H.R. 8840

[Congressional Bills 119th Congress]
[From the U.S. Government Publishing Office]
[H.R. 8840 Introduced in House (IH)]

<DOC>

119th CONGRESS
2d Session
H. R. 8840

To address the high costs of health care services, prescription drugs, 
and health insurance coverage in the United States, and for other 
purposes.

_______________________________________________________________________

IN THE HOUSE OF REPRESENTATIVES

May 14, 2026

Mr. Westerman introduced the following bill; which was referred to the 
Committee on Energy and Commerce, and in addition to the Committees on 
Ways and Means, Education and Workforce, the Judiciary, Oversight and 
Government Reform, Rules, the Budget, Armed Services, and House 
Administration, for a period to be subsequently determined by the 
Speaker, in each case for consideration of such provisions as fall 
within the jurisdiction of the committee concerned

_______________________________________________________________________

A BILL

To address the high costs of health care services, prescription drugs, 
and health insurance coverage in the United States, and for other 
purposes.

Be it enacted by the Senate and House of Representatives of the 
United States of America in Congress assembled,

SECTION 1. SHORT TITLE; TABLE OF CONTENTS.

(a) Short Title.--This Act may be cited as the ``Fair Care Act of 
2026''.
(b) Table of Contents.--The table of contents for this Act is as 
follows:

Sec. 1. Short title; table of contents.
TITLE I--MODERNIZATION OF HEALTH SAVINGS ACCOUNTS

Subtitle A--Modernization of Health Savings Accounts and Contributions

Sec. 101. Modernization of health savings accounts.
Sec. 102. Unused premium tax credits may be deposited in health savings 
accounts.
Sec. 103. Health Reimbursement Arrangements and Other Account-Based 
Group Health Plans.
Sec. 104. Cost-sharing reduction payments as eligible contributions.
Subtitle B--Assistance to Health Savings Accounts

Sec. 111. One-time application of saver's credit to contributions to 
health savings accounts.
Sec. 112. Grants for health savings account assistance and outreach.
Sec. 113. New corporations required to use health savings accounts.
Sec. 114. Federal employee health benefits and health savings accounts.
TITLE II--IMPROVING PRIVATE HEALTH INSURANCE

Subtitle A--Maintaining Protections for Patients With Preexisting 
Conditions

Sec. 201. Guaranteed availability of coverage; prohibiting 
discrimination.
Subtitle B--Expanding Coverage Options

Sec. 211. Definition of ``employer'' under ERISA with respect to group 
health plans.
Sec. 212. Short-term limited duration insurance.
Subtitle C--Improving Commercial Health Insurance

Sec. 221. Invisible Guaranteed Coverage Pool Reinsurance Program; tax 
on exchange plans.
Sec. 222. Employer health insurance mandate repeal.
Sec. 223. Refundable credits for coverage under a qualified health plan 
for individuals offered employer-sponsored 
insurance.
Sec. 224. Inclusion in income of certain costs of employer-provided 
coverage under health plans.
Sec. 225. Change in permissible age variation in health insurance 
premium rates.
Sec. 226. Premium assistance adjustment to reflect age.
Sec. 227. Premium assistance.
Sec. 228. Adding copper plans to Exchanges.
Sec. 229. Copper and bronze plans.
Sec. 230. Waivers for State innovation.
Sec. 231. Enrollment periods.
Sec. 232. State-operated Exchanges flexibility for open enrollment 
periods.
Sec. 233. Promoting health plans that cover individuals in more than 
one State.
TITLE III--COMPETITION, TRANSPARENCY AND ACCOUNTABILITY

Subtitle A--Provider and Insurer Competition

Sec. 301. Hospital consolidation.
Sec. 302. Authority of Federal Trade Commission over certain tax-exempt 
organizations.
Sec. 303. Leveling the playing field between payers and providers.
Sec. 304. Banning anticompetitive terms in facility and insurance 
contracts that limit access to higher 
quality, lower cost care.
Sec. 305. Repealing eligibility of certain ACOs.
Sec. 306. Repeal of health care reform provisions limiting Medicare 
exception to the prohibition on certain 
physician referrals for hospitals.
Sec. 307. Alternative payment model for certain shoppable procedures.
Subtitle B--Price Transparency

Sec. 321. Price transparency requirements.
Sec. 322. Access of individuals to protected health information.
Sec. 323. Advisory group on reducing burden of hospital administrative 
requirements.
Sec. 324. Data reporting to improve the transparency regarding how 340B 
hospital covered entities provide care for 
patients.
Sec. 325. Requiring 340B drug discount program reports by DSH hospital 
covered entities on low-income utilization 
rate of outpatient hospital services.
Sec. 326. Employer benefits reports.
Sec. 327. Government Accountability Office study on profit- and 
revenue-sharing in health care.
Subtitle C--Prescription Drug Competition and Innovation

Sec. 341. Expedited development and priority review for generic complex 
drug products.
Sec. 342. Preventing blocking of generic drugs.
Sec. 343. Ensuring timely access to generics.
Sec. 344. Preemption of State barriers to the substitution of 
biosimilar products.
Sec. 345. Increasing pharmaceutical options to treat an unmet medical 
need.
Sec. 346. Conditional approval of new human drugs for individuals with 
rare, progressive, and serious diseases.
Sec. 347. Consolidating exclusivity periods for drugs treating rare 
diseases and conditions.
Sec. 348. Exclusivity period for brand name biological products.
Sec. 349. Regulation of manufacturer-sponsored co-pay contributions.
Sec. 350. Antitrust exemption for private health insurance issuers to 
negotiate wholesale acquisition prices of 
prescription drugs purchased from drug 
manufacturers.
Sec. 351. Biological product innovation.
Sec. 352. Biosimilar biological products.
Sec. 353. Prompt approval of drugs related to safety information.
Sec. 354. Congressional review of the Food and Drug Administration 
rulemaking.
Sec. 355. Government Accountability Office study of rules.
Sec. 356. Provisional approval of new human drugs.
Subtitle D--Prescription Drug and Pharmacy Benefit Manager Transparency

Sec. 361. Patent disclosure requirements.
Sec. 362. Requirements with respect to prescription drug benefits.
Sec. 363. PBM transparency and elimination of DIR fees.
Sec. 364. Health plan oversight of pharmacy benefit manager services.
Sec. 365. Study by Comptroller General of the United States.
Subtitle E--Medicare and Medicaid Prescription Drug Reforms

Sec. 371. Market based part B pricing index.
Sec. 372. Innovation model testing of Medicare drug payments.
Subtitle F--Medical Malpractice Reform

Sec. 381. Definitions.
Sec. 382. Encouraging speedy resolution of claims.
Sec. 383. Compensating patient injury.
Sec. 384. Maximizing patient recovery.
Sec. 385. Authorization of payment of future damages to claimants in 
health care lawsuits.
Sec. 386. Product liability for health care providers.
Sec. 387. Effect on other laws.
Sec. 388. Limitation on expert witness testimony.
Sec. 389. Expert witness qualifications.
Sec. 390. Communications following unanticipated outcome.
Sec. 391. Affidavit of merit.
Sec. 392. Notice of intent to commence lawsuit.
Sec. 393. Limitation on liability for volunteer health care 
professionals.
Sec. 394. Rules of construction.
Sec. 395. Effective date.
TITLE IV--MEDICARE AND MEDICAID REFORMS

Subtitle A--Medicaid Reforms

Sec. 401. Medicaid payment reform.
Sec. 402. Income limitations for refundable credits for coverage under 
a qualified health plan.
Sec. 403. Medicaid eligibility determinations.
Sec. 404. Lowering safe harbor threshold with respect to State taxes on 
health care providers.
Sec. 405. Providing for State approval and implementation of specified 
waivers under the Medicaid program.
Sec. 406. Deduction for qualified charity care.
Subtitle B--Medicare Reforms

Sec. 411. Off-campus provider-based department Medicare site neutral 
payment.
Sec. 412. Eliminating FEHBP eligibility for annuitants.
Sec. 413. Elimination of Medicare eligibility for certain individuals.
Sec. 414. Medicare part D tax deduction.
Sec. 415. Repeal of net investment income tax.
Sec. 416. Medicare coverage of bad debt.
Subtitle C--Medicare Choice and Competition

Sec. 421. Competitive bidding and premiums under unified Medicare.
Sec. 422. New unified eligibility and enrollment rules.
Sec. 423. New benefit structure under unified Medicare.
Sec. 424. Late enrollment penalty not to apply for months of any health 
coverage.
Sec. 425. Medigap reform.
Sec. 426. ACO revision.
Sec. 427. Primary care options.
Sec. 428. General provisions; effective date.
Subtitle D--Telehealth Improvements and Expansion

Sec. 431. Expansion of coverage of telehealth services.
Sec. 432. Expanding the use of telehealth through the waiver of certain 
requirements.
Sec. 433. Expanding the use of telehealth for mental health services.
Sec. 434. Use of telehealth in emergency medical care.
Sec. 435. Improvements to the process for adding telehealth services.
Sec. 436. Rural health clinics and Federally qualified health centers.
Sec. 437. Native American health facilities.
Sec. 438. Waiver of telehealth restrictions during national 
emergencies.
Sec. 439. Use of telehealth in recertification for hospice care.
Sec. 440. Clarification for fraud and abuse laws regarding technologies 
provided to beneficiaries.
Sec. 441. Study and report on increasing access to telehealth services 
in the home.
Sec. 442. Analysis of telehealth waivers in alternative payment models.
Sec. 443. Model to allow additional health professionals to furnish 
telehealth services.
Sec. 444. Testing of models to examine the use of telehealth under the 
Medicare program.

TITLE I--MODERNIZATION OF HEALTH SAVINGS ACCOUNTS

Subtitle A--Modernization of Health Savings Accounts and Contributions

SEC. 101. MODERNIZATION OF HEALTH SAVINGS ACCOUNTS.

(a) In General.--Section 223 of the Internal Revenue Code of 1986 
is amended to read as follows:

``SEC. 223. HEALTH SAVINGS ACCOUNTS.

