H.R. 3200 (111^th): America’s Affordable Health Choices Act of 2009

Subtitle B (relating to affordable coverage).

Subtitle C (relating to essential benefits).

Subtitle D (relating to consumer protection).

Enrollment in employment-based health plans

An individual shall be treated as being enrolled in an employment-based health plan if the individual is a participant or beneficiary (as such terms are defined in section 3(7) and 3(8), respectively, of the Employee Retirement Income Security Act of 1974) in such plan.

Individual and group health insurance coverage

The terms individual health insurance coverage and group health insurance coverage mean health insurance coverage offered in the individual market or large or small group market, respectively, as defined in section 2791 of the Public Health Service Act.

Limitation on new enrollment

Limitation on changes in terms or conditions

Subject to paragraph (3) and except as required by law, the issuer does not change any of its terms or conditions, including benefits and cost-sharing, from those in effect as of the day before the first day of Y1.

Restrictions on premium increases

The issuer cannot vary the percentage increase in the premium for a risk group of enrollees in specific grandfathered health insurance coverage without changing the premium for all enrollees in the same risk group at the same rate, as specified by the Commissioner.

Grace period

Transitional treatment as acceptable coverage

During the grace period specified in paragraph (1)(A), an employment-based health plan that is described in such paragraph shall be treated as acceptable coverage under this division.

In general

Individual health insurance coverage that is not grandfathered health insurance coverage under subsection (a) may only be offered on or after the first day of Y1 as an Exchange-participating health benefits plan.

Separate, excepted coverage permitted

Excepted benefits (as defined in section 2791(c) of the Public Health Service Act) are not included within the definition of health insurance coverage. Nothing in paragraph (1) shall prevent the offering, other than through the Health Insurance Exchange, of excepted benefits so long as it is offered and priced separately from health insurance coverage.

Stand-alone dental and vision coverage permitted

Nothing in this division shall be construed—

Limited age variation permitted

By age (within such age categories as the Commissioner shall specify) so long as the ratio of the highest such premium to the lowest such premium does not exceed the ratio of 2 to 1.

By area

By premium rating area (as permitted by State insurance regulators or, in the case of Exchange-participating health benefits plans, as specified by the Commissioner in consultation with such regulators).

By family enrollment

By family enrollment (such as variations within categories and compositions of families) so long as the ratio of the premium for family enrollment (or enrollments) to the premium for individual enrollment is uniform, as specified under State law and consistent with rules of the Commissioner.

In general

The Commissioner shall estimate the basic per enrollee, per month cost, determined on an average actuarial basis, for including coverage under a basic plan of the services described in section 122(d)(4)(A).

Considerations

In making such estimate the Commissioner—

Study

The Commissioner, in coordination with the Secretary of Health and Human Services and the Secretary of Labor, shall conduct a study of the large group insured and self-insured employer health care markets. Such study shall examine the following:

Reports

Not later than 18 months after the date of the enactment of this Act, the Commissioner shall submit to Congress and the applicable agencies a report on the study conducted under paragraph (1). Such report shall include any recommendations the Commissioner deems appropriate to ensure that the law does not provide incentives for small and mid-size employers to self-insure or create adverse selection in the risk pools of large group insurers and self-insured employers. Not later than 18 months after the first day of Y1, the Commissioner shall submit to Congress and the applicable agencies an updated report on such study, including updates on such recommendations.

Non-exchange-participating health benefits plans

In the case of a qualified health benefits plan that is not an Exchange-participating health benefits plan, such plan may offer such coverage in addition to the essential benefits package as the QHBP offering entity may specify.

Exchange-participating health benefits plans

In the case of an Exchange-participating health benefits plan, such plan is required under section 203 to provide specified levels of benefits and, in the case of a plan offering a premium-plus level of benefits, provide additional benefits.

Continuation of offering of separate excepted benefits coverage

Nothing in this division shall be construed as affecting the offering of health benefits in the form of excepted benefits (described in section 102(b)(1)(B)(ii)) if such benefits are offered under a separate policy, contract, or certificate of insurance.

provides payment for the items and services described in subsection (b) in accordance with generally accepted standards of medical or other appropriate clinical or professional practice;

limits cost-sharing for such covered health care items and services in accordance with such benefit standards, consistent with subsection (c);

does not impose any annual or lifetime limit on the coverage of covered health care items and services;

complies with section 115(a) (relating to network adequacy); and

is equivalent, as certified by Office of the Actuary of the Centers for Medicare & Medicaid Services, to the average prevailing employer-sponsored coverage.

Hospitalization.

Outpatient hospital and outpatient clinic services, including emergency department services.

Professional services of physicians and other health professionals.

Such services, equipment, and supplies incident to the services of a physician’s or a health professional’s delivery of care in institutional settings, physician offices, patients’ homes or place of residence, or other settings, as appropriate.

Prescription drugs.

Rehabilitative and habilitative services.

Mental health and substance use disorder services, including behavioral health treatments.

Preventive services, including those services recommended with a grade of A or B by the Task Force on Clinical Preventive Services and those vaccines recommended for use by the Director of the Centers for Disease Control and Prevention.

Maternity care.

Well baby and well child care; treatment of a congenital or developmental deformity, disease, or injury; and oral health, vision, and hearing services, equipment, and supplies at least for children under 21 years of age.

No cost-sharing for preventive services

There shall be no cost-sharing under the essential benefits package for preventive items and services (as specified under the benefit standards), including well baby and well child care.

Annual limitation

Minimum actuarial value

Prohibition of required coverage

The Health Benefits Advisory Committee may not recommend under section 123(b) and the Secretary may not adopt in standards under section 124(b), the services described in paragraph (4)(A) or (4)(B) as part of the essential benefits package and the Commissioner may not require such services for qualified health benefits plans to participate in the Health Insurance Exchange.

Voluntary choice of coverage by plan

In the case of a qualified health benefits plan, the plan is not required (or prohibited) under this Act from providing coverage of services described in paragraph (4)(A) or (4)(B) and the QHBP offering entity shall determine whether such coverage is provided.

Coverage under public health insurance option

The public health insurance option shall provide coverage for services described in paragraph (4)(B). Nothing in this Act shall be construed as preventing the public health insurance option from providing for or prohibiting coverage of services described in paragraph (4)(A).

Abortion services

No application to adult coverage

Nothing in this subtitle shall be construed as requiring an individual who is 21 years of age or older to be provided stand-alone dental-only or vision-only coverage.

Treatment of combined coverage

The combination of stand-alone coverage described in paragraph (1) and a qualified health benefits plan without coverage of such oral and vision services shall be treated as satisfying the essential benefits package under this division.

In general

There is established a private-public advisory committee which shall be a panel of medical and other experts to be known as the Health Benefits Advisory Committee to recommend covered benefits and essential, enhanced, and premium plans.

Chair

The Surgeon General shall be a member and the chair of the Health Benefits Advisory Committee.

Membership

The Health Benefits Advisory Committee shall be composed of the following members, in addition to the Surgeon General:

Terms

Each member of the Health Benefits Advisory Committee shall serve a 3-year term on the Committee, except that the terms of the initial members shall be adjusted in order to provide for a staggered term of appointment for all such members.

Participation

The membership of the Health Benefits Advisory Committee shall at least reflect providers, consumer representatives, employers, labor, health insurance issuers, experts in health care financing and delivery, experts in racial and ethnic disparities, experts in care for those with disabilities, representatives of relevant governmental agencies. and at least one practicing physician or other health professional and an expert on children’s health and shall represent a balance among various sectors of the health care system so that no single sector unduly influences the recommendations of such Committee. Not less than 25 percent of the members of the Committee shall be practicing health care practitioners who, as of the date of their appointment, practice in a rural area and who have practiced in a rural area for at least the 5-year period preceding such date.

