2) Maximum award.--The amount of punitive damages, if
awarded, in a health care lawsuit may be as much as $250,000 or
as much as two times the amount of economic damages awarded,
whichever is greater. The jury shall not be informed of this
limitation.
(c) No Penalties for Providers in Compliance With FDA Standards.--A
health care provider who prescribes a medical product approved or
cleared by the Food and Drug Administration shall not be named as a
party to a product liability lawsuit involving such product and shall
not be liable to a claimant in a class action lawsuit against the
manufacturer, distributor, or seller of such product.
SEC. 108. AUTHORIZATION OF PAYMENT OF FUTURE DAMAGES TO CLAIMANTS IN
HEALTH CARE LAWSUITS.
(a) In General.--In any health care lawsuit, if an award of future
damages, without reduction to present value, equaling or exceeding
$50,000 is made against a party with sufficient insurance or other
assets to fund a periodic payment of such a judgment, the court shall,
at the request of any party, enter a judgment ordering that the future
damages be paid by periodic payments in accordance with the Uniform
Periodic Payment of Judgments Act promulgated by the National
Conference of Commissioners on Uniform State Laws.
(b) Applicability.--This section applies to all actions which have
not been first set for trial or retrial before the effective date of
this Act.
SEC. 109. DEFINITIONS.
In this subtitle:
(1) Alternative dispute resolution system; adr.--The term
``alternative dispute resolution system'' or ``ADR'' means a
system that provides for the resolution of health care lawsuits
in a manner other than through a civil action brought in a
State or Federal court.
(2) Claimant.--The term ``claimant'' means any person who
brings a health care lawsuit, including a person who asserts or
claims a right to legal or equitable contribution, indemnity or
subrogation, arising out of a health care liability claim or
action, and any person on whose behalf such a claim is asserted
or such an action is brought, whether deceased, incompetent, or
a minor.
(3) Collateral source benefits.--The term ``collateral
source benefits'' means any amount paid or reasonably likely to
be paid in the future to or on behalf of the claimant, or any
service, product or other benefit provided or reasonably likely
to be provided in the future to or on behalf of the claimant,
as a result of the injury or wrongful death, pursuant to--
(A) any State or Federal health, sickness, income-
disability, accident, or workers' compensation law;
(B) any health, sickness, income-disability, or
accident insurance that provides health benefits or
income-disability coverage;
(C) any contract or agreement of any group,
organization, partnership, or corporation to provide,
pay for, or reimburse the cost of medical, hospital,
dental, or income disability benefits; and
(D) any other publicly or privately funded program.
(4) Compensatory damages.--The term ``compensatory
damages'' means objectively verifiable monetary losses incurred
as a result of the provision of, use of, or payment for (or
failure to provide, use, or pay for) health care services or
medical products, such as past and future medical expenses,
loss of past and future earnings, cost of obtaining domestic
services, loss of employment, and loss of business or
employment opportunities, damages for physical and emotional
pain, suffering, inconvenience, physical impairment, mental
anguish, disfigurement, loss of enjoyment of life, loss of
society and companionship, loss of consortium (other than loss
of domestic service), hedonic damages, injury to reputation,
and all other nonpecuniary losses of any kind or nature. The
term ``compensatory damages'' includes economic damages and
noneconomic damages, as such terms are defined in this section.
(5) Contingent fee.--The term ``contingent fee'' includes
all compensation to any person or persons which is payable only
if a recovery is effected on behalf of one or more claimants.
(6) Economic damages.--The term ``economic damages'' means
objectively verifiable monetary losses incurred as a result of
the provision of, use of, or payment for (or failure to
provide, use, or pay for) health care services or medical
products, such as past and future medical expenses, loss of
past and future earnings, cost of obtaining domestic services,
loss of employment, and loss of business or employment
opportunities.
(7) Health care lawsuit.--The term ``health care lawsuit''
means any health care liability claim concerning the provision
of health care goods or services affecting interstate commerce,
or any health care liability action concerning the provision of
health care goods or services affecting interstate commerce,
brought in a State or Federal court or pursuant to an
alternative dispute resolution system, against a health care
provider, a health care organization, or the manufacturer,
distributor, supplier, marketer, promoter, or seller of a
medical product, regardless of the theory of liability on which
the claim is based, or the number of claimants, plaintiffs,
defendants, or other parties, or the number of claims or causes
of action, in which the claimant alleges a health care
liability claim.
(8) Health care liability action.--The term ``health care
liability action'' means a civil action brought in a State or
Federal Court or pursuant to an alternative dispute resolution
system, against a health care provider, a health care
organization, or the manufacturer, distributor, supplier,
marketer, promoter, or seller of a medical product, regardless
of the theory of liability on which the claim is based, or the
number of plaintiffs, defendants, or other parties, or the
number of causes of action, in which the claimant alleges a
health care liability claim.
(9) Health care liability claim.--The term ``health care
liability claim'' means a demand by any person, whether or not
pursuant to ADR, against a health care provider, health care
organization, or the manufacturer, distributor, supplier,
marketer, promoter, or seller of a medical product, including,
but not limited to, third-party claims, cross-claims, counter-
claims, or contribution claims, which are based upon the
provision of, use of, or payment for (or the failure to
provide, use, or pay for) health care services or medical
products, regardless of the theory of liability on which the
claim is based, or the number of plaintiffs, defendants, or
other parties, or the number of causes of action.
(10) Health care organization.--The term ``health care
organization'' means any person or entity which is obligated to
provide or pay for health benefits under any health plan,
including any person or entity acting under a contract or
arrangement with a health care organization to provide or
administer any health benefit.
(11) Health care provider.--The term ``health care
provider'' means any person or entity required by State or
Federal laws or regulations to be licensed, registered, or
certified to provide health care services, and being either so
licensed, registered, or certified, or exempted from such
requirement by other statute or regulation.
(12) Health care goods or services.--The term ``health care
goods or services'' means any goods or services provided by a
health care organization, provider, or by any individual
working under the supervision of a health care provider, that
relates to the diagnosis, prevention, or treatment of any human
disease or impairment, or the assessment of the health of human
beings.
(13) Malicious intent to injure.--The term ``malicious
intent to injure'' means intentionally causing or attempting to
cause physical injury other than providing health care goods or
services.
(14) Medical product.--The term ``medical product'' means a
drug or device intended for humans, and the terms ``drug'' and
``device'' have the meanings given such terms in sections
201(g)(1) and 201(h) of the Federal Food, Drug and Cosmetic Act
(21 U.S.C. 321), respectively, including any component or raw
material used therein, but excluding health care services.
(15) Noneconomic damages.--The term ``noneconomic damages''
means damages for physical and emotional pain, suffering,
inconvenience, physical impairment, mental anguish,
disfigurement, loss of enjoyment of life, loss of society and
companionship, loss of consortium (other than loss of domestic
service), hedonic damages, injury to reputation, and all other
nonpecuniary losses of any kind or nature.
(16) Punitive damages.--The term ``punitive damages'' means
damages awarded, for the purpose of punishment or deterrence,
and not solely for compensatory purposes, against a health care
provider, health care organization, or a manufacturer,
distributor, or supplier of a medical product. Punitive damages
are neither economic nor noneconomic damages.
(17) Recovery.--The term ``recovery'' means the net sum
recovered after deducting any disbursements or costs incurred
in connection with prosecution or settlement of the claim,
including all costs paid or advanced by any person. Costs of
health care incurred by the plaintiff and the attorneys' office
overhead costs or charges for legal services are not deductible
disbursements or costs for such purpose.
(18) State.--The term ``State'' means each of the several
States, the District of Columbia, the Commonwealth of Puerto
Rico, the Virgin Islands, Guam, American Samoa, the Northern
Mariana Islands, the Trust Territory of the Pacific Islands,
and any other territory or possession of the United States, or
any political subdivision thereof.
SEC. 110. EFFECT ON OTHER LAWS.
(a) Vaccine Injury.--
(1) To the extent that title XXI of the Public Health
Service Act establishes a Federal rule of law applicable to a
civil action brought for a vaccine-related injury or death--
(A) this subtitle does not affect the application
of the rule of law to such an action; and
(B) any rule of law prescribed by this subtitle in
conflict with a rule of law of such title XXI shall not
apply to such action.
(2) If there is an aspect of a civil action brought for a
vaccine-related injury or death to which a Federal rule of law
under title XXI of the Public Health Service Act does not
apply, then this subtitle or otherwise applicable law (as
determined under this subtitle) will apply to such aspect of
such action.
(b) Other Federal Law.--Except as provided in this section, nothing
in this subtitle shall be deemed to affect any defense available to a
defendant in a health care lawsuit or action under any other provision
of Federal law.
SEC. 111. STATE FLEXIBILITY AND PROTECTION OF STATES' RIGHTS.
(a) Health Care Lawsuits.--The provisions governing health care
lawsuits set forth in this subtitle preempt, subject to subsections (b)
and (c), State law to the extent that State law prevents the
application of any provisions of law established by or under this
subtitle. The provisions governing health care lawsuits set forth in
this subtitle supersede chapter 171 of title 28, United States Code, to
the extent that such chapter--
(1) provides for a greater amount of damages or contingent
fees, a longer period in which a health care lawsuit may be
commenced, or a reduced applicability or scope of periodic
payment of future damages, than provided in this subtitle; or
(2) prohibits the introduction of evidence regarding
collateral source benefits, or mandates or permits subrogation
or a lien on collateral source benefits.
(b) Protection of States Rights.--Any issue that is not governed by
any provision of law established by or under this subtitle (including
State standards of negligence) shall be governed by otherwise
applicable State or Federal law. This subtitle does not preempt or
supersede any law that imposes greater protections (such as a shorter
statute of limitations) for health care providers and health care
organizations from liability, loss, or damages than those provided by
this subtitle.
(c) State Flexibility.--No provision of this subtitle shall be
construed to preempt--
(1) any State law (whether effective before, on, or after
the date of the enactment of this subtitle) that specifies a
particular monetary amount of compensatory or punitive damages
(or the total amount of damages) that may be awarded in a
health care lawsuit, regardless of whether such monetary amount
is greater or lesser than is provided for under this subtitle,
notwithstanding section 104(a); or
(2) any defense available to a party in a health care
lawsuit under any other provision of State or Federal law.
SEC. 112. APPLICABILITY; EFFECTIVE DATE.
This subtitle shall apply to any health care lawsuit brought in a
Federal or State court, or subject to an alternative dispute resolution
system, that is initiated on or after the date of the enactment of this
Act, except that any health care lawsuit arising from an injury
occurring prior to the date of the enactment of this Act shall be
governed by the applicable statute of limitations provisions in effect
at the time the injury occurred.
Subtitle B--Health Information Technology
CHAPTER 1--GENERAL PROVISIONS
SEC. 121. IMPROVING HEALTH CARE, QUALITY, SAFETY, AND EFFICIENCY.
The Public Health Service Act (42 U.S.C. 201 et seq.) is amended by
adding at the end the following:
``TITLE XXIX--HEALTH INFORMATION TECHNOLOGY
``SEC. 2901. DEFINITIONS.
``In this title:
``(1) Health care provider.--The term `health care
provider' means a hospital, skilled nursing facility, home
health entity, health care clinic, federally qualified health
center, group practice (as defined in section 1877(h)(4) of the
Social Security Act), a pharmacist, a pharmacy, a laboratory, a
physician (as defined in section 1861(r) of the Social Security
Act), a health facility operated by or pursuant to a contract
with the Indian Health Service, a rural health clinic, and any
other category of facility or clinician determined appropriate
by the Secretary.
``(2) Health information.--The term `health information'
has the meaning given such term in section 1171(4) of the
Social Security Act.
``(3) Health insurance plan.--The term `health insurance
plan' means--
``(A) a health insurance issuer (as defined in
section 2791(b)(2));
``(B) a group health plan (as defined in section
2791(a)(1)); and
``(C) a health maintenance organization (as defined
in section 2791(b)(3)).
``(4) Laboratory.--The term `laboratory' has the meaning
given that term in section 353.
``(5) Pharmacist.--The term `pharmacist' has the meaning
given that term in section 804 of the Federal Food, Drug, and
Cosmetic Act.
``(6) State.--The 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.
``SEC. 2902. OFFICE OF THE NATIONAL COORDINATOR OF HEALTH INFORMATION
TECHNOLOGY.
``(a) Office of National Health Information Technology.--There is
established within the Office of the Secretary an Office of the
National Coordinator of Health Information Technology (referred to in
this section as the `Office'). The Office shall be headed by a National
Coordinator who shall be appointed by the Secretary, in consultation
with the President, and shall report directly to the Secretary.
``(b) Purpose.--It shall be the purpose of the Office to coordinate
with relevant Federal agencies and oversee programs and activities to
develop a nationwide interoperable health information technology
infrastructure that--
``(1) ensures that patients' individually identifiable
health information is secure and protected;
``(2) improves health care quality, reduces medical errors,
and advances the delivery of patient-centered medical care;
``(3) reduces health care costs resulting from
inefficiency, medical errors, inappropriate care, and
incomplete information;
``(4) ensures that appropriate information to help guide
medical decisions is available at the time and place of care;
``(5) promotes a more effective marketplace, greater
competition, and increased choice through the wider
availability of accurate information on health care costs,
quality, and outcomes; and
``(6) improves the coordination of care and information
among hospitals, laboratories, physician offices, and other
entities through an effective infrastructure for the secure and
authorized exchange of health care information.
``(c) Duties of the National Coordinator.--The National Coordinator
shall--
``(1) provide support to the public-private American Health
Information Collaborative established under section 2903;
``(2) serve as the principal advisor to the Secretary
concerning the development, application, and use of health
information technology, and coordinate and oversee the health
information technology programs of the Department;
``(3) facilitate the adoption of a nationwide,
interoperable system for the electronic exchange of health
information;
``(4) ensure the adoption and implementation of standards
for the electronic exchange of health information to reduce
cost and improve health care quality;
``(5) ensure that health information technology policy and
programs of the Department are coordinated with those of
relevant executive branch agencies (including Federal
commissions) with a goal of avoiding duplication of efforts and
of helping to ensure that each agency undertakes health
information technology activities primarily within the areas of
its greatest expertise and technical capability;
``(6) to the extent permitted by law, coordinate outreach
and consultation by the relevant executive branch agencies
(including Federal commissions) with public and private parties
of interest, including consumers, payers, employers, hospitals
and other health care providers, physicians, community health
centers, laboratories, vendors and other stakeholders;
``(7) advise the President regarding specific Federal
health information technology programs; and
``(8) submit the reports described under section 2903(i)
(excluding paragraph (4) of such section).
``(d) Rule of Construction.--Nothing in this section shall be
construed to require the duplication of Federal efforts with respect to
the establishment of the Office, regardless of whether such efforts
were carried out prior to or after the enactment of this title.
``SEC. 2903. AMERICAN HEALTH INFORMATION COLLABORATIVE.
``(a) Purpose.--The Secretary shall establish the public-private
American Health Information Collaborative (referred to in this section
as the `Collaborative') to--
``(1) advise the Secretary and recommend specific actions
to achieve a nationwide interoperable health information
technology infrastructure;
``(2) serve as a forum for the participation of a broad
range of stakeholders to provide input on achieving the
interoperability of health information technology; and
``(3) recommend standards (including content,
communication, and security standards) for the electronic
exchange of health information for adoption by the Federal
Government and voluntary adoption by private entities.
``(b) Composition.--
``(1) In general.--The Collaborative shall be composed of--
``(A) the Secretary, who shall serve as the
chairperson of the Collaborative;
``(B) the Secretary of Defense, or his or her
designee;
``(C) the Secretary of Veterans Affairs, or his or
her designee;
``(D) the Secretary of Commerce, or his or her
designee;
``(E) representatives of other relevant Federal
agencies, as determined appropriate by the Secretary;
and
``(F) representatives from among the following
categories to be appointed by the Secretary from
nominations submitted by the public--
``(i) consumer and patient organizations;
``(ii) experts in health information
privacy and security;
``(iii) health care providers;
``(iv) health insurance plans or other
third party payors;
``(v) standards development organizations;
``(vi) information technology vendors;
``(vii) purchasers or employers; and
``(viii) State or local government agencies
or Indian tribe or tribal organizations.
``(2) Considerations.--In appointing members under
paragraph (1)(F), the Secretary shall select individuals with
expertise in--
``(A) health information privacy;
``(B) health information security;
``(C) health care quality and patient safety,
including those individuals with experience in
utilizing health information technology to improve
health care quality and patient safety;
``(D) data exchange; and
``(E) developing health information technology
standards and new health information technology.
``(3) Terms.--Members appointed under paragraph (1)(G)
shall serve for 2 year terms, except that any member appointed
to fill a vacancy for an unexpired term shall be appointed for
the remainder of such term. A member may serve for not to
exceed 180 days after the expiration of such member's term or
until a successor has been appointed.
``(c) Recommendations and Policies.--The Collaborative shall make
recommendations to identify uniform national policies for adoption by
the Federal Government and voluntary adoption by private entities to
support the widespread adoption of health information technology,
including--
``(1) protection of individually identifiable health
information through privacy and security practices;
``(2) measures to prevent unauthorized access to health
information;
``(3) methods to facilitate secure patient access to health
information;
``(4) the ongoing harmonization of industry-wide health
information technology standards;
``(5) recommendations for a nationwide interoperable health
information technology infrastructure;
``(6) the identification and prioritization of specific use
cases for which health information technology is valuable,
beneficial, and feasible;
``(7) recommendations for the establishment of an entity to
ensure the continuation of the functions of the Collaborative;
and
``(8) other policies determined to be necessary by the
Collaborative.
``(d) Standards.--
``(1) Existing standards.--The standards adopted by the
Consolidated Health Informatics Initiative shall be deemed to
have been recommended by the Collaborative under this section.
``(2) First year review.--Not later than 1 year after the
date of enactment of this title, the Collaborative shall--
``(A) review existing standards (including content,
communication, and security standards) for the
electronic exchange of health information, including
such standards adopted by the Secretary under paragraph
(2)(A);
``(B) identify deficiencies and omissions in such
existing standards; and
``(C) identify duplication and overlap in such
existing standards;
and recommend modifications to such standards as necessary.
``(3) Ongoing review.--Beginning 1 year after the date of
enactment of this title, and annually thereafter, the
Collaborative shall--
``(A) review existing standards (including content,
communication, and security standards) for the
electronic exchange of health information, including
such standards adopted by the Secretary under paragraph
(2)(A);
``(B) identify deficiencies and omissions in such
existing standards; and
``(C) identify duplication and overlap in such
existing standards;
and recommend modifications to such standards as necessary.
``(4) Limitation.--The standards described in this section
shall be consistent with any standards developed pursuant to
the Health Insurance Portability and Accountability Act of
1996.
``(e) Federal Action.--Not later than 60 days after the issuance of
a recommendation from the Collaborative under subsection (d)(2), the
Secretary of Health and Human Services, in consultation with the
Secretary of Veterans Affairs, the Secretary of Defense, and
representatives of other relevant Federal agencies, as determined
appropriate by the Secretary, shall review such recommendations. The
Secretary shall provide for the adoption by the Federal Government of
any standard or standards contained in such recommendation.
``(f) Coordination of Federal Spending.--Not later than 1 year
after the adoption by the Federal Government of a recommendation as
provided for in subsection (e), and in compliance with chapter 113 of
title 40, United States Code, no Federal agency shall expend Federal
funds for the purchase of any form of health information technology or
health information technology system for clinical care or for the
electronic retrieval, storage, or exchange of health information that
is not consistent with applicable standards adopted by the Federal
Government under subsection (e).
``(g) Coordination of Federal Data Collection.--Not later than 3
years after the adoption by the Federal Government of a recommendation
as provided for in subsection (e), all Federal agencies collecting
health data for the purposes of surveillance, epidemiology, adverse
event reporting, research, or for other purposes determined appropriate
by the Secretary shall comply with standards adopted under subsection
(e).
``(h) Voluntary Adoption.--
``(1) In general.--Any standards adopted by the Federal
Government under subsection (e) shall be voluntary with respect
to private entities.
``(2) Rule of construction.--Nothing in this section shall
be construed to require that a private entity that enters into
a contract with the Federal Government adopt the standards
adopted by the Federal Government under section 2903 with
respect to activities not related to the contract.
``(3) Limitation.--Private entities that enter into a
contract with the Federal Government shall adopt the standards
adopted under section 2903 for the purpose of activities under
such Federal contract.
``(i) Effect on other provisions.--Nothing in this title shall be
construed to effect the scope or substance of--
``(1) section 264 of the Health Insurance Portability and
Accountability Act of 1996;
``(2) sections 1171 through 1179 of the Social Security
Act; and
``(3) any regulation issued pursuant to any such section;
and such sections shall remain in effect and shall apply to the
implementation of standards, programs and activities under this title.