``(a) Deduction Allowed.--In the case of an individual who is an 
eligible individual for any month during the taxable year, there shall 
be allowed as a deduction for the taxable year an amount equal to the 
aggregate amount paid in cash during such taxable year by or on behalf 
of such individual to a health savings account of such individual.
``(b) Limitations.--
``(1) In general.--The amount allowable as a deduction 
under subsection (a) with respect to any month is \1/12\ of the 
dollar amount in effect under subsection (d)(2)(A) for the 
taxable year which included such month.
``(2) Denial of deduction to dependents.--No deduction 
shall be allowed under this section to any individual with 
respect to whom a deduction under section 151 is allowable to 
another taxpayer for a taxable year beginning in the calendar 
year in which such individual's taxable year begins.
``(3) Increase in limit for individuals becoming eligible 
individuals after the beginning of the year.--
``(A) In general.--For purposes of computing the 
limitation under paragraph (1) for any taxable year, an 
individual who is an eligible individual during the 
last month of such taxable year shall be treated--
``(i) as having been an eligible individual 
during each of the months in such taxable year, 
and
``(ii) as having been enrolled, during each 
of the months such individual is treated as an 
eligible individual solely by reason of clause 
(i), in the same qualified plan in which the 
individual was enrolled for the last month of 
such taxable year.
``(B) Failure to maintain qualified plan 
coverage.--
``(i) In general.--If, at any time during 
the testing period, the individual is not an 
eligible individual, then--
``(I) gross income of the 
individual for the taxable year in 
which occurs the first month in the 
testing period for which such 
individual is not an eligible 
individual is increased by the 
aggregate amount of all contributions 
to the health savings account of the 
individual which could not have been 
made but for subparagraph (A), and
``(II) the tax imposed by this 
chapter for any taxable year on the 
individual shall be increased by 10 
percent of the amount of such increase.
``(ii) Exception for disability or death.--
Subclauses (I) and (II) of clause (i) shall not 
apply if the individual ceased to be an 
eligible individual by reason of the death of 
the individual or the individual becoming 
disabled (within the meaning of section 
72(m)(7)).
``(iii) Testing period.--The term `testing 
period' means the period beginning with the 
last month of the taxable year referred to in 
subparagraph (A) and ending on the last day of 
the 12th month following such month.
``(c) Definitions and Special Rules.--For purposes of this 
section--
``(1) Eligible individual.--The term `eligible individual' 
means, with respect to any month, any individual if such 
individual is covered under a qualified plan as of the 1st day 
of such month.
``(2) Qualified plan.--
``(A) In general.--The term `qualified health plan' 
means any health plan, including employer plans, 
individual plans, short term plans, Medicare, Medicaid, 
VA health care, TRICARE, Indian health service, health 
care sharing ministries, and association health plans.
``(B) Exclusion of certain plans.--Such term does 
not include a health plan if substantially all of its 
coverage is--
``(i) coverage for any benefit provided by 
permitted insurance, or
``(ii) coverage (whether through insurance 
or otherwise) for accidents, disability, dental 
care, vision care, or long-term care.
``(3) Permitted insurance.--The term `permitted insurance' 
means--
``(A) insurance if substantially all of the 
coverage provided under such insurance relates to--
``(i) liabilities incurred under workers' 
compensation laws,
``(ii) tort liabilities,
``(iii) liabilities relating to ownership 
or use of property, or
``(iv) such other similar liabilities as 
the Secretary may specify by regulations,
``(B) insurance for a specified disease or illness, 
and
``(C) insurance paying a fixed amount per day (or 
other period) of hospitalization.
``(4) Family coverage.--The term `family coverage' means 
any coverage other than self-only coverage.
``(d) Health Savings Account.--For purposes of this section--
``(1) In general.--The term `health savings account' means 
a trust created or organized in the United States as a health 
savings account exclusively for the purpose of paying the 
qualified medical expenses of the account beneficiary, but only 
if the written governing instrument creating the trust meets 
the following requirements:
``(A) Except in the case of a rollover contribution 
described in subsection (f)(5) or section 220(f)(5), no 
contribution will be accepted--
``(i) unless it is in cash, or
``(ii) to the extent such contribution, 
when added to previous contributions to the 
trust for the calendar year, exceeds the 
limitation amount specified in paragraph 
(2)(A), or
``(iii) to the extent such contribution, 
when added to the balance of the account, 
exceeds the limitation amount specified in 
paragraph (2)(B).
``(B) The trustee is a bank (as defined in section 
408(n)), an insurance company (as defined in section 
816), or another person who demonstrates to the 
satisfaction of the Secretary that the manner in which 
such person will administer the trust will be 
consistent with the requirements of this section.
``(C) No part of the trust assets will be invested 
in life insurance contracts.
``(D) The assets of the trust will not be 
commingled with other property except in a common trust 
fund or common investment fund.
``(E) The interest of an individual in the balance 
in his account is nonforfeitable.
``(2) Limitations.--
``(A) Annual limitation.--
``(i) In general.--The limitation amount 
specified in this subparagraph is--
``(I) $5,000 in the case of a 
qualified health plan with an actuarial 
value of less than 40 percent,
``(II) $4,300 in the case of a 
qualified health plan with an actuarial 
value that is 40 percent or more and 
less than 75 percent, and
``(III) $3,600 in the case of a 
qualified health plan with an actuarial 
value that is 75 percent or more.
``(ii) Actuarial value of qualified health 
plan.--For purposes of clause (i), the 
actuarial value of a qualified health plan is 
the percentage of the total average costs of 
covered benefits under the health plan.
``(B) Account accumulation limitation.--The 
limitation amount specified in this paragraph is 
$50,000.
``(C) Indexing.--
``(i) In general.--In the case of any 
taxable year beginning in a calendar year after 
2026, each dollar amount contained in 
subparagraphs (A)(i) and (B) shall be increased 
by the medical care cost adjustment of such 
amount for such calendar year.
``(ii) Medical care cost adjustment.--For 
purposes of clause (i), the medical care cost 
adjustment for any calendar year is the 
percentage (if any) by which--
``(I) the medical care component of 
the C-CPI-U (as defined in section 
1(f)(6)) for August of the preceding 
calendar year, exceeds
``(II) such component of the C-CPI-
U (as so defined) for August of 2025.
``(iii) Rounding.--
``(I) Annual limitation.--If any 
increase in a dollar amount contained 
in subparagraph (A)(i) determined under 
clause (i) is not a multiple of $100, 
such increase shall be rounded to the 
nearest multiple of $100.
``(II) Account limitation.--If any 
increase in the dollar amount contained 
in subparagraph (B) determined under 
clause (i) is not a multiple of $1,000, 
such increase shall be rounded to the 
nearest multiple of $1,000.
``(D) Coordination with other contributions.--The 
limitation which would (but for this paragraph) apply 
under subparagraphs (A) and (B) to an individual for 
any taxable year shall be reduced (but not below zero) 
by the sum of--
``(i) the aggregate amount contributed to 
health savings accounts of such individual 
which is excludable from the taxpayer's gross 
income for such taxable year under section 
106(d) (and such amount shall not be allowed as 
a deduction under subsection (a)), and
``(ii) the aggregate amount contributed to 
health savings accounts of such individual for 
such taxable year under section 408(d)(9) (and 
such amount shall not be allowed as a deduction 
under subsection (a)).
``(3) Qualified medical expenses.--
``(A) In general.--The term `qualified medical 
expenses' means, with respect to an account 
beneficiary, amounts paid by such beneficiary for 
medical care (as defined in section 213(d)) for such 
individual, the spouse of such individual, and any 
dependent (as defined in section 152, determined 
without regard to subsections (b)(1), (b)(2), and 
(d)(1)(B) thereof) of such individual, but only to the 
extent such amounts are not compensated for by 
insurance or otherwise. For purposes of this 
subparagraph, amounts paid for menstrual care products 
shall be treated as paid for medical care.
``(B) Health insurance may not be purchased from 
account.--
``(i) In general.--Subparagraph (A) shall 
not apply to any payment for insurance.
``(ii) Exceptions.--Clause (i) shall not 
apply to any expense for coverage under--
``(I) a health plan during any 
period of continuation coverage 
required under any Federal law,
``(II) a qualified long-term care 
insurance contract (as defined in 
section 7702B(b)),
``(III) a health plan during a 
period in which the individual is 
receiving unemployment compensation 
under any Federal or State law, or
``(IV) in the case of an account 
beneficiary who has attained the age 
specified in section 1811 of the Social 
Security Act, any health insurance 
other than a medicare supplemental 
policy (as defined in section 1882 of 
the Social Security Act).
``(iii) Exception for integrated health 
plans.--Clause (i) shall not apply to any 
expense for coverage under an integration 
eligible health plan which is integrated with 
the health savings account within the meaning 
of section 106(d).
``(iv) Exception for direct primary care 
service arrangements.--
``(I) In general.--A direct primary 
care service arrangement shall not be 
treated as insurance for purposes of 
clause (i).
``(II) Direct primary care service 
arrangement defined.--For purposes of 
this clause, the term `direct primary 
care service arrangement' means an 
arrangement under which an individual 
is provided medical care (as defined in 
section 213(d)(1), determined without 
regard to subparagraph (E) thereof) 
consisting solely of primary care 
services provided by primary care 
practitioners (as defined in section 
1833(x)(2)(A) of the Social Security 
Act, determined without regard to 
clause (ii) thereof), if the sole 
compensation for such care is a fixed 
periodic fee.
``(C) Menstrual care product.--For purposes of this 
paragraph, the term `menstrual care product' means a 
tampon, pad, liner, cup, sponge, or similar product 
used by individuals with respect to menstruation or 
other genital-tract secretions.
``(4) Account beneficiary.--The term `account beneficiary' 
means the individual on whose behalf the health savings account 
was established.
``(5) Certain rules to apply.--Rules similar to the 
following rules shall apply for purposes of this section:
``(A) Section 219(d)(2) (relating to no deduction 
for rollovers).
``(B) Section 219(f)(3) (relating to time when 
contributions deemed made).
``(C) Except as provided in section 106(d), section 
219(f)(5) (relating to employer payments).
``(D) Section 408(g) (relating to community 
property laws).
``(E) Section 408(h) (relating to custodial 
accounts).
``(e) Tax Treatment of Accounts.--
``(1) In general.--A health savings account is exempt from 
taxation under this subtitle unless such account has ceased to 
be a health savings account. Notwithstanding the preceding 
sentence, any such account is subject to the taxes imposed by 
section 511 (relating to imposition of tax on unrelated 
business income of charitable, etc. organizations).
``(2) Account terminations.--Rules similar to the rules of 
paragraphs (2) and (4) of section 408(e) shall apply to health 
savings accounts, and any amount treated as distributed under 
such rules shall be treated as not used to pay qualified 
medical expenses.
``(f) Tax Treatment of Distributions.--
``(1) Amounts used for qualified medical expenses.--Any 
amount paid or distributed out of a health savings account 
which is used exclusively to pay qualified medical expenses of 
any account beneficiary shall not be includible in gross 
income.
``(2) Inclusion of amounts not used for qualified medical 
expenses.--Any amount paid or distributed out of a health 
savings account which is not used exclusively to pay the 
qualified medical expenses of the account beneficiary shall be 
included in the gross income of such beneficiary.
``(3) Excess contributions returned before due date of 
return.--
``(A) In general.--If any excess contribution is 
contributed for a taxable year to any health savings 
account of an individual, paragraph (2) shall not apply 
to distributions from the health savings accounts of 
such individual (to the extent such distributions do 
not exceed the aggregate excess contributions to all 
such accounts of such individual for such year) if--
``(i) such distribution is received by the 
individual on or before the last day prescribed 
by law (including extensions of time) for 
filing such individual's return for such 
taxable year, and
``(ii) such distribution is accompanied by 
the amount of net income attributable to such 
excess contribution.
Any net income described in clause (ii) shall be 
included in the gross income of the individual for the 
taxable year in which it is received.
``(B) Excess contribution.--For purposes of 
subparagraph (A), the term `excess contribution' means 
any contribution (other than a rollover contribution 
described in paragraph (5) or section 220(f)(5)) which 
is neither excludable from gross income under section 
106(d) nor deductible under this section.
``(4) Additional tax on distributions not used for 
qualified medical expenses.--
``(A) In general.--The tax imposed by this chapter 
on the account beneficiary for any taxable year in 
which there is a payment or distribution from a health 
savings account of such beneficiary which is includible 
in gross income under paragraph (2) shall be increased 
by 20 percent of the amount which is so includible.
``(B) Exception for disability or death.--
Subparagraph (A) shall not apply if the payment or 
distribution is made after the account beneficiary 
becomes disabled within the meaning of section 72(m)(7) 
or dies.
``(C) Exception for distributions after medicare 
eligibility.--Subparagraph (A) shall not apply to any 
payment or distribution after the date on which the 
account beneficiary attains the age specified in 
section 1811 of the Social Security Act.
``(5) Rollover contribution.--An amount is described in 
this paragraph as a rollover contribution if it meets the 
requirements of subparagraphs (A) and (B).
``(A) In general.--Paragraph (2) shall not apply to 
any amount paid or distributed from a health savings 
account to the account beneficiary to the extent the 
amount received is paid into a health savings account 
for the benefit of such beneficiary not later than the 
60th day after the day on which the beneficiary 
receives the payment or distribution.
``(B) Limitation.--This paragraph shall not apply 
to any amount described in subparagraph (A) received by 
an individual from a health savings account if, at any 
time during the 1-year period ending on the day of such 
receipt, such individual received any other amount 
described in subparagraph (A) from a health savings 
account which was not includible in the individual's 
gross income because of the application of this 
paragraph.
``(C) Rollover from fsa, archer msa, and hra.--An 
amount is described in this subparagraph for a calendar 
year as a rollover contribution if the amount is the 
remaining balance in a health flexible spending 
account, Archer MSA, or health reimbursement 
arrangement that is contributed to the health savings 
account for a taxable year ending on or before one year 
after the date of the enactment of this subparagraph.
``(6) Coordination with medical expense deduction.--For 
purposes of determining the amount of the deduction under 
section 213, any payment or distribution out of a health 
savings account for qualified medical expenses shall not be 
treated as an expense paid for medical care.
``(7) Transfer of account incident to divorce.--The 
transfer of an individual's interest in a health savings 
account to an individual's spouse or former spouse under a 
divorce or separation instrument described in clause (i) of 
section 121(d)(3)(C) shall not be considered a taxable transfer 
made by such individual notwithstanding any other provision of 
this subtitle, and such interest shall, after such transfer, be 
treated as a health savings account with respect to which such 
spouse is the account beneficiary.
``(8) Treatment after death of account beneficiary.--
``(A) Treatment if designated beneficiary is 
spouse.--If the account beneficiary's surviving spouse 
acquires such beneficiary's interest in a health 
savings account by reason of being the designated 
beneficiary of such account at the death of the account 
beneficiary, such health savings account shall be 
treated as if the spouse were the account beneficiary.
``(B) Other cases.--
``(i) In general.--If, by reason of the 
death of the account beneficiary, any person 
acquires the account beneficiary's interest in 
a health savings account in a case to which 
subparagraph (A) does not apply--
``(I) such account shall cease to 
be a health savings account as of the 
date of death, and
``(II) an amount equal to the fair 
market value of the assets in such 
account on such date shall be 
includible if such person is not the 
estate of such beneficiary, in such 
person's gross income for the taxable 
year which includes such date, or if 
such person is the estate of such 
beneficiary, in such beneficiary's 
gross income for the last taxable year 
of such beneficiary.
``(ii) Special rules.--
``(I) Reduction of inclusion for 
predeath expenses.--The amount 
includible in gross income under clause 
(i) by any person (other than the 
estate) shall be reduced by the amount 
of qualified medical expenses which 
were incurred by the decedent before 
the date of the decedent's death and 
paid by such person within 1 year after 
such date.
``(II) Deduction for estate 
taxes.--An appropriate deduction shall 
be allowed under section 691(c) to any 
person (other than the decedent or the 
decedent's spouse) with respect to 
amounts included in gross income under 
clause (i) by such person.
``(g) Cost-of-Living Adjustment.--
``(1) In general.--In the case of any taxable year 
beginning after December 31, 2026, each dollar amount in 
paragraphs (2) and (3) of subsection (c) shall be increased by 
an amount equal to--
``(A) such dollar amount, multiplied by
``(B) the cost-of-living adjustment determined 
under section 1(f)(3) for the calendar year in which 
such taxable year begins determined by substituting 
`2025' for `2016' in subparagraph (A)(ii) thereof.
``(2) Rounding.--If any increase under paragraph (1) is not 
a multiple of $50, such increase shall be rounded to the 
nearest multiple of $50.
``(h) Reports.--The Secretary may require--
``(1) the trustee of a health savings account to make such 
reports regarding such account to the Secretary and to the 
account beneficiary with respect to contributions, 
distributions, the return of excess contributions, and such 
other matters as the Secretary determines appropriate, and
``(2) any person who provides an individual with a 
qualified health plan to make such reports to the Secretary and 
to the account beneficiary with respect to such plan as the 
Secretary determines appropriate.''.
(b) Employer Contributions to Health Savings Accounts.--
(1) In general.--Section 106(d) is amended to read as 
follows:
``(d) Contributions to Health Savings Accounts.--
``(1) In general.--In the case of an employee who is an 
eligible individual, amounts contributed by such employee's 
employer to any health savings account of such employee shall 
be treated as employer-provided coverage for medical expenses 
under an accident or health plan to the extent--
``(A) such amounts do not exceed twice the 
limitation in effect under section 223(b)(2) 
(determined without regard to this subsection) which is 
applicable to such employee for such taxable year,
``(B) such amounts are contributed to an account 
which is integrated with an integration eligible health 
plan,
``(C) such employer does not offer such employee 
coverage under any other accident or health plan,
``(D) such employer offers such amounts only to 
members of a qualified class of employees and offers 
such amounts to all members of any such qualified 
class,
``(E) such employer offers employees an opportunity 
to elect not to receive such amounts at least once per 
year and upon termination from employment, and
``(F) such employee is not covered under any health 
insurance offered by an employer of such employee's 
spouse.
``(2) Integration eligible health plan.--For purposes of 
this subsection, the term `integration eligible health plan' 
means--
``(A) any bronze, silver, or gold plan offered 
through an Exchange established under the Patient 
Protection and Affordable Care Act,
``(B) entitlement to benefits under part A of title 
XVIII of the Social Security Act and enrollment under 
part B of such title, including enrollment under a 
Medicare Advantage plan under part C of such title,
``(C) in the case of any individual who has not 
attained age 30 or is determined by the Secretary 
(after consultation with the Secretary of Health and 
Human Services) to have a hardship, coverage under a 
catastrophic plan, and
``(D) in the case of any student, coverage under a 
health plan which is conditioned on maintaining status 
as being such a student.
``(3) Integration of plans and accounts.--For purposes of 
this subsection, an account shall be treated as integrated with 
an integration eligible health plan (and such plan shall be 
treated as integrated with such account) for any month if--
``(A) the employee is the account beneficiary of 
such account and such employee is covered under an 
integration eligible health plan for such month,
``(B) the employer verifies that the employee is so 
covered by requiring the submission of documentation to 
such employer, and
``(C) the employer makes contributions to such 
account for such month which are not less than the 
excess (if any) of--
``(i) the adjusted monthly premiums for the 
applicable second lowest cost silver plan with 
respect to the taxpayer, over
``(ii) \1/12\ of 9.5 percent of the 
taxpayer's household income (within the meaning 
of section 36B).
``(4) Qualified class.--For purposes of this subsection--
``(A) In general.--The term `qualified class' means 
only the following: All employees; Full-time employees; 
Part-time employees; Seasonal employees; Employees 
covered under a collective bargaining agreement; 
Employees in a waiting period; Foreign employees who 
work abroad; Employees working in the same geographic 
location (same insurance rating area, State, or multi-
State region); Salaried workers; Non-Salaried workers 
(such as hourly workers); Temporary employees of 
staffing firms.
``(B) Rules related to class size.--
``(i) Minimum class size.--A class shall 
not be treated as a qualified class unless in 
consisting of at least the following number of 
employees:
``(I) In the case of an employer 
with fewer than 100 employees, the 
lesser of 10 employees or all employees 
of the employer.
``(II) In the case of an employer 
with at least 100 and not more than 200 
employees, 10 percent of the number of 
such employees (if not a whole number, 
rounded down to the next lowest whole 
number).
``(III) In the case of an employer 
with more than 200 employees, 20 
employees.
``(ii) Combination of classes.--Two or more 
qualified classes described in subparagraph (A) 
may be combined if each such class separately 
would not satisfy the requirement of clause 
(i).
``(C) Permitted variation within qualified 
classes.--An employer shall not fail to meet the 
requirements of paragraph (1)(D) solely because the 
amounts offered to members of a qualified class vary on 
the basis of--
``(i) number of dependents,
``(ii) age, if such variation based on age 
does not exceed a ratio of 3:1, and
``(iii) chronic health condition, if such 
variation based on chronic health condition 
does not exceed a ratio of 1.2:1.
``(5) Coordination with aca provisions.--In the case of an 
integration eligible health plan which is integrated with a 
health savings account--
``(A) such plan shall be treated as an eligible 
employer-sponsored plan described in section 
5000A(f)(1)(B),
``(B) if an individual receives contributions to 
such account which are excludible from the gross income 
of such individual under this section during any 
taxable year, no credit shall be allowed under section 
36B with respect to such individual for such taxable 
year, and
``(C) for purposes of section 36B(c)(2)(C)(i)(II), 
the employee's required contribution with respect to 
such plan shall be treated as being equal to the excess 
(if any) of--
``(i) the adjusted monthly premiums for the 
applicable second lowest cost silver plan with 
respect to the taxpayer, over
``(ii) the contributions made the employer 
to such health savings account which are 
excludible from the gross income of the 
employee under this section.
``(6) No constructive receipt.--No amount shall be included 
in the gross income of any employee solely because the employee 
may choose between the contributions referred to in paragraph 
(1) and employer contributions to another health plan of the 
employer.
``(7) Special rule for deduction of employer 
contributions.--Any employer contribution to a health savings 
account, if otherwise allowable as a deduction under this 
chapter, shall be allowed only for the taxable year in which 
paid.
``(8) Employer health savings account contributions 
required to be shown on return.--Every individual required to 
file a return under section 6012 for the taxable year shall 
include on such return the aggregate amount contributed by 
employers to the health savings accounts of such individual or 
such individual's spouse for such taxable year.
``(9) Health savings account contributions not part of 
cobra coverage.--Paragraph (1) shall not apply for purposes of 
section 4980B.
``(10) Definitions.--Terms used in this subsection which 
are also used in section 223 shall have the same respective 
meanings as when used in such section.
``(11) Regulations.--The Secretaries of Treasury, Labor, 
and Health and Human Services shall each issue such regulations 
or other guidance as may be necessary or appropriate to carry 
out the purposes of this subsection, including regulations or 
other guidance to--
``(A) prevent employers from offering plans 
integrated with health savings accounts selectively to 
sicker workers, and
``(B) establish a safe harbor that helps employers 
determine whether contributions to health savings 
accounts with respect to which there is an integrated 
health plan comply with affordability requirements 
under the Patient Protection and Affordable Care Act 
and the amendments made by such Act.
``(12) Cross reference.--For penalty on failure by employer 
to make comparable contributions to the health savings accounts 
of comparable employees, see section 4980G.''.
(2) Nonapplication of erisa.--Contributions by an employer 
to a health savings account (as defined in section 223 of the 
Internal Revenue Code of 1986), and an integration eligible 
health plan which is integrated with such account (within the 
meaning of such section), shall not be treated as a plan for 
purposes of the Employee Retirement Income Security Act of 1974 
if--
(A) receipt of such contributions by the employee 
is voluntary,
(B) the employer does not select or endorse the 
integration eligible health plan which is integrated 
with such account,
(C) no premiums, other than premiums for the 
integration eligible health plan which is integrated 
with such account, are paid from the account,
(D) the employer receives no consideration (money 
or other benefit) in connection with the employee 
selecting or renewing a plan, and
(E) each participant is notified annually that such 
contributions and such plan are not subject to the 
requirements of such Act.
(c) Termination of Certain Other Health Care Related Tax 
Benefits.--
(1) Exclusion limited to self-funded major medical plan of 
employers.--Section 105(b) of such Code is amended by striking 
``paid,'' and inserting ``paid under a self-funded major 
medical plan of the employer''.
(2) Exclusion not applicable to health reimbursement 
arrangements.--Section 105(h) of such Code is amended to read 
as follows:
``(h) Exclusion Not Applicable to Health Reimbursement 
Arrangements.--Subsection (b) shall not apply to health reimbursement 
arrangements.''.
(3) Repeal of exclusions from income for archer msas and 
fsas.--Section 106 of such Code is amended by striking 
subsection (b), (e) and (g).
(4) Termination of deduction for contributions to archer 
msas.--Section 220(a) of such Code is amended by adding at the 
end the following: ``No amount shall be allowed as a deduction 
under the preceding sentence for any taxable year beginning 
after one year after the date of the enactment of this 
sentence.''.
(d) Bankruptcy Protections.--Section 522 of title 11, United States 
Code, is amended by adding at the end the following new subsection:
``(r) For purposes of this section, any health savings account (as 
described in section 223 of the Internal Revenue Code of 1986) shall be 
treated in the same manner as an individual retirement account 
described in section 408 of such Code.''.
(e) Rollover of FSA, Archer MSA, HRA to Health Savings Account.--
Notwithstanding any other provision of law, if the remaining balance in 
a health flexible spending arrangement, Archer MSA, or health 
reimbursement arrangement is transferred to a health savings account 
before the end of any taxable year ending on or before one year after 
the date of the enactment of this Act, such transfer shall be treated 
as a rollover to the health savings account under section 223(f)(5) of 
the Internal Revenue Code of 1986 and the distribution from the health 
flexible spending arrangement, Archer MSA, or health reimbursement 
arrangement shall not be includible in gross income.
(f) Effective Dates.--
(1) In general.--The amendments made by subsections (a) and 
(b) shall apply to taxable years beginning after the date of 
the enactment of this Act.
(2) Termination of certain other health care related tax 
benefits.--The amendments made by subsection (c) shall apply to 
taxable years beginning after the date which is 1 year after 
the date of the enactment of this Act.
(3) Bankruptcy protections.--The amendment made by 
subsection (d) shall apply to cases commencing under title 11, 
United States Code, after the date of the enactment of this 
Act.

SEC. 102. UNUSED PREMIUM TAX CREDITS MAY BE DEPOSITED IN HEALTH SAVINGS 
ACCOUNTS.

(a) In General.--Section 36B is amended by redesignating subsection 
(h) as subsection (i) and by inserting after subsection (g) the 
following new subsection:
``(h) Excess Credit May Be Deposited Into a Health Savings 
Account.--
``(1) In general.--If the amount described in subparagraph 
(B) of subsection (b)(2) exceeds the amount described in 
subparagraph (A) of such subsection with respect to any 
coverage month and an election under paragraph (2) is in effect 
with respect to the applicable taxpayer, the Secretary shall 
deposit such excess into a health savings account of such 
taxpayer.
``(2) Election to deposit excess credit into a health 
savings account.--A taxpayer may elect (at such time and in 
such manner as the Secretary may provide) to have the Secretary 
deposit the excess described in paragraph (1) into a health 
savings account of the taxpayer. Any such election shall only 
be treated as being in effect if the taxpayer provides the 
Secretary with such information as the Secretary may require to 
allow the Secretary to make such deposit.
``(3) Coordination with health savings account rules.--Any 
amount deposited in a health savings account by the Secretary 
under this subsection shall--
``(A) be includible in the gross income of the 
applicable taxpayer, and
``(B) be taken into account as an amount paid to 
such account for purposes of this section.
``(4) Treatment of deposits.--For purposes of section 1324 
of title 31, United States Code, any deposit made under this 
subsection shall be treated as a credit allowed under this 
section.''.
(b) Effective Date.--The amendments made by this section shall 
apply to taxable years beginning after the date of the enactment of 
this Act.

SEC. 103. HEALTH REIMBURSEMENT ARRANGEMENTS AND OTHER ACCOUNT-BASED 
GROUP HEALTH PLANS.

The rule published by the Internal Revenue Service, the Employee 
Benefits Security Administration, and the Health and Human Services 
Department relating to ``Health Reimbursement Arrangements and Other 
Account-Based Group Health Plans'' (June 20, 2019) shall have the force 
and effect of law. Health Reimbursement Arrangements as described in 
this rule are subject to all sections in this title.

SEC. 104. COST-SHARING REDUCTION PAYMENTS AS ELIGIBLE CONTRIBUTIONS.

(a) Alternative Waiver for State Innovation.--Section 1332 of the 
Patient Protection and Affordable Care Act (42 U.S.C. 18052) is amended 
by adding at the end the following new subsection:
``(f) Alternative Waiver for State Innovation.--
``(1) In general.--Notwithstanding any preceding provision 
of this section, a State may apply to the Secretary for the 
waiver of any requirement of subsection (a)(2) with respect to 
health insurance coverage within that State for plan years 
beginning on or after January 1, 2026, if instead of complying 
with section 1402 the State provides for the distribution of 
funding received under paragraph (2) to health savings accounts 
of qualifying individuals with respect to such State. Such 
application shall be filed at such time and in such manner as 
the Secretary may require, and shall include such information 
as the Secretary may require (including a 10-year budget plan 
for such plan that is budget neutral for the Federal 
Government).
``(2) Pass-through funding.--With respect to a State waiver 
under paragraph (1), under which, due to the structure of such 
waiver, individuals in the State would not qualify for cost-
sharing reductions under section 1402 for which they would 
otherwise be eligible, the Secretary shall provide for an 
alternative means by which an amount is transferred to the 
State equal to the aggregate amount of such reductions that 
would have been paid on behalf of the participants in the 
Exchanges established under this title--
``(A) had the State not received such waiver;
``(B) had references to `eligible insureds' under 
section 1402 referred to `qualifying insureds (as 
defined in section 1332(f))';
``(C) had, after application of clause (ii), in the 
case of a qualifying insured enrolled in the bronze 
level of coverage--
``(i) the percentages specified in 
subclauses (I), (II), and (III) of section 
1402(c)(1)(B) were references to 84 percent, 77 
percent, and 63 percent, respectively; and
``(ii) the references in subparagraphs (A), 
(B), and (C) of section 1402(c)(2) to 94 
percent, 87 percent, and 73 percent, 
respectively, were references to 84 percent, 77 
percent, and 63 percent, respectively; and
``(D) had, after application of clause (ii), in the 
case of a qualifying insured enrolled in the copper 
level of coverage--
``(i) the percentages specified in 
subclauses (I), (II), and (III) of section 
1402(c)(1)(B) were references to 74 percent, 67 
percent, and 53 percent, respectively; and
``(ii) the references in subparagraphs (A), 
(B), and (C) of section 1402(c)(2) to 94 
percent, 87 percent, and 73 percent, 
respectively, were references to 74 percent, 67 
percent, and 53 percent, respectively.
The amount transferred pursuant to the previous sentence shall 
be determined annually by the Secretary, taking into 
consideration the experience of other States with respect to 
participation in an Exchange and reductions provided under such 
provisions to residents of the other States, and shall be paid 
to the State for purposes of implementing such waiver.
``(3) Waiver consideration and transparency.--The 
provisions of paragraph (4) of subsection (a) shall apply to an 
application for a waiver under paragraph (1) in the same manner 
as such provisions apply with respect to an application for a 
waiver under subsection (a)(1), except that, for purposes of 
this paragraph, the provisions of subsection (a)(4)(B)(ii) 
shall not apply.
``(4) Determinations; term of waiver.--The provisions of 
subsections (d) and (e) shall apply with respect to a 
determination with respect to an application under paragraph 
(1), and with respect to the term of a waiver under such 
paragraph, in the same manner as such provisions apply with 
respect to a determination with respect to an application under 
subsection (a)(1), and with respect to the term of a waiver 
under such subsection.
``(5) Definitions.--For purposes of this subsection:
``(A) Health savings account.--The term `health 
savings account' has the meaning given such term in 
section 223 of the Internal Revenue Code of 1986.
``(B) Qualifying insured.--The term `qualifying 
insured' means, with respect to a State and a year, an 
individual--
``(i) who is enrolled in a health savings 
account;
``(ii) who is enrolled for such year in a 
silver, bronze, or copper level coverage 
offered through an Exchange; and
``(iii) whose household income is not more 
than 250 percent of the Federal poverty line 
for a family of the size involved.''.
(b) Additional Amendments.--Section 1402 of the Patient Protection 
and Affordable Care Act (42 U.S.C. 18071) is amended by striking ``not 
less than 100 percent but'' and ``exceeds 100 percent but'' and ``more 
than 100 percent but'' each place such phrases appear.
(c) Conforming Amendments.--Section 1332 of the Patient Protection 
and Affordable Care Act (42 U.S.C. 18052), as amended by subsection 
(a), is further amended in subsection (a)(4)--
(1) in subparagraph (A) by striking the period and 
inserting ``, except in the case of a waiver described in 
subsection (f).''; and
(2) in subparagraph (B)(ii) by inserting after ``an 
application'' the following: ``(except in the case of a waiver 
described in subsection (f))''.
(d) Appropriation for Cost-Sharing Payments.--Section 1402 of the 
Patient Protection and Affordable Care Act (42 U.S.C. 18071) is amended 
by adding at the end the following new subsection:
``(g) Funding.--
``(1) Appropriations.--Out of any funds in the Treasury not 
otherwise appropriated, there is appropriated such sums as may 
be necessary to, subject to paragraph (2), provide health 
benefits coverage through payment to issuers (under this 
section or through advance payment by the Secretary of the 
Treasury under section 1412(c)(3)) of the amounts computed 
under this section for each of plan years 2026 through 2030.
``(2) Adjustments.--Notwithstanding any other provision of 
law, payments and other actions for adjustments to obligations 
incurred prior to December 31, 2026, may be made through 
December 31, 2026.
``(3) Limitation.--Amounts appropriated under paragraph (1) 
for each of plan years 2026 through 2030 are subject to the 
requirements and limitations under sections 506 and 507 of 
division H of Public Law 115-31 in the same manner and to the 
same extent as if such amounts for each such year were 
appropriated under such division.''.

Subtitle B--Assistance to Health Savings Accounts

SEC. 111. ONE-TIME APPLICATION OF SAVER'S CREDIT TO CONTRIBUTIONS TO 
HEALTH SAVINGS ACCOUNTS.

(a) In General.--In the case of an applicable taxable year, 
contributions to any health savings account of the taxpayer during such 
taxable year shall be treated as a qualified retirement savings 
contribution for purposes of section 25B of the Internal Revenue Code 
of 1986.
(b) Applicable Taxable Year.--For purposes of this section, the 
term ``applicable taxable year'' means any taxable year elected by the 
taxpayer (at such time and in such manner as the Secretary of the 
Treasury may provide) which begins during the 3-year period beginning 1 
year after the date of the enactment of this Act. A taxpayer may not 
elect not more than 1 applicable taxable year under this subsection.

SEC. 112. GRANTS FOR HEALTH SAVINGS ACCOUNT ASSISTANCE AND OUTREACH.