Recommendations on benefit standards

The Health Benefits Advisory Committee shall recommend to the Secretary of Health and Human Services (in this subtitle referred to as the Secretary) benefit standards (as defined in paragraph (4)), and periodic updates to such standards. In developing such recommendations, the Committee shall take into account innovation in health care and consider how such standards could reduce health disparities.

Deadline

The Health Benefits Advisory Committee shall recommend initial benefit standards to the Secretary not later than 1 year after the date of the enactment of this Act.

Public input

The Health Benefits Advisory Committee shall allow for public input as a part of developing recommendations under this subsection.

Benefit standards defined

In this subtitle, the term benefit standards means standards respecting—

Levels of cost-sharing for enhanced and premium plans

Per diem pay

Each member of the Health Benefits Advisory Committee shall receive travel expenses, including per diem in accordance with applicable provisions under subchapter I of chapter 57 of title 5, United States Code, and shall otherwise serve without additional pay.

Members not treated as Federal employees

Members of the Health Benefits Advisory Committee shall not be considered employees of the Federal government solely by reason of any service on the Committee.

Application of FACA

The Federal Advisory Committee Act (5 U.S.C. App.), other than section 14, shall apply to the Health Benefits Advisory Committee.

Review of recommended standards

Not later than 45 days after the date of receipt of benefit standards recommended under section 123 (including such standards as modified under paragraph (2)(B)), the Secretary shall review such standards and shall determine whether to propose adoption of such standards as a package.

Determination to adopt standards

If the Secretary determines—

Contingency

If, because of the application of paragraph (2)(B), the Secretary would otherwise be unable to propose initial adoption of such recommended standards by the deadline specified in subsection (b)(1), the Secretary shall, by regulation under section 553 of title 5, United States Code, propose adoption of initial benefit standards by such deadline.

Publication

The Secretary shall provide for publication in the Federal Register of all determinations made by the Secretary under this subsection.

Initial standards

Not later than 18 months after the date of the enactment of this Act, the Secretary shall, through the rulemaking process consistent with subsection (a), adopt an initial set of benefit standards.

Periodic updating standards

Under subsection (a), the Secretary shall provide for the periodic updating of the benefit standards previously adopted under this section.

Requirement

The Secretary may not adopt any benefit standards for an essential benefits package or for level of cost-sharing that are inconsistent with the requirements for such a package or level under sections 122 (including subsection (d)) and 123(b)(5).

In general

A qualified health benefits plan (including the public health insurance option) shall comply with standards established by the Commissioner for the accurate and timely disclosure of plan documents, plan terms and conditions, claims payment policies and practices, periodic financial disclosure, data on enrollment, data on disenrollment, data on the number of claims denials, data on rating practices, information on cost-sharing and payments with respect to any out-of-network coverage, and other information as determined appropriate by the Commissioner. The Commissioner shall require that such disclosure be provided in plain language.

Plain language

In this subsection, the term plain language means language that the intended audience, including individuals with limited English proficiency, can readily understand and use because that language is clean, concise, well-organized, and follows other best practices of plain language writing.

Guidance

The Commissioner shall develop and issue guidance on best practices of plain language writing.

In general

Notwithstanding any other provision of law, a qualified health benefits plan shall enter into a contract with a pharmacy benefit managers (in this subsection referred to as a PBM) to manage the prescription drug coverage provided under such plan, or to control the costs of such prescription drug coverage, only if as a condition of such contract the PBM is required to provide at least annually to the Commissioner and to the QHBP offering entity offering such plan the following information:

Confidentiality of information

Notwithstanding any other provision of law, information disclosed by a PBM to the Commissioner or a QHBP offering entity under this subsection is confidential and shall not be disclosed by the Commissioner or the QHBP offering entity in a form which discloses the identity of a specific PBM or prices charged by such PBM or a specific retailer, manufacturer, or wholesaler, except—

shall provide for the dissemination of information related to end-of-life planning to individuals seeking enrollment in Exchange-participating health benefits plans offered through the Exchange;

shall present such individuals with—

shall not promote suicide, assisted suicide, or the active hastening of death.

to require an individual to complete an advanced directive or a physician’s order for life sustaining treatment or other end-of-life planning document;

to require an individual to consent to restrictions on the amount, duration, or scope of medical benefits otherwise covered under a qualified health benefits plan; or

to encourage the hastening of death or the promotion of assisted suicide.

In general

Subject to paragraph (3), information provided to meet the requirements of subsection (a)(2) shall not include advanced directives or other planning tools that list or describe as an option suicide, assisted suicide or the intentional hastening of death regardless of legality.

Construction

Nothing in paragraph (1) shall be construed to apply to or affect any option to—

Exemption

The requirements of subsection (a) shall not apply to any State that as of August 1, 2009, requires the inclusion of information prohibited in such paragraph in advanced directives or other planning tools.

In general

A qualified health benefits plan, and a QHBP offering entity that offers such plan, shall conduct utilization review activities in connection with the provision of benefits under such plan only in accordance with a utilization review program that meets the requirements of this section.

Use of outside agents

Nothing in this section shall be construed as preventing a qualified health benefits plan or QHBP offering entity from arranging through a contract or otherwise for persons or entities to conduct utilization review activities on behalf of the plan entity, so long as such activities are conducted in accordance with a utilization review program that meets the requirements of this section.

Utilization review defined

For purposes of this section, the terms utilization review and utilization review activities mean procedures used to monitor or evaluate the use or coverage, clinical necessity, appropriateness, efficacy, or efficiency of health care services, procedures or settings, and includes prospective review, concurrent review, second opinions, case management, discharge planning, or retrospective review.

Written policies

A utilization review program shall be conducted consistent with written policies and procedures that govern all aspects of the program.

Use of written criteria

Administration by health care professionals

A utilization review program shall be administered by qualified health care professionals who shall oversee review decisions.

Use of qualified, independent personnel

Accessibility of review

Such a program shall provide that appropriate personnel performing utilization review activities under the program, including the utilization review administrator, are reasonably accessible by toll-free telephone during normal business hours to discuss patient care and allow response to telephone requests, and that appropriate provision is made to receive and respond promptly to calls received during other hours.

Limits on frequency

Such a program shall not provide for the performance of utilization review activities with respect to a class of services furnished to an individual more frequently than is reasonably required to assess whether the services under review are medically necessary or appropriate.

Prior authorization services

Ongoing care

Previously provided services

In the case of a utilization review activity involving retrospective review of health care services previously provided for an individual, the utilization review program shall make a determination concerning such services, and provide notice of the determination to the individual or the individual’s designee and the individual’s health care provider by telephone and in printed form, within 30 days of the date of receipt of information that is reasonably necessary to make such determination, but in no case later than 60 days after the date of receipt of the claim for benefits.

Failure to meet deadline

In a case in which a qualified health benefits plan or QHBP offering entity fails to make a determination on a claim for benefit under paragraph (1), (2)(A), or (3) by the applicable deadline established under the respective paragraph, the failure shall be treated under this subtitle as a denial of the claim as of the date of the deadline.

In general

Notice of a denial of claims for benefits under a utilization review program shall be provided in printed form and written in a manner calculated to be understood by the participant, beneficiary, or enrollee and shall include—

Specification of any additional information

Such a notice shall also specify what (if any) additional necessary information must be provided to, or obtained by, the person making the denial in order to make a decision on such an appeal.

Claim for benefits

The term claim for benefits means any request for coverage (including authorization of coverage), for eligibility, or for payment in whole or in part, for an item or service under a qualified health benefits plan.