``(j) Reports.--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, on an annual basis,
a report that--
``(1) describes the specific actions that have been taken
by the Federal Government and private entities to facilitate
the adoption of an interoperable nationwide system for the
electronic exchange of health information;
``(2) describes barriers to the adoption of such a
nationwide system;
``(3) contains recommendations to achieve full
implementation of such a nationwide system; and
``(4) contains a plan and progress toward the establishment
of an entity to ensure the continuation of the functions of the
Collaborative.
``(k) Application of FACA.--The Federal Advisory Committee Act (5
U.S.C. App.) shall apply to the Collaborative, except that the term
provided for under section 14(a)(2) shall be 5 years.
``(l) Rule of Construction.--Nothing in this section shall be
construed to require the duplication of Federal efforts with respect to
the establishment of the Collaborative, regardless of whether such
efforts were carried out prior to or after the enactment of this title.
``SEC. 2904. IMPLEMENTATION AND CERTIFICATION OF HEALTH INFORMATION
STANDARDS.
``(a) Implementation.--
``(1) In general.--The Secretary, based upon the
recommendations of the Collaborative, shall develop criteria to
ensure uniform and consistent implementation of any standards
for the electronic exchange of health information voluntarily
adopted by private entities in technical conformance with such
standards adopted under this title.
``(2) Implementation assistance.--The Secretary may
recognize a private entity or entities to assist private
entities in the implementation of the standards adopted under
this title using the criteria developed by the Secretary under
this section.
``(b) Certification.--
``(1) In general.--The Secretary, based upon the
recommendations of the Collaborative, shall develop criteria to
ensure and certify that hardware, software, and support
services that claim to be in compliance with any standard for
the electronic exchange of health information adopted under
this title have established and maintained such compliance in
technical conformance with such standards.
``(2) Certification assistance.--The Secretary may
recognize a private entity or entities to assist in the
certification described under paragraph (1) using the criteria
developed by the Secretary under this section.
``(c) Delegation Authority.--The Secretary, through consultation
with the Collaborative, may delegate the development of the criteria
under subsections (a) and (b) to a private entity.
``SEC. 2905. STUDY OF STATE HEALTH INFORMATION LAWS AND PRACTICES.
``(a) In General.--The Secretary shall carry out, or contract with
a private entity to carry out, a study that examines--
``(1) the variation among State laws and practices that
relate to the privacy, confidentiality, and security of health
information;
``(2) how such variation among State laws and practices may
impact the electronic exchange of health information--
``(A) among the States;
``(B) between the States and the Federal
Government; and
``(C) among private entities; and
``(3) how such laws and practices may be harmonized to
permit the secure electronic exchange of health information.
``(b) Report and Recommendations.--Not later than 1 year after the
date of enactment of this title, the Secretary shall submit to Congress
a report that--
``(1) describes the results of the study carried out under
subsection (a); and
``(2) makes recommendations based on the results of such
study.
``SEC. 2906. SECURE EXCHANGE OF HEALTH INFORMATION; INCENTIVE GRANTS.
``(a) In General.--The Secretary may make grants to States to carry
out programs under which such States cooperate with other States to
develop and implement State policies that will facilitate the secure
electronic exchange of health information utilizing the standards
adopted under section 2903--
``(1) among the States;
``(2) between the States and the Federal Government; and
``(3) among private entities.
``(b) Priority.--In awarding grants under subsection (a), the
Secretary shall give priority to States that provide assurance that any
funding awarded under such a grant shall be used to harmonize privacy
laws and practices between the States, the States and the Federal
Government, and among private entities related to the privacy,
confidentiality, and security of health information.
``(c) Dissemination of Information.--The Secretary shall
disseminate information regarding the efficacy of efforts of a
recipient of a grant under this section.
``(d) Technical Assistance.--The Secretary may provide technical
assistance to recipients of a grant under this section.
``(e) Authorization of Appropriations.--For the purpose of carrying
out subsection (a), there are authorized to be appropriated such sums
as may be necessary for each of the fiscal years 2006 through 2010.
``SEC. 2907. LICENSURE AND THE ELECTRONIC EXCHANGE OF HEALTH
INFORMATION.
``(a) In General.--The Secretary shall carry out, or contract with
a private entity to carry out, a study that examines--
``(1) the variation among State laws that relate to the
licensure, registration, and certification of medical
professionals; and
``(2) how such variation among State laws impacts the
secure electronic exchange of health information--
``(A) among the States; and
``(B) between the States and the Federal
Government.
``(b) Report and Recommendations.--Not later than 1 year after the
date of enactment of this title, the Secretary shall publish a report
that--
``(1) describes the results of the study carried out under
subsection (a); and
``(2) makes recommendations to States regarding the
harmonization of State laws based on the results of such study.
``SEC. 2908. AUTHORIZATION OF APPROPRIATIONS.
``(a) In General.--For the purpose of carrying out this title,
there is authorized to be appropriated $125,000,000 for fiscal year
2006, and such sums as may be necessary for each of fiscal years 2007
through 2010.
``(b) Availability.--Amounts appropriated under subsection (a)
shall remain available through fiscal year 2010.''.
SEC. 122. HIPAA REPORT.
(a) Study.--Not later than 2 years after the date of enactment of
this Act, the Secretary of Health and Human Services shall carry out,
or contract with a private entity to carry out, a study that examines
the integration of the standards adopted under the amendments made by
this subtitle with the standards adopted under the Health Insurance
Portability and Accountability Act of 1996 (Public Law 104-191).
(b) Plan; Report.--
(1) Plan.--Not later than 3 years after the date of
enactment of this Act, the Secretary of Health and Human
Services shall, based on the results of the study carried out
under subsection (a), develop a plan for the integration of the
standards described under such subsection and submit a report
to Congress describing such plan.
(2) Periodic reports.--The Secretary shall submit periodic
reports to Congress that describe the progress of the
integration described under paragraph (1).
SEC. 123. STUDY OF REIMBURSEMENT INCENTIVES.
The Secretary of Health and Human Services shall carry out, or
contract with a private entity to carry out, a study that examines
methods to create efficient reimbursement incentives for improving
health care quality in Federally qualified health centers, rural health
clinics, and free clinics.
SEC. 124. REAUTHORIZATION OF INCENTIVE GRANTS REGARDING TELEMEDICINE.
Section 330L(b) of the Public Health Service Act (42 U.S.C. 254c-
18(b)) is amended by striking ``2002 through 2006'' and inserting
``2006 through 2010''.
SEC. 125. SENSE OF THE SENATE ON PHYSICIAN PAYMENT.
It is the sense of the Senate that modifications to the medicare
fee schedule for physicians' services under section 1848 of the Social
Security Act (42 U.S.C. 1394w-4) should include provisions based on the
reporting of quality measures pursuant to those adopted in section 2909
of the Public Health Service Act (as added by section 121) and the
overall improvement of healthcare quality through the use of the
electronic exchange of health information pursuant to the standards
adopted under section 2903 of such Act (as added by section 121).
SEC. 126. ESTABLISHMENT OF QUALITY MEASUREMENT SYSTEMS FOR MEDICARE
VALUE-BASED PURCHASING PROGRAMS.
(a) In General.--Title XVIII (42 U.S.C. 1395 et seq.) is amended--
(1) by redesignating part E as part F; and
(2) by inserting after part D the following new part:
``Part E--Value-Based Purchasing
``quality measurement systems for value-based purchasing programs
``Sec. 1860E-1. (a) Establishment.--
``(1) In general.--The Secretary shall develop quality
measurement systems for purposes of providing value-based
payments to--
``(A) hospitals pursuant to section 1860E-2;
``(B) physicians and practitioners pursuant to
section 1860E-3;
``(C) plans pursuant to section 1860E-4;
``(D) end stage renal disease providers and
facilities pursuant to section 1860E-5; and
``(E) home health agencies pursuant to section
1860E-6.
``(2) Quality.--The systems developed under paragraph (1)
shall measure the quality of the care furnished by the provider
involved.
``(3) High quality health care defined.--In this part, the
term `high quality health care' means health care that is safe,
effective, patient-centered, timely, equitable, efficient,
necessary, and appropriate.
``(b) Requirements for Systems.--Under each quality measurement
system described in subsection (a)(1), the Secretary shall do the
following:
``(1) Measures.--
``(A) In general.--Subject to subparagraph (B), the
Secretary shall select measures of quality to be used
by the Secretary under each system.
``(B) Requirements.--In selecting the measures to
be used under each system pursuant to subparagraph (A),
the Secretary shall, to the extent feasible, ensure
that--
``(i) such measures are evidence-based,
reliable and valid, and feasible to collect and
report;
``(ii) measures of process, structure,
outcomes, beneficiary experience, efficiency,
and equity are included;
``(iii) measures of overuse and underuse of
health care items and services are included;
``(iv)(I) at least 1 measure of health
information technology infrastructure that
enables the provision of high quality health
care and facilitates the exchange of health
information, such as the use of one or more
elements of a qualified health information
system (as defined in subparagraph (E)), is
included during the first year each system is
implemented; and
``(II) additional measures of health
information technology infrastructure are
included in subsequent years;
``(v) in the case of the system that is
used to provide value-based payments to
hospitals under section 1860E-2, by not later
than January 1, 2008, at least 5 measures that
take into account the unique characteristics of
small hospitals located in rural areas and
frontier areas are included; and
``(vi) measures that assess the quality of
care furnished to frail individuals over the
age of 75 and to individuals with multiple
complex chronic conditions are included.
``(C) Requirement for collection of data on a
measure for 1 year prior to use under the systems.--
Data on any measure selected by the Secretary under
subparagraph (A) must be collected by the Secretary for
at least a 12-month period before such measure may be
used to determine whether a provider receives a value-
based payment under a program described in subsection
(a)(1).
``(D) Authority to vary measures.--
``(i) Under system applicable to
hospitals.--In the case of the system
applicable to hospitals under section 1860E-2,
the Secretary may vary the measures selected
under subparagraph (A) by hospital depending on
the size of, and the scope of services provided
by, the hospital.
``(ii) Under system applicable to
physicians and practitioners.--In the case of
the system applicable to physicians and
practitioners under section 1860E-3, the
Secretary may vary the measures selected under
subparagraph (A) by physician or practitioner
depending on the specialty of the physician,
the type of practitioner, or the volume of
services furnished to beneficiaries by the
physician or practitioner.
``(iii) Under system applicable to esrd
providers and facilities.--In the case of the
system applicable to providers of services and
renal dialysis facilities under section 1860E-
5, the Secretary may vary the measures selected
under subparagraph (A) by provider or facility
depending on the type of, the size of, and the
scope of services provided by, the provider or
facility.
``(iv) Under system applicable to home
health agencies.--In the case of the system
applicable to home health agencies under
section 1860E-6, the Secretary may vary the
measures selected under subparagraph (A) by
agency depending on the size of, and the scope
of services provided by, the agency.
``(E) Qualified health information system
defined.--For purposes of subparagraph (B)(iv)(I), the
term `qualified health information system' means a
computerized system (including hardware, software, and
training) that--
``(i) protects the privacy and security of
health information and properly encrypts such
health information;
``(ii) maintains and provides access to
patients' health records in an electronic
format;
``(iii) incorporates decision support
software to reduce medical errors and enhance
health care quality;
``(iv) is consistent with data standards
and certification processes recommended by the
Secretary;
``(v) allows for the reporting of quality
measures; and
``(vi) includes other features determined
appropriate by the Secretary.
``(2) Weights of measures.--
``(A) In general.--The Secretary shall assign
weights to the measures used by the Secretary under
each system.
``(B) Consideration.--If the Secretary determines
appropriate, in assigning the weights under
subparagraph (A)--
``(i) measures of clinical effectiveness
shall be weighted more heavily than measures of
beneficiary experience; and
``(ii) measures of risk adjusted outcomes
shall be weighted more heavily than measures of
process; and
``(3) Risk adjustment.--The Secretary shall establish
procedures, as appropriate, to control for differences in
beneficiary health status and beneficiary characteristics. To
the extent feasible, such procedures may be based on existing
models for controlling for such differences.
``(4) Maintenance.--
``(A) In general.--The Secretary shall, as
determined appropriate, but not more often than once
each 12-month period, update each system, including
through--
``(i) the addition of more accurate and
precise measures under the systems and the
retirement of existing outdated measures under
the system;
``(ii) the refinement of the weights
assigned to measures under the system; and
``(iii) the refinement of the risk
adjustment procedures established pursuant to
paragraph (3) under the system.
``(B) Update shall allow for comparison of data.--
Each update under subparagraph (A) of a quality
measurement system shall allow for the comparison of
data from one year to the next for purposes of
providing value-based payments under the programs
described in subsection (a)(1).
``(5) Use of most recent quality data.--
``(A) In general.--Except as provided in
subparagraph (B), the Secretary shall use the most
recent quality data with respect to the provider
involved that is available to the Secretary.
``(B) Insufficient data due to low volume.--If the
Secretary determines that there is insufficient data
with respect to a measure or measures because of a low
number of services provided, the Secretary may
aggregate data across more than 1 fiscal or calendar
year, as the case may be.
``(c) Requirements for Developing and Updating the Systems.--In
developing and updating each quality measurement system under this
section, the Secretary shall--
``(1) take into account the quality measures developed by
nationally recognized quality measurement organizations,
researchers, health care provider organizations, and other
appropriate groups;
``(2) consult with, and take into account the
recommendations of, the entity that the Secretary has an
arrangement with under subsection (e);
``(3) consult with provider-based groups and clinical
specialty societies;
``(4) take into account existing quality measurement
systems that have been developed through a rigorous process of
validation and with the involvement of entities and persons
described in subsection (e)(2)(B); and
``(5) take into account--
``(A) each of the reports by the Medicare Payment
Advisory Commission that are required under the
Medicare Value Purchasing Act of 2005;
``(B) the results of--
``(i) the demonstrations required under
such Act;
``(ii) the demonstration program under
section 1866A;
``(iii) the demonstration program under
section 1866C; and
``(iv) any other demonstration or pilot
program conducted by the Secretary relating to
measuring and rewarding quality and efficiency
of care; and
``(C) the report by the Institute of Medicine of
the National Academy of Sciences under section 238(b)
of the Medicare Prescription Drug, Improvement, and
Modernization Act of 2003 (Public Law 108-173).
``(d) Requirements for Implementing the Systems.--In implementing
each quality measurement system under this section, the Secretary shall
consult with entities--
``(1) that have joined together to develop strategies for
quality measurement and reporting, including the feasibility of
collecting and reporting meaningful data on quality measures;
and
``(2) that involve representatives of health care
providers, health plans, consumers, employers, purchasers,
quality experts, government agencies, and other individuals and
groups that are interested in quality of care.
``(e) Arrangement With an Entity To Provide Advice and
Recommendations.--
``(1) Arrangement.--On and after July 1, 2006, the
Secretary shall have in place an arrangement with an entity
that meets the requirements described in paragraph (2) under
which such entity provides the Secretary with advice on, and
recommendations with respect to, the development and updating
of the quality measurement systems under this section,
including the assigning of weights to the measures under
subsection (b)(2).
``(2) Requirements described.--The requirements described
in this paragraph are the following:
``(A) The entity is a private nonprofit entity
governed by an executive director and a board.
``(B) The members of the entity include
representatives of--
``(i)(I) health plans and providers
receiving reimbursement under this title for
the provision of items and services, including
health plans and providers with experience in
the care of the frail elderly and individuals
with multiple complex chronic conditions; or
``(II) groups representing such health
plans and providers;
``(ii) groups representing individuals
receiving benefits under this title;
``(iii) purchasers and employers or groups
representing purchasers or employers;
``(iv) organizations that focus on quality
improvement as well as the measurement and
reporting of quality measures;
``(v) State government health programs;
``(vi) persons skilled in the conduct and
interpretation of biomedical, health services,
and health economics research and with
expertise in outcomes and effectiveness
research and technology assessment; and
``(vii) persons or entities involved in the
development and establishment of standards and
certification for health information technology
systems and clinical data.
``(C) The membership of the entity is
representative of individuals with experience with--
``(i) urban health care issues;
``(ii) safety net health care issues; and
``(iii) rural and frontier health care
issues.
``(D) The entity does not charge a fee for
membership for participation in the work of the entity
related to the arrangement with the Secretary under
paragraph (1). If the entity does require a fee for
membership for participation in other functions of the
entity, there shall be no linkage between such fee and
participation in the work of the entity related to such
arrangement with the Secretary.
``(E) The entity--
``(i) permits any member described in
subparagraph (B) to vote on matters of the
entity related to the arrangement with the
Secretary under paragraph (1); and
``(ii) ensures that such members have an
equal vote on such matters .
``(F) With respect to matters related to the
arrangement with the Secretary under paragraph (1), the
entity conducts its business in an open and transparent
manner and provides the opportunity for public comment.
``(G) The entity operates as a voluntary consensus
standards setting organization as defined for purposes
of section 12(d) of the National Technology Transfer
and Advancement Act of 1995 (Public Law 104-113) and
Office of Management and Budget Revised Circular A-119
(published in the Federal Register on February 10,
1998).''.
(b) Conforming References to Previous Part E.--Any reference in law
(in effect before the date of the enactment of this Act) to part E of
title XVIII of the Social Security Act is deemed a reference to part F
of such title (as in effect after such date).
SEC. 127. EXCEPTION TO FEDERAL ANTI-KICKBACK AND PHYSICIAN SELF
REFERRAL LAWS FOR THE PROVISION OF PERMITTED SUPPORT.
(a) Anti-Kickback.--Section 1128B(b) (42 U.S.C. 1320a-7b(b)(3)) is
amended--
(1) in paragraph (3)--
(A) in subparagraph (G), by striking ``and'' at the
end;
(B) in subparagraph (H), as added by section 237(d)
of the Medicare Prescription Drug, Improvement, and
Modernization 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) by redesignating subparagraph (H), as added by
section 431(a) of the Medicare Prescription Drug,
Improvement, and Modernization Act of 2003 (Public Law
108-173; 117 Stat. 2287), as subparagraph (I);
(D) in subparagraph (I), as so redesignated--
(i) by moving such subparagraph 2 ems to
the left; and
(ii) by striking the period at the end and
inserting ``; and''; and
(E) by adding at the end the following new:
``(J) during the 5-year period beginning on the
date the Secretary issues the interim final rule under
section 801(c)(1) of the Medicare Value Purchasing Act
of 2005, the provision, with or without charge, of any
permitted support (as defined in paragraph (4)).''; and
(2) by adding at the end the following new paragraph:
``(4) Permitted support.--
``(A) Definition of permitted support.--Subject to
subparagraph (B), in this section, the term `permitted
support' means the provision of any equipment, item,
information, right, license, intellectual property,
software, training, or service used for developing,
implementing, operating, or facilitating the use of
systems designed to improve the quality of health care
and to promote the electronic exchange of health
information.
``(B) Exception.--The term `permitted support'
shall not include the provision of--
``(i) any support that is determined in a
manner that is related to the volume or value
of any referrals or other business generated
between the parties for which payment may be
made in whole or in part under a Federal health
care program;
``(ii) any support that has more than
incidental utility or value to the recipient
beyond the exchange of health care information;
or
``(iii) any health information technology
system, product, or service that is not capable
of exchanging health care information in
compliance with data standards consistent with
interoperability.
``(C) Determination.--In establishing regulations
with respect to the requirement under subparagraph
(B)(iii), the Secretary shall take in account--
``(i) whether the health information
technology system, product, or service is
widely accepted within the industry and whether
there is sufficient industry experience to
ensure successful implementation of the system,
product, or service; and
``(ii) whether the health information
technology system, product, or service improves
quality of care, enhances patient safety, or
provides greater administrative
efficiencies.''.
(b) Physician Self-Referral.--Section 1877(e) (42 U.S.C. 1395nn(e))
is amended by adding at the end the following new paragraph:
``(9) Permitted support.--During the 5-year period
beginning on the date the Secretary issues the interim final
rule under section 801(c)(1) of the Medicare Value Purchasing
Act of 2005, the provision, with or without charge, of any
permitted support (as defined in section 1128B(b)(4)).''.
(c) Regulations.--In order to carry out the amendments made by this
section--
(1) the Secretary shall issue an interim final rule with
comment period by not later than the date that is 180 days
after the date of enactment of this Act;
(2) the Secretary shall issue a final rule by not later
than the date that is 180 days after the date that the interim
final rule under paragraph (1) is issued.
CHAPTER 2--VALUE BASED PURCHASING
SEC. 131. VALUE BASED PURCHASING PROGRAMS; SENSE OF THE SENATE.