(a) In General.--The Administrator shall establish a grant program 
to provide assistance to eligible entities to carry out the activities 
described in subsection (c).
(b) Application.--An eligible entity shall submit an application to 
the Administrator in such time and in such manner as the Administrator 
may require, providing that such application requires a demonstration 
of the existence of a relationship with, or the ability to establish a 
relationship with, an employer, employee, self-employed individual, or 
consumer eligible to enroll in a health savings account.
(c) Use of Funds.--An eligible entity receiving a grant under this 
section shall use such funds to--
(1) distribute fair and impartial information to consumers 
about health savings accounts, including the availability of 
such accounts and how such accounts may be utilized;
(2) conduct activities to raise public awareness of health 
savings accounts;
(3) facilitate enrollment in health savings accounts; and
(4) refer individuals enrolled in a health savings account 
to the appropriate official, organization, or State agency for 
the purpose of addressing a complaint, grievance, or other 
question with respect to such health savings account.
(d) Amount.--The Administrator may distribute up to $5,000,000 
annually to be divided among grant recipients under this section.
(e) Report.--Not later than one year after the date on which the 
last of the grant periods awarded under this section ends, the 
Administrator shall submit a report to the Congress on the 
effectiveness of the grants provided under this section.
(f) Definitions.--In this section:
(1) Administrator.--The term ``Administrator'' means the 
Administrator of the Centers for Medicare & Medicaid Services.
(2) Consumer.--The term ``consumer'' means an individual 
enrolled in, or seeking to enroll in, a health savings account.
(3) Eligible entity.--The term ``eligible entity'' includes 
the following:
(A) A State.
(B) Trade.
(C) Industry.
(D) Professional associations.
(E) Commercial fishing industry organizations.
(F) Ranching and farming organizations.
(G) Community and consumer-focused nonprofit 
groups.
(H) Chambers of commerce.
(I) Unions.
(J) Small business development centers (as defined 
in section 21 of the Small Business Act (15 U.S.C. 
648)).
(K) Other entities capable of carrying out the 
activities described under subsection (b).
(4) Health savings account.--The term ``health savings 
account'' has the meaning given such term in section 223 of the 
Internal Revenue Code of 1986.
(5) State.--The term ``State'' means each of the several 
States, the District of Columbia, each territory and possession 
of the United States, and each federally recognized Indian 
Tribe.

SEC. 113. NEW CORPORATIONS REQUIRED TO USE HEALTH SAVINGS ACCOUNTS.

Notwithstanding any other provision of law, a corporation 
incorporated after December 31, 2026, may not receive tax benefits for 
offering employees health insurance. The previous sentence shall not 
apply to health savings account contributions offered by such a 
corporation.

SEC. 114. FEDERAL EMPLOYEE HEALTH BENEFITS AND HEALTH SAVINGS ACCOUNTS.

(a) In General.--Section 1312(d)(3)(D) of the Patient Protection 
and Affordable Care Act (42 U.S.C. 18032(d)(3)(D)) is amended--
(1) in the subparagraph heading, by striking ``Members of 
congress'' and inserting ``President, vice president, members 
of congress, and federal employees'';
(2) in clause (i), in the matter preceding subclause (I)--
(A) by striking ``Members of Congress and 
congressional staff'' and inserting ``the President, 
Vice President, Members of Congress, and Federal 
employees''; and
(B) by striking ``a Member of Congress or 
congressional staff'' and inserting ``the President, 
the Vice President, a Member of Congress, or a Federal 
employee''; and
(3) in clause (ii), by amending subclause (II) to read as 
follows:
``(II) Federal employee.--The term 
`Federal employee' means--
``(aa) an `employee', as 
such term is defined in section 
2105 of title 5, United States 
Code; and
``(bb) includes an 
individual to whom subsection 
(c) or (f) of such section 2105 
pertains (whether or not such 
individual satisfies item 
(aa)).''.
(b) Conversion to Health Savings Accounts.--Each plan offered under 
chapter 89 of title 5, United States Code, shall be converted into a 
health savings account deposit and funded at the level of the second-
least expensive silver plan available through the Exchange where the 
applicable individual resides.

TITLE II--IMPROVING PRIVATE HEALTH INSURANCE

Subtitle A--Maintaining Protections for Patients With Preexisting 
Conditions

SEC. 201. GUARANTEED AVAILABILITY OF COVERAGE; PROHIBITING 
DISCRIMINATION.

(a) In General.--Subtitle C of title I of the Health Insurance 
Portability and Accountability Act of 1996 (Public Law 104-191) is 
amended by adding at the end the following:

``SEC. 196. GUARANTEED AVAILABILITY OF COVERAGE.

``(a) Guaranteed Issuance of Coverage in the Individual and Group 
Market.--Subject to subsections (b) through (d), each health insurance 
issuer that offers health insurance coverage in the individual or group 
market in a State must accept every employer and individual in the 
State that applies for such coverage.
``(b) Enrollment.--
``(1) Restriction.--A health insurance issuer described in 
subsection (a) may restrict enrollment in coverage described in 
such subsection to open or special enrollment periods.
``(2) Establishment.--A health insurance issuer described 
in subsection (a) shall, in accordance with the regulations 
promulgated under paragraph (3), establish special enrollment 
periods for qualifying events (under section 603 of the 
Employee Retirement Income Security Act of 1974).
``(3) Regulations.--The Secretary shall promulgate 
regulations with respect to enrollment periods under paragraphs 
(1) and (2).
``(c) Special Rules for Network Plans.--
``(1) In general.--In the case of a health insurance issuer 
that offers health insurance coverage in the group and 
individual market through a network plan, the issuer may--
``(A) limit the employers that may apply for such 
coverage to those with eligible individuals who live, 
work, or reside in the service area for such network 
plan; and
``(B) within the service area of such plan, deny 
such coverage to such employers and individuals if the 
issuer has demonstrated, if required, to the applicable 
State authority that--
``(i) it will not have the capacity to 
deliver services adequately to enrollees of any 
additional groups or any additional individuals 
because of its obligations to existing group 
contract holders and enrollees; and
``(ii) it is applying this paragraph 
uniformly to all employers and individuals 
without regard to the claims experience of 
those individuals, employers and their 
employees (and their dependents), or any health 
status-related factor relating to such 
individuals, employees, and dependents.
``(2) 180-day suspension upon denial of coverage.--An 
issuer, upon denying health insurance coverage in any service 
area in accordance with paragraph (1)(B), may not offer 
coverage in the group or individual market within such service 
area for a period of 180 days after the date such coverage is 
denied.
``(d) Application of Financial Capacity Limits.--
``(1) In general.--A health insurance issuer may deny 
health insurance coverage in the group or individual market if 
the issuer has demonstrated, if required, to the applicable 
State authority that--
``(A) it does not have the financial reserves 
necessary to underwrite additional coverage; and
``(B) it is applying this paragraph uniformly to 
all employers and individuals in the group or 
individual market in the State consistent with 
applicable State law and without regard to the claims 
experience of those individuals, employers and their 
employees (and their dependents) or any health status-
related factor relating to such individuals, employees, 
and dependents.
``(2) 180-day suspension upon denial of coverage.--A health 
insurance issuer upon denying health insurance coverage in 
connection with group health plans in accordance with paragraph 
(1) in a State may not offer coverage in connection with group 
health plans in the group or individual market in the State for 
a period of 180 days after the date such coverage is denied or 
until the issuer has demonstrated to the applicable State 
authority, if required under applicable State law, that the 
issuer has sufficient financial reserves to underwrite 
additional coverage, whichever is later. An applicable State 
authority may provide for the application of this subsection on 
a service-area-specific basis.
``(e) Definitions.--In this section and in sections 197 through 
199A:
``(1) The term `Secretary' means the Secretary of Health 
and Human Services.
``(2) The terms `genetic information', `genetic test', 
`group health plan', `group market', `health insurance 
coverage', `health insurance issuer', `group health insurance 
coverage', `individual health insurance coverage', `individual 
market', and `underwriting purpose' have the meanings given 
such terms in section 2791 of the Public Health Service Act.

``SEC. 197. FAIR HEALTH INSURANCE PREMIUMS.

``(a) Prohibiting Discriminatory Premium Rates.--
``(1) In general.--With respect to the premium rate charged 
by a health insurance issuer for health insurance coverage 
offered in the individual or small group market--
``(A) such rate shall vary with respect to the 
particular plan or coverage involved only by--
``(i) whether such plan or coverage covers 
an individual or family;
``(ii) rating area, as established in 
accordance with paragraph (2);
``(iii) age, except that such rate shall 
not vary by more than 5 to 1 for adults; and
``(iv) tobacco use, except that such rate 
shall not vary by more than 1.5 to 1; and
``(B) such rate shall not vary with respect to the 
particular plan or coverage involved by any other 
factor not described in subparagraph (A).
``(2) Rating area.--
``(A) In general.--Each State shall establish 1 or 
more rating areas within that State for purposes of 
applying the requirements of this title.
``(B) Secretarial review.--The Secretary shall 
review the rating areas established by each State under 
subparagraph (A) to ensure the adequacy of such areas 
for purposes of carrying out the requirements of this 
title. If the Secretary determines a State's rating 
areas are not adequate, or that a State does not 
establish such areas, the Secretary may establish 
rating areas for that State.
``(3) Permissible age bands.--The Secretary, in 
consultation with the National Association of Insurance 
Commissioners, shall define the permissible age bands for 
rating purposes under paragraph (1)(A)(iii).
``(4) Application of variations based on age or tobacco 
use.--With respect to family coverage under a group health plan 
or health insurance coverage, the rating variations permitted 
under clauses (iii) and (iv) of paragraph (1)(A) shall be 
applied based on the portion of the premium that is 
attributable to each family member covered under the plan or 
coverage.

``SEC. 198. PROHIBITING DISCRIMINATION AGAINST INDIVIDUAL PARTICIPANTS 
AND BENEFICIARIES BASED ON HEALTH STATUS.

``(a) In General.--A group health plan and a health insurance 
issuer offering group or individual health insurance coverage may not 
establish rules for eligibility (including continued eligibility) of 
any individual to enroll under the terms of the plan or coverage based 
on any of the following health status-related factors in relation to 
the individual or a dependent of the individual:
``(1) Health status.
``(2) Medical condition (including both physical and mental 
illnesses).
``(3) Claims experience.
``(4) Receipt of health care.
``(5) Medical history.
``(6) Genetic information.
``(7) Evidence of insurability (including conditions 
arising out of acts of domestic violence).
``(8) Disability.
``(9) Any other health status-related factor determined 
appropriate by the Secretary.
``(b) In Premium Contributions.--
``(1) In general.--A group health plan, and a health 
insurance issuer offering group or individual health insurance 
coverage, may not require any individual (as a condition of 
enrollment or continued enrollment under the plan) to pay a 
premium or contribution which is greater than such premium or 
contribution for a similarly situated individual enrolled in 
the plan on the basis of any health status-related factor in 
relation to the individual or to an individual enrolled under 
the plan as a dependent of the individual.
``(2) Construction.--Nothing in paragraph (1) shall be 
construed--
``(A) to restrict the amount that an employer or 
individual may be charged for coverage under a group 
health plan except as provided in paragraph (3) or 
individual health coverage, as the case may be; or
``(B) to prevent a group health plan, and a health 
insurance issuer offering group health insurance 
coverage, from establishing premium discounts or 
rebates or modifying otherwise applicable copayments or 
deductibles in return for adherence to programs of 
health promotion and disease prevention.
``(3) No group-based discrimination on basis of genetic 
information.--
``(A) In general.--For purposes of this section, a 
group health plan, and health insurance issuer offering 
group health insurance coverage in connection with a 
group health plan, may not adjust premium or 
contribution amounts for the group covered under such 
plan on the basis of genetic information.
``(B) Rule of construction.--Nothing in 
subparagraph (A) or in paragraphs (1) and (2) of 
subsection (d) shall be construed to limit the ability 
of a health insurance issuer offering group or 
individual health insurance coverage to increase the 
premium for an employer based on the manifestation of a 
disease or disorder of an individual who is enrolled in 
the plan. In such case, the manifestation of a disease 
or disorder in one individual cannot also be used as 
genetic information about other group members and to 
further increase the premium for the employer.
``(c) Genetic Testing.--
``(1) Limitation on requesting or requiring genetic 
testing.--A group health plan, and a health insurance issuer 
offering health insurance coverage in connection with a group 
health plan, shall not request or require an individual or a 
family member of such individual to undergo a genetic test.
``(2) Rule of construction.--Paragraph (1) shall not be 
construed to limit the authority of a health care professional 
who is providing health care services to an individual to 
request that such individual undergo a genetic test.
``(3) Rule of construction regarding payment.--
``(A) In general.--Nothing in paragraph (1) shall 
be construed to preclude a group health plan, or a 
health insurance issuer offering health insurance 
coverage in connection with a group health plan, from 
obtaining and using the results of a genetic test in 
making a determination regarding payment (as such term 
is defined for the purposes of applying the regulations 
promulgated by the Secretary under part C of title XI 
of the Social Security Act and section 264 of this Act, 
as may be revised from time to time) consistent with 
subsection (a).
``(B) Limitation.--For purposes of subparagraph 
(A), a group health plan, or a health insurance issuer 
offering health insurance coverage in connection with a 
group health plan, may request only the minimum amount 
of information necessary to accomplish the intended 
purpose.
``(4) Research exception.--Notwithstanding paragraph (1), a 
group health plan, or a health insurance issuer offering health 
insurance coverage in connection with a group health plan, may 
request, but not require, that a participant or beneficiary 
undergo a genetic test if each of the following conditions is 
met:
``(A) The request is made pursuant to research that 
complies with part 46 of title 45, Code of Federal 
Regulations, or equivalent Federal regulations, and any 
applicable State or local law or regulations for the 
protection of human subjects in research.
``(B) The plan or issuer clearly indicates to each 
participant or beneficiary, or in the case of a minor 
child, to the legal guardian of such beneficiary, to 
whom the request is made that--
``(i) compliance with the request is 
voluntary; and
``(ii) noncompliance will have no effect on 
enrollment status or premium or contribution 
amounts.
``(C) No genetic information collected or acquired 
under this paragraph shall be used for underwriting 
purposes.
``(D) The plan or issuer notifies the Secretary in 
writing that the plan or issuer is conducting 
activities pursuant to the exception provided for under 
this paragraph, including a description of the 
activities conducted.
``(E) The plan or issuer complies with such other 
conditions as the Secretary may by regulation require 
for activities conducted under this paragraph.
``(d) Prohibition on Collection of Genetic Information.--
``(1) In general.--A group health plan, and a health 
insurance issuer offering health insurance coverage in 
connection with a group health plan, shall not request, 
require, or purchase genetic information for underwriting 
purposes.
``(2) Prohibition on collection of genetic information 
prior to enrollment.--A group health plan, and a health 
insurance issuer offering health insurance coverage in 
connection with a group health plan, shall not request, 
require, or purchase genetic information with respect to any 
individual prior to such individual's enrollment under the plan 
or coverage in connection with such enrollment.
``(3) Incidental collection.--If a group health plan, or a 
health insurance issuer offering health insurance coverage in 
connection with a group health plan, obtains genetic 
information incidental to the requesting, requiring, or 
purchasing of other information concerning any individual, such 
request, requirement, or purchase shall not be considered a 
violation of paragraph (2) if such request, requirement, or 
purchase is not in violation of paragraph (1).
``(e) Genetic Information of a Fetus or Embryo.--Any reference in 
this part to genetic information concerning an individual or family 
member of an individual shall--
``(1) with respect to such an individual or family member 
of an individual who is a pregnant woman, include genetic 
information of any fetus carried by such pregnant woman; and
``(2) with respect to an individual or family member 
utilizing an assisted reproductive technology, include genetic 
information of any embryo legally held by the individual or 
family member.
``(f) Programs of Health Promotion or Disease Prevention.--
``(1) General provisions.--
``(A) General rule.--For purposes of subsection 
(b)(2)(B), a program of health promotion or disease 
prevention (referred to in this subsection as a 
`wellness program') shall be a program offered by an 
employer that is designed to promote health or prevent 
disease that meets the applicable requirements of this 
subsection.
``(B) No conditions based on health status 
factor.--If none of the conditions for obtaining a 
premium discount or rebate or other reward for 
participation in a wellness program is based on an 
individual satisfying a standard that is related to a 
health status factor, such wellness program shall not 
violate this section if participation in the program is 
made available to all similarly situated individuals 
and the requirements of paragraph (2) are complied 
with.
``(C) Conditions based on health status factor.--If 
any of the conditions for obtaining a premium discount 
or rebate or other reward for participation in a 
wellness program is based on an individual satisfying a 
standard that is related to a health status factor, 
such wellness program shall not violate this section if 
the requirements of paragraph (3) are complied with.
``(2) Wellness programs not subject to requirements.--If 
none of the conditions for obtaining a premium discount or 
rebate or other reward under a wellness program as described in 
paragraph (1)(B) are based on an individual satisfying a 
standard that is related to a health status factor (or if such 
a wellness program does not provide such a reward), the 
wellness program shall not violate this section if 
participation in the program is made available to all similarly 
situated individuals. The following programs shall not have to 
comply with the requirements of paragraph (3) if participation 
in the program is made available to all similarly situated 
individuals:
``(A) A program that reimburses all or part of the 
cost for memberships in a fitness center.
``(B) A diagnostic testing program that provides a 
reward for participation and does not base any part of 
the reward on outcomes.
``(C) A program that encourages preventive care 
related to a health condition through the waiver of the 
copayment or deductible requirement under a group 
health plan for the costs of certain items or services 
related to a health condition (such as prenatal care or 
well-baby visits).
``(D) A program that reimburses individuals for the 
costs of smoking cessation programs without regard to 
whether the individual quits smoking.
``(E) A program that provides a reward to 
individuals for attending a periodic health education 
seminar.
``(3) Wellness programs subject to requirements.--If any of 
the conditions for obtaining a premium discount, rebate, or 
reward under a wellness program as described in paragraph 
(1)(C) is based on an individual satisfying a standard that is 
related to a health status factor, the wellness program shall 
not violate this section if the following requirements are 
complied with:
``(A) The reward for the wellness program, together 
with the reward for other wellness programs with 
respect to the plan that requires satisfaction of a 
standard related to a health status factor, shall not 
exceed 30 percent of the cost of employee-only coverage 
under the plan. If, in addition to employees or 
individuals, any class of dependents (such as spouses 
or spouses and dependent children) may participate 
fully in the wellness program, such reward shall not 
exceed 30 percent of the cost of the coverage in which 
an employee or individual and any dependents are 
enrolled. For purposes of this paragraph, the cost of 
coverage shall be determined based on the total amount 
of employer and employee contributions for the benefit 
package under which the employee is (or the employee 
and any dependents are) receiving coverage. A reward 
may be in the form of a discount or rebate of a premium 
or contribution, a waiver of all or part of a cost-
sharing mechanism (such as deductibles, copayments, or 
coinsurance), the absence of a surcharge, or the value 
of a benefit that would otherwise not be provided under 
the plan. The Secretaries of Labor, Health and Human 
Services, and the Treasury may increase the reward 
available under this subparagraph to up to 50 percent 
of the cost of coverage if the Secretaries determine 
that such an increase is appropriate.
``(B) The wellness program shall be reasonably 
designed to promote health or prevent disease. A 
program complies with the preceding sentence if the 
program has a reasonable chance of improving the health 
of, or preventing disease in, participating individuals 
and it is not overly burdensome, is not a subterfuge 
for discriminating based on a health status factor, and 
is not highly suspect in the method chosen to promote 
health or prevent disease.
``(C) The plan shall give individuals eligible for 
the program the opportunity to qualify for the reward 
under the program at least once each year.
``(D) The full reward under the wellness program 
shall be made available to all similarly situated 
individuals. For such purpose, among other things:
``(i) The reward is not available to all 
similarly situated individuals for a period 
unless the wellness program allows--
``(I) for a reasonable alternative 
standard (or waiver of the otherwise 
applicable standard) for obtaining the 
reward for any individual for whom, for 
that period, it is unreasonably 
difficult due to a medical condition to 
satisfy the otherwise applicable 
standard; and
``(II) for a reasonable alternative 
standard (or waiver of the otherwise 
applicable standard) for obtaining the 
reward for any individual for whom, for 
that period, it is medically 
inadvisable to attempt to satisfy the 
otherwise applicable standard.
``(ii) If reasonable under the 
circumstances, the plan or issuer may seek 
verification, such as a statement from an 
individual's physician, that a health status 
factor makes it unreasonably difficult or 
medically inadvisable for the individual to 
satisfy or attempt to satisfy the otherwise 
applicable standard.
``(E) The plan or issuer involved shall disclose in 
all plan materials describing the terms of the wellness 
program the availability of a reasonable alternative 
standard (or the possibility of waiver of the otherwise 
applicable standard) required under subparagraph (D). 
If plan materials disclose that such a program is 
available, without describing its terms, the disclosure 
under this subparagraph shall not be required.

``SEC. 199. PROHIBITION OF PREEXISTING CONDITION EXCLUSIONS OR OTHER 
DISCRIMINATION BASED ON HEALTH STATUS.