Denial of claim for benefits

The term denial means, with respect to a claim for benefits, means a denial, or a failure to act on a timely basis upon, in whole or in part, the claim for benefits and includes a failure to provide benefits (including items and services) required to be provided under this title.

In general

Each qualified health benefits plan, and each QHBP offering entity offering such plan—

Treatment of oral requests

The request for review under paragraph (1)(B) may be made orally, but, in the case of an oral request, shall be followed by a request in writing.

Conduct of review

Time limits for internal reviews

In general

A qualified health benefits plan, and a QHBP offering entity, shall establish procedures in writing for the expedited consideration of requests for review under subsection (b) in situations—

Process

Under such procedures—

Deadline for decision

The decision on the expedited review must be made and communicated to the parties as soon as possible in accordance with the medical exigencies of the case, and in no event later than 72 hours after the time of receipt of the request for expedited review, except that in a case described in paragraph (1)(B), the decision must be made before the end of the approved period of care.

In general

A qualified health benefits plan, and a QHBP offering entity, shall provide for an external appeals process that meets the requirements of this section in the case of an externally appealable decision described in paragraph (2), for which a timely appeal is made either by the plan or entity or by the participant, beneficiary, or enrollee (and any provider or other person acting on behalf of such an individual with the individual’s consent or without such consent if such an individual is medically unable to provide such consent). The appropriate Secretary shall establish standards to carry out such requirements.

Externally appealable decision defined

Exhaustion of internal review process

Except as provided under section 139A(d), a plan or entity may condition the use of an external appeal process in the case of an externally appealable decision upon a final decision in an internal review under section 140, but only if the decision is made in a timely basis consistent with the deadlines provided under this subtitle.

Filing fee requirement

Contract with qualified external appeal entity

Elements of process

An external appeal process shall be conducted consistent with standards established by the appropriate Secretary that include at least the following:

In general

For purposes of this section, the term qualified external appeal entity means, in relation to a plan or issuer, an entity that is certified under paragraph (2) as meeting the following requirements:

Initial certification of external appeal entities

Independence requirements

Limitation on liability of reviewers

No qualified external appeal entity having a contract with a qualified health benefits plan under this part and no person who is employed by any such entity or who furnishes professional services to such entity, shall be held by reason of the performance of any duty, function, or activity required or authorized pursuant to this section, to have violated any criminal law, or to be civilly liable under any law of the United States or of any State (or political subdivision thereof) if due care was exercised in the performance of such duty, function, or activity and there was no actual malice or gross misconduct in the performance of such duty, function, or activity.

Monetary penalties

In any case in which the determination of an external review entity is not followed by a qualified health benefits plan, any person who, acting in the capacity of authorizing the benefit, causes such refusal may, in the discretion in a court of competent jurisdiction, be liable to an aggrieved participant, beneficiary, or enrollee for a civil penalty in an amount of up to $1,000 a day from the date on which the determination was transmitted to the plan by the external review entity until the date the refusal to provide the benefit is corrected.

Cease and desist order and order of attorney"s fees

In any action described in paragraph (1) brought by a participant, beneficiary, or enrollee with respect to a qualified health benefits plan, in which a plaintiff alleges that a person referred to in such paragraph has taken an action resulting in a refusal of a benefit determined by an external appeal entity in violation of such terms of the plan, coverage, or this subtitle, or has failed to take an action for which such person is responsible under the plan or this title and which is necessary under the plan or coverage for authorizing a benefit, the court shall cause to be served on the defendant an order requiring the defendant—

Additional civil penalties

Removal and disqualification

Any person acting in the capacity of authorizing benefits who has engaged in any such pattern or practice described in paragraph (3)(A) with respect to a plan or coverage, upon the petition of the appropriate Secretary, may be removed by the court from such position, and from any other involvement, with respect to such a plan or coverage, and may be precluded from returning to any such position or involvement for a period determined by the court.

In general

The Administration shall be headed by a Health Choices Commissioner (in this division referred to as the Commissioner) who shall be appointed by the President, by and with the advice and consent of the Senate.

Compensation; etc

The provisions of paragraphs (2), (5), and (7) of subsection (a) (relating to compensation, terms, general powers, rulemaking, and delegation) of section 702 of the Social Security Act (42 U.S.C. 902) shall apply to the Commissioner and the Administration in the same manner as such provisions apply to the Commissioner of Social Security and the Social Security Administration.

Qualified plan standards

The establishment of qualified health benefits plan standards under this title, including the enforcement of such standards in coordination with State insurance regulators and the Secretaries of Labor and the Treasury.

Health Insurance Exchange

The establishment and operation of a Health Insurance Exchange under subtitle A of title II.

Individual affordability credits

The administration of individual affordability credits under subtitle C of title II, including determination of eligibility for such credits.

Additional functions

Such additional functions as may be specified in this division.

In general

The Commissioner shall undertake activities in accordance with this subtitle to promote accountability of QHBP offering entities in meeting Federal health insurance requirements, regardless of whether such accountability is with respect to qualified health benefits plans offered through the Health Insurance Exchange or outside of such Exchange.

Compliance examination and audits

In general

In the case that the Commissioner determines that a QHBP offering entity violates a requirement of this title, the Commissioner may, in coordination with State insurance regulators and the Secretary of Labor, provide, in addition to any other remedies authorized by law, for any of the remedies described in paragraph (2).

Remedies

The remedies described in this paragraph, with respect to a qualified health benefits plan offered by a QHBP offering entity, are—

The National Association of Insurance Commissioners, State attorneys general, and State insurance regulators, including concerning the standards for insured qualified health benefits plans under this title and enforcement of such standards.

Appropriate State agencies, specifically concerning the administration of individual affordability credits under subtitle C of title II and the offering of Exchange-participating health benefits plans, to Medicaid eligible individuals under subtitle A of such title.

Other appropriate Federal agencies.

Indian tribes and tribal organizations.

The National Association of Insurance Commissioners for purposes of using model guidelines established by such association for purposes of subtitles B and D.

In general

In carrying out the functions of the Commissioner, including with respect to the enforcement of the provisions of this division, the Commissioner shall work in coordination with existing Federal and State entities to the maximum extent feasible consistent with this division and in a manner that prevents conflicts of interest in duties and ensures effective enforcement.

Uniform standards

The Commissioner, in coordination with such entities, shall seek to achieve uniform standards that adequately protect consumers in a manner that does not unreasonably affect employers and insurers.

receive complaints, grievances, and requests for information submitted by individuals;

provide assistance with respect to complaints, grievances, and requests referred to in paragraph (1), including—

submit annual reports to Congress and the Commissioner that describe the activities of the Ombudsman and that include such recommendations for improvement in the administration of this division as the Ombudsman determines appropriate. The Ombudsman shall not serve as an advocate for any increases in payments or new coverage of services, but may identify issues and problems in payment or coverage policies.

In general

In the case of health insurance coverage not offered through the Health Insurance Exchange (whether or not offered in connection with an employment-based health plan), and in the case of employment-based health plans, the requirements of this title do not supercede any requirements applicable under titles XXII and XXVII of the Public Health Service Act, parts 6 and 7 of subtitle B of title I of the Employee Retirement Income Security Act of 1974, or State law, except insofar as such requirements prevent the application of a requirement of this division, as determined by the Commissioner.

Construction

Nothing in paragraph (1) shall be construed as affecting the application of section 514 of the Employee Retirement Income Security Act of 1974.