(a) Medicare Value Based Purchasing Pilot Program.--
(1) In general.--The Secretary of Health and Human Services
(referred to in this section as the ``Secretary'') shall
establish under title XVIII of the Social Security Act (42
U.S.C. 1395 et seq.) a value based purchasing pilot program
based on the reporting of quality measures pursuant to those
adopted in section 1860E-1 of the Social Security Act (as added
by section 126). Such pilot program should be based on
experience gained through previous demonstration projects
conducted by the Secretary, including demonstration projects
conducted under sections 1866A and 1866C of the Social Security
Act (42 U.S.C. 1395cc-1; 1395cc-3), section 649 of the Medicare
Prescription Drug, Improvement, and Modernization Act of 2003
(Public Law 108-173; 117 Stat. 2322), and other relevant work
conducted by private entities.
(2) Expansion.--Not later than 2 years after conducting the
pilot program under paragraph (1), the Secretary shall
transition and implement such program on a national basis.
(3) Information technology.--Providers reporting quality
measurement data electronically under this section shall report
such data pursuant to the standards adopted under title XXIX of
the Public Health Service Act (as added by section 121).
(4) Funding.--The Secretary shall ensure that the total
amount of expenditures under this Act in a year does not exceed
the total amount of expenditures that would have been expended
in such year under this Act if this subsection had not been
enacted.
(b) Medicaid Value Based Purchasing Programs.--
(1) In general.--The Secretary shall authorize waivers
under section 1115 of the Social Security Act (42 U.S.C. 1315)
for States to establish value based purchasing programs for
State medicaid programs established under title XIX of such Act
(42 U.S.C. 1396 et seq.). Such programs shall be based on the
reporting of quality measures pursuant to those adopted in
section 1860E-1 of the Social Security Act (as added by section
126).
(2) Information technology.--Providers reporting quality
measurement data electronically under this section shall report
such data pursuant to the standards adopted under title XXIX of
the Public Health Service Act (as added by section 121).
(3) Waiver.--In authorizing such waivers, the Secretary
shall waive any provisions of title XI or XIX of the Social
Security Act that would otherwise prevent a State from
establishing a value based purchasing program in accordance
with paragraph (1).
Subtitle C--Patient Safety and Quality Improvement
SEC. 141. SHORT TITLE.
This subtitle may be cited as the ``Patient Safety and Quality
Improvement Act of 2005''.
SEC. 142. FINDINGS AND PURPOSES.
(a) Findings.--Congress makes the following findings:
(1) In 1999, the Institute of Medicine released a report
entitled To Err is Human that described medical errors as the
eighth leading cause of death in the United States, with as
many as 98,000 people dying as a result of medical errors each
year.
(2) To address these deaths and injuries due to medical
errors, the health care system must identify and learn from
such errors so that systems of care can be improved.
(3) In their report, the Institute of Medicine called on
Congress to provide legal protections with respect to
information reported for the purposes of quality improvement
and patient safety.
(4) The Health, Education, Labor, and Pensions Committee of
the Senate held 4 hearings in the 106th Congress and 1 hearing
in the 107th Congress on patient safety where experts in the
field supported the recommendation of the Institute of Medicine
for congressional action.
(5) Myriad public and private patient safety initiatives
have begun. The Quality Interagency Coordination Taskforce has
recommended steps to improve patient safety that may be taken
by each Federal agency involved in health care and activities
relating to these steps are ongoing.
(6) The research on patient safety unequivocally calls for
a learning environment, rather than a punitive environment, in
order to improve patient safety.
(7) Voluntary data gathering systems are more supportive
than mandatory systems in creating the learning environment
referred to in paragraph (6) as stated in the Institute of
Medicine's report.
(8) Promising patient safety reporting systems have been
established throughout the United States and the best ways to
structure and use these systems are currently being determined,
largely through projects funded by the Agency for Healthcare
Research and Quality.
(9) Many organizations currently collecting patient safety
data have expressed a need for legal protections that will
allow them to review protected information and collaborate in
the development and implementation of patient safety
improvement strategies. Currently, the State peer review
protections are inadequate to allow the sharing of information
to promote patient safety.
(b) Purposes.--It is the purpose of this subtitle to--
(1) encourage a culture of safety and quality in the United
States health care system by providing for legal protection of
information reported voluntarily for the purposes of quality
improvement and patient safety; and
(2) ensure accountability by raising standards and
expectations for continuous quality improvements in patient
safety.
SEC. 143. AMENDMENTS TO PUBLIC HEALTH SERVICE ACT.
Title IX of the Public Health Service Act (42 U.S.C. 299 et seq.)
is amended--
(1) in section 912(c), by inserting ``, in accordance with
part C,'' after ``The Director shall'';
(2) by redesignating part C as part D;
(3) by redesignating sections 921 through 928, as sections
931 through 938, respectively;
(4) in 934(d) (as so redesignated), by striking the second
sentence and inserting the following: ``Penalties provided for
under this section shall be imposed and collected by the
Secretary using the administrative and procedural processes
used to impose and collect civil money penalties under section
1128A of the Social Security Act (other than subsections (a)
and (b), the second sentence of subsection (f), and subsections
(i), (m), and (n)), unless the Secretary determines that a
modification of procedures would be more suitable or reasonable
to carry out this subsection and provides for such modification
by regulation.'';
(5) in section 938(1) (as so redesignated), by striking
``921'' and inserting ``931''; and
(6) by inserting after part B the following:
``PART C--PATIENT SAFETY IMPROVEMENT
``SEC. 921. DEFINITIONS.
``In this part:
``(1) Non-identifiable information.--
``(A) In general.--The term `non-identifiable
information' means, with respect to information, that
the information is presented in a form and manner that
prevents the identification of a provider, a patient,
or a reporter of patient safety data.
``(B) Identifiability of patient.--For purposes of
subparagraph (A), the term `presented in a form and
manner that prevents the identification of a patient'
means, with respect to information that has been
subject to rules promulgated pursuant to section 264(c)
of the Health Insurance Portability and Accountability
Act of 1996 (42 U.S.C. 1320d-2 note), that the
information has been de-identified so that it is no
longer individually identifiable health information as
defined in such rules.
``(2) Patient safety data.--
``(A) In general.--The term `patient safety data'
means--
``(i) any data, reports, records,
memoranda, analyses (such as root cause
analyses), or written or oral statements that
are--
``(I) collected or developed by a
provider for reporting to a patient
safety organization, provided that they
are reported to the patient safety
organization within 60 days;
``(II) requested by a patient
safety organization (including the
contents of such request), if they are
reported to the patient safety
organization within 60 days;
``(III) reported to a provider by a
patient safety organization; or
``(IV) collected by a patient
safety organization from another
patient safety organization, or
developed by a patient safety
organization;
that could result in improved patient safety,
health care quality, or health care outcomes;
or
``(ii) any deliberative work or process
with respect to any patient safety data
described in clause (i).
``(B) Limitation.--
``(i) Collection.--If the original material
from which any data, reports, records,
memoranda, analyses (such as root case
analyses), or written or oral statements
referred to in subclause (I) or (IV) of
subparagraph (A)(i) are collected and is not
patient safety data, the act of such collection
shall not make such original material patient
safety data for purposes of this part.
``(ii) Separate data.--The term `patient
safety data' shall not include information
(including a patient's medical record, billing
and discharge information or any other patient
or provider record) that is collected or
developed separately from and that exists
separately from patient safety data. Such
separate information or a copy thereof
submitted to a patient safety organization
shall not itself be considered as patient
safety data. Nothing in this part, except for
section 922(f)(1), shall be construed to
limit--
``(I) the discovery of or
admissibility of information described
in this subparagraph in a criminal,
civil, or administrative proceeding;
``(II) the reporting of information
described in this subparagraph to a
Federal, State, or local governmental
agency for public health surveillance,
investigation, or other public health
purposes or health oversight purposes;
or
``(III) a provider's recordkeeping
obligation with respect to information
described in this subparagraph under
Federal, State, or local law.
``(3) Patient safety organization.--The term `patient
safety organization' means a private or public entity or
component thereof that is currently listed by the Secretary
pursuant to section 924(c).
``(4) Patient safety organization activities.--The term
`patient safety organization activities' means the following
activities, which are deemed to be necessary for the proper
management and administration of a patient safety organization:
``(A) The conduct, as its primary activity, of
efforts to improve patient safety and the quality of
health care delivery.
``(B) The collection and analysis of patient safety
data that are submitted by more than one provider.
``(C) The development and dissemination of
information to providers with respect to improving
patient safety, such as recommendations, protocols, or
information regarding best practices.
``(D) The utilization of patient safety data for
the purposes of encouraging a culture of safety and of
providing direct feedback and assistance to providers
to effectively minimize patient risk.
``(E) The maintenance of procedures to preserve
confidentiality with respect to patient safety data.
``(F) The provision of appropriate security
measures with respect to patient safety data.
``(G) The utilization of qualified staff.
``(5) Person.--The term `person' includes Federal, State,
and local government agencies.
``(6) Provider.--The term `provider' means--
``(A) a person licensed or otherwise authorized
under State law to provide health care services,
including--
``(i) a hospital, nursing facility,
comprehensive outpatient rehabilitation
facility, home health agency, hospice program,
renal dialysis facility, ambulatory surgical
center, pharmacy, physician or health care
practitioner's office, long term care facility,
behavior health residential treatment facility,
clinical laboratory, or health center; or
``(ii) a physician, physician assistant,
nurse practitioner, clinical nurse specialist,
certified registered nurse anesthetist,
certified nurse midwife, psychologist,
certified social worker, registered dietitian
or nutrition professional, physical or
occupational therapist, pharmacist, or other
individual health care practitioner; or
``(B) any other person specified in regulations
promulgated by the Secretary.
``SEC. 922. PRIVILEGE AND CONFIDENTIALITY PROTECTIONS.
``(a) Privilege.--Notwithstanding any other provision of Federal,
State, or local law, patient safety data shall be privileged and,
subject to the provisions of subsection (c)(1), shall not be--
``(1) subject to a Federal, State, or local civil,
criminal, or administrative subpoena;
``(2) subject to discovery in connection with a Federal,
State, or local civil, criminal, or administrative proceeding;
``(3) disclosed pursuant to section 552 of title 5, United
States Code (commonly known as the Freedom of Information Act)
or any other similar Federal, State, or local law;
``(4) admitted as evidence or otherwise disclosed in any
Federal, State, or local civil, criminal, or administrative
proceeding; or
``(5) utilized in a disciplinary proceeding against a
provider.
``(b) Confidentiality.--Notwithstanding any other provision of
Federal, State, or local law, and subject to the provisions of
subsections (c) and (d), patient safety data shall be confidential and
shall not be disclosed.
``(c) Exceptions to Privilege and Confidentiality.--Nothing in this
section shall be construed to prohibit one or more of the following
uses or disclosures:
``(1) Disclosure by a provider or patient safety
organization of relevant patient safety data for use in a
criminal proceeding only after a court makes an in camera
determination that such patient safety data contains evidence
of a wanton and criminal act to directly harm the patient.
``(2) Voluntary disclosure of non-identifiable patient
safety data by a provider or a patient safety organization.
``(d) Protected Disclosure and Use of Information.--Nothing in this
section shall be construed to prohibit one or more of the following
uses or disclosures:
``(1) Disclosure of patient safety data by a person that is
a provider, a patient safety organization, or a contractor of a
provider or patient safety organization, to another such
person, to carry out patient safety organization activities.
``(2) Disclosure of patient safety data by a provider or
patient safety organization to grantees or contractors carrying
out patient safety research, evaluation, or demonstration
projects authorized by the Director.
``(3) Disclosure of patient safety data by a provider to an
accrediting body that accredits that provider.
``(4) Voluntary disclosure of patient safety data by a
patient safety organization to the Secretary for public health
surveillance if the consent of each provider identified in, or
providing, such data is obtained prior to such disclosure.
Nothing in the preceding sentence shall be construed to prevent
the release of patient safety data that is provided by, or that
relates solely to, a provider from which the consent described
in such sentence is obtained because one or more other
providers do not provide such consent with respect to the
disclosure of patient safety date that relates to such
nonconsenting providers. Consent for the future release of
patient safety data for such purposes may be requested by the
patient safety organization at the time the data is submitted.
``(5) Voluntary disclosure of patient safety data by a
patient safety organization to State of local government
agencies for public health surveillance if the consent of each
provider identified in, or providing, such data is obtained
prior to such disclosure. Nothing in the preceding sentence
shall be construed to prevent the release of patient safety
data that is provided by, or that relates solely to, a provider
from which the consent described in such sentence is obtained
because one or more other providers do not provide such consent
with respect to the disclosure of patient safety date that
relates to such nonconsenting providers. Consent for the future
release of patient safety data for such purposes may be
requested by the patient safety organization at the time the
data is submitted.
``(e) Continued Protection of Information after Disclosure.--
``(1) In general.--Except as provided in paragraph (2),
patient safety data that is used or disclosed shall continue to
be privileged and confidential as provided for in subsections
(a) and (b), and the provisions of such subsections shall apply
to such data in the possession or control of--
``(A) a provider or patient safety organization
that possessed such data before the use or disclosure;
or
``(B) a person to whom such data was disclosed.
``(2) Exception.--Notwithstanding paragraph (1), and
subject to paragraph (3)--
``(A) if patient safety data is used or disclosed
as provided for in subsection (c)(1), and such use or
disclosure is in open court, the confidentiality
protections provided for in subsection (b) shall no
longer apply to such data; and
``(B) if patient safety data is used or disclosed
as provided for in subsection (c)(2), the privilege and
confidentiality protections provided for in subsections
(a) and (b) shall no longer apply to such data.
``(3) Construction.--Paragraph (2) shall not be construed
as terminating or limiting the privilege or confidentiality
protections provided for in subsection (a) or (b) with respect
to data other than the specific data used or disclosed as
provided for in subsection (c).
``(f) Limitation on Actions.--
``(1) Patient safety organizations.--Except to enforce
disclosures pursuant to subsection (c)(1), no action may be
brought or process served against a patient safety organization
to compel disclosure of information collected or developed
under this part whether or not such information is patient
safety data unless such information is specifically identified,
is not patient safety data, and cannot otherwise be obtained.
``(2) Providers.--An accrediting body shall not take an
accrediting action against a provider based on the good faith
participation of the provider in the collection, development,
reporting, or maintenance of patient safety data in accordance
with this part. An accrediting body may not require a provider
to reveal its communications with any patient safety
organization established in accordance with this part.
``(g) Reporter Protection.--
``(1) In general.--A provider may not take an adverse
employment action, as described in paragraph (2), against an
individual based upon the fact that the individual in good
faith reported information--
``(A) to the provider with the intention of having
the information reported to a patient safety
organization; or
``(B) directly to a patient safety organization.
``(2) Adverse employment action.--For purposes of this
subsection, an `adverse employment action' includes--
``(A) loss of employment, the failure to promote an
individual, or the failure to provide any other
employment-related benefit for which the individual
would otherwise be eligible; or
``(B) an adverse evaluation or decision made in
relation to accreditation, certification,
credentialing, or licensing of the individual.
``(h) Enforcement.--
``(1) Prohibition.--Except as provided in subsections (c)
and (d) and as otherwise provided for in this section, it shall
be unlawful for any person to negligently or intentionally
disclose any patient safety data, and any such person shall,
upon adjudication, be assessed in accordance with section
934(d).
``(2) Relation to hipaa.--The penalty provided for under
paragraph (1) shall not apply if the defendant would otherwise
be subject to a penalty under the regulations promulgated under
section 264(c) of the Health Insurance Portability and
Accountability Act of 1996 (42 U.S.C. 1320d-2 note) or under
section 1176 of the Social Security Act (42 U.S.C. 1320d-5) for
the same disclosure.
``(3) Equitable relief.--
``(A) In general.--Without limiting remedies
available to other parties, a civil action may be
brought by any aggrieved individual to enjoin any act
or practice that violates subsection (g) and to obtain
other appropriate equitable relief (including
reinstatement, back pay, and restoration of benefits)
to redress such violation.
``(B) Against state employees.--An entity that is a
State or an agency of a State government may not assert
the privilege described in subsection (a) unless before
the time of the assertion, the entity or, in the case
of and with respect to an agency, the State has
consented to be subject to an action as described by
this paragraph, and that consent has remained in
effect.
``(i) Rule of Construction.--Nothing in this section shall be
construed to--
``(1) limit other privileges that are available under
Federal, State, or local laws that provide greater
confidentiality protections or privileges than the privilege
and confidentiality protections provided for in this section;
``(2) limit, alter, or affect the requirements of Federal,
State, or local law pertaining to information that is not
privileged or confidential under this section;
``(3) alter or affect the implementation of any provision
of section 264(c) of the Health Insurance Portability and
Accountability Act of 1996 (Public Law 104-191; 110 Stat.
2033), section 1176 of the Social Security Act (42 U.S.C.
1320d-5), or any regulation promulgated under such sections;
``(4) limit the authority of any provider, patient safety
organization, or other person to enter into a contract
requiring greater confidentiality or delegating authority to
make a disclosure or use in accordance with subsection (c) or
(d); and
``(5) prohibit a provider from reporting a crime to law
enforcement authorities, regardless of whether knowledge of the
existence of, or the description of, the crime is based on
patient safety data, so long as the provider does not disclose
patient safety data in making such report.
``SEC. 923. PATIENT SAFETY NETWORK OF DATABASES.
``(a) In General.--The Secretary shall maintain a patient safety
network of databases that provides an interactive evidence-based
management resource for providers, patient safety organizations, and
other persons. The network of databases shall have the capacity to
accept, aggregate, and analyze nonidentifiable patient safety data
voluntarily reported by patient safety organizations, providers, or
other persons.
``(b) Network of Database Standards.--The Secretary may determine
common formats for the reporting to the patient safety network of
databases maintained under subsection (a) of nonidentifiable patient
safety data, including necessary data elements, common and consistent
definitions, and a standardized computer interface for the processing
of such data. To the extent practicable, such standards shall be
consistent with the administrative simplification provisions of Part C
of title XI of the Social Security Act.
``SEC. 924. PATIENT SAFETY ORGANIZATION CERTIFICATION AND LISTING.
``(a) Certification.--
``(1) Initial certification.--Except as provided in
paragraph (2), an entity that seeks to be a patient safety
organization shall submit an initial certification to the
Secretary that the entity intends to perform the patient safety
organization activities.
``(2) Delayed certification of collection from more than
one provider.--An entity that seeks to be a patient safety
organization may--
``(A) submit an initial certification that it
intends to perform patient safety organization
activities other than the activities described in
subparagraph (B) of section 921(4); and
``(B) within 2 years of submitting the initial
certification under subparagraph (A), submit a
supplemental certification that it performs the patient
safety organization activities described in
subparagraphs (A) through (F) of section 921(4).
``(3) Expiration and renewal.--
``(A) Expiration.--An initial certification under
paragraph (1) or (2)(A) shall expire on the date that
is 3 years after it is submitted.
``(B) Renewal.--
``(i) In general.--An entity that seeks to
remain a patient safety organization after the
expiration of an initial certification under
paragraph (1) or (2)(A) shall, within the 3-
year period described in subparagraph (A),
submit a renewal certification to the Secretary
that the entity performs the patient safety
organization activities described in section
921(4).
``(ii) Term of renewal.--A renewal
certification under clause (i) shall expire on
the date that is 3 years after the date on
which it is submitted, and may be renewed in
the same manner as an initial certification.
``(b) Acceptance of Certification.--Upon the submission by an
organization of an initial certification pursuant to subsection (a)(1)
or (a)(2)(A), a supplemental certification pursuant to subsection
(a)(2)(B), or a renewal certification pursuant to subsection (a)(3)(B),
the Secretary shall review such certification and--
``(1) if such certification meets the requirements of
subsection (a)(1), (a)(2)(A), (a)(2)(B), or (a)(3)(B), as
applicable, the Secretary shall notify the organization that
such certification is accepted; or
``(2) if such certification does not meet such
requirements, as applicable, the Secretary shall notify the
organization that such certification is not accepted and the
reasons therefor.
``(c) Listing.--
``(1) In general.--Except as otherwise provided in this
subsection, the Secretary shall compile and maintain a current
listing of patient safety organizations with respect to which
the Secretary has accepted a certification pursuant to
subsection (b).
``(2) Removal from listing.--The Secretary shall remove
from the listing under paragraph (1)--
``(A) an entity with respect to which the Secretary
has accepted an initial certification pursuant to
subsection (a)(2)(A) and which does not submit a
supplemental certification pursuant to subsection
(a)(2)(B) that is accepted by the Secretary;
``(B) an entity whose certification expires and
which does not submit a renewal application that is
accepted by the Secretary; and
``(C) an entity with respect to which the Secretary
revokes the Secretary's acceptance of the entity's
certification, pursuant to subsection (d).
``(d) Revocation of Acceptance.--
``(1) In general.--Except as provided in paragraph (2), if
the Secretary determines (through a review of patient safety
organization activities) that a patient safety organization
does not perform one of the patient safety organization
activities described in subparagraph (A) through (F) of section
921(4), the Secretary may, after notice and an opportunity for
a hearing, revoke the Secretary's acceptance of the
certification of such organization.