``(a) In General.--A group health plan and a health insurance 
issuer offering group or individual health insurance coverage may not 
impose any preexisting condition exclusion with respect to such plan or 
coverage.
``(b) Definitions.--For purposes of this section--
``(1) Preexisting condition exclusion.--
``(A) In general.--The term `preexisting condition 
exclusion' means, with respect to coverage, a 
limitation or exclusion of benefits relating to a 
condition based on the fact that the condition was 
present before the date of enrollment for such 
coverage, whether or not any medical advice, diagnosis, 
care, or treatment was recommended or received before 
such date.
``(B) Treatment of genetic information.--Genetic 
information shall not be treated as a condition 
described in subsection (a)(1) in the absence of a 
diagnosis of the condition related to such information.
``(2) Enrollment date.--The term `enrollment date' means, 
with respect to an individual covered under a group health plan 
or health insurance coverage, the date of enrollment of the 
individual in the plan or coverage or, if earlier, the first 
day of the waiting period for such enrollment.
``(3) Late enrollee.--The term `late enrollee' means, with 
respect to coverage under a group health plan, a participant or 
beneficiary who enrolls under the plan other than during--
``(A) the first period in which the individual is 
eligible to enroll under the plan; or
``(B) a special enrollment period under subsection 
(f).
``(4) Waiting period.--The term `waiting period' means, 
with respect to a group health plan and an individual who is a 
potential participant or beneficiary in the plan, the period 
that must pass with respect to the individual before the 
individual is eligible to be covered for benefits under the 
terms of the plan.
``(c) Rules Relating to Crediting Previous Coverage.--
``(1) Creditable coverage defined.--For purposes of this 
title, the term `creditable coverage' means, with respect to an 
individual, coverage of the individual under any of the 
following:
``(A) A group health plan.
``(B) Health insurance coverage.
``(C) Part A or part B of title XVIII of the Social 
Security Act.
``(D) Title XIX of the Social Security Act, other 
than coverage consisting solely of benefits under 
section 1928.
``(E) Chapter 55 of title 10, United States Code.
``(F) A medical care program of the Indian Health 
Service or of a tribal organization.
``(G) A State health benefits risk pool.
``(H) A health plan offered under chapter 89 of 
title 5, United States Code.
``(I) A public health plan (as defined in 
regulations).
``(J) A health benefit plan under section 5(e) of 
the Peace Corps Act (22 U.S.C. 2504(e)).
Such term does not include coverage consisting solely of 
coverage of excepted benefits (as defined in section 2791(c)).
``(2) Not counting periods before significant breaks in 
coverage.--
``(A) In general.--A period of creditable coverage 
shall not be counted, with respect to enrollment of an 
individual under a group or individual health plan, if, 
after such period and before the enrollment date, there 
was a 63-day period during all of which the individual 
was not covered under any creditable coverage.
``(B) Waiting period not treated as a break in 
coverage.--For purposes of subparagraph (A) and 
subsection (d)(4), any period that an individual is in 
a waiting period for any coverage under a group or 
individual health plan (or for group health insurance 
coverage) or is in an affiliation period (as defined in 
subsection (g)(2)) shall not be taken into account in 
determining the continuous period under subparagraph 
(A).
``(C) TAA-eligible individuals.--In the case of 
plan years beginning before January 1, 2014--
``(i) TAA pre-certification period rule.--
In the case of a TAA-eligible individual, the 
period beginning on the date the individual has 
a TAA-related loss of coverage and ending on 
the date that is 7 days after the date of the 
issuance by the Secretary (or by any person or 
entity designated by the Secretary) of a 
qualified health insurance costs credit 
eligibility certificate for such individual for 
purposes of section 7527 of the Internal 
Revenue Code of 1986 shall not be taken into 
account in determining the continuous period 
under subparagraph (A).
``(ii) Definitions.--The terms `TAA-
eligible individual' and `TAA-related loss of 
coverage' have the meanings given such terms in 
section 2205(b)(4).
``(3) Method of crediting coverage.--
``(A) Standard method.--Except as otherwise 
provided under subparagraph (B), for purposes of 
applying subsection (a)(3), a group health plan, and a 
health insurance issuer offering group or individual 
health insurance coverage, shall count a period of 
creditable coverage without regard to the specific 
benefits covered during the period.
``(B) Election of alternative method.--A group 
health plan, or a health insurance issuer offering 
group or individual health insurance, may elect to 
apply subsection (a)(3) based on coverage of benefits 
within each of several classes or categories of 
benefits specified in regulations rather than as 
provided under subparagraph (A). Such election shall be 
made on a uniform basis for all participants and 
beneficiaries. Under such election a group or 
individual health plan or issuer shall count a period 
of creditable coverage with respect to any class or 
category of benefits if any level of benefits is 
covered within such class or category.
``(C) Plan notice.--In the case of an election with 
respect to a group health plan under subparagraph (B) 
(whether or not health insurance coverage is provided 
in connection with such plan), the plan shall--
``(i) prominently state in any disclosure 
statements concerning the plan, and state to 
each enrollee at the time of enrollment under 
the plan, that the plan has made such election; 
and
``(ii) include in such statements a 
description of the effect of this election.
``(D) Issuer notice.--In the case of an election 
under subparagraph (B) with respect to health insurance 
coverage offered by an issuer in the individual or 
group market, the issuer--
``(i) shall prominently state in any 
disclosure statements concerning the coverage, 
and to each employer at the time of the offer 
or sale of the coverage, that the issuer has 
made such election; and
``(ii) shall include in such statements a 
description of the effect of such election.
``(4) Establishment of period.--Periods of creditable 
coverage with respect to an individual shall be established 
through presentation of certifications described in subsection 
(e) or in such other manner as may be specified in regulations.
``(d) Exceptions.--
``(1) Exclusion not applicable to certain newborns.--
Subject to paragraph (4), a group health plan, and a health 
insurance issuer offering group or individual health insurance 
coverage, may not impose any preexisting condition exclusion in 
the case of an individual who, as of the last day of the 30-day 
period beginning with the date of birth, is covered under 
creditable coverage.
``(2) Exclusion not applicable to certain adopted 
children.--Subject to paragraph (4), a group health plan, and a 
health insurance issuer offering group or individual health 
insurance coverage, may not impose any preexisting condition 
exclusion in the case of a child who is adopted or placed for 
adoption before attaining 18 years of age and who, as of the 
last day of the 30-day period beginning on the date of the 
adoption or placement for adoption, is covered under creditable 
coverage. The previous sentence shall not apply to coverage 
before the date of such adoption or placement for adoption.
``(3) Exclusion not applicable to pregnancy.--A group 
health plan, and health insurance issuer offering group or 
individual health insurance coverage, may not impose any 
preexisting condition exclusion relating to pregnancy as a 
preexisting condition.
``(4) Loss if break in coverage.--Paragraphs (1) and (2) 
shall no longer apply to an individual after the end of the 
first 63-day period during all of which the individual was not 
covered under any creditable coverage.
``(e) Certifications and Disclosure of Coverage.--
``(1) Requirement for certification of period of creditable 
coverage.--
``(A) In general.--A group health plan, and a 
health insurance issuer offering group or individual 
health insurance coverage, shall provide the 
certification described in subparagraph (B)--
``(i) at the time an individual ceases to 
be covered under the plan or otherwise becomes 
covered under a COBRA continuation provision;
``(ii) in the case of an individual 
becoming covered under such a provision, at the 
time the individual ceases to be covered under 
such provision; and
``(iii) on the request on behalf of an 
individual made not later than 24 months after 
the date of cessation of the coverage described 
in clause (i) or (ii), whichever is later.
The certification under clause (i) may be provided, to 
the extent practicable, at a time consistent with 
notices required under any applicable COBRA 
continuation provision.
``(B) Certification.--The certification described 
in this subparagraph is a written certification of--
``(i) the period of creditable coverage of 
the individual under such plan and the coverage 
(if any) under such COBRA continuation 
provision; and
``(ii) the waiting period (if any) (and 
affiliation period, if applicable) imposed with 
respect to the individual for any coverage 
under such plan.
``(C) Issuer compliance.--To the extent that 
medical care under a group health plan consists of 
group health insurance coverage, the plan is deemed to 
have satisfied the certification requirement under this 
paragraph if the health insurance issuer offering the 
coverage provides for such certification in accordance 
with this paragraph.
``(2) Disclosure of information on previous benefits.--In 
the case of an election described in subsection (c)(3)(B) by a 
group health plan or health insurance issuer, if the plan or 
issuer enrolls an individual for coverage under the plan and 
the individual provides a certification of coverage of the 
individual under paragraph (1)--
``(A) upon request of such plan or issuer, the 
entity which issued the certification provided by the 
individual shall promptly disclose to such requesting 
plan or issuer information on coverage of classes and 
categories of health benefits available under such 
entity's plan or coverage; and
``(B) such entity may charge the requesting plan or 
issuer for the reasonable cost of disclosing such 
information.
``(3) Regulations.--The Secretary shall establish rules to 
prevent an entity's failure to provide information under 
paragraph (1) or (2) with respect to previous coverage of an 
individual from adversely affecting any subsequent coverage of 
the individual under another group health plan or health 
insurance coverage.
``(f) Special Enrollment Periods.--
``(1) Individuals losing other coverage.--A group health 
plan, and a health insurance issuer offering group health 
insurance coverage in connection with a group health plan, 
shall permit an employee who is eligible, but not enrolled, for 
coverage under the terms of the plan (or a dependent of such an 
employee if the dependent is eligible, but not enrolled, for 
coverage under such terms) to enroll for coverage under the 
terms of the plan if each of the following conditions is met:
``(A) The employee or dependent was covered under a 
group health plan or had health insurance coverage at 
the time coverage was previously offered to the 
employee or dependent.
``(B) The employee stated in writing at such time 
that coverage under a group health plan or health 
insurance coverage was the reason for declining 
enrollment, but only if the plan sponsor or issuer (if 
applicable) required such a statement at such time and 
provided the employee with notice of such requirement 
(and the consequences of such requirement) at such 
time.
``(C) The employee's or dependent's coverage 
described in subparagraph (A)--
``(i) was under a COBRA continuation 
provision and the coverage under such provision 
was exhausted; or
``(ii) was not under such a provision and 
either the coverage was terminated as a result 
of loss of eligibility for the coverage 
(including as a result of legal separation, 
divorce, death, termination of employment, or 
reduction in the number of hours of employment) 
or employer contributions toward such coverage 
were terminated.
``(D) Under the terms of the plan, the employee 
requests such enrollment not later than 30 days after 
the date of exhaustion of coverage described in 
subparagraph (C)(i) or termination of coverage or 
employer contribution described in subparagraph 
(C)(ii).
``(2) For dependent beneficiaries.--
``(A) In general.--If--
``(i) a group health plan makes coverage 
available with respect to a dependent of an 
individual;
``(ii) the individual is a participant 
under the plan (or has met any waiting period 
applicable to becoming a participant under the 
plan and is eligible to be enrolled under the 
plan but for a failure to enroll during a 
previous enrollment period); and
``(iii) a person becomes such a dependent 
of the individual through marriage, birth, or 
adoption or placement for adoption,
the group health plan shall provide for a dependent 
special enrollment period described in subparagraph (B) 
during which the person (or, if not otherwise enrolled, 
the individual) may be enrolled under the plan as a 
dependent of the individual, and in the case of the 
birth or adoption of a child, the spouse of the 
individual may be enrolled as a dependent of the 
individual if such spouse is otherwise eligible for 
coverage.
``(B) Dependent special enrollment period.--A 
dependent special enrollment period under this 
subparagraph shall be a period of not less than 30 days 
and shall begin on the later of--
``(i) the date dependent coverage is made 
available; or
``(ii) the date of the marriage, birth, or 
adoption or placement for adoption (as the case 
may be) described in subparagraph (A)(iii).
``(C) No waiting period.--If an individual seeks to 
enroll a dependent during the first 30 days of such a 
dependent special enrollment period, the coverage of 
the dependent shall become effective--
``(i) in the case of marriage, not later 
than the first day of the first month beginning 
after the date the completed request for 
enrollment is received;
``(ii) in the case of a dependent's birth, 
as of the date of such birth; or
``(iii) in the case of a dependent's 
adoption or placement for adoption, the date of 
such adoption or placement for adoption.
``(3) Special rules for application in case of medicaid and 
chip.--
``(A) In general.--A group health plan, and a 
health insurance issuer offering group health insurance 
coverage in connection with a group health plan, shall 
permit an employee who is eligible, but not enrolled, 
for coverage under the terms of the plan (or a 
dependent of such an employee if the dependent is 
eligible, but not enrolled, for coverage under such 
terms) to enroll for coverage under the terms of the 
plan if either of the following conditions is met:
``(i) Termination of medicaid or chip 
coverage.--The employee or dependent is covered 
under a Medicaid plan under title XIX of the 
Social Security Act or under a State child 
health plan under title XXI of such Act and 
coverage of the employee or dependent under 
such a plan is terminated as a result of loss 
of eligibility for such coverage and the 
employee requests coverage under the group 
health plan (or health insurance coverage) not 
later than 60 days after the date of 
termination of such coverage.
``(ii) Eligibility for employment 
assistance under medicaid or chip.--The 
employee or dependent becomes eligible for 
assistance, with respect to coverage under the 
group health plan or health insurance coverage, 
under such Medicaid plan or State child health 
plan (including under any waiver or 
demonstration project conducted under or in 
relation to such a plan), if the employee 
requests coverage under the group health plan 
or health insurance coverage not later than 60 
days after the date the employee or dependent 
is determined to be eligible for such 
assistance.
``(B) Coordination with medicaid and chip.--
``(i) Outreach to employees regarding 
availability of medicaid and chip coverage.--
``(I) In general.--Each employer 
that maintains a group health plan in a 
State that provides medical assistance 
under a State Medicaid plan under title 
XIX of the Social Security Act, or 
child health assistance under a State 
child health plan under title XXI of 
such Act, in the form of premium 
assistance for the purchase of coverage 
under a group health plan, shall 
provide to each employee a written 
notice informing the employee of 
potential opportunities then currently 
available in the State in which the 
employee resides for premium assistance 
under such plans for health coverage of 
the employee or the employee's 
dependents. For purposes of compliance 
with this subclause, the employer may 
use any State-specific model notice 
developed in accordance with section 
701(f)(3)(B)(i)(II) of the Employee 
Retirement Income Security Act of 1974 
(29 U.S.C. 1181(f)(3)(B)(i)(II)).
``(II) Option to provide concurrent 
with provision of plan materials to 
employee.--An employer may provide the 
model notice applicable to the State in 
which an employee resides concurrent 
with the furnishing of materials 
notifying the employee of health plan 
eligibility, concurrent with materials 
provided to the employee in connection 
with an open season or election process 
conducted under the plan, or concurrent 
with the furnishing of the summary plan 
description as provided in section 
104(b) of the Employee Retirement 
Income Security Act of 1974.
``(ii) Disclosure about group health plan 
benefits to states for medicaid and chip 
eligible individuals.--In the case of an 
enrollee in a group health plan who is covered 
under a Medicaid plan of a State under title 
XIX of the Social Security Act or under a State 
child health plan under title XXI of such Act, 
the plan administrator of the group health plan 
shall disclose to the State, upon request, 
information about the benefits available under 
the group health plan in sufficient 
specificity, as determined under regulations of 
the Secretary of Health and Human Services in 
consultation with the Secretary that require 
use of the model coverage coordination 
disclosure form developed under section 
311(b)(1)(C) of the Children's Health Insurance 
Reauthorization Act of 2009, so as to permit 
the State to make a determination (under 
paragraph (2)(B), (3), or (10) of section 
2105(c) of the Social Security Act or 
otherwise) concerning the cost-effectiveness of 
the State providing medical or child health 
assistance through premium assistance for the 
purchase of coverage under such group health 
plan and in order for the State to provide 
supplemental benefits required under paragraph 
(10)(E) of such section or other authority.
``(g) Use of Affiliation Period by HMOs as Alternative to 
Preexisting Condition Exclusion.--
``(1) In general.--A health maintenance organization which 
offers health insurance coverage in connection with a group 
health plan and which does not impose any preexisting condition 
exclusion allowed under subsection (a) with respect to any 
particular coverage option may impose an affiliation period for 
such coverage option, but only if--
``(A) such period is applied uniformly without 
regard to any health status-related factors; and
``(B) such period does not exceed 2 months (or 3 
months in the case of a late enrollee).
``(2) Affiliation period.--
``(A) Defined.--For purposes of this title, the 
term `affiliation period' means a period which, under 
the terms of the health insurance coverage offered by 
the health maintenance organization, must expire before 
the health insurance coverage becomes effective. The 
organization is not required to provide health care 
services or benefits during such period and no premium 
shall be charged to the participant or beneficiary for 
any coverage during the period.
``(B) Beginning.--Such period shall begin on the 
enrollment date.
``(C) Runs concurrently with waiting periods.--An 
affiliation period under a plan shall run concurrently 
with any waiting period under the plan.
``(3) Alternative methods.--A health maintenance 
organization described in paragraph (1) may use alternative 
methods, from those described in such paragraph, to address 
adverse selection as approved by the State insurance 
commissioner or official or officials designated by the State 
to enforce the requirements of this part for the State involved 
with respect to such issuer.

``SEC. 199A. EXTENSION OF DEPENDENT COVERAGE.

``(a) In General.--A group health plan and a health insurance 
issuer offering group or individual health insurance coverage that 
provides dependent coverage of children shall continue to make such 
coverage available for an adult child (who is not married) until the 
child turns 26 years of age. Nothing in this section shall require a 
health plan or a health insurance issuer described in the preceding 
sentence to make coverage available for a child of a child receiving 
dependent coverage.
``(b) Regulations.--The Secretary shall promulgate regulations to 
define the dependents to which coverage shall be made available under 
subsection (a).
``(c) Rule of Construction.--Nothing in this section shall be 
construed to modify the definition of `dependent' as used in the 
Internal Revenue Code of 1986 with respect to the tax treatment of the 
cost of coverage.

``SEC. 199B. ANNUAL LIMITATION ON COST-SHARING.

``(a) In General.--
``(1) 2014.--The cost-sharing incurred under a group health 
plan or group or individual health insurance coverage with 
respect to self-only coverage or coverage other than self-only 
coverage for a plan year beginning in 2014 shall not exceed the 
dollar amounts in effect under section 223(c)(2)(A)(ii) of the 
Internal Revenue Code of 1986 for self-only and family 
coverage, respectively, for taxable years beginning in 2014.
``(2) 2015 and later.--In the case of any plan year 
beginning in a calendar year after 2014, the limitation under 
this paragraph shall--
``(A) in the case of self-only coverage, be equal 
to the dollar amount under paragraph (1) for self-only 
coverage for plan years beginning in 2014, increased by 
an amount equal to the product of that amount and the 
premium adjustment percentage under subsection (c) for 
the calendar year; and
``(B) in the case of other coverage, twice the 
amount in effect under subparagraph (A).
If the amount of any increase under subparagraph (A) is not a 
multiple of $50, such increase shall be rounded to the next 
lowest multiple of $50.
``(b) Cost-Sharing.--In this section:
``(1) In general.--The term `cost-sharing' includes--
``(A) deductibles, coinsurance, copayments, or 
similar charges; and
``(B) any other expenditure required of an insured 
individual which is a qualified medical expense (within 
the meaning of section 223(d)(2) of the Internal 
Revenue Code of 1986) with respect to essential health 
benefits covered under the plan.
``(2) Exceptions.--Such term does not include premiums, 
balance billing amounts for non-network providers, or spending 
for non-covered services.
``(c) Premium Adjustment Percentage.--For purposes of subsection 
(a)(2)(A), the premium adjustment percentage for any calendar year is 
the percentage (if any) by which the average per capita premium for 
health insurance coverage in the United States for the preceding 
calendar year (as estimated by the Secretary no later than October 1 of 
such preceding calendar year) exceeds such average per capita premium 
for 2013 (as determined by the Secretary).

``SEC. 199C. ENFORCEMENT OF CERTAIN HEALTH INSURANCE REQUIREMENTS.