In general

In the case of health insurance coverage offered through the Health Insurance Exchange—

Construction

In the case of coverage described in paragraph (1), nothing in such paragraph shall be construed as preventing the application of rights and remedies under State laws with respect to any requirement referred to in paragraph (1)(A).

provided, caused to be provided, or is about to provide or cause to be provided to the employer, the Federal Government, or the attorney general of a State information relating to any violation of, or any act or omission the employee reasonably believes to be a violation of any provision of this Act or any order, rule, or regulation promulgated under this Act;

testified or is about to testify in a proceeding concerning such violation;

assisted or participated or is about to assist or participate in such a proceeding; or

objected to, or refused to participate in, any activity, policy, practice, or assigned task that the employee (or other such person) reasonably believed to be in violation of any provision of this Act or any order, rule, or regulation promulgated under this Act.

In general

Nothing in this Act shall be construed to have any effect on Federal laws regarding—

subject any individual or institutional health care entity to discrimination, or

require any health plan created or regulated under this Act (or an amendment made by this Act) to subject any individual or institutional health care entity to discrimination,

in its heading, by inserting and continuation in force, including prohibition of rescission, after guaranteed renewability; and

in subsection (a), by inserting , including without rescission, after continue in force.

Section 2723(c) of such Act (42 U.S.C. 300gg–23(c)) is amended by striking section 2704 and inserting sections 2704 and 2708.

Section 2762(b)(2) of such Act (42 U.S.C. 300gg–62(b)(2)) is amended by striking section 2751 and inserting sections 2751 and 2754.

The amendments made by subsection (a) shall apply with respect to group health plans for plan years beginning on or after January 1, 2010.

The amendment made by subsection (b) shall apply with respect to health insurance coverage offered, sold, issued, renewed, in effect, or operated in the individual market on or after such date.

The amendments made by subsection (a) shall remain in effect until such time as benefit standards are adopted subject to section 124 of this title.

Section 104(1) of the Health Insurance Portability and Accountability Act of 1996 is amended by striking this subtitle (and the amendments made by this subtitle and section 401) and inserting the provisions of part 7 of subtitle B of title I of the Employee Retirement Income Security Act of 1974, the provisions of parts A and C of title XXVII of the Public Health Service Act, and chapter 100 of the Internal Revenue Code of 1986.

In general

Part C of title XI of the Social Security Act (42 U.S.C. 1320d et seq.) is amended by inserting after section 1173 the following new sections:

Definitions

Section 1171 of such Act (42 U.S.C. 1320d) is amended—

Conforming amendment

Section 1179 of such Act (42 U.S.C. 1320d–8) is amended, in the matter before paragraph (1)—

Standard for health claims attachments

Not later than 1 year after the date of the enactment of this Act, the Secretary of Health and Human Services shall promulgate a final rule to establish a standard for health claims attachment transaction described in section 1173(a)(2)(B) of the Social Security Act (42 U.S.C. 1320d-2(a)(2)(B)) and coordination of benefits.

Revision in processing payment transactions by financial institutions

in paragraph (23), by striking the or at the end;

in paragraph (24), by striking the period and inserting ; or; and

by inserting after paragraph (24) the following new paragraph:

In general

Not later than 90 days after the date of the enactment of this Act, the Secretary of Health and Human Services shall establish a temporary reinsurance program (in this section referred to as the reinsurance program) to provide reimbursement to assist participating employment-based plans with the cost of providing health benefits to retirees and to eligible spouses, surviving spouses and dependents of such retirees.

Definitions

For purposes of this section:

Submission of claims

Program payments and limit

If the Secretary determines that a participating employment-based plan has submitted a valid claim under paragraph (1), the Secretary shall reimburse such plan for 80 percent of that portion of the costs attributable to such claim that exceeds $15,000, but is less than $90,000. Such amounts shall be adjusted each year based on the percentage increase in the medical care component of the Consumer Price Index (rounded to the nearest multiple of $1,000) for the year involved.

Use of payments

Amounts paid to a participating employment-based plan under this subsection shall be used to lower the costs borne directly by the participants and beneficiaries for health benefits provided under such plan in the form of premiums, co-payments, deductibles, co-insurance, or other out-of-pocket costs. Such payments shall not be used to reduce the costs of an employer maintaining the participating employment-based plan. The Secretary shall develop a mechanism to monitor the appropriate use of such payments by such plans.

Appeals and program protections

The Secretary shall establish—

Audits

The Secretary shall conduct annual audits of claims data submitted by participating employment-based plans under this section to ensure that they are in compliance with the requirements of this section.

Establishment

Reduction in look-back period

Section 2701(a)(1) of the Public Health Service Act (42 U.S.C. 300gg(a)(1)) is amended by striking 6-month period and inserting 30-day period.

Reduction in permitted preexisting condition limitation period

Section 2701(a)(2) of such Act (42 U.S.C. 300gg(a)(2)) is amended by striking 12 months and inserting 3 months, and by striking 18 months and inserting 9 months.

Effective date

Applicability of group health insurance limitations on imposition of preexisting condition exclusions

Effective date

The amendments made by this subsection shall apply with respect to health insurance coverage offered, sold, issued, renewed, in effect, or operated in the individual market beginning after the end of the 6th calendar month following the date of the enactment of this Act.

under section 204 establish standards for, accept bids from, and negotiate and enter into contracts with, QHBP offering entities for the offering of health benefits plans through the Health Insurance Exchange, with different levels of benefits required under section 203, and including with respect to oversight and enforcement;

under section 205 facilitate outreach and enrollment in such plans of Exchange-eligible individuals and employers described in section 202; and

conduct such activities related to the Health Insurance Exchange as required, including establishment of a risk pooling mechanism under section 206 and consumer protections under subtitle D of title I.

Exchange-eligible individual

The term Exchange-eligible individual means an individual who is eligible under this section to be enrolled through the Health Insurance Exchange in an Exchange-participating health benefits plan and, with respect to family coverage, includes dependents of such individual.

Exchange-eligible employer

The term Exchange-eligible employer means an employer that is eligible under this section to enroll through the Health Insurance Exchange employees of the employer (and their dependents) in Exchange-eligible health benefits plans.

Employment-related definitions

The terms employer, employee, full-time employee, and part-time employee have the meanings given such terms by the Commissioner for purposes of this division.

First year

In Y1 (as defined in section 100(c))—

Second year

In Y2—

Third and subsequent years

In Y3 and subsequent years—

Individual described

Subject to the succeeding provisions of this subsection, an individual described in this paragraph is an individual who—

Acceptable coverage

For purposes of this division, the term acceptable coverage means any of the following:

Treatment of certain non-traditional Medicaid eligible individuals

An individual who is a non-traditional Medicaid eligible individual (as defined in section 205(e)(4)(C)) in a State may be an Exchange-eligible individual if the individual was enrolled in a qualified health benefits plan, grandfathered health insurance coverage, or current group health plan during the 6 months before the individual became a non-traditional Medicaid eligible individual. During the period in which such an individual has chosen to enroll in an Exchange-participating health benefits plan, the individual is not also eligible for medical assistance under Medicaid.

Continuing eligibility permitted

Smallest employer

Subject to paragraph (4), smallest employers described in this paragraph are employers with 10 or fewer employees.

Smaller employers

Subject to paragraph (4), smaller employers described in this paragraph are employers that are not smallest employers described in paragraph (1) and have 20 or fewer employees.

Larger employers

Continuing eligibility

Once an employer is permitted to be an Exchange-eligible employer under this subsection and enrolls employees through the Health Insurance Exchange, the employer shall continue to be treated as an Exchange-eligible employer for each subsequent plan year regardless of the number of employees involved unless and until the employer meets the requirement of section 311(a) through paragraph (1) of such section by offering a group health plan and not through offering an Exchange-participating health benefits plan.