``(2) Delayed certification of collection from more than
one provider.--A revocation under paragraph (1) may not be
based on a determination that the organization does not perform
the activity described in section 921(4)(B) if--
``(A) the listing of the organization is based on
its submittal of an initial certification under
subsection (a)(2)(A);
``(B) the organization has not submitted a
supplemental certification under subsection (a)(2)(B);
and
``(C) the 2-year period described in subsection
(a)(2)(B) has not expired.
``(e) Notification of Revocation or Removal From Listing.--
``(1) Supplying confirmation of notification to
providers.--Within 15 days of a revocation under subsection
(d)(1), a patient safety organization shall submit to the
Secretary a confirmation that the organization has taken all
reasonable actions to notify each provider whose patient safety
data is collected or analyzed by the organization of such
revocation.
``(2) Publication.--Upon the revocation of an acceptance of
an organization's certification under subsection (d)(1), or
upon the removal of an organization from the listing under
subsection (c)(2), the Secretary shall publish notice of the
revocation or removal in the Federal Register.
``(f) Status of Data After Removal From Listing.--
``(1) New data.--With respect to the privilege and
confidentiality protections described in section 922, data
submitted to an organization within 30 days after the
organization is removed from the listing under subsection
(c)(2) shall have the same status as data submitted while the
organization was still listed.
``(2) Protection to continue to apply.--If the privilege
and confidentiality protections described in section 922
applied to data while an organization was listed, or during the
30-day period described in paragraph (1), such protections
shall continue to apply to such data after the organization is
removed from the listing under subsection (c)(2).
``(g) Disposition of Data.--If the Secretary removes an
organization from the listing as provided for in subsection (c)(2),
with respect to the patient safety data that the organization received
from providers, the organization shall--
``(1) with the approval of the provider and another patient
safety organization, transfer such data to such other
organization;
``(2) return such data to the person that submitted the
data; or
``(3) if returning such data to such person is not
practicable, destroy such data.
``SEC. 925. TECHNICAL ASSISTANCE.
``The Secretary, acting through the Director, may provide technical
assistance to patient safety organizations, including convening annual
meetings for patient safety organizations to discuss methodology,
communication, data collection, or privacy concerns.
``SEC. 926. PROMOTING THE INTEROPERABILITY OF HEALTH CARE INFORMATION
TECHNOLOGY SYSTEMS.
``(a) Development.--Not later than 36 months after the date of
enactment of the Patient Safety and Quality Improvement Act of 2005,
the Secretary shall develop or adopt voluntary standards that promote
the electronic exchange of health care information.
``(b) Updates.--The Secretary shall provide for the ongoing review
and periodic updating of the standards developed under subsection (a).
``(c) Dissemination.--The Secretary shall provide for the
dissemination of the standards developed and updated under this
section.
``SEC. 927. AUTHORIZATION OF APPROPRIATIONS.
``There is authorized to be appropriated such sums as may be
necessary to carry out this part.''.
SEC. 144. STUDIES AND REPORTS.
(a) In General.--The Secretary of Health and Human Services shall
enter into a contract (based upon a competitive contracting process)
with an appropriate research organization for the conduct of a study to
assess the impact of medical technologies and therapies on patient
safety, patient benefit, health care quality, and the costs of care as
well as productivity growth. Such study shall examine--
(1) the extent to which factors, such as the use of labor
and technological advances, have contributed to increases in
the share of the gross domestic product that is devoted to
health care and the impact of medical technologies and
therapies on such increases;
(2) the extent to which early and appropriate introduction
and integration of innovative medical technologies and
therapies may affect the overall productivity and quality of
the health care delivery systems of the United States; and
(3) the relationship of such medical technologies and
therapies to patient safety, patient benefit, health care
quality, and cost of care.
(b) Report.--Not later than 18 months after the date of enactment
of this Act, the Secretary of Health and Human Services shall prepare
and submit to the appropriate committees of Congress a report
containing the results of the study conducted under subsection (a).
Subtitle D--Fraud and Abuse
SEC. 151. NATIONAL EXPANSION OF THE MEDICARE-MEDICAID DATA MATCH PILOT
PROGRAM.
(a) Requirement of the Medicare Integrity Program.--Section 1893 of
the Social Security Act (42 U.S.C. 1395ddd) is amended--
(1) in subsection (b), by adding at the end the following:
``(6) The Medicare-Medicaid data match program in
accordance with subsection (g).''; and
(2) by adding at the end the following:
``(g) Medicare-Medicaid Data Match Program.--
``(1) Expansion of program.--
``(A) In general.--The Secretary shall enter into
contracts with eligible entities for the purpose of
ensuring that, beginning with 2006, the Medicare-
Medicaid data match program (commonly referred to as
the `Medi-Medi Program') is conducted with respect to
the program established under this title and the
applicable number of State Medicaid programs under
title XIX for the purpose of--
``(i) identifying vulnerabilities in both
such programs;
``(ii) assisting States, as appropriate, to
take action to protect the Federal share of
expenditures under the Medicaid program; and
``(iii) increasing the effectiveness and
efficiency of both such programs through cost
avoidance, savings, and recoupments of
fraudulent, wasteful, or abusive expenditures.
``(B) Applicable number.--For purposes of
subparagraph (A), the term `applicable number' means--
``(i) in the case of fiscal year 2006, 10
State Medicaid programs;
``(ii) in the case of fiscal year 2007, 12
State Medicaid programs; and
``(iii) in the case of fiscal year 2008, 15
State Medicaid programs.
``(2) Limited waiver authority.--The Secretary shall waive
only such requirements of this section and of titles XI and XIX
as are necessary to carry out paragraph (1).''.
(b) Funding.--Section 1817(k)(4) of the Social Security Act (42
U.S.C. 1395i(k)(4)) 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:
``(C) Expansion of the medicare-medicaid data match
program.--Of the amount appropriated under subparagraph
(A) for a fiscal year, the following amounts shall be
used to carry out section 1893(b)(6) for that year:
``(i) $10,000,000 of the amount
appropriated for fiscal year 2006.
``(ii) $12,200,000 of the amount
appropriated for fiscal year 2007.
``(iii) $15,800,000 of the amount
appropriated for fiscal year 2008.''.
Subtitle E--Miscellaneous Provisions
SEC. 161. SENSE OF THE SENATE ON ESTABLISHING A MANDATED BENEFITS
COMMISSION.
It is the Sense of the Senate that--
(1) there should be established an independent Federal
entity to study and provide advice to Congress on existing and
proposed federally mandated health insurance benefits offered
by employer-sponsored health plans and insurance issuers; and
(2) advice provided under paragraph (1) should be evidence-
and actuarially-based, and take into consideration the
population costs and benefits, including the health, financial,
and social impact on affected populations, safety and medical
efficacy, the impact on costs and access to insurance
generally, and to different types of insurance products, the
impact on labor costs and jobs, and any other relevant factors.
SEC. 162. ENFORCEMENT OF REIMBURSEMENT PROVISIONS BY FIDUCIARIES.
Section 502(a)(3) of the Employee Retirement Income Security Act of
1974 (29 U.S.C. 1132(a)(3)) is amended by inserting before the
semicolon the following: ``(which may include the recovery of amounts
on behalf of the plan by a fiduciary enforcing the terms of the plan
that provide a right of recovery by reimbursement or subrogation with
respect to benefits provided to a participant or beneficiary)''.
TITLE II--EXPANDING ACCESS TO AFFORDABLE HEALTH COVERAGE THROUGH TAX
INCENTIVES AND OTHER INITIATIVES
Subtitle A--Refundable Health Insurance Credit
SEC. 201. REFUNDABLE HEALTH INSURANCE COSTS CREDIT.
(a) Allowance of Credit.--
(1) In general.--Subpart C of part IV of subchapter A of
chapter 1 of the Internal Revenue Code of 1986 (relating to
refundable personal credits) is amended by redesignating
section 36 as section 37 and by inserting after section 35 the
following new section:
``SEC. 36. HEALTH INSURANCE COSTS FOR UNINSURED INDIVIDUALS.
``(a) Allowance of Credit.--In the case of an individual, there
shall be allowed as a credit against the tax imposed by this subtitle
for the taxable year an amount equal to the amount paid by the taxpayer
during such taxable year for qualified health insurance for the
taxpayer and the taxpayer's spouse and dependents.
``(b) Limitations.--
``(1) In general.--Except as provided in paragraphs (2) and
(3), the amount allowed as a credit under subsection (a) to the
taxpayer for the taxable year shall not exceed the lesser of--
``(A) 90 percent of the sum of the amounts paid by
the taxpayer for qualified health insurance for each
individual referred to in subsection (a) for coverage
months of the individual during the taxable year, or
``(B) $3,000.
``(2) Monthly limitation.--
``(A) In general.--For purposes of paragraph (1),
amounts paid by the taxpayer for qualified health
insurance for an individual for any coverage month of
such individual during the taxable year shall not be
taken into account to the extent such amounts exceed
the amount equal to \1/12\ of--
``(i) $1,111 if such individual is the
taxpayer,
``(ii) $1,111 if--
``(I) such individual is the spouse
of the taxpayer,
``(II) the taxpayer and such spouse
are married as of the first day of such
month, and
``(III) the taxpayer files a joint
return for the taxable year,
``(iii) $1,111 if such individual has
attained the age of 24 as of the close of the
taxable year and is a dependent of the taxpayer
for such taxable year, and
``(iv) one-half of the amount described in
clause (i) if such individual has not attained
the age of 24 as of the close of the taxable
year and is a dependent of the taxpayer for
such taxable year.
``(B) Limitation to 2 young dependents.--If there
are more than 2 individuals described in subparagraph
(A)(iv) with respect to the taxpayer for any coverage
month, the aggregate amounts paid by the taxpayer for
qualified health insurance for such individuals which
may be taken into account under paragraph (1) shall not
exceed \1/12\ of the dollar amount in effect under
subparagraph (A)(i) for the coverage month.
``(C) Special rule for married individuals.--In the
case of a taxpayer--
``(i) who is married (within the meaning of
section 7703) as of the close of the taxable
year but does not file a joint return for such
year, and
``(ii) who does not live apart from such
taxpayer's spouse at all times during the
taxable year,
any dollar limitation imposed under this paragraph on
amounts paid for qualified health insurance for
individuals described in subparagraph (A)(iv) shall be
divided equally between the taxpayer and the taxpayer's
spouse unless they agree on a different division.
``(3) Income phaseout of credit percentage for one-person
coverage.--
``(A) Phaseout for unmarried individuals (other
than surviving spouses and heads of households).--In
the case of an individual (other than a surviving
spouse, the head of a household, or a married
individual) with one-person coverage, if such
individual has modified adjusted gross income--
``(i) in excess of $15,000 for a taxable
year but not in excess of $20,000, the 90
percent under paragraph (1)(B) shall be reduced
by the number of percentage points which bears
the same ratio to 40 percentage points as--
``(I) the excess of modified
adjusted gross income in excess of
$15,000, bears to
``(II) $5,000, or
``(ii) in excess of $20,000 for a taxable
year, the 90 percent under paragraph (1)(B)
shall be reduced by the sum of 40 percentage
points plus the number of percentage points
which bears the same ratio to 50 percentage
points as--
``(I) the excess of modified
adjusted gross income in excess of
$20,000, bears to
``(II) $10,000.
``(B) Phaseout for other individuals.--In the case
of a taxpayer (other than an individual described in
subparagraph (A) or (C)) with one-person coverage, if
the taxpayer has modified adjusted gross income in
excess of $25,000 for a taxable year, the 90 percent
under paragraph (1)(B) shall be reduced by the number
of percentage points which bears the same ratio to 90
percentage points as--
``(i) the excess of modified adjusted gross
income in excess of $25,000, bears to
``(ii) $15,000.
``(C) Married filing separate return.--In the case
of a taxpayer who is married filing a separate return
for the taxable year and who has one-person coverage,
if the taxpayer has modified adjusted gross income in
excess of $12,500 for the taxable year, the 90 percent
under paragraph (1)(B) shall be reduced by the number
of percentage points which bears the same ratio to 90
percentage points as--
``(i) the excess of modified adjusted gross
income in excess of $12,500, bears to
``(ii) $7,500.
``(4) Income phaseout of credit percentage for coverage of
more than one person.--
``(A) In general.--Except as provided in
subparagraph (B), in the case of a taxpayer with
coverage of more than one person, if the taxpayer has
modified adjusted gross income in excess of $25,000 for
a taxable year, the 90 percent under paragraph (1)(B)
shall be reduced by the number of percentage points
which bears the same ratio to 90 percentage points as--
``(i) the excess of modified adjusted gross
income in excess of $25,000, bears to
``(ii) $35,000.
``(B) Married filing separate return.--In the case
of a taxpayer who is married filing a separate return
for the taxable year and who has coverage of more than
one person, if the taxpayer has modified adjusted gross
income in excess of $12,500 for the taxable year, the
90 percent under paragraph (1)(B) shall be reduced by
the number of percentage points which bears the same
ratio to 90 percentage points as--
``(i) the excess of modified adjusted gross
income in excess of $12,500, bears to
``(ii) $17,500.
``(5) Rounding.--Any percentage resulting from a reduction
under paragraphs (3) and (4) shall be rounded to the nearest
one-tenth of a percent.
``(6) Modified adjusted gross income.--The term `modified
adjusted gross income' means adjusted gross income determined--
``(A) without regard to this section and sections
911, 931, and 933, and
``(B) after application of sections 86, 135, 137,
219, 221, and 469.
``(c) Coverage Month.--For purposes of this section--
``(1) In general.--The term `coverage month' means, with
respect to an individual, any month if--
``(A) as of the first day of such month such
individual is covered by qualified health insurance,
and
``(B) the premium for coverage under such insurance
for such month is paid by the taxpayer.
``(2) Group health plan coverage.--
``(A) In general.--The term `coverage month' shall
not include any month for which if, as of the first day
of the month, the individual participates in any group
health plan (within the meaning of section 5000 without
regard to section 5000(d)).
``(B) Exception for certain permitted coverage.--
Subparagraph (A) shall not apply to an individual if
the individual's only coverage for a month is coverage
described in clause (i) or (ii) of section
223(c)(1)(B).
``(3) Employer-provided coverage.--The term `coverage
month' shall not include any month during a taxable year if any
amount is not includible in the gross income of the taxpayer
for such year under section 106 (other than coverage described
in clause (i) or (ii) of section 223(c)(1)(B)).
``(4) Medicare, medicaid, and schip.--The term `coverage
month' shall not include any month with respect to an
individual if, as of the first day of such month, such
individual--
``(A) is entitled to any benefits under part A of
title XVIII of the Social Security Act or is enrolled
under part B of such title, or
``(B) is enrolled in the program under title XIX or
XXI of such Act (other than under section 1928 of such
Act).
``(5) Certain other coverage.--The term `coverage month'
shall not include any month during a taxable year with respect
to an individual if, as of the first day of such month at any
time during such month, such individual is enrolled in a
program under--
``(A) chapter 89 of title 5, United States Code, or
``(B) chapter 55 of title 10, United States Code.
``(6) Prisoners.--The term `coverage month' shall not
include any month with respect to an individual if, as of the
first day of such month, such individual is imprisoned under
Federal, State, or local authority.
``(7) Insufficient presence in united states.--The term
`coverage month' shall not include any month during a taxable
year with respect to an individual if such individual is
present in the United States on fewer than 183 days during such
year (determined in accordance with section 7701(b)(7)).
``(d) Qualified Health Insurance.--For purposes of this section--
``(1) In general.--The term `qualified health insurance'
means health insurance coverage (as defined in section
9832(b)(1)) which--
``(A) is coverage described in paragraph (2), and
``(B) meets the requirements of paragraph (3).
``(2) Eligible coverage.--Coverage described in this
paragraph is the following:
``(A) Coverage under individual health insurance.
``(B) Coverage through a private sector health care
coverage purchasing pool.
``(C) Coverage through a State care coverage
purchasing pool.
``(D) Coverage under a State high-risk pool
described in subparagraph (C) of section 35(e)(1).
``(E) Coverage after December 31, 2006, under an
eligible State buy in program.
``(3) Requirements.--The requirements of this paragraph are
as follows:
``(A) Cost limits.--The coverage meets the
requirements of section 223(c)(2)(A)(ii).
``(B) Maximum benefits.--Under the coverage, the
annual and lifetime maximum benefits are not less than
$700,000.
``(C) Broad coverage.--The coverage includes
inpatient and outpatient care, emergency benefits, and
physician care.
``(D) Guaranteed renewability.--Such coverage is
guaranteed renewable by the provider.
``(4) Eligible state buy in program.--For purposes of
paragraph (2)(E)--
``(A) In general.--The term `eligible State buy in
program' means a State program under which an
individual who--
``(i) is not eligible for assistance under
the State medicaid program under title XIX of
the Social Security Act,
``(ii) is not eligible for assistance under
the State children's health insurance program
under title XXI of such Act, or
``(iii) is not a State employee,
is able to buy health insurance coverage through a
purchasing arrangement entered into between the State
and a private sector health care purchasing group or
health plan.
``(B) Requirements.--Subparagraph (A) shall only
apply to a State program if--
``(i) the program uses private sector
health care purchasing groups or health plans,
and
``(ii) the State maintains separate risk
pools for participants under the State buy in
program and other participants.
``(C) Subsidies.--
``(i) In general.--A State program shall
not fail to be treated as an eligible State buy
in program merely because the State subsidizes
the costs of an individual in buying health
insurance coverage under the program.
``(ii) Exception.--Clause (i) shall not
apply if the State subsidy under the program
for any adult for any consecutive 12-month
period exceeds the applicable dollar amount.
``(iii) Applicable dollar amount.--
``(I) In general.--For purposes of
clause (ii), the applicable dollar
amount is $2,000.
``(II) Reduction.--In the case of a
family with annual income in excess of
133 percent of the applicable poverty
line (as determined in accordance with
criteria established by the Director of
the Office of Management and Budget)
but not in excess of 200 percent of
such line, the dollar amount under
clause (i) shall be ratably reduced
(but not below zero) for each dollar of
such excess. In the case of a family
with annual income in excess of 200
percent of such line, the applicable
dollar amount shall be zero.
``(e) Arrangements Under Which Insurers Contribute to HSA.--
``(1) In general.--For purposes of this section, health
insurance shall not be treated as qualified health insurance if
the insurer makes contributions to a health savings account of
the taxpayer unless such insurance is provided under an
arrangement described in paragraph (2).
``(2) Arrangements described.--
``(A) Amounts paid for coverage exceed monthly
limitation.--In the case of amounts paid under an
arrangement for health insurance for a coverage month
in excess of the amount in effect under subsection
(b)(2)(A) for such month, an arrangement is described
in this subparagraph if under the arrangement--
``(i) the aggregate amount contributed by
the insurer to any health savings account of
the taxpayer does not exceed 90 percent of the
excess of--
``(I) the amount paid by the
taxpayer for qualified health insurance
under such arrangement for such month,
over
``(II) the amount in effect under
subsection (b)(2)(A) for such month,
and
``(ii) the amount contributed by the
insurer to a qualified health savings account
of the taxpayer, reduced by the amount of the
excess under clause (i), does not exceed 27
percent of the amount in effect under
subsection (b)(2)(A) for such month.
``(B) Amounts paid for coverage less than monthly
limitation.--In the case of an arrangement under which
the amount paid for qualified health insurance for a
coverage month does not exceed the amount in effect
under subsection (b)(2)(A) for such month, an
arrangement is described in this subparagraph if--
``(i) under the arrangement the value of
the insured benefits (excluding overhead)
exceeds 65 percent of the amount paid for
qualified health insurance for such month, and
``(ii) the amount contributed by the
insurer to a qualified health savings account
of the taxpayer does not exceed 27 percent of
the amount in effect under subsection (b)(2)(A)
for such month.
``(3) Qualified health savings account.--
``(A) In general.--The term `qualified health
savings account' means a health savings account (as
defined in section 223(d))--
``(i) which is designated (in such form as
the Secretary may prescribe) as a qualified
account for purposes of this section,
``(ii) which may not include any amount
other than contributions described in this
subsection and earnings on such contributions,
and
``(iii) with respect to which section
223(f)(4)(A) is applied by substituting `100
percent' for `10 percent'.
``(B) Subaccounts and separate accounting.--The
Secretary may prescribe rules under which a subaccount
within a health savings account, or separate accounting
with respect to contributions and earnings described in
subparagraph (A)(ii), may be treated in the same manner
as a qualified health savings account.
``(C) Rollovers.--A contribution of a distribution
from a qualified health savings account to another
health savings account shall be treated as a rollover
contribution for purposes of section 223(f)(5) only if
the other account is a qualified health savings
account.
``(f) Dependents.--For purposes of this section--
``(1) Dependent defined.--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).