``(a) State Enforcement.--
``(1) State authority.--Each State may require that health 
insurance issuers that issue, sell, renew, or offer health 
insurance coverage in the State in the individual or group 
market meet the requirements of this part with respect to such 
issuers.
``(2) Failure to implement provisions.--In the case of a 
determination by the Secretary that a State has failed to 
substantially enforce a provision (or provisions) of sections 
196 through 199A with respect to health insurance issuers in 
the State, the Secretary shall enforce such provision (or 
provisions) under subsection (b) insofar as they relate to the 
issuance, sale, renewal, and offering of health insurance 
coverage in connection with group health plans or individual 
health insurance coverage in such State.
``(b) Secretarial Enforcement Authority.--
``(1) Limitation.--The provisions of this subsection shall 
apply to enforcement of a provision (or provisions) described 
in subsection (a)(2) only--
``(A) as provided under such subsection; and
``(B) with respect to individual health insurance 
coverage or group health plans that are non-Federal 
governmental plans.
``(2) Imposition of penalties.--In the cases described in 
paragraph (1)--
``(A) In general.--Subject to the succeeding 
provisions of this subsection, any non-Federal 
governmental plan that is a group health plan and any 
health insurance issuer that fails to meet a provision 
of this part applicable to such plan or issuer is 
subject to a civil money penalty under this subsection.
``(B) Liability for penalty.--In the case of a 
failure by--
``(i) a health insurance issuer, the issuer 
is liable for such penalty; or
``(ii) a group health plan that is a non-
Federal governmental plan which is--
``(I) sponsored by 2 or more 
employers, the plan is liable for such 
penalty; or
``(II) not so sponsored, the 
employer is liable for such penalty.
``(C) Amount of penalty.--
``(i) In general.--The maximum amount of 
penalty imposed under this paragraph is $100 
for each day for each individual with respect 
to which such a failure occurs.
``(ii) Considerations in imposition.--In 
determining the amount of any penalty to be 
assessed under this paragraph, the Secretary 
shall take into account the previous record of 
compliance of the entity being assessed with 
the applicable provisions of this part and the 
gravity of the violation.
``(iii) Limitations.--
``(I) Penalty not to apply where 
failure not discovered exercising 
reasonable diligence.--No civil money 
penalty shall be imposed under this 
paragraph on any failure during any 
period for which it is established to 
the satisfaction of the Secretary that 
none of the entities against whom the 
penalty would be imposed knew, or 
exercising reasonable diligence would 
have known, that such failure existed.
``(II) Penalty not to apply to 
failures corrected within 30 days.--No 
civil money penalty shall be imposed 
under this paragraph on any failure if 
such failure was due to reasonable 
cause and not to willful neglect, and 
such failure is corrected during the 
30-day period beginning on the first 
day any of the entities against whom 
the penalty would be imposed knew, or 
exercising reasonable diligence would 
have known, that such failure existed.
``(D) Administrative review.--
``(i) Opportunity for hearing.--The entity 
assessed shall be afforded an opportunity for 
hearing by the Secretary upon request made 
within 30 days after the date of the issuance 
of a notice of assessment. In such hearing the 
decision shall be made on the record pursuant 
to section 554 of title 5, United States Code. 
If no hearing is requested, the assessment 
shall constitute a final and unappealable 
order.
``(ii) Hearing procedure.--If a hearing is 
requested, the initial agency decision shall be 
made by an administrative law judge, and such 
decision shall become the final order unless 
the Secretary modifies or vacates the decision. 
Notice of intent to modify or vacate the 
decision of the administrative law judge shall 
be issued to the parties within 30 days after 
the date of the decision of the judge. A final 
order which takes effect under this paragraph 
shall be subject to review only as provided 
under subparagraph (E).
``(E) Judicial review.--
``(i) Filing of action for review.--Any 
entity against whom an order imposing a civil 
money penalty has been entered after an agency 
hearing under this paragraph may obtain review 
by the United States district court for any 
district in which such entity is located or the 
United States District Court for the District 
of Columbia by filing a notice of appeal in 
such court within 30 days from the date of such 
order, and simultaneously sending a copy of 
such notice by registered mail to the 
Secretary.
``(ii) Certification of administrative 
record.--The Secretary shall promptly certify 
and file in such court the record upon which 
the penalty was imposed.
``(iii) Standard for review.--The findings 
of the Secretary shall be set aside only if 
found to be unsupported by substantial evidence 
as provided by section 706(2)(E) of title 5, 
United States Code.
``(iv) Appeal.--Any final decision, order, 
or judgment of the district court concerning 
such review shall be subject to appeal as 
provided in chapter 83 of title 28 of such 
Code.
``(F) Failure to pay assessment; maintenance of 
action.--
``(i) Failure to pay assessment.--If any 
entity fails to pay an assessment after it has 
become a final and unappealable order, or after 
the court has entered final judgment in favor 
of the Secretary, the Secretary shall refer the 
matter to the Attorney General who shall 
recover the amount assessed by action in the 
appropriate United States district court.
``(ii) Nonreviewability.--In such action 
the validity and appropriateness of the final 
order imposing the penalty shall not be subject 
to review.
``(G) Payment of penalties.--Except as otherwise 
provided, penalties collected under this paragraph 
shall be paid to the Secretary (or other officer) 
imposing the penalty and shall be available without 
appropriation and until expended for the purpose of 
enforcing the provisions with respect to which the 
penalty was imposed.
``(3) Enforcement authority relating to genetic 
discrimination.--
``(A) General rule.--In the cases described in 
paragraph (1), notwithstanding the provisions of 
paragraph (2)(C), the succeeding subparagraphs of this 
paragraph shall apply with respect to an action under 
this subsection by the Secretary with respect to any 
failure of a health insurance issuer in connection with 
a group health plan, to meet the requirements of 
subsection (a)(1)(F), (b)(3), (c), or (d) of section 
196 or section 197 or 196(b)(1) with respect to genetic 
information in connection with the plan.
``(B) Amount.--
``(i) In general.--The amount of the 
penalty imposed under this paragraph shall be 
$100 for each day in the noncompliance period 
with respect to each participant or beneficiary 
to whom such failure relates.
``(ii) Noncompliance period.--For purposes 
of this paragraph, the term `noncompliance 
period' means, with respect to any failure, the 
period--
``(I) beginning on the date such 
failure first occurs; and
``(II) ending on the date the 
failure is corrected.
``(C) Minimum penalties where failure discovered.--
Notwithstanding clauses (i) and (ii) of subparagraph 
(D):
``(i) In general.--In the case of 1 or more 
failures with respect to an individual--
``(I) which are not corrected 
before the date on which the plan 
receives a notice from the Secretary of 
such violation; and
``(II) which occurred or continued 
during the period involved;
the amount of penalty imposed by subparagraph 
(A) by reason of such failures with respect to 
such individual shall not be less than $2,500.
``(ii) Higher minimum penalty where 
violations are more than de minimis.--To the 
extent violations for which any person is 
liable under this paragraph for any year are 
more than de minimis, clause (i) shall be 
applied by substituting `$15,000' for `$2,500' 
with respect to such person.
``(D) Limitations.--
``(i) Penalty not to apply where failure 
not discovered exercising reasonable 
diligence.--No penalty shall be imposed by 
subparagraph (A) on any failure during any 
period for which it is established to the 
satisfaction of the Secretary that the person 
otherwise liable for such penalty did not know, 
and exercising reasonable diligence would not 
have known, that such failure existed.
``(ii) Penalty not to apply to failures 
corrected within certain periods.--No penalty 
shall be imposed by subparagraph (A) on any 
failure if--
``(I) such failure was due to 
reasonable cause and not to willful 
neglect; and
``(II) such failure is corrected 
during the 30-day period beginning on 
the first date the person otherwise 
liable for such penalty knew, or 
exercising reasonable diligence would 
have known, that such failure existed.
``(iii) Overall limitation for 
unintentional failures.--In the case of 
failures which are due to reasonable cause and 
not to willful neglect, the penalty imposed by 
subparagraph (A) for failures shall not exceed 
the amount equal to the lesser of--
``(I) 10 percent of the aggregate 
amount paid or incurred by the employer 
(or predecessor employer) during the 
preceding taxable year for group health 
plans; or
``(II) $500,000.
``(E) Waiver by secretary.--In the case of a 
failure which is due to reasonable cause and not to 
willful neglect, the Secretary may waive part or all of 
the penalty imposed by subparagraph (A) to the extent 
that the payment of such penalty would be excessive 
relative to the failure involved.
``(c) Definitions.--For purposes of this section:
``(1) Governmental plan.--The term `governmental plan' has 
the meaning given such term under section 3(32) of the Employee 
Retirement Income Security Act of 1974 and any Federal 
governmental plan.
``(2) Federal governmental plan.--The term ``Federal 
governmental plan'' means a governmental plan established or 
maintained for its employees by the Government of the United 
States or by any agency or instrumentality of such Government.
``(3) Non-federal governmental plan.--The term `non-Federal 
governmental plan' means a governmental plan that is not a 
Federal governmental plan.''.
(b) Conforming Amendment.--The table of contents under section 1(b) 
of the Health Insurance Portability and Accountability Act of 1996 
(Public Law 104-191) is amended by inserting after the item relating to 
section 195 the following:

``Sec. 196. Guaranteed availability of coverage.
``Sec. 197. Fair health insurance premiums.
``Sec. 198. Prohibiting discrimination against individual participants 
and beneficiaries based on health status.
``Sec. 199. Prohibition of preexisting condition exclusions or other 
discrimination based on health status.
``Sec. 199A. Extension of dependent coverage.
``Sec. 199B. Annual limitation on cost-sharing.
``Sec. 199C. Enforcement of certain health insurance requirements.''.
(c) ERISA and IRC Enforcement.--
(1) ERISA.--Subpart B of part 7 of title I of the Employee 
Retirement Income Security Act of 1974 (29 U.S.C. 1185 et seq.) 
is amended by adding at the end the following new section:

``SEC. 716. OTHER MARKET REFORMS.

``Sections 196 and 197 of the Health Insurance Portability and 
Accountability Act of 1996 shall apply to health insurance issuers 
providing health insurance coverage in connection with group health 
plans, and sections 198 through 199B of such Act shall apply to group 
health plans and health insurance issuers providing health insurance 
coverage in connection with group health plans, as if included in this 
subpart, and to the extent that any provision of this part conflicts 
with a provision of such section 196 or 197 with respect to health 
insurance issuers providing health insurance coverage in connection 
with group health plans or of such section 198, 199, 199A, or 199B with 
respect to group health plans or health insurance issuers providing 
health insurance coverage in connection with group health plans, the 
provisions of such sections 196 through 199B shall apply.''.
(2) IRC.--Subchapter B of chapter 100 of subtitle K of 
title 26 of the Internal Revenue Code of 1986 is amended by 
adding at the end the following new section:

``SEC. 9816. OTHER MARKET REFORMS.

``Sections 196 and 197 of the Health Insurance Portability and 
Accountability Act of 1996 shall apply to health insurance issuers 
providing health insurance coverage in connection with group health 
plans, and sections 198 through 199B of such Act shall apply to group 
health plans and health insurance issuers providing health insurance 
coverage in connection with group health plans, as if included in this 
subchapter, and to the extent that any provision of this chapter 
conflicts with a provision of such section 196 or 197 with respect to 
health insurance issuers providing health insurance coverage in 
connection with group health plans or of such section 198, 199, 199A, 
or 199B with respect to group health plans or health insurance issuers 
providing health insurance coverage in connection with group health 
plans, the provisions of such sections 196 through 199B shall apply.''.
(d) Effective Date.--The amendments made by this section shall take 
effect on the date on which the Supreme Court of the United States 
issues a decision striking down the Patient Protection and Affordable 
Care Act (Public Law 111-148) in its entirety.

Subtitle B--Expanding Coverage Options

SEC. 211. DEFINITION OF ``EMPLOYER'' UNDER ERISA WITH RESPECT TO GROUP 
HEALTH PLANS.

(a) Definition of Employer.--Section 3(5) of the Employee 
Retirement Income Security Act of 1974 (29 U.S.C. 1002(5)) is amended 
by striking the period and inserting ``(which, with respect to a group 
health plan, shall be determined in accordance with criteria that 
includes the criteria under section 735).''.
(b) Group Health Plans.--Part 7 of subtitle B of title I of the 
Employee Retirement Income Security Act of 1974 (29 U.S.C. 1181 et 
seq.) is amended by adding at the end the following:

``SEC. 735. DEFINITION OF `EMPLOYER' WITH RESPECT TO GROUP HEALTH 
PLANS.

``(a) In General.--A group or association of employers that meets 
the criteria under subsection (b) shall be considered an employer under 
section 3(5) for purposes of sponsoring a group health plan.
``(b) Requirements.--The requirements under this subsection are 
each of the following:
``(1) The primary purpose of the group or association may 
be to offer and provide health coverage to its employer members 
and their employees, if such group or association has at least 
1 substantial business purpose, as described in subsection (c), 
unrelated to offering and providing health coverage or other 
employee benefits to its employer members and their employees.
``(2) Each employer member of the group or association 
participating in the group health plan is a person acting 
directly as an employer of at least 1 employee who is a 
participant covered under the plan.
``(3) The group or association has--
``(A) a formal organizational structure with a 
governing body; and
``(B) by-laws or other similar indications of 
formality.
``(4) The functions and activities of the group or 
association shall be controlled by the employer members of the 
group or association, and the employer members of the group or 
association that participate in the group health plan shall 
control the plan. Control under this paragraph shall be in form 
and substance.
``(5) The employer members shall have a commonality of 
interest as described in subsection (d).
``(6)(A) The group or association shall not make health 
coverage through the group health plan available other than 
to--
``(i) an employee of a current employer member of 
the group or association;
``(ii) a former employee of a current employer 
member of the group or association who became eligible 
for coverage under the group health plan when the 
former employee was an employee of the employer; and
``(iii) a beneficiary of an individual described in 
clause (i) or (ii), such as a spouse or dependent 
child.
``(B) Notwithstanding subparagraph (A), the group or 
association shall not make health coverage through the group 
health plan available to any individual (or beneficiaries of 
the individual) for any plan year following the plan year in 
which the plan determines pursuant to reasonable monitoring 
procedures described in subsection (f)(2)(C) that the 
individual ceases to meet the conditions described in 
subsection (f)(2) for being a working owner (unless the 
individual again meets those conditions), except as may be 
required by section 601.
``(7) The group or association, and any health coverage 
offered by the group or association, shall comply with the 
nondiscrimination provisions under subsection (e).
``(8) The group or association shall not be a health 
insurance issuer, or owned or controlled by such a health 
insurance issuer or by a subsidiary or affiliate of such a 
health insurance issuer, other than to the extent such entities 
participate in the group or association in their capacity as 
employer members of the group or association.
``(c) Substantial Business Purpose.--
``(1) In general.--For purposes of subsection (b)(1), a 
substantial business purpose shall exist if the group or 
association would be a viable entity in the absence of 
sponsoring an employee benefit plan.
``(2) Business purpose.--For purposes of subsection (b)(1) 
and paragraph (1), a business purpose shall--
``(A) include promoting common business interests 
of the members of the group or association or the 
common economic interests in a given trade or employer 
community; and
``(B) not be required to be a for-profit activity.
``(d) Commonality of Interest.--
``(1) In general.--Subject to paragraph (3), employer 
members of the group or association shall be treated as having 
a commonality of interest for purposes of subsection (b)(5) 
if--
``(A) the employers are in the same trade, 
industry, line of business, or profession; or
``(B) each employer has a principal place of 
business in the same region that does not exceed the 
boundaries of a single State or a metropolitan area 
(even if the metropolitan area includes more than 1 
State).
``(2) Same trade, industry, or line of business.--In the 
case of a group or association that is sponsoring a group 
health plan under this section and that is itself an employer 
member of the group or association, the group or association 
shall be deemed for purposes of paragraph (1)(A) to be in the 
same trade, industry, line of business, or profession, as 
applicable, as the other employer members of the group or 
association.
``(3) Nondiscrimination.--The standards under paragraph (1) 
shall not be implemented in a manner that is subterfuge for 
discrimination as is prohibited under subsection (e).
``(e) Nondiscrimination.--
``(1) In general.--A group or association of employers 
sponsoring a group health plan under this section, and any 
health coverage sponsored by such group or association, shall 
comply with each of the following:
``(A) The group or association shall not condition 
employer membership in the group or association on any 
health factor of any individual who is or may become 
eligible to participate in the group health plan 
sponsored by the group or association.
``(B) The group health plan sponsored by the group 
or association shall comply with the rules under 
section 2590.702(b) of title 29, Code of Federal 
Regulations (as in effect on June 21, 2018), with 
respect to nondiscrimination in rules for eligibility 
for benefits, subject to subparagraph (D).
``(C) The group health plan sponsored by the group 
or association shall comply with the rules under 
section 2590.702(c) of title 29, Code of Federal 
Regulations (as in effect on June 21, 2018), with 
respect to nondiscrimination in premiums or 
contributions required by any participant or 
beneficiary for coverage under the plan, subject to 
subparagraph (D).
``(D) In applying subparagraphs (B) and (C), the 
group or association may not treat the employees of 
different employer members of the group or association 
as distinct groups of similarly situated individuals 
based on a health factor of 1 or more individuals.
``(2) Definition of health factor.--For purposes of this 
subsection, the term `health factor' has the meaning given such 
term in section 2590.702(a) of title 29, Code of Federal 
Regulations (as in effect on June 21, 2018).
``(f) Dual Treatment of Working Owners as Employers and 
Employees.--
``(1) In general.--A person determined in accordance with 
paragraph (2) to be a working owner of a trade or business may 
qualify as both an employer and as an employee of the trade or 
business for purposes of the requirements under subsection (b), 
including the requirements under paragraphs (2) and (6) of such 
subsection.
``(2) Working owner.--
``(A) Eligibility.--A person shall qualify as a 
`working owner' if a responsible fiduciary of the group 
health plan reasonably determines that the person--
``(i) does not have any common law 
employees;
``(ii) has an ownership right of any nature 
in a trade or business, whether incorporated or 
unincorporated, including a partner and other 
self-employed individual;
``(iii) is earning wages or self-employment 
income from the trade or business for providing 
personal services to the trade or business; and
``(iv) either--
``(I) works on average at least 20 
hours per week, or at least 80 hours 
per month, providing personal services 
to the person's trade or business; or
``(II) has wages or self-employment 
income from such trade or business that 
at least equals the person's cost of 
coverage for participation by the 
person, and any covered beneficiaries, 
in the group health plan sponsored by 
the group or association in which the 
person is participating.
``(B) Determination.--The determination under 
subparagraph (A) shall be made when the person first 
becomes eligible for coverage under the group health 
plan.
``(C) Reasonable monitoring procedures.--A 
responsible fiduciary of the group health plan shall, 
through reasonable monitoring procedures, periodically 
confirm the continued eligibility of a person to 
qualify as a working owner under subparagraph (A) for 
purposes of meeting the requirements under subsection 
(b) for the group health plan sponsored under this 
section.
``(g) Applicability.--
``(1) Fully insured.--This section shall apply beginning on 
September 1, 2026, with respect to a group or association of 
employers sponsoring a group health plan that is fully insured.
``(2) Plans expanding to include broader group.--This 
section shall apply beginning on January 1, 2026, with respect 
to a group or association of employers sponsoring a group 
health plan that--
``(A) is not fully insured;
``(B) is in existence on June 21, 2025;
``(C) meets the requirements that applied with 
respect to such plan before June 21, 2025; and
``(D) chooses to be a plan sponsored under this 
section (and subject to the requirements under 
subsections (b) through (f)).
``(3) Other association health plans.--This section shall 
apply beginning on April 1, 2026, with respect to any other 
group or association of employers sponsoring a group health 
plan.
``(4) Other criteria in advisory opinions.--The criteria 
under this section shall not invalidate any criteria provided 
in an advisory opinion, in effect on or after the date of 
enactment of the Fair Care Act of 2026, that the Secretary may 
use to determine if a group or association of employers is an 
employer under section 3(5) for purposes of sponsoring a group 
health plan.
``(h) Determination of Employer or Joint Employer Status.--
``(1) In general.--Participating in or facilitating a group 
health plan sponsored by a bona fide group or association of 
employers pursuant to subsection (a) shall not be construed as 
establishing an employer or joint employer relationship under 
any Federal or State law.
``(2) Application of provision.--Paragraph (1) shall apply 
to a group health plan sponsored or facilitated by a franchisor 
and any franchisee, by multiple franchisors for the benefit of 
the employees of such franchisors and their franchisees, by 
multiple franchisees for the benefit of the employees of such 
franchisees, by a franchisor whose franchisee or franchisees 
participate or participates in the plan, or by a person or 
entity that contracts with any individual as an independent 
contractor for whom the plan benefits.
``(i) Rule of Construction.--Nothing in this section shall be 
construed as repealing or otherwise limiting the application of this 
Act (including section 712 relating to mental health parity) to group 
health plans and employee welfare benefit plans.''.

SEC. 212. SHORT-TERM LIMITED DURATION INSURANCE.

(a) Definition.--Section 2791(b) of the Public Health Service Act 
(42 U.S.C. 300gg-91(b)) is amended by adding at the end the following:
``(6) Short-term limited duration insurance.--The term 
`short-term limited duration insurance' means health insurance 
coverage provided pursuant to a contract with a health 
insurance issuer that has an expiration date specified in the 
contract (not taking into account any extensions that may be 
elected by the policyholder with or without the issuer's 
consent) that is less than 12 months after the original 
effective date of the contract.''.
(b) Guaranteed Renewability.--Section 2703 of the Public Health 
Service Act (42 U.S.C. 300gg-2) is amended--
(1) in subsection (a), by inserting ``or offers short-term 
limited duration insurance'' after ``group market''; and
(2) by adding at the end the following:
``(f) Application to Short-Term Limited Duration Insurance.--
``(1) In general.--In applying this section in the case of 
short-term limited duration insurance--
``(A) a reference to `health insurance coverage' 
with respect to such coverage offered in the individual 
market shall be deemed to include short-term limited 
duration insurance; and
``(B) a reference to `health insurance issuer' with 
respect to health insurance coverage offered in the 
individual market shall be deemed to include an issuer 
of short-term limited duration insurance.
``(2) Special rule for short-term limited duration 
insurance.--In the case of short-term limited duration 
insurance, at the time of application for enrollment in such 
insurance coverage, an issuer of such insurance may offer 
renewability of such coverage, and an individual may decline 
renewability of such coverage in accordance with this section, 
and the contract between such individual and the health 
insurance issuer shall specify whether the individual opted for 
renewability or no renewability.''.
(c) Applicability.--The amendments made by subsections (a) and (b) 
shall apply with respect to contracts for short-term limited duration 
insurance that take effect on or after January 1, 2026.

Subtitle C--Improving Commercial Health Insurance

SEC. 221. INVISIBLE GUARANTEED COVERAGE POOL REINSURANCE PROGRAM; TAX 
ON EXCHANGE PLANS.

(a) Establishment.--Not later than 2 years after the date of 
enactment of this Act, the Secretary of Health and Human Services shall 
establish the Invisible Guaranteed Coverage Pool Reinsurance Program 
(in this section referred to as the ``IGCPR program'').
(b) State Grants.--Under the IGCPR program, the Secretary shall, 
from amounts appropriated under subsection (f) for a fiscal year, award 
grants to States for such fiscal year, in amounts determined in 
accordance with the allocation methodology specified under subsection 
(d). Such grants shall be used for the purpose of establishing or 
maintaining a qualifying Invisible Guaranteed Coverage Pool for the 
State.
(c) Federal Default.--
(1) In general.--In the case of a State that does not, by a 
date and in a manner specified by the Secretary, choose to be 
awarded a grant under subsection (b) for a fiscal year to 
operate a qualifying Invisible Guaranteed Coverage Pool for the 
State, the Secretary shall, from amounts appropriated under 
subsection (f) for such fiscal year, use the allocation 
determined for the State under subsection (d) for participation 
of such State in the Federal default qualifying Invisible 
Guaranteed Coverage Pool described in paragraph (2).
(2) Federal default qualifying invisible guaranteed 
coverage pool.--The Federal default qualifying high risk pool 
is, with respect to each State that chooses not to be awarded a 
grant under subsection (b) with respect to a fiscal year for 
which funds are appropriated under subsection (f), an Invisible 
Guaranteed Coverage Pool under which health insurance issuers 
participating in the Exchange of such a State, with respect to 
designated individuals who are enrolled in health insurance 
coverage and are expected to experience higher than average 
health costs as determined by the insurer, cede risk to the 
pool, without affecting the premium paid by the designated 
individuals or their terms of coverage. With respect to such 
pool--
(A) high-risk individuals designated for cession to 
the pool shall be designated by the ceding issuer;
(B) the premium amount the ceding issuer shall pay 
to the reinsurance pool shall be 90 percent of the 
premium paid to the issuer for the coverage;
(C) the ceding issuer shall retain the same risk 
under the ceded policies as under any other policy of 
the issuer with respect to the first $10,000 of 
benefits for each ceded policy involved and will not 
retain any risk under ceded policies after such first 
$10,000 of benefits; and
(D) after a ceding issuer, with respect to a ceded 
policy, no longer retains risk under such policy 
pursuant to subparagraph (C), the negotiated rate under 
such policy for items and services shall be payable at 
the reimbursement rate under the Medicare program under 
title XVIII of the Social Security Act for such items 
and services, or in the case of items and services for 
which payment is available under the policy but not the 
Medicare program, at a rate determined by the 
Secretary.
(d) Allocation Methodology.--Not later than six months after the 
establishment of the IGCPR program, the Secretary shall specify an 
allocation methodology for determining the amount of funds appropriated 
under subsection (f) for a fiscal year to be allocated for each State 
for purposes of subsections (b) and (c). Such methodology shall be 
based on the number of residents of each State and the general health 
status of such residents.
(e) Qualifying Invisible Guaranteed Coverage Pool.--For purposes of 
this section, the term ``qualifying Invisible Guaranteed Coverage 
Pool'' means, with respect to a State, a method of designation under 
which health insurance issuers identify individuals who experience 
higher than average health costs as determined by the State and are 
enrolled in health insurance coverage offered in the individual market, 
and cede the risk of spending more than $10,000 on health care services 
for a single individual to the pool without affecting the premium paid 
by the designated individuals or their terms of coverage. With respect 
to such pool, the State, or an entity operating the pool on behalf of 
the State, shall establish--
(1) the premium amount the ceding issuer shall pay to the 
reinsurance pool;
(2) the applicable attachment points or coinsurance 
percentages if the ceding issuer retains any portion of the 
risk under ceded policies, except that the provisions of 
subparagraphs (C) and (D) of subsection (c)(2) shall apply to 
such high risk pool in the same manner as such clauses apply to 
the Federal default high risk pool; and
(3) the mechanism by which high-risk individuals are 
designated for cession to the pool, which may include a list of 
designated high-cost health conditions.
(f) Appropriations.--There is appropriated to the Secretary of 
Health and Human Services $200,000,000,000 to carry out this section 
for the period of the first 10 years after the establishment of the 
IGCPR program.
(g) Tax on Health Insurance Plans Sold on Exchanges.--
(1) In general.--Chapter 34 of the Internal Revenue Code of 
1986 is amended by adding at the end the following new 
subchapter:

``Subchapter C--Additional Tax on Health Insurance Plans Sold by 
Insurers Offering Plans on Exchanges

``Sec. 4401. Additional tax on health insurance plans sold by insurers 
offering plans on exchanges.