Employer participation and contributions

Affiliated groups

Any employer which is part of a group of employers who are treated as a single employer under subsection (b), (c), (m), or (o) of section 414 of the Internal Revenue Code of 1986 shall be treated, for purposes of this subtitle, as a single employer.

Other counting rules

The Commissioner shall establish rules relating to how employees are counted for purposes of carrying out this subsection.

In general

The Commissioner shall conduct a study of access to the Health Insurance Exchange for individuals and for employers, including individuals and employers who are not eligible and enrolled in Exchange-participating health benefits plans. The goal of the study is to determine if there are significant groups and types of individuals and employers who are not Exchange-eligible individuals or employers, but who would have improved benefits and affordability if made eligible for coverage in the Exchange.

Items included in study

Such study also shall examine—

Report

Not later than January 1 of Y3, in Y6, and thereafter, the Commissioner shall submit to Congress on the study conducted under this subsection and shall include in such report recommendations regarding changes in standards for Exchange eligibility for individuals and employers.

Report

No later than December 31, 2011, the Secretary of Health and Human Services shall submit to Congress a report that compares the benefits packages offered in 2011 to an average State child health plan under title XXI of the Social Security Act and to the benefit standards adopted under section 124 for the essential benefits package and the affordability credits under subtitle C.

Certification of Secretary

Notwithstanding the previous provisions of this section, no child who would be eligible for coverage under title XXI of the Social Security Act shall be enrolled in an Exchange participating health benefits plan until the Secretary of Health and Human Services has certified, based on the findings in the report under paragraph (1) and changes made pursuant to the recommendations in the report, if any, that the coverage (as described in section 121(a)) is at least comparable to the coverage provided to children under an average State child health plan under such title as in effect in 2011.

Required offering of basic plan

The entity offers only one basic plan for such service area.

Optional offering of enhanced plan

If and only if the entity offers a basic plan for such service area, the entity may offer one enhanced plan for such area.

Optional offering of premium plan

If and only if the entity offers an enhanced plan for such service area, the entity may offer one premium plan for such area.

Optional offering of premium-plus plans

If and only if the entity offers a premium plan for such service area, the entity may offer one or more premium-plus plans for such area.

In general

The Commissioner shall establish the following standards consistent with this subsection and title I:

Basic plan

Enhanced plan

An enhanced plan shall offer, in addition to the level of benefits under the basic plan, a lower level of cost-sharing as provided under title I consistent with section 123(b)(5)(A).

Premium plan

A premium plan shall offer, in addition to the level of benefits under the basic plan, a lower level of cost-sharing as provided under title I consistent with section 123(b)(5)(B).

Premium-plus plan

A premium-plus plan is a premium plan that also provides additional benefits, such as adult oral health and vision care, approved by the Commissioner. The portion of the premium that is attributable to such additional benefits shall be separately specified.

Range of permissible variation in cost-sharing

The Commissioner shall establish a permissible range of variation of cost-sharing for each basic, enhanced, and premium plan, except with respect to any benefit for which there is no cost-sharing permitted under the essential benefits package. Such variation shall permit a variation of not more than plus (or minus) 10 percent in cost-sharing with respect to each benefit category specified under section 122.

Assured availability of varied coverage through the Health Insurance Exchange

The Commissioner shall assure that, of the Exchange participating health benefits plan offered in each premium rating area of the Health Insurance Exchange—

Segregation of funds

If a qualified health benefits plan provides coverage of services described in section 122(d)(4)(A), the plan shall provide assurances satisfactory to the Commissioner that—

Offering entity and plan standards

The Commissioner shall—

Soliciting and negotiating bids; contracts

The Commissioner shall—

FAR not applicable

The provisions of the Federal Acquisition Regulation shall not apply to contracts between the Commissioner and QHBP offering entities for the offering of Exchange-participating health benefits plans under this title.

Licensed

The entity shall be licensed to offer health insurance coverage under State law for each State in which it is offering such coverage.

Data reporting

The entity shall provide for the reporting of such information as the Commissioner may specify, including information necessary to administer the risk pooling mechanism described in section 206(b) and information to address disparities in health and health care.

Implementing affordability credits

The entity shall provide for implementation of the affordability credits provided for enrollees under subtitle C, including the reduction in cost-sharing under section 244(c).

Enrollment

The entity shall accept all enrollments under this subtitle, subject to such exceptions (such as capacity limitations) in accordance with the requirements under title I for a qualified health benefits plan. The entity shall notify the Commissioner if the entity projects or anticipates reaching such a capacity limitation that would result in a limitation in enrollment.

Risk pooling participation

The entity shall participate in such risk pooling mechanism as the Commissioner establishes under section 206(b).

Essential community providers

With respect to the basic plan offered by the entity, the entity shall contract for outpatient services with covered entities (as defined in section 340B(a)(4) of the Public Health Service Act, as in effect as of July 1, 2009). The Commissioner shall specify the extent to which and manner in which the previous sentence shall apply in the case of a basic plan with respect to which the Commissioner determines provides substantially all benefits through a health maintenance organization, as defined in section 2791(b)(3) of the Public Health Service Act.

Culturally and linguistically appropriate services and communications

The entity shall provide for culturally and linguistically appropriate communication and health services.

Additional requirements

The entity shall comply with other applicable requirements of this title, as specified by the Commissioner, which shall include standards regarding billing and collection practices for premiums and related grace periods and which may include standards to ensure that the entity does not use coercive practices to force providers not to contract with other entities offering coverage through the Health Insurance Exchange.

Bid application

To be eligible to enter into a contract under this section, a QHBP offering entity shall submit to the Commissioner a bid at such time, in such manner, and containing such information as the Commissioner may require.

Term

Each contract with a QHBP offering entity under this section shall be for a term of not less than one year, but may be made automatically renewable from term to term in the absence of notice of termination by either party.

Enforcement of network adequacy

In the case of a health benefits plan of a QHBP offering entity that uses a provider network, the contract under this section with the entity shall provide that if—

Oversight and enforcement responsibilities

The Commissioner shall establish processes, in coordination with State insurance regulators, to oversee, monitor, and enforce applicable requirements of this title with respect to QHBP offering entities offering Exchange-participating health benefits plans and such plans, including the marketing of such plans. Such processes shall include the following:

Outreach

The Commissioner shall conduct outreach activities consistent with subsection (c), including through use of appropriate entities as described in paragraph (3) of such subsection, to inform and educate individuals and employers about the Health Insurance Exchange and Exchange-participating health benefits plan options. Such outreach shall include outreach specific to vulnerable populations, such as children, individuals with disabilities, individuals with mental illness, and individuals with other cognitive impairments.

Eligibility

The Commissioner shall make timely determinations of whether individuals and employers are Exchange-eligible individuals and employers (as defined in section 202).

Enrollment

The Commissioner shall establish and carry out an enrollment process for Exchange-eligible individuals and employers, including at community locations, in accordance with subsection (b).

In general

The Commissioner shall establish a process consistent with this title for enrollments in Exchange-participating health benefits plans. Such process shall provide for enrollment through means such as the mail, by telephone, electronically, and in person.

Enrollment periods

Automatic enrollment for non-Medicaid eligible individuals

Direct payment of premiums to plans

Under the enrollment process, individuals enrolled in an Exchange-participating health benefits plan shall pay such plans directly, and not through the Commissioner or the Health Insurance Exchange.

Coverage information

The Commissioner shall provide for the broad dissemination of information on Exchange-participating health benefits plans offered under this title. Such information shall be provided in a comparative manner, and shall include information on benefits, premiums, cost-sharing, quality, provider networks, and consumer satisfaction.