``(2) Special rule for dependent child of divorced
parents.--An individual who is a child to whom section 152(e)
applies shall be treated as a dependent of the custodial parent
for a coverage month unless the custodial and noncustodial
parent provide otherwise.
``(3) Denial of credit to dependents.--No credit shall be
allowed under this section to any individual with respect to
whom a deduction under section 151(c) is allowable to another
taxpayer for a taxable year beginning in the calendar year in
which such individual's taxable year begins.
``(g) Inflation Adjustments.--
``(1) Credit and health insurance amounts.--In the case of
any taxable year beginning after 2006, each dollar amount
referred to in subsections (b)(1)(B), (b)(2)(A), (d)(3)(B), and
(d)(4)(C)(iii)(I) shall be increased by an amount equal to--
``(A) such dollar amount, multiplied by
``(B) the cost-of-living adjustment determined
under section 213(d)(10)(B)(ii) for the calendar year
in which the taxable year begins, determined by
substituting `2005' for `1996' in subclause (II)
thereof.
If any amount as adjusted under the preceding sentence is not a
multiple of $10, such amount shall be rounded to the nearest
multiple of $10.
``(2) Income phaseout amounts.--In the case of any taxable
year beginning after 2006, each dollar amount referred to in
paragraph (3) and (4) of subsection (b) 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 2005' for `calendar year 1992' in
subparagraph (B) thereof.
If any amount as adjusted under the preceding sentence is not a
multiple of $50, such amount shall be rounded to the next
lowest multiple of $50.
``(h) Archer MSA Contributions; HSA Contributions.--If a deduction
would be allowed under section 220 to the taxpayer for a payment for
the taxable year to the Archer MSA of an individual or under section
223 to the taxpayer for a payment for the taxable year to the Health
Savings Account of such individual, subsection (a) shall not apply to
the taxpayer for any month during such taxable year for which the
taxpayer, spouse, or dependent is an eligible individual for purposes
of either such section.
``(i) Other Rules.--For purposes of this section--
``(1) Coordination with medical expense and premium
deductions for high deductible health plans.--The amount which
would (but for this paragraph) be taken into account by the
taxpayer under section 213 or 224 for the taxable year shall be
reduced by the credit (if any) allowed by this section to the
taxpayer for such year.
``(2) Coordination with deduction for health insurance
costs of self-employed individuals.--No credit shall be
allowable under this section for a taxable year if a deduction
is allowed under section 162(l) for the taxable year.
``(3) Coordination with advance payment.--Rules similar to
the rules of section 35(g)(1) shall apply to any credit to
which this section applies.
``(4) Coordination with section 35.--If a taxpayer is
eligible for the credit allowed under this section and section
35 for any taxable year, the taxpayer shall elect which credit
is to be allowed.
``(j) Expenses Must Be Substantiated.--A payment for insurance to
which subsection (a) applies may be taken into account under this
section only if the taxpayer substantiates such payment in such form as
the Secretary may prescribe.
``(k) Regulations.--The Secretary shall prescribe such regulations
as may be necessary to carry out the purposes of this section.''.
(b) Information Reporting.--
(1) In general.--Subpart B of part III of subchapter A of
chapter 61 of the Internal Revenue Code of 1986 (relating to
information concerning transactions with other persons) is
amended by inserting after section 6050T the following:
``SEC. 6050U. RETURNS RELATING TO PAYMENTS FOR QUALIFIED HEALTH
INSURANCE.
``(a) In General.--Any person who, in connection with a trade or
business conducted by such person, receives payments during any
calendar year from any individual for coverage of such individual or
any other individual under creditable health insurance, shall make the
return described in subsection (b) (at such time as the Secretary may
by regulations prescribe) with respect to each individual from whom
such payments were received.
``(b) Form and Manner of Returns.--A return is described in this
subsection if such return--
``(1) is in such form as the Secretary may prescribe, and
``(2) contains--
``(A) the name, address, and TIN of the individual
from whom payments described in subsection (a) were
received,
``(B) the name, address, and TIN of each individual
who was provided by such person with coverage under
creditable health insurance by reason of such payments
and the period of such coverage,
``(C) the aggregate amount of payments described in
subsection (a), and
``(D) such other information as the Secretary may
reasonably prescribe.
``(c) Creditable Health Insurance.--For purposes of this section,
the term `creditable health insurance' means qualified health insurance
(as defined in section 36(d)).
``(d) Statements To Be Furnished to Individuals With Respect to
Whom Information Is Required.--Every person required to make a return
under subsection (a) shall furnish to each individual whose name is
required under subsection (b)(2)(A) to be set forth in such return a
written statement showing--
``(1) the name and address of the person required to make
such return and the phone number of the information contact for
such person,
``(2) the aggregate amount of payments described in
subsection (a) received by the person required to make such
return from the individual to whom the statement is required to
be furnished, and
``(3) the information required under subsection (b)(2)(B)
with respect to such payments.
The written statement required under the preceding sentence shall be
furnished on or before January 31 of the year following the calendar
year for which the return under subsection (a) is required to be made.
``(e) Returns Which Would Be Required To Be Made by 2 or More
Persons.--Except to the extent provided in regulations prescribed by
the Secretary, in the case of any amount received by any person on
behalf of another person, only the person first receiving such amount
shall be required to make the return under subsection (a).''.
(2) Assessable penalties.--
(A) Subparagraph (B) of section 6724(d)(1) of such
Code (relating to definitions) is amended by
redesignating clauses (xiii) through (xviii) as clauses
(xiv) through (xix), respectively, and by inserting
after clause (xii) the following:
``(xiii) section 6050U (relating to returns
relating to payments for qualified health
insurance),''.
(B) Paragraph (2) of section 6724(d) of such Code
is amended by striking ``or'' at the end of
subparagraph (AA), by striking the period at the end of
the subparagraph (BB) and inserting ``, or'', and by
adding at the end the following:
``(CC) section 6050U(d) (relating to returns
relating to payments for qualified health
insurance).''.
(3) Clerical amendment.--The table of sections for subpart
B of part III of subchapter A of chapter 61 of such Code is
amended by inserting after the item relating to section 6050T
the following:
``Sec. 6050U. Returns relating to payments for qualified health
insurance.''.
(c) Criminal Penalty for Fraud.--Subchapter B of chapter 75 of the
Internal Revenue Code of 1986 (relating to other offenses) is amended
by adding at the end the following:
``SEC. 7276. PENALTIES FOR OFFENSES RELATING TO HEALTH INSURANCE TAX
CREDIT.
``Any person who knowingly misuses Department of the Treasury
names, symbols, titles, or initials to convey the false impression of
association with, or approval or endorsement by, the Department of the
Treasury of any insurance products or group health coverage in
connection with the credit for health insurance costs under section 36
shall on conviction thereof be fined not more than $10,000, or
imprisoned not more than 1 year, or both.''.
(d) Conforming Amendments.--
(1) Section 162(l) of the Internal Revenue Code of 1986 is
amended by adding at the end the following:
``(6) Election to have subsection apply.--No deduction
shall be allowed under paragraph (1) for a taxable year unless
the taxpayer elects to have this subsection apply for such
year.''.
(2) Paragraph (2) of section 1324(b) of title 31, United
States Code, is amended by inserting before the period ``, or
from section 36 of such Code''.
(3) The table of sections for subpart C of part IV of
subchapter A of chapter 1 of the Internal Revenue Code of 1986
is amended by striking ``35'' and inserting ``36'' and by
inserting after the item relating to section 35 the following:
``Sec. 36. Health insurance costs for uninsured individuals.''.
(4) The table of sections for subchapter B of chapter 75 of
such Code is amended by adding at the end the following:
``Sec. 7276. Penalties for offenses relating to health insurance tax
credit.''.
(e) Effective Dates.--
(1) In general.--Except as provided in paragraph (2), the
amendments made by this section shall apply to taxable years
beginning after December 31, 2005.
(2) Penalties.--The amendments made by subsections (c) and
(d)(4) shall take effect on the date of the enactment of this
Act.
SEC. 202. ADVANCE PAYMENT OF CREDIT TO ISSUERS OF QUALIFIED HEALTH
INSURANCE.
(a) In General.--Chapter 77 of the Internal Revenue Code of 1986
(relating to miscellaneous provisions) is amended by adding at the end
the following:
``SEC. 7529. ADVANCE PAYMENT OF CREDIT FOR HEALTH INSURANCE COSTS OF
ELIGIBLE INDIVIDUALS.
``Not later than July 1, 2007, the Secretary shall establish a
program for making payments to providers of qualified health insurance
(as defined in section 36(d)) on behalf of individuals eligible for the
credit under section 36. Such payments shall be made on the basis of
modified adjusted gross income of eligible individuals for the
preceding taxable year.''.
(b) Clerical Amendment.--The table of sections for chapter 77 of
the Internal Revenue Code of 1986 is amended by adding at the end the
following:
``Sec. 7529. Advance payment of health insurance credit for purchasers
of qualified health insurance.''.
Subtitle B--High Deductible Health Plans and Health Savings Accounts
SEC. 211. DEDUCTION OF PREMIUMS FOR HIGH DEDUCTIBLE HEALTH PLANS.
(a) In General.--Part VII of subchapter B of chapter 1 of the
Internal Revenue Code of 1986 (relating to additional itemized
deductions for individuals) is amended by redesignating section 224 as
section 225 and by inserting after section 223 the following new
section:
``SEC. 224. PREMIUMS FOR HIGH DEDUCTIBLE HEALTH PLANS.
``(a) Deduction Allowed.--In the case of an individual, there shall
be allowed as a deduction for the taxable year the aggregate amount
paid by or on behalf of such individual as premiums under a high
deductible health plan with respect to months during such year for
which such individual is an eligible individual with respect to such
health plan.
``(b) Definitions.--For purposes of this section--
``(1) Eligible individual.--The term `eligible individual'
has the meaning given such term by section 223(c)(1).
``(2) High deductible health plan.--The term `high
deductible health plan' has the meaning given such term by
section 223(c)(2).
``(c) Special Rules.--
``(1) Deduction allowable for only 1 plan.--For purposes of
this section, in the case of an individual covered by more than
1 high deductible health plan for any month, the individual may
only take into account amounts paid for 1 of such plans for
such month.
``(2) Group health plan coverage.--
``(A) In general.--No deduction shall be allowed to
an individual under subsection (a) for any amount paid
for coverage under a high deductible health plan for a
month if, as of the first day of that month, that
individual participates in any coverage under a group
health plan (within the meaning of section 5000 without
regard to section 5000(d)).
``(B) Exception for certain permitted coverage.--
Subparagraph (A) shall not apply to an individual if
the individual's only coverage under a group health
plan for a month is coverage described in clause (i) or
(ii) of section 223(c)(1)(B).
``(3) Medicare eligible individuals.--No deduction shall be
allowed under subsection (a) with respect to any individual for
any month if the individual is entitled to benefits under title
XVIII of the Social Security Act for the month.
``(4) Health savings account required.--A deduction shall
not be allowed under subsection (a) for a taxable year with
respect to an individual unless the individual is an account
beneficiary of a health savings account during a portion of the
taxable year.
``(5) Medical and health savings accounts.--Subsection (a)
shall not apply with respect to any amount which is paid or
distributed out of an Archer MSA or a health savings account
which is not included in gross income under section 220(f) or
223(f), as the case may be.
``(6) Coordination with deduction for health insurance of
self-employed individuals.--The amount taken into account by
the taxpayer in computing the deduction under section 162(l)
shall not be taken into account under this section.
``(7) Coordination with medical expense deduction.--The
amount taken into account by the taxpayer in computing the
deduction under this section shall not be taken into account
under section 213.''.
(b) Deduction Allowed Whether or Not Individual Itemizes Other
Deductions.--Subsection (a) of section 62 of the Internal Revenue Code
of 1986 (defining adjusted gross income) is amended by inserting before
the last sentence at the end the following new paragraph:
``(21) Premiums for high deductible health plans.--The
deduction allowed by section 224.''.
(c) Coordination With Health Insurance Costs Credit.--Section
35(g)(2) of the Internal Revenue Code of 1986 is amended by striking
``or 213'' and inserting ``,213, or 224''.
(d) Clerical Amendment.--The table of sections for part VII of
subchapter B of chapter 1 of the Internal Revenue Code of 1986 is
amended by redesignating section 224 as section 225 and by inserting
before such item the following new item:
``Sec. 224. Premiums for high deductible health plans.''.
(e) Effective Date.--The amendments made by this section shall
apply to taxable years beginning after December 31, 2005.
SEC. 212. REFUNDABLE CREDIT FOR CONTRIBUTIONS TO HEALTH SAVINGS
ACCOUNTS OF SMALL BUSINESS EMPLOYEES.
(a) In General.--Subpart C of part IV of subchapter A of chapter 1
of the Internal Revenue Code of 1986, as amended by subtitle A, is
amended by inserting after section 36 the following new section:
``SEC. 36A. SMALL EMPLOYER CONTRIBUTIONS TO HEALTH SAVINGS ACCOUNTS.
``(a) General Rule.--In the case of an eligible employer, there
shall be allowed as a credit against the tax imposed by this subtitle
an amount equal to the lesser of--
``(1) the amount contributed by such employer to any
qualified health savings account of any employee who is an
eligible individual (as defined in section 223(c)(1)) during
the taxable year, or
``(2) an amount equal to the product of--
``(A) $200 ($500 if coverage for all months
described in subparagraph (B)(i) is family coverage),
and
``(B) a fraction--
``(i) the numerator of which is the number
of months that the employee was covered under a
high deductible health plan maintained by the
employer, and
``(ii) the denominator of which is the
number of months in the taxable year.
``(b) Eligible Employer.--For purposes of this section--
``(1) In general.--The term `eligible employer' means, with
respect to any taxable year, an employer which--
``(A) is a small employer, and
``(B) maintains a high deductible health plan under
which all employees of the employer reasonably expected
to receive at least $5,000 of compensation during the
taxable year are eligible to participate.
An employer may exclude from consideration under subparagraph
(B) employees who are covered by an agreement described in
section 410(b)(3)(A) if there is evidence that health benefits
were the subject of good faith bargaining.
``(2) Exception for governmental and tax-exempt
employers.--The term `eligible employer' shall not include the
Federal Government or any employer described in section
457(e)(1).
``(3) Small employer.--
``(A) In general.--The term `small employer' means,
with respect to any calendar year, any employer if such
employer employed an average of 100 or fewer employees
on business days during either of the 2 preceding
calendar years. For purposes of the preceding sentence,
a preceding calendar year may be taken into account
only if the employer was in existence throughout such
year.
``(B) Employers not in existence in preceding
year.--In the case of an employer which was not in
existence throughout the 1st preceding calendar 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 calendar year.
``(C) Special rule.--Any reference in this
paragraph to an employer shall include a reference to
any predecessor of such employer.
``(c) Definitions.--For purposes of this section--
``(1) High deductible health plan.--The term `high
deductible health plan' has the meaning given such term by
section 223(c)(2).
``(2) Qualified health savings account.--
``(A) In general.--The term `qualified health
savings account' means a health savings account (as
defined in section 223(d))--
``(i) which is designated (in such form as
the Secretary may prescribe) as a qualified
account for purposes of this section,
``(ii) which may not include any amount
other than contributions described in
subsection (a) and earnings on such
contributions, and
``(iii) with respect to which section
223(f)(4)(A) is applied by substituting `100
percent' for `10 percent'.
``(B) Subaccounts and separate accounting.--The
Secretary may prescribe rules under which a subaccount
within a health savings account, or separate accounting
with respect to contributions and earnings described in
subparagraph (A)(ii), may be treated in the same manner
as a qualified health savings account.
``(C) Rollovers.--A contribution of a distribution
from a qualified health savings account to another
health savings account shall be treated as a rollover
contribution for purposes of section 223(f)(5) only if
the other account is a qualified health savings
account.
``(d) Special Rules.--For purposes of this section--
``(1) Aggregation 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.
``(2) Disallowance of deduction.--No deduction shall be
allowed for that portion of contributions to any health savings
accounts for the taxable year which is equal to the credit
determined under subsection (a).
``(3) Election not to claim credit.--This section shall not
apply to a taxpayer for any taxable year if such taxpayer
elects to have this section not apply for such taxable year.''.
(b) Conforming Amendments.--
(1) Paragraph (2) of section 1324(b) of title 31, United
States Code, is amended by inserting before the period ``, or
from section 36A of such Code''.
(2) The table of sections for subpart C of part IV of
chapter 1 of the Internal Revenue Code of 1986, as amended by
subtitle A, is amended by inserting after the item relating to
section 36 the following new item:
``Sec. 36A. Small employer contributions to health savings accounts.''.
(c) Effective Date.--The amendments made by this section shall
apply to contributions made in taxable years beginning after December
31, 2005.
Subtitle C--Improvement of the Health Coverage Tax Credit
SEC. 221. CHANGE IN STATE-BASED COVERAGE RULES RELATED TO PREEXISTING
CONDITIONS.
(a) In General.--Section 35(e)(2) of the Internal Revenue Code of
1986 (relating to requirements for State-based coverage) is amended by
adding at the end the following:
``(C) Limitation on preexisting condition exclusion
period.--The term `qualified health insurance' does not
include any coverage described in subparagraphs (C)
through (H) of paragraph (1) that imposes a pre-
existing condition exclusion with respect to any
individual unless--
``(i) such exclusion relates to a physical
or mental condition, regardless of the cause of
the condition, for which medical advice,
diagnosis, care, or treatment was recommended
or received within the 6-month period ending on
the date the individual seeks to enroll in the
coverage,
``(ii) such exclusion extends for a period
of not more than 12 months after the individual
seeks to enroll in the coverage,
``(iii) the period of any such preexisting
condition exclusion is reduced by the length of
the aggregate of the periods of creditable
coverage (as defined in section 9801(c))
applicable to the individual as of the
enrollment date, and
``(iv) such exclusion is not an exclusion
described in section 9801(d).''.
(b) Conforming Amendments.--
(1) Internal revenue code of 1986.--Subparagraph (A) of
section 35(e)(2) of such Code is amended--
(A) by striking clause (ii); and
(B) by redesignating clauses (iii) and (iv) as
clauses (ii) and (iii), respectively.
(2) Workforce investment act of 1998 amendments.--Section
173(f)(2)(B) of the Workforce Investment Act of 1998 (29 U.S.C.
2918(f)(2)(B)) is amended--
(A) in clause (i)--
(i) by striking subclause (II); and
(ii) by redesignating subclauses (III) and
(IV) as subclauses (II) and (III),
respectively; and
(B) by adding at the end the following:
``(iii) Limitation on preexisting condition
exclusion period.--The term `qualified health
insurance' does not include any coverage
described in clauses (iii) through (ix) of
subparagraph (A) that imposes a pre-existing
condition exclusion with respect to any
individual unless--
``(I) such exclusion relates to a
physical or mental condition,
regardless of the cause of the
condition, for which medical advice,
diagnosis, care, or treatment was
recommended or received within the 6-
month period ending on the date the
individual seeks to enroll in the
coverage;
``(II) such exclusion extends for a
period of not more than 12 months after
the individual seeks to enroll in the
coverage;
``(III) the period of any such
preexisting condition exclusion is
reduced by the length of the aggregate
of the periods of creditable coverage
(as defined in section 9801(c) of the
Internal Revenue Code of 1986)
applicable to the individual as of the
enrollment date; and
``(IV) such exclusion is not an
exclusion described in section 9801(d)
of such Code.''.
(c) Effective Date.--The amendments made by this section apply to
taxable years beginning after December 31, 2005.
SEC. 222. ELIGIBILITY OF SPOUSE OF CERTAIN INDIVIDUALS ENTITLED TO
MEDICARE.
(a) In General.--Subsection (b) of section 35 of such Code
(defining eligible coverage month) is amended by adding at the end the
following:
``(3) Special rule for spouse of individual entitled to
medicare.--Any month which would be an eligible coverage month
with respect to a taxpayer (determined without regard to
subsection (f)(2)(A)) shall be an eligible coverage month for
any spouse of such taxpayer, provided the spouse has attained
age 55 and meets the requirements of clauses (ii), (iii), and
(iv) of paragraph (1)(A).''.
(b) Effective Date.--The amendment made by subsection (a) applies
to taxable years beginning after December 31, 2005.
SEC. 223. ELIGIBLE PBGC PENSION RECIPIENT.
(a) In General.--Subparagraph (B) of section 35(c)(4) of such Code
(relating to eligible PBGC pension recipients) is amended by inserting
before the period the following ``, or, after August 6, 2002, received
from such Corporation a one-time single-sum pension payment in lieu of
an annuity''.
(b) Effective Date.--The amendment made by subsection (a) shall
take effect as if included in the enactment of section 201 of the Trade
Act of 2002 (Public Law 107-210, 116 Stat. 954).