``SEC. 4401. ADDITIONAL TAX ON HEALTH INSURANCE PLANS SOLD BY INSURERS 
OFFERING PLANS ON EXCHANGES.

``(a) Imposition of Tax.--There is imposed a tax of $4 for each 
policy month of each health insurance policy sold by insurers offering 
plans through an Exchange established under the Patient Protection and 
Affordable Care Act.
``(b) Liability.--The tax imposed by subsection (a) shall be paid 
by the plan sponsor.''.
(2) Conforming amendment.--The table of subchapters for 
chapter 34 of the Internal Revenue Code of 1986 is amended by 
adding at the end the following item:

``subchapter c--additional tax on health insurance plans sold by 
insurers offering plans on exchanges''.

(3) Effective date.--The amendments made by this subsection 
shall apply with respect to months beginning after the date of 
enactment of this Act.
(h) Report.--The Secretary of Health and Human Services, in 
collaboration with the Comptroller General of the United States, shall 
submit to Congress, not later than 5 years after the date of enactment 
of this Act, and again 5 years thereafter, a report on the status of 
reinsurance pool funding, along with any recommendations with respect 
to future allocations or funding methods for such pool.

SEC. 222. EMPLOYER HEALTH INSURANCE MANDATE REPEAL.

(a) In General.--Chapter 43 of the Internal Revenue Code of 1986 is 
amended by striking section 4980H.
(b) Repeal of Related Reporting Requirements.--Subpart D of part 
III of subchapter A of chapter 61 of such Code is amended by striking 
section 6056.
(c) Conforming Amendments.--
(1) Section 6724(d)(1)(B) of such Code is amended by 
inserting ``or'' at the end of clause (xxiii), by striking 
``or'' at the end of clause (xxiv), and by striking clause 
(xxv).
(2) Section 6724(d)(2) of such Code is amended by inserting 
``or'' at the end of subparagraph (GG) and by striking 
subparagraph (HH).
(3) The table of sections for chapter 43 of such Code is 
amended by striking the item relating to section 4980H.
(4) The table of sections for subpart D of part III of 
subchapter A of chapter 61 of such Code is amended by striking 
the item relating to section 6056.
(5) Section 1513 of the Patient Protection and Affordable 
Care Act is amended by striking subsection (c).
(d) Effective Date.--
(1) In general.--Except as otherwise provided in this 
subsection, the amendments made by this section shall apply to 
months and other periods beginning after December 31, 2026.
(2) Repeal of study and report.--The amendment made by 
subsection (c)(5) shall take effect on the date of the 
enactment of this Act.

SEC. 223. REFUNDABLE CREDITS FOR COVERAGE UNDER A QUALIFIED HEALTH PLAN 
FOR INDIVIDUALS OFFERED EMPLOYER-SPONSORED INSURANCE.

(a) In General.--Section 36B(c)(2) of the Internal Revenue Code of 
1986 is amended--
(1) in subparagraph (B)(i), by inserting ``or section 
5000A(f)(1)(B)'', and
(2) by striking subparagraph (C).
(b) Effective Date.--The amendments made by this section shall 
apply to taxable years beginning after the date of the enactment of 
this Act.

SEC. 224. INCLUSION IN INCOME OF CERTAIN COSTS OF EMPLOYER-PROVIDED 
COVERAGE UNDER HEALTH PLANS.

(a) In General.--Section 106 of the Internal Revenue Code of 1986 
is amended by adding at the end the following new subsection:
``(h) Limitation.--
``(1) In general.--Subsection (a) shall not apply to the 
extent that employer-provided coverage under health plans for 
an employee for a taxable year exceeds--
``(A) $10,200 for self-only coverage, and
``(B) $27,500 for all other coverage.
``(2) In general.--In the case of any calendar year after 
2026, the dollar amounts in paragraph (1) shall each be 
increased by an amount equal to--
``(A) such dollar amount, multiplied by
``(B) the cost-of-living adjustment determined 
under section 1(f)(3) for such calendar year, 
determined--
``(i) by substituting `calendar year 2025' 
for `calendar year 2018' in subparagraph 
(A)(ii) thereof, and
``(ii) by substituting for the C-CPI-U 
referred to in section 1(f)(3)(A) the amount 
that such CPI would have been if the annual 
percentage increase in CPI with respect to each 
year after 2024 and before 2034 had been one 
percentage point greater.
``(3) Terms related to cpi.--
``(A) Annual percentage increase.--For purposes of 
subparagraph (B)(ii)(II), the term `annual percentage 
increase' means the percentage (if any) by which C-CPI-
U for any year exceeds the C-CPI-U for the prior year.
``(B) Other terms.--Terms used in this paragraph 
which are also used in section 1(f)(3) shall have the 
same meanings as when used in such section.''.
(b) Effective Date.--The amendments made by this section shall 
apply with respect to taxable years beginning after December 31, 2026.

SEC. 225. CHANGE IN PERMISSIBLE AGE VARIATION IN HEALTH INSURANCE 
PREMIUM RATES.

Section 2701(a)(1)(A)(iii) of the Public Health Service Act (42 
U.S.C. 300gg(a)(1)(A)(iii)) is amended by inserting after ``(consistent 
with section 2707(c))'' the following: ``or, for plan years beginning 
on or after January 1, 2026, as the Secretary may implement through 
interim final regulation, 5 to 1 for adults (consistent with section 
2707(c))''.

SEC. 226. PREMIUM ASSISTANCE ADJUSTMENT TO REFLECT AGE.

(a) Modification of Applicable Percentage.--Section 36B(b)(3)(A) of 
the Internal Revenue Code of 1986 is amended to read as follows:
``(A) Applicable percentage.--
``(i) In general.--The applicable 
percentage for any taxable year shall be the 
percentage such that the applicable percentage 
for any taxpayer whose household income is 
within an income tier specified in the 
following table shall increase, on a sliding 
scale in a linear manner, from the initial 
percentage to the final percentage specified in 
such table for such income tier with respect to 
a taxpayer of the age involved:

------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
``In the case of Up to Age 29 Age 30-39 Age 40-49 Age 50-59 Over Age 59
household income ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------
(expressed as a
percent of the
poverty line)
within the Initial % Final % Initial % Final % Initial % Final % Initial % Final % Initial % Final %
following income
tier:
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
Up to 100% 0............... 0............... 0............... 0.............. 0.............. 0.............. 0.............. 0.............. 0.............. 0
100%-133% 2............... 2............... 2............... 2.............. 2.............. 2.............. 2.............. 2.............. 2.............. 2
133%-150% 3............... 4.3............. 3............... 4.3............ 3.............. 4.3............ 3.............. 4.3............ 3.............. 4.3
150%-200% 4.3............. 6.7............. 4.3............. 6.7............ 4.3............ 6.7............ 4.3............ 6.7............ 4.3............ 6.7
200%-250% 6.7............. 6.7............. 6.7............. 7.6............ 6.7............ 8.3............ 6.7............ 8.3............ 6.7............ 8.3
250%-300% 6.7............. 6.7............. 7.6............. 7.6............ 8.3............ 9.8............ 8.3............ 9.8............ 8.3............ 9.8
300%-400% 6.7............. 7............... 7.6............. 8.............. 9.8............ 10............. 9.8............ 10............. 9.8............ 10
400%-600% 7............... 9............... 8............... 10............. 10............. 15............. 10............. 15............. 10............. 15
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

``(ii) Age determinations.--
``(I) In general.--For purposes of 
clause (i), the age of the taxpayer 
taken into account under clause (i) 
with respect to any taxable year is the 
age attained by such taxpayer before 
the close of such taxable year.
``(II) Joint returns.--In the case 
of a joint return, the age of the older 
spouse shall be taken into account 
under clause (i).
``(iii) Indexing.--In the case of any 
taxable year beginning after calendar year 
2026, the initial and final percentages 
contained in clause (i) shall be adjusted to 
reflect--
``(I) the excess (if any) of the 
rate of premium growth for the period 
beginning with calendar year 2013 and 
ending with calendar year 2025, over 
the rate of income growth for such 
period, and
``(II) in addition to any 
adjustment under subclause (I), the 
excess (if any) of the rate of premium 
growth for calendar year 2025, over the 
rate of growth in the consumer price 
index for calendar year 2025.
``(iv) Failsafe.--Clause (iii)(II) shall 
apply only if the aggregate amount of premium 
tax credits under this section and cost-sharing 
reductions under section 1402 of the Patient 
Protection and Affordable Care Act for the 
preceding calendar year exceeds an amount equal 
to 0.504 percent of the gross domestic product 
for such calendar year.''.
(b) Expansion of Eligibility.--Section 36B of the Internal Revenue 
Code of 1986 is amended--
(1) in subsection (c)(1)(A), by striking ``400'' and 
inserting ``600''; and
(2) in subsection (f)(2)(B)(i), by striking ``400'' each 
place such reference appears and inserting ``600'' in each such 
place.
(c) Effective Date.--The amendment made by this section shall apply 
to taxable years beginning after December 31, 2026.

SEC. 227. PREMIUM ASSISTANCE.

Notwithstanding any other provision of law, the Secretary of the 
Treasury shall calculate the credit allowable under section 36B of the 
Internal Revenue Code of 1986 based on the taxpayer's prior year tax 
return and the Secretary of Health and Human Services shall provide for 
open enrollment periods that end on April 15.

SEC. 228. ADDING COPPER PLANS TO EXCHANGES.

(a) In General.--Section 1302 of the Patient Protection and 
Affordable Care Act (42 U.S.C. 18022) is amended--
(1) in subsection (a)(3), by inserting ``copper,'' after 
``either the'';
(2) in subsection (c), by adding at the end the following 
new paragraph:
``(5) Special rule for copper plans.--A health plan in the 
copper level of coverage (as described in subsection (d)(1)(E)) 
shall be deemed to meet the requirements of this subsection.'';
(3) in subsection (d)--
(A) in paragraph (1), by adding at the end the 
following new subparagraph:
``(E) Copper level.--A plan in the copper level 
shall provide a level of coverage that is designed to 
provide benefits that are actuarially equivalent to 50 
percent of the full actuarial value of the benefits 
provided under the plan and will have out-of-pocket 
limits that are 30 percent higher than bronze plans.''; 
and
(B) in paragraph (4)--
(i) by inserting ``copper,'' after ``any 
reference to a''; and
(ii) by inserting ``copper,'' after 
``providing a''; and
(4) in subsection (e)(1), by inserting ``copper,'' after 
``not providing a''.
(b) Effective Date.--The amendments made by this section shall 
apply with respect to plan years beginning on or after January 1, 2026.

SEC. 229. COPPER AND BRONZE PLANS.

Notwithstanding any other provision of law, refundable credits for 
coverage under a qualified health plan and cost-sharing reductions may 
be used to purchase bronze and copper plans.

SEC. 230. WAIVERS FOR STATE INNOVATION.

(a) Streamlining the State Application Process.--Section 1332 of 
the Patient Protection and Affordable Care Act (42 U.S.C. 18052) is 
amended--
(1) in subsection (a)(1)(C), by striking ``the law'' and 
inserting ``a law or has in effect a certification''; and
(2) in subsection (b)(2)--
(A) in the paragraph heading, by inserting ``or 
certify'' after ``law'';
(B) in subparagraph (A)--
(i) by striking ``A law'' and inserting the 
following:
``(i) Laws.--A law''; and
(ii) by adding at the end the following:
``(ii) Certifications.--A certification 
described in this paragraph is a document, 
signed by the Governor of the State, that 
certifies that such Governor has the authority 
under existing Federal and State law to take 
action under this section, including 
implementation of the State plan under 
subsection (a)(1)(B).''; and
(C) in subparagraph (B)--
(i) in the subparagraph heading, by 
striking ``of opt out''; and
(ii) by striking ``may repeal a law'' and 
all that follows through the period at the end 
and inserting the following: ``may terminate 
the authority provided under the waiver with 
respect to the State by--
``(i) repealing a law described in 
subparagraph (A)(i); or
``(ii) terminating a certification 
described in subparagraph (A)(ii), through a 
certification for such termination signed by 
the Governor of the State.''.
(b) Providing Expedited Approval of State Waivers.--Section 1332(d) 
of the Patient Protection and Affordable Care Act (42 U.S.C. 18052(d)) 
is amended--
(1) in paragraph (1) by striking ``180'' and inserting 
``90''; and
(2) by adding at the end the following:
``(3) Expedited determination.--
``(A) In general.--With respect to any application 
under subsection (a)(1) submitted on or after the date 
of this paragraph or any such application submitted 
prior to such date of enactment and under review by the 
Secretary on such date of enactment, the Secretary 
shall make a determination on such application, using 
the criteria for approval otherwise applicable under 
this section, not later than 45 days after the receipt 
of such application, and shall allow the public notice 
and comment at the State and Federal levels described 
under subsection (a)(4) to occur concurrently if such 
State application--
``(i) is submitted in response to an urgent 
situation, with respect to areas in the State 
that the Secretary determines are at risk for 
excessive premium increases or having no health 
plans offered in the applicable health 
insurance market for the current or following 
plan year; or
``(ii) is for a waiver that is the same or 
substantially similar to a waiver that the 
Secretary already has approved for another 
State.
``(B) Approval.--
``(i) Urgent situations.--
``(I) Provisional approval.--A 
waiver approved under the expedited 
determination process under 
subparagraph (A)(i) shall be in effect 
for a period of 3 years, unless the 
State requests a shorter duration.
``(II) Full approval.--Subject to 
the requirements for approval otherwise 
applicable under this section, not 
later than 1 year before the expiration 
of a provisional waiver period 
described in subclause (I) with respect 
to an application described in 
subparagraph (A)(i), the Secretary 
shall make a determination on whether 
to extend the approval of such waiver 
for the full term of the waiver 
requested by the State, for a total 
approval period not to exceed 6 years. 
The Secretary may request additional 
information as the Secretary determines 
appropriate to make such determination.
``(ii) Approval of same or similar 
applications.--An approval of a waiver under 
subparagraph (A)(ii) shall be subject to the 
terms of subsection (e).
``(C) GAO study.--Not later than 5 years after the 
date of enactment of this paragraph, the Comptroller 
General of the United States shall conduct a review of 
all waivers approved pursuant to an application under 
subparagraph (A)(ii) to evaluate whether such waivers 
met the requirements of subsection (b)(1) and whether 
the applications should have qualified for such 
expedited process.''.
(c) Providing Certainty for State-Based Reforms.--Section 1332(e) 
of the Patient Protection and Affordable Care Act (42 U.S.C. 18052(e)) 
is amended by striking ``No waiver'' and all that follows through the 
period at the end and inserting the following: ``A waiver under this 
section--
``(1) shall be in effect for a period of 6 years unless the 
State requests a shorter duration;
``(2) may be renewed, subject to the State meeting the 
criteria for approval otherwise applicable under this section, 
for unlimited additional 6-year periods upon application by the 
State; and
``(3) may not be suspended or terminated, in whole or in 
part, by the Secretary at any time before the date of 
expiration of the waiver period (including any renewal period 
under paragraph (2)), unless the Secretary determines that the 
State materially failed to comply with the terms and conditions 
of the waiver.''.
(d) Ensuring Patient Access to More Flexible Health Plans.--Section 
1332(b)(1)(B) of the Patient Protection and Affordable Care Act (42 
U.S.C. 18052(b)(1)(B)) is amended by striking ``at least as 
affordable'' and inserting ``of comparable affordability, including for 
low-income individuals, individuals with serious health needs, and 
other vulnerable populations,''.
(e) Applicability.--The amendments made by this Act to section 1332 
of the Patient Protection and Affordable Care Act (42 U.S.C. 18052)--
(1) with respect to applications for waivers under such 
section 1332 submitted after the date of enactment of this Act 
and applications for such waivers submitted prior to such date 
of enactment and under review by the Secretary on the date of 
enactment, shall take effect on the date of enactment of this 
Act; and
(2) with respect to applications for waivers approved under 
such section 1332 before the date of enactment of this Act, 
shall not require reconsideration of whether such applications 
meet the requirements of such section 1332, except that, at the 
request of a State, the Secretary shall recalculate the amount 
of funding provided under subsection (a)(3) of such section.

SEC. 231. ENROLLMENT PERIODS.

(a) Exchanges.--Paragraph (7) of section 1311(c) of the Patient 
Protection and Affordable Care Act (42 U.S.C. 18031(c)), as added by 
section 106, is amended by adding at the end the following new 
subparagraph:
``(B) Enrollments other than during initial, open, 
and special enrollment periods.--Beginning with plan 
year 2026, an Exchange may provide for enrollments 
during periods in addition to open enrollment periods 
described in subparagraph (A) or paragraph (6) and 
special enrollment periods described in paragraph 
(6).''.
(b) Health Plans.--Subpart I of part A of title XXVII of the Public 
Health Service Act is amended by adding at the end the following new 
section:

``SEC. 2710. ENROLLMENT OUTSIDE OF INITIAL, OPEN, AND SPECIAL 
ENROLLMENT PERIOD.

``Beginning with plan year 2026, a group health plan and a health 
insurance issuer offering group or individual health insurance coverage 
may provide for enrollment in such plan or coverage during periods in 
addition to initial, open, or special enrollment periods. In the case 
that an individual enrolls in such plan or coverage during a period 
pursuant to the previous sentence, the plan or issuer may charge the 
individual a one-time enrollment fee.''.

SEC. 232. STATE-OPERATED EXCHANGES FLEXIBILITY FOR OPEN ENROLLMENT 
PERIODS.

Section 1311(c) of the Patient Protection and Affordable Care Act 
(42 U.S.C. 18031(c)) is amended--
(1) in paragraph (6), by striking ``The Secretary'' and 
inserting ``Subject to paragraph (7), the Secretary''; and
(2) by adding at the end the following new paragraph:
``(7) Flexibility for enrollment periods.--
``(A) State-operated exchanges open enrollment 
periods.--In the case of an Exchange operated by a 
State, beginning with plan years of 1 year after the 
date of enactment of this Act, the Exchange may provide 
for open enrollment periods (after the initial 
enrollment period) every 12, 24, or 36 months, as 
determined by the State.''.

SEC. 233. PROMOTING HEALTH PLANS THAT COVER INDIVIDUALS IN MORE THAN 
ONE STATE.

There are appropriated, out of amounts in the Treasury not 
otherwise appropriated, $10,000,000 to be made available by no later 
than 1 year after the date of enactment of this Act, to the Center for 
Medicare & Medicaid Innovation to fund new research or pilot programs 
dedicated to pursuing viable methods of enrolling individuals in health 
insurance programs that cross State lines.

TITLE III--COMPETITION, TRANSPARENCY AND ACCOUNTABILITY

Subtitle A--Provider and Insurer Competition

SEC. 301. HOSPITAL CONSOLIDATION.

(a) Authorization of Appropriations.--There is authorized to be 
appropriated $160,000,000 to the Federal Trade Commission to hire staff 
to investigate, as consistent with the Sherman Antitrust Act and other 
relevant Federal laws, anti-competitive mergers and practices under 
such laws to the extent such mergers and practices relate to providers 
of inpatient and outpatient health care services, as defined by the 
Secretary of Health and Human Services.
(b) Medicare Advantage Rates Applied to Certain HHI Hospitals.--
(1) In general.--Section 1866(a) of the Social Security Act 
(42 U.S.C. 1395cc(a)) is amended--
(A) in paragraph (1)--
(i) in subparagraph (X), by striking 
``and'' at the end;
(ii) in subparagraph (Y), by striking the 
period at the end and inserting ``; and''; and
(iii) by inserting after subparagraph (Y) 
the following new subparagraph:
``(Z) subject to paragraph (4), beginning in 2028, 
in the case of a hospital located in a county whose 
population density is above the median population 
density for all counties in the United States with 
respect to which there is a Herfindahl-Hirschman Index 
(HHI) of greater than 4,000, to apply the average 
reimbursement rate (or, with respect to years before 
2032, the percent specified in paragraph (4)(C) of such 
average rate) with respect to individuals (regardless 
of whether such an individual is entitled to or 
eligible for benefits under this title, but excluding 
individuals eligible for medical assistance under a 
State plan under title XIX) furnished items and 
services at such hospital that would be billable under 
this title for such items and services if furnished by 
such hospital to an individual enrolled under part 
C.''; and
(B) by adding at the end the following new 
paragraph:
``(4)(A) The requirement under paragraph (1)(Z) shall not 
apply in the case of a hospital in a hospital referral region 
if--
``(i) the HRR market share of such hospital (as 
determined under subparagraph (B)) is less than 0.15; 
or
``(ii) the hospital is located in a rural area (as 
defined in section 1886(d)(2)(D)).
``(B) For purposes of subparagraph (A), the HRR market 
share of a hospital in a hospital referral region is equal to--
``(i) the total revenue of the hospital, divided by
``(ii) the total revenue of all hospitals in the 
hospital referral region.
``(C) For purposes of paragraph (1)(Z), the percent 
specified in this subparagraph is--
``(i) for 2028, 178 percent;
``(ii) for 2029, 150 percent;
``(iii) for 2030, 130 percent; and
``(iv) for 2031, 110 percent.''.
(2) Effective date.--The amendments made by this subsection 
shall apply with respect to items and services furnished on or 
after January 1, 2026.
(c) Grants for Hospital Infrastructure Improvement.--
(1) In general.--The Secretary of Health and Human Services 
shall carry out a grant program under which the Secretary shall 
provide grants to eligible States, in accordance with this 
subsection.
(2) Uses.--An eligible State receiving a grant under this 
subsection may use such grant to improve the State hospital 
infrastructure and to supplement any other funds provided for a 
purpose authorized under a State or local hospital grant 
program under State law.
(3) Eligibility.--
(A) In general.--An eligible State may receive not 
more than one grant under this subsection with respect 
to each qualifying criterion described in subparagraph 
(B) that is met by the State.
(B) Eligible state.--For purposes of this 
subsection, the term ``eligible State'' means a State 
that meets any one or more of the following qualifying 
criteria:
(i) The State does not have in effect any 
State certificate of need law that requires a 
health care provider to provide to a regulatory 
body a certification that the community needs 
the services provided by the health care 
provider.
(ii) The State has in effect State scope of 
practice laws that--
(I) allow advanced practice 
providers (such as nurse practitioners, 
advanced practice registered nurses, 
clinical nurse specialists, and 
physician assistants) to evaluate 
patients; diagnose, order, and 
interpret diagnostic tests; and 
initiate and manage treatments; or
(II) provide that the only 
justification for limiting the scope of 
practice of a health care provider is 
safety to the public.
(iii) The State does not have in effect any 
State laws that require managed care plans to 
accept into the network of such plan any 
qualified provider who is willing to accept the 
terms and conditions of the managed care plan.
(iv) The State does not have in effect any 
Certificate of Public Advantage laws that 
clearly articulate the State's intent to 
displace competition in favor of regulation or 
that violate State or Federal antitrust laws.
(v) The State does not have in effect any 
network adequacy laws regulating a health 
plan's ability to deliver benefits by providing 
reasonable access to a sufficient number of in-
network primary care and specialty physicians, 
as well as all health care services included 
under the terms of an insuree's contract with a 
health insurer.
(4) Funding.--There is authorized to be appropriated to 
carry out this subsection $1,000,000,000 for each of the fiscal 
years 2026 through 2035. Funds appropriated under this 
paragraph shall remain available until expended.
(d) Critical Access Hospital Reimbursement Rates.--
(1) Part a.--Section 1814(l)(1) of the Social Security Act 
(42 U.S.C. 1395f(l)(1)) is amended by inserting ``(or, for 
2026, 102, plus 1 percentage point for each subsequent year 
through 2033, and 110 for each subsequent year thereafter)'' 
after ``101''.
(2) Part b.--Section 1834(g)(1) of such Act (42 U.S.C. 
1395m(g)(1)) is amended by inserting ``(or, for 2026, 102, plus 
1 percentage point for each subsequent year through 2033, and 
110 for each subsequent year thereafter)'' after ``101''.