Consumer assistance with choice

To provide assistance to Exchange-eligible individuals and employers, the Commissioner shall—

Use of other entities

In carrying out this subsection, the Commissioner may work with other appropriate entities to facilitate the dissemination of information under this subsection and to provide assistance as described in paragraph (2).

Coverage for certain newborns

CHIP transition

A child who, as of the day before the first day of Y1, is eligible for child health assistance under title XXI of the Social Security Act (including a child receiving coverage under an arrangement described in section 2101(a)(2) of such Act) is deemed as of such first day to be an Exchange-eligible individual unless the individual is a traditional Medicaid eligible individual as of such day.

Automatic enrollment of Medicaid eligible individuals into Medicaid

The Commissioner shall provide for a process under which an individual who is described in section 202(d)(3) and has not elected to enroll in an Exchange-participating health benefits plan is automatically enrolled under Medicaid.

Notifications

The Commissioner shall notify each State in Y1 and for purposes of section 1902(gg)(1) of the Social Security Act (as added by section 1703(a)) whether the Health Insurance Exchange can support enrollment of children described in paragraph (2) in such State in such year.

In general

Non-traditional Medicaid eligible individuals

In the case of a non-traditional Medicaid eligible individual described in section 202(d)(3) who elects to enroll under Medicaid under paragraph (1)(A), the Commissioner shall provide for the enrollment of the individual under the State Medicaid plan in accordance with the Medicaid memorandum of understanding under paragraph (3).

Coordinated enrollment with State through memorandum of understanding

The Commissioner, in consultation with the Secretary of Health and Human Services, shall enter into a memorandum of understanding with each State (each in this division referred to as a Medicaid memorandum of understanding) with respect to coordinating enrollment of individuals in Exchange-participating health benefits plans and under the State’s Medicaid program consistent with this section and to otherwise coordinate the implementation of the provisions of this division with respect to the Medicaid program. Such memorandum shall permit the exchange of information consistent with the limitations described in section 1902(a)(7) of the Social Security Act. Nothing in this section shall be construed as permitting such memorandum to modify or vitiate any requirement of a State Medicaid plan.

Medicaid eligible individuals

For purposes of this division:

Establishment; appointment

There is hereby established the Office of the Special Inspector General for the Health Insurance Exchange, to be headed by a Special Inspector General for the Health Insurance Exchange (in this subsection referred to as the Special Inspector General) to be appointed by the President, by and with the advice and consent of the Senate. The nomination of an individual as Special Inspector General shall be made as soon as practicable after the establishment of the program under this subtitle.

Duties

The Special Inspector General shall—

Application of other special inspector general provisions

The provisions of subsections (b) (other than paragraphs (1) and (3)), (d) (other than paragraph (1)), and (e) of section 121 of division A of the Emergency Economic Stabilization Act of 2009 (Public Law 110–343) shall apply to the Special Inspector General under this subsection in the same manner as such provisions apply to the Special Inspector General under such section.

Reports

Not later than one year after the confirmation of the Special Inspector General, and annually thereafter, the Special Inspector General shall submit to the appropriate committees of Congress a report summarizing the activities of the Special Inspector General during the one year period ending on the date such report is submitted.

Termination

The Office of the Special Inspector General shall terminate five years after the date of the enactment of this Act.

Dedicated payments

There is hereby appropriated to the Trust Fund amounts equivalent to the following:

Appropriations to cover government contributions

There are hereby appropriated, out of any moneys in the Treasury not otherwise appropriated, to the Trust Fund, an amount equivalent to the amount of payments made from the Trust Fund under subsection (b) plus such amounts as are necessary reduced by the amounts deposited under paragraph (1).

a State (or group of States, subject to the approval of the Commissioner) applies to the Commissioner for approval of a State-based Health Insurance Exchange to operate in the State (or group of States); and

the Commissioner approves such State-based Health Insurance Exchange,

In general

The Commissioner may not approve a State-based Health Insurance Exchange under this section unless the following requirements are met:

Presumption for certain State-operated Exchanges

In general

A State-based Health Insurance Exchange may, at the option of each State involved, and only after providing timely and reasonable notice to the Commissioner, cease operation as such an Exchange, in which case the Health Insurance Exchange shall operate, instead of such State-based Health Insurance Exchange, with respect to such State (or States).

Termination; Health Insurance Exchange resumption of functions

The Commissioner may terminate the approval (for some or all functions) of a State-based Health Insurance Exchange under this section if the Commissioner determines that such Exchange no longer meets the requirements of subsection (b) or is no longer capable of carrying out such functions in accordance with the requirements of this subtitle. In lieu of terminating such approval, the Commissioner may temporarily assume some or all functions of the State-based Health Insurance Exchange until such time as the Commissioner determines the State-based Health Insurance Exchange meets such requirements of subsection (b) and is capable of carrying out such functions in accordance with the requirements of this subtitle.

Effectiveness

The ceasing or termination of a State-based Health Insurance Exchange under this subsection shall be effective in such time and manner as the Commissioner shall specify.

Authority retained

Enforcement authorities of the Commissioner shall be retained by the Commissioner.

Discretion to retain additional authority

The Commissioner may specify functions of the Health Insurance Exchange that—

Purposes

The purposes of this subsection are—

Incentive payments for medical liability reform

Application

Each State seeking an incentive payment under this subsection shall submit to the Secretary an application, at such time, in such manner, and containing such information as the Secretary may require.

Technical assistance

The Secretary may provide technical assistance to the States applying for or awarded an incentive payment under this subsection.

Reports

Beginning not later than one year after the date of the enactment of this subsection, the Secretary shall submit to Congress an annual report on the progress States have made in adopting and implementing alternative medical liability laws that comply with this subsection. Such reports shall contain sufficient documentation regarding the effectiveness of such laws to enable an objective comparative analysis of them.

Rulemaking

The Secretary may make rules to carry out this subsection.

Definition

In this subsection—

Authorization of appropriations

There are authorized to be appropriated to carry out this subsection such sums as may be necessary, to remain available until expended.

Exclusive to the Exchange

The public health insurance option shall only be made available through the Health Insurance Exchange.

Ensuring a level playing field

Consistent with this subtitle, the public health insurance option shall comply with requirements that are applicable under this title to an Exchange-participating health benefits plan, including requirements related to benefits, benefit levels, provider networks, notices, consumer protections, and cost sharing.

Provision of benefit levels

The public health insurance option—

In general

The Secretary shall establish geographically-adjusted premium rates for the public health insurance option in a manner—

Contingency margin

In establishing premium rates under paragraph (1), the Secretary shall include an appropriate amount for a contingency margin (which shall be not less than 90 days of estimated claims). Before setting such appropriate amount for years starting with Y3, the Secretary shall solicit a recommendation on such amount from the American Academy of Actuaries.

Establishment

There is established in the Treasury of the United States an Account for the receipts and disbursements attributable to the operation of the public health insurance option, including the start-up funding under paragraph (2). Section 1854(g) of the Social Security Act shall apply to receipts described in the previous sentence in the same manner as such section applies to payments or premiums described in such section.

Start-up funding

No bailouts

In no case shall the public health insurance option receive any Federal funds for purposes of insolvency in any manner similar to the manner in which entities receive Federal funding under the Troubled Assets Relief Program of the Secretary of the Treasury.

In general

The Secretary shall negotiate payment rates for the public health insurance option for services and health care providers consistent with this section and section 224.

Manner of negotiation

The Secretary shall negotiate such rates in a manner that results in payment rates that are not lower, in the aggregate, than rates under title XVIII of the Social Security Act, and not higher, in the aggregate, than the average rates paid by other QHBP offering entities for services and health care providers.