SEC. 224. APPLICATION OF OPTION TO OFFER STATE-BASED COVERAGE TO PUERTO
RICO, NORTHERN MARIANA ISLANDS, AMERICAN SAMOA, GUAM, AND
THE UNITED STATES VIRGIN ISLANDS.
(a) In General.--Section 35(e) of such Code (relating to
requirements for qualified health insurance) is amended by adding at
the end the following:
``(4) Application to puerto rico, northern mariana islands,
american samoa, guam, and the united states virgin islands.--
For purposes of this section, Puerto Rico, Northern Mariana
Islands, American Samoa, Guam, and the United States Virgin
Islands shall be considered States.''.
(b) Conforming Amendment.--Section 173(f)(2) of the Workforce
Investment Act of 1998 (29 U.S.C. 2918(f)(2)) is amended by adding at
the end the following:
``(D) Application to northern mariana islands,
american samoa, guam, and the united states virgin
islands.--For purposes of subsection (a)(4)(A) and this
subsection, the term `State' shall include the Northern
Mariana Islands, American Samoa, Guam, and the United
States Virgin Islands.''.
(c) Effective Date.--The amendments made by this section apply to
taxable years beginning after December 31, 2005.
SEC. 225. CLARIFICATION OF DISCLOSURE RULES.
(a) In General.--Subsection (k) of section 6103 of such Code
(relating to disclosure of certain returns and return information for
tax administration purposes) is amended by adding at the end the
following:
``(10) Disclosure of certain return information for
purposes of carrying out a program for advance payment of
credit for health insurance costs of eligible individuals.--The
Secretary may disclose to providers of health insurance,
administrators of health plans, or contractors of such
providers or administrators, for any certified individual (as
defined in section 7527(c)) the taxpayer identity and health
insurance member and group numbers of the certified individual
(and any qualifying family member as defined in section 35(d),
if applicable) and the amount and period of the payment, to the
extent the Secretary deems necessary for the administration of
the program established by section 7527 (relating to advance
payment of credit for health insurance costs of eligible
individuals).''.
(b) Conforming Amendments.--
(1) Section 6103 of such Code (relating to confidentiality
and disclosure of returns and return information) is amended--
(A) in subsection (a)(3), by inserting ``(k)(10),''
after ``(e)(1)(D)(iii),'';
(B) in subsection (l), by striking paragraph (18);
and
(C) in subsection (p)--
(i) in paragraph (3)(A)--
(I) by striking ``or (9)'' and
inserting ``(9), or (10)''; and
(II) by striking ``(17), or (18)''
and inserting ``or (17)''; and
(ii) in paragraph (4), by striking ``(18)''
after ``(l)(16)'' each place it appears.
(2) Section 7213(a)(2) of such Code (relating to
unauthorized disclosure of information) is amended by inserting
``(k)(10)'' before ``(l)(6)''.
(3) Section 7213A(a)(1)(B) of such Code (relating to
unauthorized inspection of returns or return information) is
amended by striking ``subsection (l)(18) or (n) of section
6103'' and inserting ``section 6103(n)''.
(c) Effective Date.--The amendments made by this section apply to
taxable years beginning after December 31, 2005.
SEC. 226. CLARIFICATION THAT STATE-BASED COBRA CONTINUATION COVERAGE IS
SUBJECT TO SAME RULES AS FEDERAL COBRA.
(a) In General.--Section 35(e)(2) of such Code (relating to state-
based coverage requirements) is amended--
(1) in subparagraph (A), in the matter preceding clause
(i), by striking ``(B)'' and inserting ``(C)''; and
(2) in subparagraph(B)(i), by striking ``(B)'' and
inserting ``(C)''.
(b) Conforming Amendments.--Section 173(f)(2)(B) of the Workforce
Investment Act of 1998 (29 U.S.C. 2918(f)(2)(B)) is amended--
(1) in clause (i), in the matter preceding subclause (I),
by striking ``(ii)'' and inserting ``(iii)''; and
(2) in clause (ii)(I), by striking ``(ii)'' and inserting
``(iii)''.
(c) Effective Date.--The amendments made by this section shall take
effect as if included in the enactment of sections 201 and 203,
respectively, of the Trade Act of 2002 (Public Law 107-210, 116 Stat.
954).
SEC. 227. APPLICATION OF RULES FOR OTHER SPECIFIED COVERAGE TO ELIGIBLE
ALTERNATIVE TAA RECIPIENTS CONSISTENT WITH RULES FOR
OTHER ELIGIBLE INDIVIDUALS.
(a) In General.--Section 35(f)(1) of such Code (relating to
subsidized coverage) is amended by striking subparagraph (B) and
redesignating subparagraph (C) as subparagraph (B).
(b) Conforming Amendments.--Section 173(f)(7)(A) of the Workforce
Investment Act of 1998 (29 U.S.C. 2918(f)(7)(A)) is amended by striking
clause (ii) and redesignating clause (iii) as clause (ii).
Subtitle D--Long-Term Care Insurance
SEC. 231. SENSE OF THE SENATE CONCERNING LONG-TERM CARE.
It is the sense of the Senate that Congress should take steps to
make long-term care more affordable by providing tax incentives for the
purchase of long-term care insurance, support for family caregivers,
and making necessary public program reforms.
Subtitle E--Other Provisions
SEC. 241. DISPOSITION OF UNUSED HEALTH BENEFITS IN CAFETERIA PLANS AND
FLEXIBLE SPENDING ARRANGEMENTS.
(a) In General.--Section 125 of the Internal Revenue Code of 1986
(relating to cafeteria plans) is amended by redesignating subsections
(h) and (i) as subsections (i) and (j), respectively, and by inserting
after subsection (g) the following:
``(h) Contributions of Certain Unused Health Benefits.--
``(1) In general.--For purposes of this title, a plan or
other arrangement shall not fail to be treated as a cafeteria
plan solely because qualified benefits under such plan include
a health flexible spending arrangement under which not more
than $500 of unused health benefits may be--
``(A) carried forward to the succeeding plan year
of such health flexible spending arrangement, or
``(B) to the extent permitted by section 106(c),
contributed by the employer to a health savings account
(as defined in section 223(d)) maintained for the
benefit of the employee.
``(2) Health flexible spending arrangement.--
``(A) In general.--For purposes of this subsection,
the term `health flexible spending arrangement' means a
flexible spending arrangement (as defined in section
106(c)) that is a qualified benefit and only permits
reimbursement for expenses for medical care (as defined
in section 213(d)(1), without regard to subparagraphs
(C) and (D) thereof).
``(B) Flexible spending arrangement.--A flexible
spending arrangement is a benefit program which
provides employees with coverage under which--
``(i) specified incurred expenses may be
reimbursed (subject to reimbursement maximums
and other reasonable conditions), and
``(ii) the maximum amount of reimbursement
which is reasonably available to a participant
for such coverage is less than 500 percent of
the value of such coverage.
In the case of an insured plan, the maximum amount
reasonably available shall be determined on the basis
of the underlying coverage.
``(3) Unused health benefits.--For purposes of this
subsection, with respect to an employee, the term `unused
health benefits' means the excess of--
``(A) the maximum amount of reimbursement allowable
to the employee for a plan year under a health flexible
spending arrangement, over
``(B) the actual amount of reimbursement for such
year under such arrangement.''.
(b) Effective Date.--The amendments made by subsection (a) shall
apply to taxable years beginning after December 31, 2004.
SEC. 242. MICROENTREPRENEURS.
Section 404(8) of the Assets for Independence Act (42 U.S.C. 604
note) is amended by adding at the end the following:
``(F) High deductible health insurance.--
``(i) In general.--The eligible
individual's contribution (as an employer or
employee) for coverage under a high deductible
health plan (as defined in section 223(c)(2) of
the Internal Revenue Code of 1986).
``(ii) Definition of employee.--For
purposes of clause (i), the term `employee'
includes an individual described in section
401(c)(1) of the Internal Revenue Code of
1986.''.
SEC. 243. STUDY ON ACCESS TO AFFORDABLE HEALTH INSURANCE FOR FULL-TIME
COLLEGE AND UNIVERSITY STUDENTS.
(a) Sense of the Senate.--It is the sense of the Senate that,
because a considerable number of the United States uninsured population
are young adults who are enrolled full-time at an institution of higher
education, Congress should determine whether health care coverage
proposals targeting this population would be effective.
(b) Study Required.--The Government Accountability Office shall
provide for the conduct of a study to evaluate existing and potential
sources of affordable health insurance coverage for graduate and
undergraduate students enrolled at an institution of higher education
(as defined in section 1201 of the Higher Education Act of 1965 (20
U.S.C. 1141)).
(c) Required Elements of Study.--In conducting the study under
subsection (b), the Government Accountability Office shall, at a
minimum, examine the following:
(1) Student demographics.--
(A) In general.--The size and characteristics of
the insured and uninsured population of undergraduate
and graduate students enrolled at institutions of
higher education. Such data shall be differentiated as
provided for in subparagraphs (B) and (C).
(B) Statistical breakdown.--The data concerning the
uninsured student population collected under
subparagraph (A) shall be differentiated by--
(i) the full-time, full-time equivalent,
and part-time enrollment status of the students
involved;
(ii) the type of institution involved (such
as a public, private, non-profit, or community
institution);
(iii) the length and type of educational
program involved (such as a certificate or
diploma program, a 2-year or 4-year degree
program, a masters degree program, or a
doctoral degree program); and
(iv) the undergraduate and graduate student
populations involved.
(C) Coverage.--The data concerning the insured
student population collected under subparagraph (A)
shall be differentiated by the sources of coverage for
such students, including the number and percentage of
such insured students who lose parental (or other)
coverage during the course of their enrollment at such
institutions and the age at which such coverage is
lost.
(2) Impact analysis.--The financial and other impact of
uninsured students at such institutions, as compared to insured
students, on--
(A) the health of students;
(B) the student's family;
(C) the student's educational progress; and
(D) education and health care institutions and
facilities.
(3) Assessment of existing programs.--The effect of
mandatory and voluntary programs on the access of students to
health insurance coverage, including--
(A) the level and type of coverage provided through
mandatory and voluntary State and institutionally-
sponsored health care programs currently providing
health care insurance coverage to students;
(B) the average premium paid with respect to
students covered under such plans;
(C) the extent to which any State or institutional
health insurance plan may serve as a model for the
expansion of access to health insurance for all full-
time undergraduate and graduate students attending an
institution of higher education; and
(D) whether such programs targeted to the student
population would be more effective in reducing the
overall rate of uninsured relative to proposals
targeted to broader populations.
(4) Incentives and disincentives.--The existence of
incentives and disincentives offered to institutions of higher
education to expand access to health care coverage for
students, including--
(A) an assessment of the types of incentives and
disincentives that may be used to encourage or require
an institution of higher education to include health
care coverage for all of its students on a mandatory
basis, including financial, regulatory, administrative,
and other incentives or disincentives;
(B) a list of burdensome regulatory or
administrative reporting and other requirements (from
the Department of Education or other governmental
agencies) that could be waived without compromising
program integrity as a means of encouraging
institutions of higher education to provide uninsured
students with access to health care coverage;
(C) other incentives or disincentives that would
increase the level of institutional participation in
health care coverage programs; and
(D) an analysis of the costs and effectiveness (to
reduce the number of uninsured students) of including
the cost of health insurance as an allowable cost of
attendance under the Higher Education Act of 1965, and
the impact of such inclusion on the student's financial
aid package.
(d) Consultation With Congress.--In carrying out the study under
subsection (b), the Government Accountability Office shall consult on a
regular basis with the Secretary of Education, the Secretary of Health
and Human Services, the Committee on the Budget of the Senate, the
Committee on Health, Education, Labor, and Pensions of the Senate, and
the Committee on Education and the Workforce of the House of
Representatives.
(e) Report.--Not later than 1 year after the date of enactment of
this Act, the Government Accountability Office shall prepare and submit
to the Committee on the Budget and the Committee on Health, Education,
Labor, and Pensions of the Senate, and the Committee on Education and
the Workforce of the House of Representatives, a report concerning the
results of the study conducted under this section.
SEC. 244. EXTENSION OF FUNDING FOR OPERATION OF STATE HIGH RISK HEALTH
INSURANCE POOLS.
Section 2745 of the Public Health Service Act (42 U.S.C. 300gg-45)
is amended to read as follows:
``SEC. 2745. PROMOTION OF QUALIFIED HIGH RISK POOLS.
``(a) Extension of Seed Grants to States.--The Secretary shall
provide from the funds appropriated under subsection (d)(1)(A) a grant
of up to $1,000,000 to each State that has not created a qualified high
risk pool as of the date of enactment of this section for the State's
costs of creation and initial operation of such a pool.
``(b) Grants for Operational Losses.--
``(1) In general.--In the case of a State that has
established a qualified high risk pool that--
``(A) restricts premiums charged under the pool to
no more than 150 percent of the premium for applicable
standard risk rates;
``(B) offers a choice of two or more coverage
options through the pool; and
``(C) has in effect a mechanism reasonably designed
to ensure continued funding of losses incurred by the
State after the end of fiscal year 2004 in connection
with operation of the pool;
the Secretary shall provide, from the funds appropriated under
subsection (d)(1)(B)(i) and allotted to the State under
paragraph (2), a grant for the losses incurred by the State in
connection with the operation of the pool.
``(2) Allotment.--The amounts appropriated under subsection
(d)(1)(B)(i) for a fiscal year shall be made available to the
States (or the entities that operate the high risk pool under
applicable State law) as follows:
``(A) An amount equal to 50 percent of the
appropriated amount for the fiscal year shall be
allocated in equal amounts among each eligible State
that applies for assistance under this subsection.
``(B) An amount equal to 25 percent of the
appropriated amount for the fiscal year shall be
allocated among the States so that the amount provided
to a State bears the same ratio to such available
amount as the number of uninsured individuals in the
State bears to the total number of uninsured
individuals in all States (as determined by the
Secretary).
``(C) An amount equal to 25 percent of the
appropriated amount for the fiscal year shall be
allocated among the States so that the amount provided
to a State bears the same ratio to such available
amount as the number of individuals enrolled in health
care coverage through the qualified high risk pool of
the State bears to the total number of individuals so
enrolled through qualified high risk pools in all
States (as determined by the Secretary).
``(c) Bonus Grants for Supplemental Consumer Benefits.--
``(1) In general.--In the case of a State that has
established a qualified high risk pool, the Secretary shall
provide, from the funds appropriated under subsection
(d)(1)(B)(ii) and allotted to the State under paragraph (3), a
grant to be used to provide supplemental consumer benefits to
enrollees or potential enrollees (or defined subsets of such
enrollees or potential enrollees) in qualified high risk pools.
``(2) Benefits.--A State shall use amounts received under a
grant under this subsection to provide one or more of the
following benefits:
``(A) Low-income premium subsidies.
``(B) A reduction in premium trends, actual
premiums, or other cost-sharing requirements.
``(C) An expansion or broadening of the pool of
individuals eligible for coverage, including
eliminating waiting lists, increasing enrollment caps,
or providing flexibility in enrollment rules.
``(D) Less stringent rules, or additional waiver
authority, with respect to coverage of pre-existing
conditions.
``(E) Increased benefits.
``(F) The establishment of disease management
programs.
``(3) Limitation.--In allotting amounts under this
subsection, the Secretary shall ensure that no State receives
an amount that exceeds 10 percent of the amount appropriated
for the fiscal year involved under subsection (d)(1)(B)(ii).
``(4) Rule of construction.--Nothing in this subsection
shall be construed to prohibit States that, on the date of
enactment of the State High Risk Pool Funding Extension Act of
2005, are in the process of implementing programs to provide
benefits of the type described in paragraph (2), from being
eligible for a grant under this subsection.
``(d) Funding.--
``(1) In general.--Out of any money in the Treasury of the
United States not otherwise appropriated, there are authorized
and appropriated--
``(A) $15,000,000 for the period of fiscal years
2005 and 2006 to carry out subsection (a); and
``(B) $75,000,000 for each of fiscal years 2005
through 2009, of which--
``(i) two-thirds of the amount appropriated
for a fiscal year shall be made available for
allotments under subsection (b)(2); and
``(ii) one-third of the amount appropriated
for a fiscal year shall be made available for
allotments under subsection (c)(2).
``(2) Availability.--Funds appropriated under this
subsection for a fiscal year shall remain available for
obligation through the end of the following fiscal year.
``(3) Reallotment.--If, on June 30 of each fiscal year, the
Secretary determines that all amounts appropriated under
paragraph (1)(B)(ii) for the fiscal year are not allotted, such
remaining amounts shall be allotted among States receiving
grants under subsection (b) for the fiscal year in amounts
determined appropriate by the Secretary.
``(4) No entitlement.--Nothing in this section shall be
construed as providing a State with an entitlement to a grant
under this section.
``(e) Applications.--To be eligible for a grant under this section,
a State shall submit to the Secretary an application at such time, in
such manner, and containing such information as the Secretary may
require.
``(f) Definitions.--In this section:
``(1) Qualified high risk pool.--
``(A) In general.--The term `qualified high risk
pool' has the meaning given such term in section
2744(c)(2), except that with respect to subparagraph
(A) of such section a State may elect to provide for
the enrollment of eligible individuals through--
``(i) a combination of a qualified high
risk pool and an acceptable alternative
mechanism; or
``(ii) other health insurance coverage
described in subparagraph (B).
``(B) Health insurance coverage.--Health insurance
coverage described in this subparagraph is individual
health insurance coverage--
``(i) that meets the requirements of
section 2741;
``(ii) that is subject to limits on the
rates charged to individuals;
``(iii) that is available to all
individuals eligible for health insurance
coverage under this title who are not able to
participate in a qualified high risk pool; and
``(iv) the defined rate limit of which does
not exceed the limit allowed for a qualified
risk pool that is otherwise eligible to receive
assistance under a grant under this section.
``(C) Other coverage.--In addition to coverage
described in subparagraph (B), a State may provide for
the offering of health insurance coverage that provides
first dollar coverage, limits on cost-sharing, and
comprehensive medical, hospital and surgical coverage,
if the limits on rates for such coverage do not exceed
125 percent of the limit described in subparagraph
(B)(iv).
``(2) Standard risk rate.--The term `standard risk rate'
means a rate--
``(A) determined under the State high risk pool by
considering the premium rates charged by other health
insurers offering health insurance coverage to
individuals in the insurance market served;
``(B) that is established using reasonable
actuarial techniques; and
``(C) that reflects anticipated claims experience
and expenses for the coverage involved.
``(3) State.--The term `State' means any of the 50 States
and the District of Columbia.''.
SEC. 245. SENSE OF THE SENATE ON AFFORDABLE HEALTH COVERAGE FOR SMALL
EMPLOYERS.
It is the sense of the Senate that Congress should pass legislation
to support expanded, affordable health coverage options for
individuals, particularly those who work for small businesses, by
streamlining and reducing regulations and expanding the role of
associations and other group purchasing arrangements.
Subtitle F--Covering Kids
SEC. 251. SHORT TITLE.
This subtitle may be cited as the ``Covering Kids Act of 2005''.
SEC. 252. GRANTS TO PROMOTE INNOVATIVE OUTREACH AND ENROLLMENT UNDER
MEDICAID AND SCHIP.
(a) Grants for Expanded Outreach Activities.--Title XXI of the
Social Security Act (42 U.S.C. 1397aa et seq.) is amended by adding at
the end the following:
``SEC. 2111. EXPANDED OUTREACH ACTIVITIES.
``(a) Grants To Conduct Innovative Outreach and Enrollment
Efforts.--
``(1) In general.--The Secretary shall award grants to
eligible entities to--
``(A) conduct innovative outreach and enrollment
efforts that are designed to increase the enrollment
and participation of eligible children under this title
and title XIX; and
``(B) promote understanding of the importance of
health insurance coverage for prenatal care and
children.
``(2) Performance bonuses.--The Secretary may reserve a
portion of the funds appropriated under subsection (g) for a
fiscal year for the purpose of awarding performance bonuses
during the succeeding fiscal year to eligible entities that
meet enrollment goals or other criteria established by the
Secretary.
``(b) Priority for Award of Grants.--
``(1) In general.--In making grants under subsection
(a)(1), the Secretary shall give priority to--
``(A) eligible entities that propose to target
geographic areas with high rates of--
``(i) eligible but unenrolled children,
including such children who reside in rural
areas; or
``(ii) racial and ethnic minorities and
health disparity populations, including those
proposals that address cultural and linguistic
barriers to enrollment; and
``(B) eligible entities that plan to engage in
outreach efforts with respect to individuals described
in subparagraph (A) and that are--
``(i) Federal health safety net
organizations; or
``(ii) faith-based organizations or
consortia.
``(2) 10 percent set aside for outreach to indian
children.--An amount equal to 10 percent of the funds
appropriated under subsection (g) for a fiscal year shall be
used by the Secretary to award grants to Indian Health Service
providers and urban Indian organizations receiving funds under
title V of the Indian Health Care Improvement Act (25 U.S.C.