SEC. 302. AUTHORITY OF FEDERAL TRADE COMMISSION OVER CERTAIN TAX-EXEMPT 
ORGANIZATIONS.

Section 4 of the Federal Trade Commission Act (15 U.S.C. 44) is 
amended, in the undesignated paragraph relating to the definition of 
the term ``Corporation''--
(1) by striking ``, and any'' and inserting ``, any''; and
(2) by inserting before the period at the end the 
following: ``, and any organization described in section 
501(c)(3) of the Internal Revenue Code of 1986 that is exempt 
from taxation under section 501(a) of such Code''.

SEC. 303. LEVELING THE PLAYING FIELD BETWEEN PAYERS AND PROVIDERS.

(a) Exemption.--It shall not be a violation of the antitrust laws 
for one or more private health insurer issuers or their designated 
agents to jointly negotiate prices of particular hospital services with 
a hospital provider with regards to the reimbursement policies of the 
insurers for those services.
(b) Definitions.--For purposes of this section:
(1) Antitrust laws.--The term ``antitrust laws'' has the 
meaning given it in subsection (a) of the 1st section of the 
Clayton Act (15 U.S.C. 12(a)), except that such term includes 
section 5 of the Federal Trade Commission Act (15 U.S.C. 45) to 
the extent such section 5 applies to unfair methods of 
competition.
(2) Health insurance issuer.--The term ``health insurance 
issuer'' means an insurance company, insurance service, or 
insurance organization (including a health maintenance 
organization, as defined in subparagraph (C)) which is licensed 
to engage in the business of insurance in a State and which is 
subject to State law which regulates insurance (within the 
meaning of section 514(b)(2) of the Employee Retirement Income 
Security Act of 1974 (29 U.S.C. 1144(b)(2))). Such term does 
not include a group health plan.
(3) Health maintenance organization.--The term ``health 
maintenance organization'' means--
(A) a Federally qualified health maintenance 
organization (as defined in section 300e(a) of title 42 
of the United States Code),
(B) an organization recognized under State law as a 
health maintenance organization, or
(C) a similar organization regulated under State 
law for solvency in the same manner and to the same 
extent as such a health maintenance organization.
(c) Effective Date.--This section shall take effect on the date of 
the enactment of this Act but shall not apply with respect to conduct 
that occurs before such date.

SEC. 304. BANNING ANTICOMPETITIVE TERMS IN FACILITY AND INSURANCE 
CONTRACTS THAT LIMIT ACCESS TO HIGHER QUALITY, LOWER COST 
CARE.

(a) In General.--Section 2729B of the Public Health Service Act, as 
added by section 301, is amended by adding at the end the following:
``(b) Protecting Health Plans Network Design Flexibility.--
``(1) In general.--A group health plan or a health 
insurance issuer offering group or individual health insurance 
coverage shall not enter into an agreement with a provider, 
network or association of providers, or other service provider 
offering access to a network of service providers if such 
agreement, directly or indirectly--
``(A) restricts the group health plan or health 
insurance issuer from--
``(i) directing or steering enrollees to 
other health care providers; or
``(ii) offering incentives to encourage 
enrollees to utilize specific health care 
providers;
``(B) requires the group health plan or health 
insurance issuer to enter into any additional contract 
with an affiliate of the provider, such as an affiliate 
of the provider, as a condition of entering into a 
contract with such provider;
``(C) requires the group health plan or health 
insurance issuer to agree to payment rates or other 
terms for any affiliate not party to the contract of 
the provider involved; or
``(D) restricts other group health plans or health 
insurance issuers not party to the contract from paying 
a lower rate for items or services than the contracting 
plan or issuer pays for such items or services.
``(2) Additional requirement for self-insured plans.--A 
self-insured group health plan shall not enter into an 
agreement with a provider, network or association of providers, 
third-party administrator, or other service provider offering 
access to a network of providers if such agreement directly or 
indirectly requires the group health plan to certify, attest, 
or otherwise confirm in writing that the group health plan is 
bound by restrictive contracting terms between the service 
provider and a third-party administrator that the group health 
plan is not party to, without a disclosure that such terms 
exist.
``(3) Exception for certain group model issuers.--Paragraph 
(1)(A) shall not apply to a group health plan or health 
insurance issuer offering group or individual health insurance 
coverage with respect to--
``(A) a health maintenance organization (as defined 
in section 2791(b)(3)), if such health maintenance 
organization operates primarily through exclusive 
contracts with multi-specialty physician groups, nor to 
any arrangement between such a health maintenance 
organization and its affiliates; or
``(B) a value-based network arrangement, such as an 
exclusive provider network, accountable care 
organization, center of excellence, a provider 
sponsored health insurance issuer that operates 
primarily through aligned multi-specialty physician 
group practices or integrated health systems, or such 
other similar network arrangements as determined by the 
Secretary through rulemaking.
``(4) Attestation.--A group health plan or health insurance 
issuer offering group or individual health insurance coverage 
shall annually submit to, as applicable, the applicable 
authority described in section 2723 or the Secretary of Labor, 
an attestation that such plan or issuer is in compliance with 
the requirements of this subsection.
``(c) Maintenance of Existing HIPAA, GINA, and ADA Protections.--
Nothing in this section shall modify, reduce, or eliminate the existing 
privacy protections and standards provided by reason of State and 
Federal law, including the requirements of parts 160 and 164 of title 
45, Code of Federal Regulations (or any successor regulations).
``(d) Regulations.--The Secretary, not later than 1 year after the 
date of enactment of the Fair Care Act of 2026, shall promulgate 
regulations to carry out this section.
``(e) Rule of Construction.--Nothing in this section shall be 
construed to limit network design or cost or quality initiatives by a 
group health plan or health insurance issuer, including accountable 
care organizations, exclusive provider organizations, networks that 
tier providers by cost or quality or steer enrollees to centers of 
excellence, or other pay-for-performance programs.
``(f) Clarification With Respect to Antitrust Laws.--Compliance 
with this section does not constitute compliance with the antitrust 
laws, as defined in subsection (a) of the first section of the Clayton 
Act (15 U.S.C. 12(a)).''.
(b) Effective Date.--Section 2729B of the Public Health Service Act 
(as added by section 301 and amended by subsection (a)) shall apply 
with respect to any contract entered into on or after the date that is 
18 months after the date of enactment of this Act. With respect to an 
applicable contract that is in effect on the date of enactment of this 
Act, such section 2729B shall apply on the earlier of the date of 
renewal of such contract or 3 years after such date of enactment.

SEC. 305. REPEALING ELIGIBILITY OF CERTAIN ACOS.

(a) In General.--Section 1899(b)(1) of the Social Security Act (42 
U.S.C. 1395jjj(b)(1)) is amended by striking subparagraphs (C) through 
(E).
(b) Effective Date.--The amendment made by subsection (a) shall 
take effect on January 1, 2026.

SEC. 306. REPEAL OF HEALTH CARE REFORM PROVISIONS LIMITING MEDICARE 
EXCEPTION TO THE PROHIBITION ON CERTAIN PHYSICIAN 
REFERRALS FOR HOSPITALS.

Sections 6001 and 10601 of the Patient Protection and Affordable 
Care Act (Public Law 111-148; 124 Stat. 684, 1005) and section 1106 of 
the Health Care and Education Reconciliation Act of 2010 (Public Law 
111-152; 124 Stat. 1049) are repealed and the provisions of law amended 
by such sections are restored as if such sections had never been 
enacted.

SEC. 307. ALTERNATIVE PAYMENT MODEL FOR CERTAIN SHOPPABLE PROCEDURES.

(a) In General.--A group health plan and a health insurance issuer 
offering group or individual health insurance coverage (as such terms 
are defined in section 2791 of the Public Health Service Act (42 U.S.C. 
300gg-91)) may elect, with respect to a plan year, to provide a set 
payment amount to an enrollee under such plan or coverage for certain 
shoppable procedures (as defined in subsection (b)) in accordance with 
the provisions of this section in lieu of otherwise providing coverage 
for such a procedure under such plan or coverage, but only if the 
enrollee so agrees to such set payment amount.
(b) Definition.--For purposes of this section, the term ``shoppable 
procedure'' means a procedure specified by the Secretary of Health and 
Human Services (in this section referred to as the ``Secretary'') with 
respect to which individuals may be expected to compare prices for such 
procedure of health care providers and facilities, including primary 
and preventive services, prenatal care and childbirth, common surgeries 
that can be scheduled, and other similar services.
(c) Set Payment Rules.--A set payment described in subsection (a) 
under a group health plan or group or individual health insurance 
coverage offered by a health insurance issuer shall--
(1) be disclosed prior to beginning of each plan year such 
payment is in effect and shall not vary during such plan year;
(2) be the same amount with respect to the same shoppable 
procedure furnished in a geographic area (as defined by the 
Secretary);
(3) not be less than the median negotiated rate for all 
group health plans and health insurance coverage offered in 
such area for such procedure;
(4) be made available to an enrollee under such plan or 
such coverage regardless of the provider or facility furnishing 
the shoppable procedure;
(5) represent the entirety of the payment obligation of 
such plan or such issuer with respect to such procedure; and
(6) may be retained by such enrollee to the extent that the 
amount of such payment exceeds the amount charged by such 
provider or facility for such procedure.
(d) Provision of Price Information.--Each health care provider and 
facility that may furnish a shoppable procedure during a year shall 
post in a public area a notice containing the prices that will be 
charged by such provider of facility with respect to each such 
procedure to individuals making payment for such services pursuant to a 
set payment amount described in subsection (a).
(e) EHB Waiver Authority.--The Secretary may waive such provisions 
of section 1302(b) of the Patient Protection and Affordable Care Act 
(42 U.S.C. 18022(b)) with respect to a group health plan, health 
insurance issuer offering group or individual health insurance 
coverage, and a plan year as the Secretary determines necessary to 
allow for the provision of set payment amounts described in subsection 
(a).

Subtitle B--Price Transparency

SEC. 321. PRICE TRANSPARENCY REQUIREMENTS.

(a) Hospitals.--Section 2718(e) of the Public Health Service Act 
(42 U.S.C. 300gg-18(e)) is amended--
(1) by striking ``Each hospital'' and inserting the 
following:
``(1) In general.--Each hospital'';
(2) by inserting ``, in a machine-readable format, via open 
application program interfaces (APIs)'' after ``a list'';
(3) by inserting ``, along with such additional information 
as the Secretary may require with respect to such charges for 
purposes of promoting public awareness of hospital pricing in 
advance of receiving a hospital item or service'' before the 
period; and
(4) by adding at the end the following:
``(2) Definition of standard charges.--Notwithstanding any 
other provision of law, for purposes of paragraph (1), the term 
`standard charges' means the rates hospitals, including 
providers or entities that contract with or practice at a 
hospital, charge for all items and services at a minimum, 
chargemaster rates, rates that hospitals negotiate with third 
party payers across all plans, including those related to a 
patient's specific plan, discounted cash prices, and other 
rates determined by the Secretary.
``(3) Enforcement.--In addition to any other enforcement 
actions or penalties that may apply under subsection (b)(3) or 
another provision of law, a hospital that fails to provide the 
information required by this subsection and has not completed a 
corrective action plan to comply with the requirements of such 
subsection shall be subject to a civil monetary penalty of an 
amount not to exceed $300 per day that the violation is ongoing 
as determined by the Secretary. Such penalty shall be imposed 
and collected in the same manner as civil money penalties under 
subsection (a) of section 1128A of the Social Security Act are 
imposed and collected.''.
(b) Transparency in Coverage.--Section 1311(e)(3) of the Patient 
Protection and Affordable Care Act (42 U.S.C. 18031(e)(3)) is amended--
(1) in subparagraph (A)--
(A) in clause (vii), by inserting before the period 
the following: ``, including, for all items and 
services covered under the plan, aggregate information 
on specific payments the plan has made to out-of-
network health care providers on behalf of plan 
enrollees'';
(B) by designating clause (ix) as clause (x); and
(C) by inserting after clause (viii), the 
following:
``(ix) Information on the specific 
negotiated payment rates between the plan and 
health care providers for all items and 
services covered under the plan.'';
(2) in subparagraph (B)--
(A) in the heading, by striking ``use'' and 
inserting ``delivery methods and use'';
(B) by inserting ``, as applicable,'' after 
``English proficiency''; and
(C) by inserting after the second sentence, the 
following: ``The Secretary shall establish standards 
for electronic delivery and access to such information 
by individuals, free of charge, in machine readable 
format, through an Internet website and via open 
APIs.'';
(3) in subparagraph (C)--
(A) in the first sentence, by inserting ``or out-
of-network provider'' after ``item or service by a 
participating provider'';
(B) in the second sentence, by striking ``through 
an Internet website'' and inserting ``free of charge, 
in machine readable format, through an Internet 
website, and via open APIs, in accordance with 
standards established by the Secretary,''; and
(C) by adding at the end the following: ``Such 
information shall include specific negotiated rates 
that allow for comparison between providers and across 
plans, and related to a patient's specific plan, 
including after an enrollee has exceeded their 
deductible responsibility.''; and
(4) in subparagraph (D) by striking ``subparagraph (A)'' 
and inserting ``subparagraphs (A), (B), and (C)''.

SEC. 322. ACCESS OF INDIVIDUALS TO PROTECTED HEALTH INFORMATION.

The provisions of section 164.524 of title 45, Code of Federal 
Regulations, as in effect on the day before the date of the enactment 
of this Act, shall have the force and effect of law.

SEC. 323. ADVISORY GROUP ON REDUCING BURDEN OF HOSPITAL ADMINISTRATIVE 
REQUIREMENTS.

(a) In General.--Not later than January 1, 2026, the Secretary of 
Health and Human Services shall convene an advisory group to provide, 
in accordance with this section, recommendations on ways the Federal 
Government could reduce the burden of administrative requirements on 
hospitals.
(b) Recommendations.--Not later than January 1, 2027, the advisory 
board convened under this section shall--
(1) submit to the Secretary of Health and Human Services 
recommendations described under subsection (a) for executive 
action and any recommendations for State actions for potential 
consideration in making grants under section 2(c) to States; 
and
(2) submit to Congress recommendations described under 
subsection (a) for legislative proposals.
(c) Membership.--The advisory board under this section shall 
consist of the following members:
(1) Three representatives of companies that have--
(A) geographically distributed workforces;
(B) at least 10,000 employees; and
(C) no more than 10 percent of such employees in 
any single State.
(2) Three representatives of health insurance issuers and 
health plans, consisting of--
(A) one representative of for-profit health 
insurance issuers and health plans with at least 
20,000,000 enrollees in the employer-sponsored market;
(B) one representative of non-profit health 
insurance issuers and health plans operating in at 
least 5 States; and
(C) one representative of non-profit health 
insurance issuers and health plans operating in a rural 
State (as defined by the Census Bureau).
(3) Seven public policy experts in the field of hospital 
consolidation.

SEC. 324. DATA REPORTING TO IMPROVE THE TRANSPARENCY REGARDING HOW 340B 
HOSPITAL COVERED ENTITIES PROVIDE CARE FOR PATIENTS.

Section 340B of the Public Health Service Act (42 U.S.C. 256b) is 
amended by adding at the end the following new subsection:
``(f) Data Reporting To Improve the Transparency Regarding How 
Hospital Covered Entities Provide Care for Patients.--
``(1) In general.--Beginning on the date that is 14 months 
after the date of the enactment of this subsection, and 
annually thereafter, subject to subparagraph (C), a covered 
entity described in subparagraph (L) or (M) of subsection 
(a)(4), unless otherwise indicated, shall report on the 
following, with respect to the previous year, in such a manner 
and form as specified by the Secretary:
``(A) The following information:
``(i) With respect to such covered entity 
and with respect to each child site of such 
entity (as referenced in paragraph (11)), the 
number and percentage of individuals who are 
dispensed or administered drugs that are 
subject to an agreement under this section, 
organized by form of health insurance coverage 
of such individuals (including at least by the 
Medicare program under title XVIII of the 
Social Security Act, the Medicaid program under 
title XIX of such Act, health insurance 
coverage offered in the individual or group 
market or a group health plan (as such terms 
are defined in section 2791), and uninsured).
``(ii) With respect to each such child site 
of such entity, the total costs incurred at 
each such site and the cost incurred at each 
such site for charity care as defined in line 
23 of worksheet S-10 to the Medicare cost 
report or in any successor form.
``(B) The aggregate amount of gross reimbursement 
received by each such covered entity (including child 
sites of such entity) described in such subparagraph 
(L) or (M) for all drugs purchased that are subject to 
an agreement under this section and the entity's 
aggregate acquisition cost for such drugs.
``(C) In the case of covered entity described in 
subparagraph (L) of subsection (a)(4), at the time of 
application and recertification (and at least annually 
thereafter), the contract that is the basis for 
eligibility under the requirement under clause (i) of 
such subparagraph and any modifications to such 
contract for purposes of review by the Secretary.
``(D) With respect to such covered entity and with 
respect to each child site of such entity, the name of 
all third-party vendors or other similar entities that 
the covered entity contracts with to provide services 
associated with the program under this section.
``(2) Availability of information.--
``(A) In general.--The Secretary shall make data 
reported by covered entities under subparagraphs (A), 
(C), and (D) of paragraph (1) available on the public 
website of the Department of Health and Human Services 
in an electronic and searchable format, which may 
include the 340B Office of Pharmacy Affairs Information 
System or a successor to such system.
``(B) Format.--Data made available under 
subparagraph (A) shall be made available in a manner 
that shows each category of data reported both in the 
aggregate and identified by covered entities described 
in subparagraphs (L) and (M) of subsection (a)(4) and 
child sites of such covered entities. In carrying out 
this paragraph, with respect to data reported pursuant 
to paragraph (1)(C), the Secretary shall ensure that 
any proprietary information shall be redacted from 
contracts submitted pursuant to such paragraph (1)(C) 
before posting such data.
``(3) Interim final regulations.--The Secretary shall issue 
interim final regulations no later than the date that is 6 
months after the date of the enactment of this subsection, to 
carry out this subsection and shall finalize such regulations 
prior to the end of the moratorium period to which subsection 
(a)(11) applies.
``(4) Reports to congress.--
``(A) OIG report.--Not later than 2 years after the 
date of the enactment of this subsection, the Office of 
the Inspector General shall submit to Congress a final 
report on the level of charity care provided by covered 
entities described in subparagraphs (L) and (M) of 
subsection (a)(4) and separately by child sites of such 
covered entities, as reported in paragraph (1)(A).
``(B) GAO reports.--
``(i) Initial report.--Not later than 1 
year after the date of the enactment of this 
subsection, the Comptroller General of the 
United States shall submit to Congress a 
report--
``(I) analyzing the State and local 
government contracts intended to 
satisfy the requirement under 
subsection (a)(4)(L)(i) for a covered 
entity to qualify as an entity 
described in subparagraph (L) of 
subsection (a)(4);
``(II) assessing the amount of care 
such contracts obligate such entity to 
provide to low-income individuals 
ineligible for Medicare under title 
XVIII of the Social Security Act and 
Medicaid under title XIX of such Act; 
and
``(III) analyzing how these 
contracts define low-income individuals 
and whether the Secretary reviews such 
determinations.
``(ii) Subsequent report.--Not later than 2 
years after the date of the enactment of this 
subsection, the Comptroller General of the 
United States shall submit to Congress a final 
report on the information collected under 
paragraph (1)(B) regarding the difference 
between the aggregate gross reimbursement and 
aggregate acquisition costs received by each 
such covered entity (including child sites of 
such entity) for drugs subject to an agreement 
under this section.''.

SEC. 325. REQUIRING 340B DRUG DISCOUNT PROGRAM REPORTS BY DSH HOSPITAL 
COVERED ENTITIES ON LOW-INCOME UTILIZATION RATE OF 
OUTPATIENT HOSPITAL SERVICES.