Innovative payment methods

Nothing in this subsection shall be construed as preventing the use of innovative payment methods such as those described in section 224 in connection with the negotiation of payment rates under this subsection.

Prescription drugs

Notwithstanding any other provision of law, the Secretary shall establish a particular formulary for prescription drugs under the public health insurance option.

In general

Health care providers (including physicians and hospitals) participating in Medicare are participating providers in the public health insurance option unless they opt out in a process established by the Secretary consistent with this subsection.

Requirements for opt-out process

Under the process established under paragraph (1)—

Rulemaking

Not later than 18 months before the first day of Y1, the Secretary shall promulgate rules (pursuant to notice and comment) for the process described in paragraph (1).

seeks to—

promotes care that is integrated, patient-centered, quality, and efficient.

To the extent that the Secretary finds a payment and delivery system reform successful in improving quality and reducing costs, the Secretary shall implement such reform on as large a geographic scale as practical and economical.

The Secretary may delay the implementation of such a reform in geographic areas in which such implementation would place the public health insurance option at a competitive disadvantage.

The Secretary may prioritize implementation of such a reform in high cost geographic areas or otherwise in order to reduce total program costs or to promote high value care.

the individual shall be eligible for, in accordance with this subtitle, affordability credits consisting of—

the Commissioner shall pay the QHBP offering entity that offers such plan from the Health Insurance Exchange Trust Fund the aggregate amount of affordability credits for all affordable credit eligible individuals enrolled in such plan.

In general

An Exchange eligible individual may apply to the Commissioner through the Health Insurance Exchange or through another entity under an arrangement made with the Commissioner, in a form and manner specified by the Commissioner. The Commissioner through the Health Insurance Exchange or through another public entity under an arrangement made with the Commissioner shall make a determination as to eligibility of an individual for affordability credits under this subtitle. The Commissioner shall establish a process whereby, on the basis of information otherwise available, individuals may be deemed to be affordable credit eligible individuals. In carrying this subtitle, the Commissioner shall establish effective methods that ensure that individuals with limited English proficiency are able to apply for affordability credits.

Use of State Medicaid agencies

If the Commissioner determines that a State Medicaid agency has the capacity to make a determination of eligibility for affordability credits under this subtitle and under the same standards as used by the Commissioner, under the Medicaid memorandum of understanding (as defined in section 205(c)(4))—

Medicaid screen and enroll obligation

In the case of an application made under paragraph (1), there shall be a determination of whether the individual is a Medicaid-eligible individual. If the individual is determined to be so eligible, the Commissioner, through the Medicaid memorandum of understanding, shall provide for the enrollment of the individual under the State Medicaid plan in accordance with the Medicaid memorandum of understanding. In the case of such an enrollment, the State shall provide for the same periodic redetermination of eligibility under Medicaid as would otherwise apply if the individual had directly applied for medical assistance to the State Medicaid agency.

In general

In Y1 and Y2 an affordable credit eligible individual may use an affordability credit only with respect to a basic plan.

Flexibility in plan enrollment authorized

Beginning with Y3, the Commissioner shall establish a process to allow an affordability credit to be used for enrollees in enhanced or premium plans. In the case of an affordable credit eligible individual who enrolls in an enhanced or premium plan, the individual shall be responsible for any difference between the premium for such plan and the affordable credit amount otherwise applicable if the individual had enrolled in a basic plan.

Prohibition of use of public funds for abortion coverage

An affordability credit may not be used for payment for services described in section 122(d)(4)(A).

In general

For purposes of this division, the term affordable credit eligible individual means, subject to subsection (b), an individual who is lawfully present in a State in the United States (other than as a nonimmigrant described in a subparagraph (excluding subparagraphs (K), (T), (U), and (V)) of section 101(a)(15) of the Immigration and Nationality Act)—

Treatment of family

Except as the Commissioner may otherwise provide, members of the same family who are affordable credit eligible individuals shall be treated as a single affordable credit individual eligible for the applicable credit for such a family under this subtitle.

Equal treatment of certain employed individuals

In general

Subject to paragraph (2), the term affordable credit eligible individual does not include a full-time employee of an employer if the employer offers the employee coverage (for the employee and dependents) as a full-time employee under a group health plan if the coverage and employer contribution under the plan meet the requirements of section 312.

Exceptions

In general

In this title, the term income means modified adjusted gross income (as defined in section 59B of the Internal Revenue Code of 1986).

Study of income disregards

The Commissioner shall conduct a study that examines the application of income disregards for purposes of this subtitle. Not later than the first day of Y2, the Commissioner shall submit to Congress a report on such study and shall include such recommendations as the Commissioner determines appropriate.

In general

The affordable premium amount specified in this subsection for an individual for monthly premium in a plan year shall be equal to 1/12 of the product of—

Premium percentage limits based on table

The Commissioner shall establish premium percentage limits so that for individuals whose family income is within an income tier specified in the table in subsection (d) such percentage limits shall increase, on a sliding scale in a linear manner, from the initial premium percentage to the final premium percentage specified in such table for such income tier.

In general

For purposes of this subtitle, subject to paragraphs (3) and (4), the table specified in this subsection is as follows:

Special rules

For purposes of applying the table under paragraph (1)—

Indexing

For years after Y1, the Commissioner shall adjust the initial and final premium percentages to maintain the ratio of governmental to enrollee shares of premiums over time, for each income tier identified in the table in paragraph (1).

Contingent adjustment for additional savings

Program integrity

The Commissioner shall take such steps as may be appropriate to ensure the accuracy of determinations and redeterminations under this subtitle.

Income verification

Changes in income as a percent of FPL

In the case that an individual’s income (expressed as a percentage of the Federal poverty level for a family of the size involved) for a plan year is expected (in a manner specified by the Commissioner) to be significantly different from the income (as so expressed) used under subsection (a), the Commissioner shall establish rules requiring an individual to report, consistent with the mechanism established under paragraph (2), significant changes in such income (including a significant change in family composition) to the Commissioner and requiring the substitution of such income for the income otherwise applicable.

Reporting of significant changes in income

The Commissioner shall establish rules under which an individual determined to be an affordable credit eligible individual would be required to inform the Commissioner when there is a significant change in the family income of the individual (expressed as a percentage of the FPL for a family of the size involved) and of the information regarding such change. Such mechanism shall provide for guidelines that specify the circumstances that qualify as a significant change, the verifiable information required to document such a change, and the process for submission of such information. If the Commissioner receives new information from an individual regarding the family income of the individual, the Commissioner shall provide for a redetermination of the individual’s eligibility to be an affordable credit eligible individual.

Transition for CHIP

In the case of a child described in section 205(d)(2), the Commissioner shall establish rules under which the family income of the child is deemed to be no greater than the family income of the child as most recently determined before Y1 by the State under title XXI of the Social Security Act.

Study of geographic variation in application of FPL

the individual is liable for repayment of the amount of the improper affordability credit; ;and

in the case of such an intentional misrepresentation or other egregious circumstances specified by the Commissioner, the Commissioner may impose an additional penalty.

loans (of such period and with such terms as the Secretary may specify) to cooperatives to assist such cooperatives with start-up costs; and

grants to cooperatives to assist such cooperatives in meeting State solvency requirements in the States in which such cooperative offers or issues insurance coverage.

The cooperative is structured as a not-for-profit, member organization under the law of each State in which such cooperative offers, intends to offer, or issues insurance coverage, with the membership of the cooperative being made up entirely of beneficiaries of the insurance coverage offered by such cooperative.

The cooperative did not offer insurance on or before July 16, 2009, and the cooperatives is not an affiliate or successor to an insurance company offering insurance on or before such date.