1651 et seq.) for outreach to, and enrollment of, children who
are Indians.
``(c) Application.--An eligible entity that desires to receive a
grant under subsection (a)(1) shall submit an application to the
Secretary in such form and manner, and containing such information, as
the Secretary may decide. Such application shall include--
``(1) quality and outcomes performance measures to evaluate
the effectiveness of activities funded by a grant awarded under
this section to ensure that the activities are meeting their
goals; and
``(2) an assurance that the entity shall--
``(A) conduct an assessment of the effectiveness of
such activities against such performance measures; and
``(B) cooperate with the collection and reporting
of enrollment data and other information determined as
a result of conducting such assessments to the
Secretary, in such form and manner as the Secretary
shall require.
``(d) Dissemination of Enrollment Data and Information Determined
From Effectiveness Assessments; Annual Report.--The Secretary shall--
``(1) disseminate to eligible entities and make publicly
available the enrollment data and information collected and
reported in accordance with subsection (c)(2)(B); and
``(2) submit an annual report to Congress on the outreach
activities funded by grants awarded under this section.
``(e) Supplement, Not Supplant.--Federal funds awarded under this
section shall be used to supplement, not supplant, non-Federal funds
that are otherwise available for activities funded under this section.
``(f) Definitions.--In this section:
``(1) Eligible entity.--The term `eligible entity' means
any of the following:
``(A) A State or local government.
``(B) A Federal health safety net organization.
``(C) A national, local, or community-based public
or nonprofit private organization.
``(D) A faith-based organization or consortia, to
the extent that a grant awarded to such an entity is
consistent with the requirements of section 1955 of the
Public Health Service Act (42 U.S.C. 300x-65) relating
to a grant award to non-governmental entities.
``(E) An elementary or secondary school.
``(2) Federal health safety net organization.--The term
`Federal health safety net organization' means--
``(A) an Indian tribe, tribal organization, or an
urban Indian organization receiving funds under title V
of the Indian Health Care Improvement Act (25 U.S.C.
1651 et seq.), or an Indian Health Service provider;
``(B) a Federally-qualified health center (as
defined in section 1905(l)(2)(B));
``(C) a hospital defined as a disproportionate
share hospital for purposes of section 1923;
``(D) a covered entity described in section
340B(a)(4) of the Public Health Service Act (42 U.S.C.
256b(a)(4)); and
``(E) any other entity or a consortium that serves
children under a federally-funded program, including
the special supplemental nutrition program for women,
infants, and children (WIC) established under section
17 of the Child Nutrition Act of 1966 (42 U.S.C. 1786),
the head start and early head start programs under the
Head Start Act (42 U.S.C. 9801 et seq.), the school
lunch program established under the Richard B. Russell
National School Lunch Act, and an elementary or
secondary school.
``(3) Indians; indian tribe; tribal organization; urban
indian organization.--The terms `Indian', `Indian tribe',
`tribal organization', and `urban Indian organization' have the
meanings given such terms in section 4 of the Indian Health
Care Improvement Act (25 U.S.C. 1603).
``(g) Appropriation.--There is appropriated, out of any money in
the Treasury not otherwise appropriated, $50,000,000 for each of fiscal
years 2006 and 2007 for the purpose of awarding grants under this
section. Amounts appropriated and paid under the authority of this
section shall be in addition to amounts appropriated under section 2104
and paid to States in accordance with section 2105, including with
respect to expenditures for outreach activities in accordance with
subsection (a)(1)(D)(iii) of that section.''.
(b) Extending Use of Outstationed Workers To Accept Title XXI
Applications.--Section 1902(a)(55) of the Social Security Act (42
U.S.C. 1396a(a)(55)) is amended by striking ``or (a)(10)(A)(ii)(IX)''
and inserting ``(a)(10)(A)(ii)(IX), or (a)(10)(A)(ii)(XIV), and
applications for child health assistance under title XXI''.
SEC. 253. STATE OPTION TO PROVIDE FOR SIMPLIFIED DETERMINATIONS OF A
CHILD'S FINANCIAL ELIGIBILITY FOR MEDICAL ASSISTANCE
UNDER MEDICAID OR CHILD HEALTH ASSISTANCE UNDER SCHIP.
(a) Medicaid.--Section 1902(e) of the Social Security Act (42
U.S.C. 1396a(e)) is amended by adding at the end the following:
``(13)(A) At the option of the State, the plan may provide
that financial eligibility requirements for medical assistance
are met for a child who is under an age specified by the State
(not to exceed 21 years of age) by using a determination made
within a reasonable period (as determined by the State) before
its use for this purpose, of the child's family or household
income, or if applicable for purposes of determining
eligibility under this title or title XXI, assets or resources,
by a Federal or State agency, or a public or private entity
making such determination on behalf of such agency, specified
by the plan, including (but not limited to) an agency
administering the State program funded under part A of title
IV, the Food Stamp Act of 1977, the Richard B. Russell National
School Lunch Act, or the Child Nutrition Act of 1966,
notwithstanding any differences in budget unit, disregard,
deeming, or other methodology, but only if--
``(i) the agency has fiscal liabilities or
responsibilities affected or potentially affected by
such determination; and
``(ii) any information furnished by the agency
pursuant to this subparagraph is used solely for
purposes of determining financial eligibility for
medical assistance under this title or for child health
assistance under title XXI.
``(B) Nothing in subparagraph (A) shall be construed--
``(i) to authorize the denial of medical assistance
under this title or of child health assistance under
title XXI to a child who, without the application of
this paragraph, would qualify for such assistance;
``(ii) to relieve a State of the obligation under
subsection (a)(8) to furnish medical assistance with
reasonable promptness after the submission of an
initial application that is evaluated or for which
evaluation is requested pursuant to this paragraph;
``(iii) to relieve a State of the obligation to
determine eligibility for medical assistance under this
title or for child health assistance under title XXI on
a basis other than family or household income (or, if
applicable, assets or resources) if a child is
determined ineligible for such assistance on the basis
of information furnished pursuant to this paragraph; or
``(iv) as affecting the applicability of any non-
financial requirements for eligibility for medical
assistance under this title or child health assistance
under title XXI.''.
(b) SCHIP.--Section 2107(e)(1) of the Social Security Act (42
U.S.C. 1397gg(e)(1)) is amended by adding at the end the following:
``(E) Section 1902(e)(13) (relating to the State
option to base a determination of child's financial
eligibility for assistance on financial determinations
made by a program providing nutrition or other public
assistance).''.
(c) Effective Date.--The amendments made by this section take
effect on October 1, 2005.
TITLE III--IMPROVING CARE AND STRENGTHENING THE SAFETY NET
Subtitle A--High Needs Areas
SEC. 301. PURPOSE.
It is the purpose of this subtitle to enhance the quality of life
of residents of high need areas by increasing their access to the
preventive and primary healthcare services provided by community health
centers and rural health centers.
SEC. 302. HIGH NEED COMMUNITY HEALTH CENTERS.
Section 330 of the Public Health Service Act (42 U.S.C. 254b) is
amended--
(1) by redesignating subsections (k) through (r) as
subsections (l) through (s), respectively;
(2) by inserting after subsection (j), the following:
``(k) Priority for Residents of High Need Areas.--
``(1) In general.--In awarding grants under this section,
the Secretary shall give priority to eligible health centers in
high need areas.
``(2) Eligible health centers.--A health center is
described in this paragraph if such health center--
``(A) is a health center as defined under
subsection (a) or a rural health clinic that receives
funds under section 330A;
``(B) agrees to use grant funds to provide
preventive and primary healthcare services to residents
of high need areas;
``(C) specifically requests such priority in the
grant application;
``(D) describes how the community to be served
meets the definition of high need area; and
``(E) otherwise meets all other grant requirements.
``(3) High need area.--
``(A) In general.--In this subsection, the term
`high need area' means a county or a regional area
identified by the Secretary pursuant to the regulations
promulgated under subparagraph (B).
``(B) Regulations.--The Secretary shall promulgate
regulations that define the term `high need area' for
purposes of this subsection. Such regulations shall
specify procedures that the Department shall follow in
determining estimates on a periodic basis in the United
States of the number of medically uninsured persons and
the national percentage of medically uninsured persons
served by health centers (referred to in this
subsection as the `ENP') and for the designation of an
area as a `high need area' if the estimated percentage
of medically uninsured individuals in the area is
higher than the national average and the estimated
percentage of medically uninsured individuals in the
area served by health centers in the area is below the
ENP.
``(C) Medically underserved area.--The Secretary
shall designate residents of high need areas as
medically underserved for purposes of this section.
``(4) Funding preference.--The Secretary may limit the
amount of grants awarded to applicants from high need areas as
provided for in this subsection to not less than 25 percent of
the total amount of grants awarded under this subsection for
each grant category for each grant period.'';
(3) in subsection (e)(1)(B), by striking ``subsection
(k)(3)'' and inserting ``subsection (l)(3)'';
(4) in subsection (l)(3)(H)(iii) (as so redesignated), by
striking ``or (p)'' and inserting ``or (q)'';
(5) in subsection (m) (as so redesignated), by striking
``subsection (k)(3)'' and inserting ``subsection (l)(3)'';
(6) in subsection (q) (as so redesignated), by striking
``subsection (k)(3)(G)'' and inserting ``subsection
(l)(3)(G)''; and
(7) in subsection (s)(2)(A) (as so redesignated), by
striking ``subsection (k)'' each place that such appears and
inserting ``subsection (l)''.
SEC. 303. GRANT APPLICATION PROCESS.
Section 330(k) of the Public Health Service Act (42 U.S.C. 254b(k))
is amended by adding at the end the following:
``(5) Economic viability of applicants.--
``(A) In general.--In considering applications
under this section, the Secretary shall ensure that an
application that demonstrates economic viability,
consistent with funding guidelines established by the
Secretary for purposes of this section, is not
disadvantaged in the evaluation process on the basis
that it relies solely on Federal funding.
``(B) Qualification of individuals reviewing
applications.--The Secretary shall require verification
that all individuals who are evaluating community
health center grant applications have completed within
the 3-year period ending on the date on which the
application is being evaluated a training course on the
community health center program which addresses the
purposes served by community health centers, the
critical role of community health centers in the safety
net, expectations for the evaluation of applications,
and the criteria for awarding grant funding.
``(C) Medically underserved designations.--Not
later than 6 months after the date of enactment of this
paragraph, the Administrator of the Health Resources
and Services Administration shall submit to the
appropriate committees of Congress a report concerning
the process for designating an area or population as
medically underserved. Such report shall contain
recommendations for ensuring that such designations are
current within the last 3 years. The report shall also
detail plans for ensuring subsequent review to maintain
an accurate reflection of community needs in areas and
populations designated as medically underserved. Not
later than 1 year after such date of enactment, the
Secretary shall promulgate regulations based on the
recommendations contained in the report.''.
Subtitle B--Qualified Integrated Health Care systems
SEC. 321. GRANTS TO QUALIFIED INTEGRATED HEALTH CARE SYSTEMS.
(a) Eligibility for Grants Under PHSA.--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--Promotion of Integrated Health Care Systems Serving
Medically Underserved Populations
``SEC. 340H. GRANTS TO QUALIFIED INTEGRATED HEALTH CARE SYSTEMS.
``(a) Definitions.--For purposes of this section:
``(1) Qualified integrated health care system.--The term
`qualified integrated health care system' means an integrated
health care system that--
``(A) has a demonstrated capacity and commitment to
provide a full range of primary, specialty, and
hospital care to a medically underserved population in
both inpatient and outpatient settings, as appropriate;
``(B) is organized to provide such care in a
coordinated fashion;
``(C) operates one or more integrated health
centers meeting the requirements of section 340I;
``(D) meets the requirements of subsection (c)(3);
and
``(E) agrees to use any funds received under this
section to supplement and not to supplant amounts
received from other sources for the provision of such
care.
``(2) Medically underserved population.--The term
`medically underserved population' has the meaning given such
term in section 330(b)(3).
``(b) Operating Grants.--
``(1) Authority.--The Secretary may make grants to private
nonprofit entities for the costs of the operation of qualified
integrated health care systems that provide primary, specialty,
and hospital care to medically underserved populations.
``(2) Amount.--
``(A) In general.--The amount of any grant made in
any fiscal year under paragraph (1) to an integrated
health care system shall be determined by the Secretary
(taking into account the full range of care, including
specialty services, provided by the system), but may
not exceed the amount by which the costs of operation
of the system in such fiscal year exceed the total of--
``(i) State, local, and other operational
funding provided to the system; and
``(ii) the fees, premiums, and third-party
reimbursements which the system may reasonably
be expected to receive for its operations in
such fiscal year.
``(B) Payments.--Payments under grants under
paragraph (1) shall be made in advance or by way of
reimbursement and in such installments as the Secretary
finds necessary and adjustments may be made for
overpayments or underpayments.
``(C) Use of nongrant funds.--Nongrant funds
described in clauses (i) and (ii) of subparagraph (A),
including any such funds in excess of those originally
expected, shall be used as permitted under this
section, and may be used for such other purposes as are
not specifically prohibited under this section if such
use furthers the objectives of the project.
``(c) Applications.--
``(1) Submission.--No grant may be made under this section
unless an application therefore is submitted to, and approved
by, the Secretary. Such an application shall be submitted in
such form and manner and shall contain such information as the
Secretary shall prescribe.
``(2) Description of need.--
``(A) In general.--An application for a grant under
subsection (b)(1) for an integrated health care system
shall include--
``(i) a description of the need for health
care services in the area served by the
integrated health care system;
``(ii) a demonstration by the applicant
that the area or the population group to be
served by the applicant has a shortage of
personal health services; and
``(iii) a demonstration that the health
care system will be located so that it will
provide services to the greatest number of
individuals residing in such area or included
in such population group.
``(B) Demonstrations.--A demonstration shall be
made under clauses (ii) or (iii) of subparagraph (A) on
the basis of the criteria prescribed by the Secretary
under section 330(b)(3) or on the basis of any other
criteria which the Secretary may prescribe to determine
if the area or population group to be served by the
applicant has a shortage of personal health services.
``(C) Condition of approval.--In considering an
application for a grant under subsection (b)(1), the
Secretary may require as a condition to the approval of
such application an assurance that any integrated
health center operated by the applicant will provide
any required primary health services and any additional
health services (as defined in section 340I) that the
Secretary finds are needed to meet specific health
needs of the area to be served by the applicant. Such a
finding shall be made in writing and a copy shall be
provided to the applicant.
``(3) Requirements.--The Secretary shall approve an
application for a grant under subsection (b)(1) if the
Secretary determines that the entity for which the application
is submitted is an integrated health care system (within the
meaning of subsection (a)) and that--
``(A) the primary, specialty, and hospital care
provided by the system will be available and accessible
in the service area of the system promptly, as
appropriate, and in a manner which assures continuity;
``(B) the system is participating (or will
participate) in a community consortium of safety net
providers serving such area (unless other such safety
net providers do not exist in a community, decline or
refuse to participate, or place unreasonable conditions
on their participation);
``(C) all of the centers operated by the system are
accredited by a national accreditation body recognized
by the Secretary;
``(D) the system will demonstrate its financial
responsibility by the use of such accounting procedures
and other requirements as may be prescribed by the
Secretary;
``(E) the system provides or will provide services
to individuals who are eligible for medical assistance
under title XIX of the Social Security Act and to
individuals who are eligible for assistance under title
XXI of such Act;
``(F) the system--
``(i) has prepared a schedule of fees or
payments for the provision of its services
consistent with locally prevailing rates or
charges and designed to cover its reasonable
costs of operation and has prepared a
corresponding schedule of discounts to be
applied to the payment of such fees or
payments, and which discounts are adjusted on
the basis of the patient's ability to pay;
``(ii)(I) will assure that no patient will
be denied health care services due to an
individual's inability to pay for such
services; and
``(II) will assure that any fees or
payments required by the system for such
services will be reduced or waived to enable
the system to fulfill the assurance described
in subclause (I); and
``(iii) has submitted to the Secretary such
reports as the Secretary may require to
determine compliance with this subparagraph;
``(G) the system has established a governing board
that selects the services to be provided by the center,
approves the center's annual budget, approves the
selection of a director for the center, and establishes
general policies for the center;
``(H) the system has developed--
``(i) an overall plan and budget that meets
the requirements of the Secretary; and
``(ii) an effective procedure for compiling
and reporting to the Secretary such statistics
and other information as the Secretary may
require relating to--
``(I) the costs of its operations;
``(II) the patterns of use of its
services;
``(III) the availability,
accessibility, and acceptability of its
services; and
``(IV) such other matters relating
to operations of the applicant as the
Secretary may require;
``(I) the system will review periodically its
service area to--
``(i) ensure that the size of such area is
such that the services to be provided through
the system (including any satellite) are
available and accessible to the residents of
the area promptly and as appropriate;
``(ii) ensure that the boundaries of such
area conform, to the extent practicable, to
relevant boundaries of political subdivisions,
school districts, and Federal and State health
and social service programs; and
``(iii) ensure that the boundaries of such
area eliminate, to the extent possible,
barriers to access to the services of the
system, including barriers resulting from the
area's physical characteristics, its
residential patterns, its economic and social
grouping, and available transportation;
``(J) in the case of a system which serves a
substantial proportion of individuals of limited
English-speaking ability, the system has--
``(i) developed a plan and made
arrangements for providing services, to the
extent practicable, in the predominant language
or languages of such individuals and in the
cultural context most appropriate to such
individuals; and
``(ii) identified one or more individuals
on its staff who are fluent in such predominant
language or languages and in English and whose
responsibilities shall include providing
guidance to such individuals and to other
appropriate staff members with respect to
cultural sensitivities and bridging linguistic
and cultural differences;
``(K) the system maintains appropriate referral
relationships between its hospitals, its physicians
with hospital privileges, and any integrated health
center operated by the system so that primary,
specialty care, and hospital care is provided in a
continuous and coordinated way; and
``(L) the system encourages persons receiving or
seeking health services from the system to participate
in any public or private (including employer-offered)
health programs or plans for which the persons are
eligible, so long as the center, in complying with this
paragraph, does not violate the requirements of
subparagraph (F)(ii)(I).
``(d) Authorization of Appropriations.--
``(1) In general.--There are authorized to be appropriated
to carry out this section such sums as may be necessary for
each of fiscal years 2006 through 2010.
``(2) Funding report.--The Secretary shall annually prepare
and submit to the appropriate committees of Congress a report
concerning the distribution of funds under this section that
are provided to meet the health care needs of medically
underserved populations, and the appropriateness of the
delivery systems involved in responding to the needs of the
particular populations. Such report shall include an assessment
of the relative health care access needs of the targeted
populations and the rationale for any substantial changes in
the distribution of funds.
``(e) Records.--
``(1) In general.--Each entity which receives a grant under
subsection (b)(1) shall establish and maintain such records as
the Secretary shall require.
``(2) Availability.--Each entity which is required to
establish and maintain records under this subsection shall make
such books, documents, papers, and records available to the
Secretary or the Comptroller General of the United States, or
any of their duly authorized representatives, for examination,
copying, or mechanical reproduction on or off the premises of
such entity upon a reasonable request therefore. The Secretary
and the Comptroller General of the United States, or any of
their duly authorized representatives, shall have the authority
to conduct such examination, copying, and reproduction.
``(f) Audits.--
``(1) In general.--Each entity which receives a grant under
this section shall provide for an independent annual financial
audit of any books, accounts, financial records, files, and
other papers and property which relate to the disposition or
use of the funds received under such grant and such other funds
received by or allocated to the project for which such grant
was made. For purposes of assuring accurate, current, and
complete disclosure of the disposition or use of the funds
received, each such audit shall be conducted in accordance with
generally accepted accounting principles. Each audit shall
evaluate--
``(A) the entity's implementation of the guidelines
established by the Secretary respecting cost
accounting;
``(B) the processes used by the entity to meet the
financial and program reporting requirements of the
Secretary; and
``(C) the billing and collection procedures of the
entity and the relation of the procedures to its fee
schedule and schedule of discounts and to the
availability of health insurance and public programs to
pay for the health services it provides.
A report of each such audit shall be filed with the Secretary
at such time and in such manner as the Secretary may require.
``(2) Records.--Each entity which receives a grant under
this section shall establish and maintain such records as the
Secretary shall by regulation require to facilitate the audit
required by paragraph (1). The Secretary may specify by
regulation the form and manner in which such records shall be
established and maintained.
``(3) Availability of records.--Each entity which is
required to establish and maintain records or to provide for an
audit under this subsection shall make such books, documents,
papers, and records available to the Secretary or the
Comptroller General of the United States, or any of their duly
authorized representatives, for examination, copying, or
mechanical reproduction on or off the premises of such entity
upon a reasonable request therefore. The Secretary and the
Comptroller General of the United States, or any of their duly
authorized representatives, shall have the authority to conduct
such examination, copying, and reproduction.