The governing documents of the cooperatives incorporate ethical and conflict of interest standards designed to protect against insurance industry involvement and interference in the governance of the cooperative.

The cooperative is not sponsored by a State government.

Substantially all of the activities of the cooperative consist of the issuance of qualified health benefit plans through the Health Insurance Exchange or a State-based health insurance exchange.

The cooperative is licenced to offer insurance in each State in which it offers insurance.

The governance of the cooperative must be subject to a majority vote of its members.

As provided in guidance issued by the Secretary of Health and Human Services, the cooperative operates with a strong consumer focus, including timeliness, responsiveness, and accountability to members.

Any profits made by the cooperative are used to lower premiums, improve benefits, or to otherwise improve the quality of health care delivered to members.

operate on a Statewide basis;

use an integrated delivery system; or

have a significant level of financial support from non-governmental sources.

In general

Section 1886 of the Social Security Act (42 U.S.C. 1395ww), as amended by section 1103(a), is amended by adding at the end the following new subsection:

in paragraph (5)—

by inserting after paragraph (4) the following new paragraph:

Interim policy

Development and application of performance measures

Definitions

For purposes of this subsection:

Study

The Secretary of Health and Human Services shall conduct a study to determine how the readmissions policy described in the previous subsections could be applied to physicians.

Considerations

In conducting the study, the Secretary shall consider approaches such as—

Report

The Secretary shall issue a public report on such study not later than the date that is one year after the date of the enactment of this Act.

In general

The Secretary of Health and Human Services (in this section referred to as the Secretary) shall develop a detailed plan to reform payment for post acute care (PAC) services under the Medicare program under title XVIII of the Social Security Act (in this section referred to as the Medicare program). The goals of such payment reform are to—

Bundling post acute services

The plan described in paragraph (1) shall include detailed specifications for a bundled payment for post acute services (in this section referred to as the post acute care bundle), and may include other approaches determined appropriate by the Secretary.

Post acute services

For purposes of this section, the term post acute services means services for which payment may be made under the Medicare program that are furnished by skilled nursing facilities, inpatient rehabilitation facilities, long term care hospitals, hospital based outpatient rehabilitation facilities and home health agencies to an individual after discharge of such individual from a hospital, and such other services determined appropriate by the Secretary.

The nature of payments under a post acute care bundle, including the type of provider or entity to whom payment should be made, the scope of activities and services included in the bundle, whether payment for physicians’ services should be included in the bundle, and the period covered by the bundle.

Whether the payment should be consolidated with the payment under the inpatient prospective system under section 1886 of the Social Security Act (in this section referred to as MS-DRGs) or a separate payment should be established for such bundle, and if a separate payment is established, whether it should be made only upon use of post acute care services or for every discharge.

Whether the bundle should be applied across all categories of providers of inpatient services (including critical access hospitals) and post acute care services or whether it should be limited to certain categories of providers, services, or discharges, such as high volume or high cost MS-DRGs.

The extent to which payment rates could be established to achieve offsets for efficiencies that could be expected to be achieved with a bundle payment, whether such rates should be established on a national basis or for different geographic areas, should vary according to discharge, case mix, outliers, and geographic differences in wages or other appropriate adjustments, and how to update such rates.

The nature of protections needed for individuals under a system of bundled payments to ensure that individuals receive quality care, are furnished the level and amount of services needed as determined by an appropriate assessment instrument, are offered choice of provider, and the extent to which transitional care services would improve quality of care for individuals and the functioning of a bundled post-acute system.

The nature of relationships that may be required between hospitals and providers of post acute care services to facilitate bundled payments, including the application of gainsharing, anti-referral, anti-kickback, and anti-trust laws.

Quality measures that would be appropriate for reporting by hospitals and post acute providers (such as measures that assess changes in functional status and quality measures appropriate for each type of post acute services provider including how the reporting of such quality measures could be coordinated with other reporting of such quality measures by such providers otherwise required).

How cost-sharing for a post acute care bundle should be treated relative to current rules for cost-sharing for inpatient hospital, home health, skilled nursing facility, and other services.

How other programmatic issues should be treated in a post acute care bundle, including rules specific to various types of post-acute providers such as the post-acute transfer policy, three-day hospital stay to qualify for services furnished by skilled nursing facilities, and the coordination of payments and care under the Medicare program and the Medicaid program.

Such other issues as the Secretary deems appropriate.

Consultation with stakeholders

In developing the plan under subsection (a)(1), the Secretary shall consult with relevant stakeholders and shall consider experience with such research studies and demonstrations that the Secretary determines appropriate.

Analysis and data collection

In developing such plan, the Secretary shall—

Funding

For purposes of carrying out the provisions of this section, in addition to funds otherwise available, out of any funds in the Treasury not otherwise appropriated, there are appropriated to the Secretary for the Center for Medicare & Medicaid Services Program Management Account $15,000,000 for each of the fiscal years 2010 through 2012. Amounts appropriated under this paragraph for a fiscal year shall be available until expended.

Expedited data collection

Chapter 35 of title 44, United States Code shall not apply to this section.

Interim reports

The Secretary shall issue interim public reports on a periodic basis on the plan described in subsection (a)(1), the issues described in subsection (b), and impact analyses as the Secretary determines appropriate.

Final report

Not later than the date that is 3 years after the date of the enactment of this Act, the Secretary shall issue a final public report on such plan, including analysis of issues described in subsection (b) and impact analyses.

In general

Part E of title XVIII of the Social Security Act is amended by inserting after section 1866C the following new section:

Conforming amendment

Section 1866C(b) of the Social Security Act (42 U.S.C. 1395cc–3(b)) is amended by striking The Secretary and inserting Subject to section 1866D, the Secretary.

in clause (iv), by striking “Insofar as” and inserting “Subject to clause (vi), insofar as”; and

by adding at the end the following new clause:

in clause (i)—

by adding at the end the following new clause:

in clause (iii), by inserting (including being subject to the productivity adjustment described in section 1886(b)(3)(B)(iii)(II)) after in the same manner; and

in clause (v)(I), by inserting (but not below 0) after reduced.

in subsection (d)(2)—

in subsection (d)(3)—

by amending subsection (f) to read as follows:

by amending subsection (g)(5) to read as follows:

by adding at the end the following new subsection:

Funding

For purposes of carrying out the amendments made by subsection (a) and the provisions of subsection (b), in addition to funds otherwise available, out of any funds in the Treasury not otherwise appropriated there are appropriated to the Secretary of Health and Human Services for the Centers for Medicare & Medicaid Services Program Management Account $5,000,000 for each fiscal year beginning with fiscal year 2010. Amounts appropriated under this paragraph for a fiscal year shall be available until expended.

Administration

Chapter 35 of title 44, United States Code, shall not apply to the amendments made by subsection (a) and the provisions of subsection (b).

Empirical validity of the adjustment factors.

Methodology used to determine the adjustment factors.

Measures used for the adjustment factors, taking into account—

The effect of the adjustment factors on the level and distribution of the health care workforce and resources, including—

The effect of the adjustment factors on population health and quality of care.

The effect of the adjustment factors on the ability of providers to furnish efficient, high value care.

Funding for improvements

The Secretary shall use funds as provided under subsection (c) in making changes to the geographic adjustment factors pursuant to subsection (a). In making such changes to such geographic adjustment factors, the Secretary shall ensure that the estimated increased expenditures resulting from such changes does not exceed the amounts provided under subsection (c).

Ensuring fairness

In carrying out this subsection, the Secretary shall not reduce the geographic adjustment below the factor that applied for such payment system in the payment year before such changes.