``(4) Waiver.--The Secretary may, under appropriate
circumstances, waive the application of all or part of the
requirements of this subsection with respect to an entity.
``SEC. 340I. INTEGRATED HEALTH CENTER.
``(a) Integrated Health Center.--The term `integrated health
center' means an health center that is operated by an integrated health
care system and that serves a medically underserved population (as
defined for purposes of section 330(b)(3)) by providing, either through
the staff and supporting resources of the center or through contracts
or cooperative arrangements--
``(1) required primary health services (as defined in
subsection (b)(1)); and
``(2) as may be appropriate for particular centers
additional health services (as defined in subsection (b)(2))
necessary for the adequate support of the primary health
services required under paragraph (1);
for all residents of the area served by the center.
``(b) Definitions.--For purposes of this section:
``(1) Required primary health services.--The term `required
primary health services' means--
``(A) basic health services which, for purposes of
this section, shall consist of--
``(i) health services related to family
medicine, internal medicine, pediatrics,
obstetrics, or gynecology that are furnished by
physicians and where appropriate, physician
assistants, nurse practitioners, and nurse
midwives;
``(ii) diagnostic laboratory and radiologic
services;
``(iii) preventive health services,
including--
``(I) prenatal and perinatal
services;
``(II) appropriate cancer
screening;
``(III) well-child services;
``(IV) immunizations against
vaccine-preventable diseases;
``(V) screenings for elevated blood
lead levels, communicable diseases, and
cholesterol;
``(VI) pediatric eye, ear, and
dental screenings to determine the need
for vision and hearing correction and
dental care;
``(VII) voluntary family planning
services; and
``(VIII) preventive dental
services;
``(iv) emergency medical services; and
``(v) pharmaceutical services and
medication therapy management services as may
be appropriate for particular centers;
``(B) referrals to providers of medical services
(including specialty and hospital care referrals when
medically indicated) and other health-related services
(including substance abuse and mental health services);
``(C) patient case management services (including
counseling, referral, and follow-up services) and other
services designed to assist health center patients in
establishing eligibility for and gaining access to
Federal, State, and local programs that provide or
financially support the provision of medical, social,
housing, educational, or other related services;
``(D) services that enable individuals to use the
services of the center (including outreach and
transportation services and, if a substantial number of
the individuals in the population served by a center
are of limited English-speaking ability, the services
of appropriate personnel fluent in the languages spoken
by a predominant number of such individuals); and
``(E) education of patients and the general
population served by the center regarding the
availability and proper use of health services.
``(2) Additional health services.--The term `additional
health services' means services that are not included as
required primary health services and that are appropriate to
meet the health needs of the population served by the center
involved. Such term may include--
``(A) behavioral and mental health and substance
abuse services;
``(B) recuperative care services; and
``(C) environmental health services.''.
(b) Coverage Under the Medicare Program.--
(1) Part b benefit.--Section 1861(s)(2)(E) of the Social
Security Act (42 U.S.C. 1395x(s)(2)(E)) is amended--
(A) by striking ``services and'' and inserting
``services,''; and
(B) by striking ``services'' the second place it
appears and inserting ``services, and integrated health
center services''.
(2) Definitions.--Section 1861(aa) of the Social Security
Act (42 U.S.C. 1395x(aa)) is amended--
(A) in the heading--
(i) by striking ``Services and'' and
inserting ``Services,''; and
(ii) by striking ``Services'' the second
place it appears and inserting ``Services, and
Integrated Health Center Services'';
(B) in paragraph (1)(B), by striking ``paragraph
(5))'' and inserting ``paragraph (7));
(C) by redesignating paragraphs (5), (6), and (7)
as paragraphs (7), (8), and (9), respectively; and
(D) by inserting after paragraph (4) the following
new paragraph:
``(5) The term `integrated health center services' means--
``(A) services of the type described in subparagraphs (A)
through (C) of paragraph (1); and
``(B) preventive primary health services that a center is
required to provide under section 340I of the Public Health
Service Act,
when furnished to an individual as an outpatient of an integrated
health center, and for this purpose, any reference to a rural health
clinic or a physician described in paragraph (2)(B) is deemed a
reference to an integrated health center or a physician at the center,
respectively.
``(6) The term `integrated health center' means a center that is
operated by a qualified integrated health care system (as defined in
section 340H(a)(1) of the Public Health Service Act that--
``(A) is receiving a grant under section 340H of such Act;
or
``(B) is determined by the Secretary to meet the
requirements for receiving such a grant.''.
(3) Payment.--
(A) In general.--Section 1832(a)(2)(D) of the
Social Security Act (42 U.S.C. 1395k(a)(2)(D)) is
amended--
(i) by striking ``and (ii)'' and inserting
``, (ii)''; and
(ii) by striking ``services'' the second
place it appears and inserting ``services, and
(iii) integrated health center services.''.
(B) Part b deductible does not apply.--Section
1833(b)(4) of the Social Security Act (42 U.S.C.
13951(b)(4)) is amended by inserting ``or integrated
health center services'' after ``Federally qualified
health center services''.
(C) Exclusion from payment removed.--The second
sentence of section 1862(a) of the Social Security Act
(42 U.S.C. 1395y(a)) is amended by inserting ``or
integrated health center services described in section
1861 (aa)(5)(B)'' after ``section 1861(aa)(3)(B)''.
(D) Waiver of anti-kickback restriction.--Section
1128B(b)(3)(D) of the Social Security Act (42 U.S.C.
1320a-7b(b)(3)(D)) is amended by inserting ``or by an
integrated health center'' after ``Federally qualified
health center''.
(4) Conforming amendments.--(A) Clauses (ii) and (iv) of
section 1834(a)(1)(E) of the Social Security Act (42 U.S.C.
1395m(a)(1)(E)) are each amended by striking ``section
1861(aa)(5)'' and inserting ``section 1861(aa)(7)''.
(B) Section 1842(b)(18)(C)(i) of the Social Security Act
(42 U.S.C. 1395u(b)(18)(C)(i)) is amended by striking ``section
1861(aa)(5)'' and inserting ``section 1861(aa)(7)''.
(C) Section 1861(s)(2) of the Social Security Act (42
U.S.C. 1395x(s)(2)) is amended--
(i) in subparagraph (H)(i), by striking
``subsection (aa)(5)'' and inserting ``subsection
(aa)(7)''; and
(ii) in subparagraph (K)--
(I) by striking ``subsection (aa)(5)'' each
place it appears and inserting ``subsection
(aa)(7)''; and
(II) by striking ``subsection (aa)(6)'' and
inserting ``subsection (aa)(8)''.
(D) Section 1861(dd)(3)(B) of the Social Security Act (42
U.S.C. 1395x(dd)(3)(B)) is amended by striking ``subsection
(aa)(5)'' and inserting ``subsection (aa)(7)''.
(c) Recognition Under Medicaid.--
(1) Coverage.--Section 1905(a)(2) of the Social Security
Act (42 U.S.C. 1396d(a)(2)) is amended--
(A) by striking ``and (C)'' and inserting ``,
(C)''; and
(B) by inserting ``, and
``(D) integrated health center services (as defined
in subsection (1)(3)(A)) and any other ambulatory
services offered by the integrated health center and
which are otherwise included in the plan.'' after
``included in the plan'' the second place it appears.
(2) Definitions.--Section 1905(l) of such Act (42 U.S.C.
1396d(l)) is amended by adding at the end the following:
``(3)(A) The term `integrated health center services' means
services of the type described in subparagraphs (A) through (C) of
section 1861(aa) when furnished to an individual as a patient of an
integrated health center and, for this purpose, any reference to a
rural health clinic or a physician described in section 1861(aa)(2)(B)
is deemed a reference to an integrated health center or a physician at
the center, respectively.
``(B) The term `integrated health center' means a center that is
operated by a qualified integrated health care system that--
``(i) is receiving a grant under section 340H of the Public
Health Service Act; or
``(ii) is determined by the Secretary, based on the
recommendations of the Administrator of the Centers for
Medicare & Medicaid Services, to meet the requirements for
receiving such a grant.''.
(3) Payment.--Section 1902(a) of such Act (42 U.S.C.
1396a(a)) is amended--
(A) in paragraph (15), by inserting ``and for
services described in clause (D) of section 1905(a)(2)
in accordance with the provisions of subsection (cc)''
after ``subsection (bb)''; and
(B) by adding at the end the following:
``(cc) Payment for Services Provided by Integrated Health
Centers.--
``(1) In general.--Beginning with fiscal year 2006 with
respect to services furnished on or after January 1, 2006, and
each succeeding fiscal year, the State plan shall provide for
payment for services described in section 1905(a)(2)(D)
furnished by an integrated health center in accordance with the
provisions of this subsection.
``(2) Fiscal year 2006.--Subject to paragraph (4), for
services furnished on and after January 1, 2006, during fiscal
year 2006, the State plan shall provide for payment for such
services in an amount (calculated on a per visit basis) that is
equal to 100 percent of the average of the costs of the center
of furnishing such services during fiscal years 2004 and 2005
which are reasonable and related to the cost of furnishing such
services, or based on such other tests of reasonableness as the
Secretary prescribes in regulations under section 1833(a)(3),
or, in the case of services to which such regulations do not
apply, the same methodology used under section 1833(a)(3),
adjusted to take into account any increase or decrease in the
scope of such services furnished by the center during fiscal
years 2004 and 2005.
``(3) Fiscal year 2007 and succeeding fiscal years.--
Subject to paragraph (4), for services furnished during fiscal
year 2007 or a succeeding fiscal year, the State plan shall
provide for payment for such services in an amount (calculated
on a per visit basis) that is equal to the amount calculated
for such services under this subsection for the preceding
fiscal year--
``(A) increased by the percentage increase in the
MEI (as defined in section 1842(i)(3)) for that fiscal
year; and
``(B) adjusted to take into account any increase or
decrease in the scope of such services furnished by the
center during that fiscal year.
``(4) Establishment of initial year payment amount for new
centers.--In any case in which an entity first qualifies as an
integrated health center after fiscal year 2006, the State plan
shall provide for payment for services described in section
1905(a)(2)(D) furnished by the center in the first fiscal year
in which the center so qualifies in an amount (calculated on a
per visit basis) that is equal to 100 percent of the costs of
furnishing such services during such fiscal year based on the
rates established under this subsection for the fiscal year for
other such centers located in the same or adjacent area with a
similar case load or, in the absence of such a center, in
accordance with the regulations and methodology referred to in
paragraph (2) or based on such other tests of reasonableness as
the Secretary may specify. For each fiscal year following the
fiscal year in which the entity first qualifies as an
integrated health center, the State plan shall provide for the
payment amount to be calculated in accordance with paragraph
(3).
``(5) Administration in the case of managed care.--
``(A) In general.--In the case of services
furnished by an integrated health center pursuant to a
contract between the center and a managed care entity
(as defined in section 1932(a)(1)(B)), the State plan
shall provide for payment to the center by the State of
a supplemental payment equal to the amount (if any) by
which the amount determined under paragraphs (2), (3),
and (4) exceeds the amount of the payments provided
under the contract.
``(B) Payment schedule.--The supplemental payment
required under subparagraph (A) shall be made pursuant
to a payment schedule agreed to by the State and the
integrated health center, but in no case less
frequently than every 4 months.
``(6) Alternative payment methodologies.--Notwithstanding
any other provision of this section, the State plan may provide
for payment in any fiscal year to an integrated health center
for services described in section 1905(a)(2)(D) in an amount
which is determined under an alternative payment methodology
that--
``(A) is agreed to by the State and the center; and
``(B) results in payment to the center of an amount
which is at least equal to the amount otherwise
required to be paid to the center under this
section.''.
(4) Waiver prohibited.--Section 1915(b) of the Social
Security Act (42 U.S.C.1396n(b)) is amended in the matter
preceding paragraph (1), by inserting ``1902(cc),'' after
``1902(bb),''.
(d) Protection Against Liability.--Section 224(g) of the Public
Health Service Act (42 U.S.C. 233(g)) is amended--
(1) In paragraph (4), by striking ``An entity'' and
inserting ``Subject to paragraph (6), an entity''; and
(2) by adding at the end the following:
``(6) For purposes of this section--
``(A) a qualified integrated health care system receiving a
grant under section 340H and any integrated health center
operated by such system shall be considered to be an entity
described in paragraph (4); and
``(B) the provisions of this section shall apply to such
system and centers in the same manner as such provisions apply
to an entity described in such paragraph (4), except that--
``(i) notwithstanding paragraph (1)(B), the deeming
of any system or center, or of an officer, governing
board member, employee, or contractor of such system or
center, to be an employee of the Public Health Service
for purposes of this section shall apply only with
respect to items and services that are furnished to a
member of the underserved population served by the
entity;
``(ii) notwithstanding paragraph (3), this
paragraph shall apply only with respect to causes of
action arising from acts or omissions that occur on or
after January 1, 2006; and
``(iii) the Secretary shall make separate estimates
under subsection (k)(1) with respect to such systems
and centers and entities described in paragraph (4)
(other than such systems and centers), establish
separate funds under subsection (k)(2) with respect to
such groups of entities, and any appropriations under
this subsection for such systems and centers shall be
separate from the amounts authorized by subsection
(k)(2).''.
(e) Effective Date.--The amendments made subsections (b) and (c)
shall apply to items and services furnished on or after October 1,
2005.
Subtitle C--Miscellaneous Provisions
SEC. 331. COMMUNITY HEALTH CENTER COLLABORATIVE ACCESS EXPANSION.
Section 330 of the Public Health Service Act (42 U.S.C. 254b) is
amended by adding at the end the following:
``(s) Miscellaneous Provisions.--
``(1) Rule of construction with respect to rural health
clinics.--
``(A) In general.--Nothing in this section shall be
construed to prevent a community health center from
contracting with a federally certified rural health
clinic (as defined by section 1861(aa)(2) of the Social
Security Act) for the delivery of primary health care
services that are available at the rural health clinic
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 rural health
clinic.
``(B) Assurances.--In order for a rural health
clinic to receive funds under this section through a
contract with a community health center under paragraph
(1), such rural health clinic shall establish policies
to ensure--
``(i) nondiscrimination based upon the
ability of a patient to pay; and
``(ii) the establishment of a sliding fee
scale for low-income patients.''.
SEC. 332. IMPROVEMENTS TO SECTION 340B PROGRAM.
(a) Elimination of Group Purchasing Prohibition for Certain
Hospitals.--Section 340B(a)(4)(L) of the Public Health Service Act (42
U.S.C. 256b(a)(4)(L)) is amended--
(1) in clause (i), by adding ``and'' at the end;
(2) in clause (ii), by striking ``; and'' and inserting a
period; and
(3) by striking clause (iii).
(b) Permitting Use of Multiple Contract Pharmacies.--Section 340B f
the Public Health Service Act (42 U.S.C. 256b) is amended by adding at
the end the following:
``(e) Permitting Use of Multiple Contract Pharmacies.--Nothing in
this section shall be construed as prohibiting a covered entity from
entering into contracts with more than one pharmacy for the provision
of covered drugs, including a contract that--
``(1) supplements the use of an in-house pharmacy
arrangement; or
``(2) requires the approval of the Secretary.''.
(c) Improvements in Program Administration.--Section 340B of the
Public Health Service Act (42 U.S.C. 256b), as amended by subsection
(b), is further amended by adding at the end the following:
``(f) Improvements in Program Administration.--
``(1) In general.--The Secretary shall provide, from funds
appropriated under paragraph (2), for improvements in the
integrity and administration of the program under this section
in order to prevent abuse and misuse of discounted prices made
available under this section. Such improvements shall include
the following:
``(A) The development of a system to verify the
accuracy of information regarding covered entities that
is listed on the Internet website of the Department of
Health and Human Services relating to this section.
``(B) The establishment of a third-party auditing
system by which covered entities and manufacturers are
regularly audited to ensure compliance with the
requirements of this section.
``(C) The conduct of such audits under subsection
(a)(5)(C) that supplement the audits conducted under
subparagraph (B) as the Secretary determines
appropriate and the implementation of dispute
resolution guidelines and other compliance programs.
``(D) The development of more detailed guidance
regarding the definition of section 340B patients and
describing options for billing under the medicaid
program under title XIX of the Social Security Act in
order to avoid duplicative discounts.
``(E) The issuance of advisory opinions within
defined time periods in response to questions from
manufacturers or covered entities regarding the
application of the requirements of this section in
specific factual circumstances.
``(F) Insofar as the Secretary determines feasible,
providing access through the Internet website of the
Department of Health and Human Services on the prices
for covered drugs made available under this section,
but only in a manner (such as through the use of
password protection) that limits such access to covered
entities.
``(G) The improved dissemination of educational
materials regarding the program under this section to
covered entities that are not currently participating
in such programs including regional educational
sessions.
``(2) Authorization of appropriations.--There are
authorized to be appropriated to carry out this subsection,
such sums as may be necessary for fiscal year 2006 and each
succeeding fiscal year.''.
SEC. 333. FORBEARANCE FOR STUDENT LOANS FOR PHYSICIANS PROVIDING
SERVICES IN FREE CLINICS.
(a) In General.--Section 428(c)(3)(A) of the Higher Education Act
of 1965 (20 U.S.C. 1078(c)(3)(A)) is amended--
(1) in clause (i)--
(A) in subclause (III), by striking ``or'' at the
end;
(B) in subclause (V), by adding ``or'' at the end;
and
(C) by adding at the end the following:
``(V) is volunteering without pay
for at least 80 hours per month at a
free clinic as defined under section
224 of the Public Health Service
Act;''; and
(2) in clause (ii)(III), by inserting ``or (i)(V)'' after
``clause (i)(III)''.
(b) Perkins Program.--Section 464(e) of the Higher Education Act of
1965 (20 U.S.C. 1087dd(e)) is amended--
(1) in paragraph (1), by striking ``or'' at the end;
(2) in paragraph (2), by striking the period and inserting
``; or''; and
(3) by adding at the end the following:
``(3) the borrower is volunteering without pay for at least
80 hours per month at a free clinic as defined under section
224 of the Public Health Service Act.''.
SEC. 334. AMENDMENTS TO THE PUBLIC HEALTH SERVICE ACT RELATING TO
LIABILITY.
Section 224 of the Public Health Service Act (42 U.S.C. 233) is
amended--
(1) in subsection (g)(1)--
(A) in subparagraph (A)--
(i) in the first sentence, by striking ``or
employee'' and inserting ``employee, or
(subject to subsection (k)(4)) volunteer
practitioner''; and
(ii) in the second sentence, by inserting
``and subsection (k)(4)'' after ``subject to
paragraph (5)''; and
(B) by adding at the end the following:
``(I) For purposes of this subsection, the term `employee' shall
include a health professional who volunteers to provide health-related
services for an entity described in paragraph (4).'';
(2) in subsection (k), by adding at the end the following:
``(4)(A) Subsections (g) through (m) apply with respect to
volunteer practitioners beginning with the first fiscal year for which
an appropriations Act provides that amounts in the fund under paragraph
(2) are available with respect to such practitioners.
``(B) For purposes of subsections (g) through (m), the term
`volunteer practitioner' means a practitioner who, with respect to an
entity described in subsection (g)(4), meets the following conditions:
``(i) The practitioner is a licensed physician or a
licensed clinical psychologist.
``(ii) At the request of such entity, the practitioner
provides services to patients of the entity, at a site at which
the entity operates or at a site designated by the entity. The
weekly number of hours of services provided to the patients by
the practitioner is not a factor with respect to meeting
conditions under this subparagraph.
``(iii) The practitioner does not for the provision of such
services receive any compensation from such patients, from the
entity, or from third-party payors (including reimbursement
under any insurance policy or health plan, or under any Federal
or State health benefits program).'';
(3) in subsection (o)(2)--
(A) in subparagraph (D), by striking clause (i) and
inserting the following:
``(i) The health care practitioner may provide the
services involved as an employee of the free clinic, or
may receive repayment from the free clinic only for
reasonable expenses incurred by the health care
practitioner in the provision of the services to the
individual.''; and
(B) by adding at the end the following:
``(G) The health care practitioner is providing the
services involved as a paid employee of the free clinic.''; and
(4) in each of subsections (g), (i), (j), (k), (l), and
(m), by striking ``employee, or contractor'' each place such
term appears and inserting ``employee, volunteer practitioner,
or contractor''.
SEC. 335. SENSE OF THE SENATE CONCERNING HEALTH DISPARITIES.
It is the sense of the Senate that additional measures are needed
to reduce or eliminate disparities in health care related to race,
ethnicity, socioeconomic status, and geography that affect access to
quality health care.
<all>
Introduced in Senate
Read twice and referred to the Committee on Finance. (text of measure as introduced: CR S9160-9182)
Llama 3.2 · runs locally in your browser
Ask anything about this bill. The AI reads the full text to answer.
Enter to send · Shift+Enter for new line