(a) In General.--Section 340B(d)(2) of the Public Health Service 
Act (42 U.S.C. 256b(d)(2)) is amended--
(1) in subparagraph (B)(i), by inserting before the period 
at the end the following: ``, including, with respect to such 
updates made on or after one year after the date of enactment 
of the Act, by requiring covered entities described in 
subsection (a)(4)(L) to submit (and to so regularly update) 
information described in subparagraph (C)''; and
(2) by adding at the end the following new subparagraph:
``(C) Information on low-income utilization rate of 
outpatient hospital services.--
``(i) In general.--For purposes of 
subparagraph (B)(i), the information described 
in this subparagraph, with respect to a covered 
entity described in subsection (a)(4)(L) and an 
update under such subparagraph (B)(i), is--
``(I) the low-income outpatient 
utilization rate of such covered entity 
for the most recent fiscal year; and
``(II) the low-income outpatient 
utilization rate of off-site outpatient 
facilities, clinics, eligible off-site 
locations, and associated sites of such 
entity identified as child sites of 
such entity pursuant to the 
identification system under 
subparagraph (B)(iv) for the most 
recent fiscal year.
``(ii) Low-income outpatient utilization 
rate defined.--In this subparagraph, the term 
`low-income outpatient utilization rate' has 
the meaning given the term `low-income 
utilization rate' under paragraph (3) of 
section 1923(b) of the Social Security Act, 
except that--
``(I) clauses (i) and (ii) of 
subparagraph (A) of such paragraph 
shall be applied as if--
``(aa) each reference to 
`patient services' were a 
reference to `patient services 
furnished on an outpatient 
basis'; and
``(bb) for purposes of 
clause (i)(II) of this 
subparagraph, each reference to 
`hospital' were a reference to 
`off-site outpatient 
facilities, clinics, eligible 
off-site locations, and 
associated sites of the 
hospital that are identified as 
child sites of the hospital 
pursuant to the identification 
system under section 
340B(d)(2)(B)(iv) of the Public 
Health Service Act'; and
``(II) clauses (i) and (ii) of 
subparagraph (B) of such paragraph 
shall be applied as if--
``(aa) each reference to 
`inpatient hospital services' 
were a reference to `outpatient 
hospital services'; and
``(bb) for purposes of 
clause (i)(II) each reference 
to `hospital's charges' were a 
reference to `charges of the 
off-site outpatient facilities, 
clinics, eligible off-site 
locations, and associated sites 
of the hospital that are 
identified as child sites of 
the hospital pursuant to the 
identification system under 
section 340B(d)(2)(B)(iv) of 
the Public Health Service 
Act'.''.
(b) Annual Reports.--Not later than 1 year after the date of 
enactment of this Act, and annually thereafter, the Administrator of 
the Health Resources and Services Administration shall submit to 
Congress a report on information submitted by covered entities for the 
previous year pursuant to the amendments made by subsection (a).

SEC. 326. EMPLOYER BENEFITS REPORTS.

(a) In General.--Subject to subsection (b), for each plan year 
beginning on or after 1 year after the date of enactment of this Act, a 
group health plan and a health insurance issuer offering group health 
insurance coverage shall provide to each individual enrolled in such 
plan or such coverage for such plan year a notification containing the 
following:
(1) The amount the sponsor of such group health plan 
expended with respect to such individual under such plan for 
such plan year (or, in the case of a health insurance issuer 
offering group health insurance coverage, the amount the 
employer of such individual contributed for such coverage for 
such individual for such plan year).
(2) The amount the sponsor of such group health plan 
expended with respect to such individual under such plan for 
each previous plan year (or, in the case of a health insurance 
issuer offering group health insurance coverage, the amount the 
employer of such individual contributed for such coverage for 
such individual for each previous plan year), if applicable.
(b) Limitation.--Subsection (a) shall not apply to a group health 
plan, or a health insurance issuer offering group health insurance 
coverage, for a plan year if, for such plan year, the number of 
individuals enrolled under such plan or such coverage was less than 
100.
(c) Penalty.--In the case that the Secretary of Health and Human 
Services determines that a group health plan or a health insurance 
issuer offering group health insurance failed to provide the notice 
required under subsection (a), the Secretary may impose a civil 
monetary penalty on the sponsor of such plan or such issuer, as 
applicable, in an amount not to exceed $100 per individual enrolled in 
such plan or such coverage per day that such sponsor or issuer failed 
to provide such notification to such individual.
(d) Definitions.--In this section, the terms ``group health plan'', 
``group health insurance coverage'', ``health insurance issuer'', and 
``sponsor'' have the meaning given such terms in section 2791 of the 
Public Health Service Act (42 U.S.C. 300gg-91).

SEC. 327. GOVERNMENT ACCOUNTABILITY OFFICE STUDY ON PROFIT- AND 
REVENUE-SHARING IN HEALTH CARE.

(a) Study.--Not later than 1 year after the date of enactment of 
this Act, the Comptroller General of the United States shall conduct a 
study to--
(1) describe what is known about profit- and revenue-
sharing relationships in the commercial health care markets, 
including those relationships that--
(A) involve one or more--
(i) physician groups that practice within a 
hospital included in the profit- or revenue-
sharing relationship, or refer patients to such 
hospital;
(ii) laboratory, radiology, or pharmacy 
services that are delivered to privately 
insured patients of such hospital;
(iii) surgical services;
(iv) hospitals or group purchasing 
organizations; or
(v) rehabilitation or physical therapy 
facilities or services; and
(B) include revenue- or profit-sharing whether 
through a joint venture, management or professional 
services agreement, or other form of gain-sharing 
contract;
(2) describe Federal oversight of such relationships, 
including authorities of the Department of Health and Human 
Services and the Federal Trade Commission to review such 
relationships and their potential to increase costs for 
patients, and identify limitations in such oversight; and
(3) as appropriate, make recommendations to improve Federal 
oversight of such relationships.
(b) Report.--Not later than 1 year after the date of enactment of 
this Act, the Comptroller General of the United States shall prepare 
and submit a report on the study conducted under subsection (a) to the 
Committee on Health, Education, Labor, and Pensions of the Senate and 
the Committee on Education and Workforce and the Committee on Energy 
and Commerce of the House of Representatives.

Subtitle C--Prescription Drug Competition and Innovation

SEC. 341. EXPEDITED DEVELOPMENT AND PRIORITY REVIEW FOR GENERIC COMPLEX 
DRUG PRODUCTS.

Subchapter A of chapter V of the Federal Food, Drug, and Cosmetic 
Act (21 U.S.C. 351 et seq.) is amended by adding at the end the 
following:

``SEC. 524C. EXPEDITED DEVELOPMENT AND PRIORITY REVIEW FOR GENERIC 
COMPLEX DRUG PRODUCTS.

``(a) Establishment of Program.--The Secretary shall establish a 
program to expedite the development of, and provide priority review 
under section 505(j) for, generic complex drug products.
``(b) Request for Designation.--A sponsor of a generic complex drug 
product may request that the Secretary designate such product for 
expedited development and priority review under this section.
``(c) Designation Process.--
``(1) In general.--Not later than 60 calendar days after 
the receipt of a request under subsection (b), the Secretary 
shall determine whether the product that is the subject of the 
request meets the criteria under subsection (e) to be 
considered a generic complex drug product. If the Secretary 
determines that the product meets the criteria, the Secretary 
shall designate the product for expedited development and 
priority review.
``(2) Review.--Review of a request under subsection (b) 
shall be undertaken by a team that is composed of experienced 
staff and senior managers of the Food and Drug Administration.
``(3) Withdrawal.--The Secretary may not withdraw a 
designation granted under this section on the basis of the 
criteria under subsection (e) no longer applying because of the 
subsequent clearance or approval of any other product.
``(d) Expedited Development and Priority Review Guidance.--
``(1) Content.--Not later than 1 year after the date of 
enactment of this section, the Secretary shall issue guidance 
on the implementation of this section. Such guidance shall--
``(A) set forth the process by which a person may 
seek a designation under subsection (c);
``(B) provide a template for requests under 
subsection (b);
``(C) identify the criteria the Secretary will use 
in evaluating a request for designation under this 
section; and
``(D) identify the criteria and processes the 
Secretary will use to expedite the development and 
review of products designated under this section.
``(2) Process.--Prior to finalizing the guidance under 
paragraph (1), the Secretary shall seek public comment on a 
draft version of that guidance.
``(e) Generic Complex Drug Product Defined.--In this section, the 
term `generic complex drug product' means a product that represents a 
complex therapy that consists of or includes a drug that has been 
approved under section 505(j) and that--
``(1)(A) contains complex active ingredients (such as 
peptides, polymeric compounds, complex mixtures of active 
ingredients, and naturally sourced ingredients);
``(B) is composed of complex formulations (such as 
liposomes or colloids);
``(C) requires a complex route of delivery (such as locally 
acting drugs such as dermatological products and complex 
ophthalmological products and otic dosage forms that are 
formulated as suspensions, emulsions, or gels); or
``(D) involves a complex dosage form (such as transdermals, 
metered dose inhalers, or extended release injectables);
``(2) presents as a complex drug-device combination product 
(such as auto injectors or metered dose inhalers); or
``(3) is a product that would benefit from early scientific 
engagement due to complexity or uncertainty concerning the 
approval pathway under section 505(j).''.

SEC. 342. PREVENTING BLOCKING OF GENERIC DRUGS.

(a) In General.--Section 505(j)(5)(B)(iv) of the Federal Food, 
Drug, and Cosmetic Act (21 U.S.C. 355(j)(5)(B)(iv)) is amended--
(1) in subclause (I), by striking ``180 days after the 
date'' and all that follows through ``by any first applicant'' 
and inserting ``180 days after the earlier of the dates 
described in items (aa) and (bb) of subclause (II)'';
(2) by redesignating subclause (II) as subclause (III); and
(3) by inserting after subclause (I) the following:
``(II) Dates described.--
``(aa) First date.--The 
date described in this item is 
the date of the first 
commercial marketing of the 
drug (including the commercial 
marketing of the listed drug) 
by any first applicant.
``(bb) Second date.--The 
date described in this item is 
the date on which all of the 
following conditions are first 
met, provided no application 
submitted by any first 
applicant is approved on or 
before such date:

``(AA) An 
application for the 
drug submitted by an 
applicant other than a 
first applicant has 
received tentative 
approval and could 
receive approval, if no 
first applicant were 
eligible for 180-day 
exclusivity under this 
clause, and such 
applicant has not 
entered into an 
agreement that would 
prevent commercial 
marketing upon approval 
and has submitted a 
notification to the 
Secretary documenting 
that it has not entered 
into an agreement that 
would prevent 
commercial marketing.

``(BB) Thirty-three 
months have passed 
since the date of 
submission of an 
application for the 
drug by one first 
applicant, if there is 
only one first 
applicant, or, in the 
case of more than one 
first applicant, 33 
months have passed 
since the date of 
submission of all such 
applications.

``(CC) Approval of 
an application for the 
drug submitted by at 
least one first 
applicant would not be 
precluded under clause 
(iii).''.

(b) Information.--Not later than 60 days after the date of 
enactment of this Act, the Secretary of Health and Human Services 
(referred to in this subsection as the ``Secretary'') shall publish, as 
appropriate and available, information sufficient to allow applicants 
to assess whether the conditions described in subitems (AA) through 
(CC) of section 505(j)(5)(B)(iv)(II)(bb) of the Federal Food, Drug, and 
Cosmetic Act (as amended by subsection (a)) have been or will be 
satisfied for all applications where the exclusivity period under 
(iv)(I) of section 505(j)(5)(B) of the Federal Food, Drug, and Cosmetic 
Act (as so amended) has not expired, and shall provide updates to 
reflect the most recent information available to the Secretary.

SEC. 343. ENSURING TIMELY ACCESS TO GENERICS.

Section 505(q) of the Federal Food, Drug, and Cosmetic Act (21 
U.S.C. 355(q)) is amended--
(1) in paragraph (1)--
(A) in subparagraph (A)(i), by inserting ``, 
10.31,'' after ``10.30'';
(B) in subparagraph (E)--
(i) by striking ``application and'' and 
inserting ``application or'';
(ii) by striking ``If the Secretary'' and 
inserting the following:
``(i) In general.--If the Secretary'';
(iii) by striking the second sentence and 
inserting the following:
``(ii) Primary purpose of delaying.--
``(I) In general.--In determining 
whether a petition was submitted with 
the primary purpose of delaying an 
application, the Secretary may consider 
the following factors:
``(aa) Whether the petition 
was submitted in accordance 
with paragraph (2)(B), based on 
when the petitioner knew or 
reasonably should have known 
the relevant information relied 
upon to form the basis of such 
petition.
``(bb) Whether the 
petitioner has submitted 
multiple or serial petitions or 
supplements to petitions 
raising issues that reasonably 
could have been known to the 
petitioner at the time of 
submission of the earlier 
petition or petitions.
``(cc) Whether the petition 
was submitted close in time to 
a known, first date upon which 
an application under subsection 
(b)(2) or (j) of this section 
or section 351(k) of the Public 
Health Service Act could be 
approved.
``(dd) Whether the petition 
was submitted without relevant 
data or information in support 
of the scientific positions 
forming the basis of such 
petition.
``(ee) Whether the petition 
raises the same or 
substantially similar issues as 
a prior petition to which the 
Secretary has responded 
substantively already, 
including if the subsequent 
submission follows such 
response from the Secretary 
closely in time.
``(ff) Whether the petition 
requests changing the 
applicable standards that other 
applicants are required to 
meet, including requesting 
testing, data, or labeling 
standards that are more onerous 
or rigorous than the standards 
the Secretary has determined to 
be applicable to the listed 
drug, reference product, or 
petitioner's version of the 
same drug.
``(gg) The petitioner's 
record of submitting petitions 
to the Food and Drug 
Administration that have been 
determined by the Secretary to 
have been submitted with the 
primary purpose of delay.
``(hh) Other relevant and 
appropriate factors, which the 
Secretary shall describe in 
guidance.
``(II) Guidance.--The Secretary may 
issue or update guidance, as 
appropriate, to describe factors the 
Secretary considers in accordance with 
subclause (I).''; and
(iv) by adding at the end the following:
``(iii) Referral to the federal trade 
commission.--The Secretary shall establish 
procedures for referring to the Federal Trade 
Commission any petition or supplement to a 
petition that the Secretary determines was 
submitted with the primary purpose of delaying 
approval of an application. Such procedures 
shall include notification to the petitioner by 
the Secretary.'';
(C) by striking subparagraph (F);
(D) by redesignating subparagraphs (G) through (I) 
as subparagraphs (F) through (H), respectively; and
(E) in subparagraph (H), as so redesignated, by 
striking ``submission of this petition'' and inserting 
``submission of this document'';
(2) in paragraph (2)--
(A) by redesignating subparagraphs (A) through (C) 
as subparagraphs (C) through (E), respectively;
(B) by inserting before subparagraph (C), as so 
redesignated, the following:
``(A) In general.--A person shall submit a petition 
to the Secretary under paragraph (1) before filing a 
civil action in which the person seeks to set aside, 
delay, rescind, withdraw, or prevent submission, 
review, or approval of an application submitted under 
subsection (b)(2) or (j) of this section or section 
351(k) of the Public Health Service Act. Such petition 
and any supplement to such a petition shall describe 
all information and arguments that form the basis of 
the relief requested in any civil action described in 
the previous sentence.
``(B) Timely submission of citizen petition.--A 
petition and any supplement to a petition shall be 
submitted not later than 60 days after the date on 
which the person first knew, or reasonably should have 
known, the information that forms the basis of the 
request made in the petition or supplement.'';
(C) in subparagraph (C), as so redesignated--
(i) in the heading, by striking ``within 
150 days'';
(ii) in clause (i), by striking ``during 
the 150-day period referred to in paragraph 
(1)(F),''; and
(iii) by amending clause (ii) to read as 
follows:
``(ii) on or after the date that is 151 
days after the date of submission of the 
petition, the Secretary approves or has 
approved the application that is the subject of 
the petition without having made such a final 
decision.'';
(D) by amending subparagraph (D), as so 
redesignated, to read as follows:
``(D) Dismissal of certain civil actions.--
``(i) Petition.--If a person files a civil 
action against the Secretary in which a person 
seeks to set aside, delay, rescind, withdraw, 
or prevent submission, review, or approval of 
an application submitted under subsection 
(b)(2) or (j) of this section or section 351(k) 
of the Public Health Service Act without 
complying with the requirements of subparagraph 
(A), the court shall dismiss without prejudice 
the action for failure to exhaust 
administrative remedies.
``(ii) Timeliness.--If a person files a 
civil action against the Secretary in which a 
person seeks to set aside, delay, rescind, 
withdraw, or prevent submission, review, or 
approval of an application submitted under 
subsection (b)(2) or (j) of this section or 
section 351(k) of the Public Health Service Act 
without complying with the requirements of 
subparagraph (B), the court shall dismiss with 
prejudice the action for failure to timely file 
a petition.
``(iii) Final response.--If a civil action 
is filed against the Secretary with respect to 
any issue raised in a petition timely filed 
under paragraph (1) in which the petitioner 
requests that the Secretary take any form of 
action that could, if taken, set aside, delay, 
rescind, withdraw, or prevent submission, 
review, or approval of an application submitted 
under subsection (b)(2) or (j) of this section 
or section 351(k) of the Public Health Service 
Act before the Secretary has taken final agency 
action on the petition within the meaning of 
subparagraph (C), the court shall dismiss 
without prejudice the action for failure to 
exhaust administrative remedies.''; and
(E) in clause (iii) of subparagraph (E), as so 
redesignated, by striking ``as defined under 
subparagraph (2)(A)'' and inserting ``within the 
meaning of subparagraph (C)''; and
(3) in paragraph (4)--
(A) by striking ``Exceptions'' and all that follows 
through ``This subsection does'' and inserting 
``Exceptions.--This subsection does'';
(B) by striking subparagraph (B); and
(C) by redesignating clauses (i) and (ii) as 
subparagraphs (A) and (B), respectively, and adjusting 
the margins accordingly.

SEC. 344. PREEMPTION OF STATE BARRIERS TO THE SUBSTITUTION OF 
BIOSIMILAR PRODUCTS.

No State, or any political subdivision thereof, may, under any 
circumstances, prohibit a pharmacy or pharmacist from dispensing, in 
place of a biological reference product, any biosimilar that the Food 
and Drug Administration has designated as an interchangeable product 
for that biological reference product.

SEC. 345. INCREASING PHARMACEUTICAL OPTIONS TO TREAT AN UNMET MEDICAL 
NEED.

Subsection (b) of section 506 of the Federal Food, Drug, and 
Cosmetic Act (21 U.S.C. 356) is amended by adding at the end the 
following:
``(4) Unmet medical need.--For purposes of paragraph (1), a 
drug to address an unmet medical need for a disease or 
condition shall be deemed to address such medical need if fewer 
than 3 available drugs exist for the treatment of such disease 
or condition.''.

SEC. 346. CONDITIONAL APPROVAL OF NEW HUMAN DRUGS FOR INDIVIDUALS WITH 
RARE, PROGRESSIVE, AND SERIOUS DISEASES.

(a) In General.--Subchapter A of chapter V of the Federal Food, 
Drug, and Cosmetic Act (21 U.S.C. 351 et seq.), as amended by section 
341, is further amended by adding at the end of the following:

``SEC. 524D. CONDITIONAL APPROVAL OF HUMAN DRUGS FOR INDIVIDUALS WITH 
RARE, PROGRESSIVE, AND SERIOUS DISEASES.

``(a) Conditional Approval; Priority Review; Other Designations.--
``(1) In general.--The sponsor of a drug may file with the 
Secretary an application for conditional approval of an 
eligible drug described in subsection (b). The Secretary shall 
approve or deny such application in accordance with subsection 
(c).
``(2) Priority review.--The Secretary shall give priority 
review to an application for conditional approval of an 
eligible drug described in subsection (b).
``(3) Other designations.--If a drug that is granted 
conditional approval under this section is eligible for a 
special designation by the Secretary under this Act, including 
as a drug for a rare disease or condition under section 526, 
all applicable benefits of such other designation shall be 
available for use under such conditional approval, including 
any tax credits and waiving of fees under chapter VII.
``(4) Other programs.--A sponsor of a drug seeking 
conditional approval of such drug under this section may also 
seek designation, exclusivity, or approval, as applicable, of 
such drug under other applicable provisions of this Act or the 
Public Health Service Act, subject to the requirements of such 
provisions.
``(b) Eligibility.--
``(1) In general.--A drug may be eligible for conditional 
approval under this section if such drug is intended to treat a 
disease or condition that is--
``(A) rapidly progressive, terminal, and has 
substantial unmet medical need, as determined by the 
Secretary; or
``(B) a rare disease or condition (as defined in 
section 526(a)(2)) that results in a substantially 
shortened lifespan, substantial reduction in quality of 
life, or other substantial adverse health effects, as 
determined by the Secretary.
``(2) Exclusion from eligibility.--A drug that is intended 
to treat or respond to a material threat identified by the 
Secretary of Homeland Security under section 319F-
2(c)(2)(A)(ii) of the Public Health Service Act shall not be 
eligible for conditional approval under this section.
``(c) Standard of Review for Conditional Approval.--
``(1) Requirements.--The Secretary shall only approve an 
application for conditional approval of a drug under this 
section if--
``(A) the Secretary determines that--
``(i)(I) evidence of safety for the drug 
has been established by--
``(aa) the completion of a phase 1 
clinical investigation of the drug (as 
described in section 312.21 of title 
21, Code of Federal Regulations (or 
successor regulations)); or
``(bb) another demonstration of 
safety, as determined appropriate by 
the Secretary; and
``(II) evidence of effectiveness in 
treating a given indication (which indication 
is congruent with the eligibility requirements 
of subsection (b)), as established by an 
ongoing or completed phase 2 clinical 
investigation of the drug (as described in 
section 312.21 of title 21, Code of Federal 
Regulations (or successor regulations)); or
``(ii) in the case of a drug that is 
intended to treat a terminal pediatric rare 
disease or condition (as defined in section 
526(a)(2)) that does not predominately affect 
adults--
``(I) evidence of safety for the 
drug has been established in accordance 
with clause (i)(I); and
``(II) the drug shows preliminary 
evidence of clinical effectiveness 
based upon studies in animal models; 
and
``(B) the sponsor has provided a written 
affirmation of the sponsor's intent to pursue under 
section 505 of this Act or section 351 of the Public 
Health Service Act approval of the drug, which 
affirmation shall include a justification and a plan 
for pursuing such approval.
``(2) Rolling, real-time review.--
``(A) In general.--If the Secretary determines, 
after preliminary evaluation of data submitted by the 
sponsor, that a drug may meet the standard for 
conditional approval, the sponsor may submit portions 
of an application for conditional approval of a drug 
under this section for evaluation by the Secretary 
before the sponsor submits a complete application, 
which submission shall include--
``(i) a schedule for submission of 
information necessary to make the application 
complete; and
``(ii) a payment of any fee that may be 
required under section 736.
``(B) Review.--The Secretary--
``(i) shall evaluate each application 
submitted under subparagraph (A) to assess 
whether such application is complete or ready 
to be filed; and
``(ii) may commence review of portions of 
such application for approval.
``(3) Use of real-world evidence.--
``(A) In general.--The Secretary shall allow the 
use of real-world evidence (as defined in section 
505F(b)), including real-world data used to generate 
real-world evidence, and of external sources of data, 
including prospective or retrospective natural history 
data, to support an application for conditional 
approval under this section.
``(B) Data integrity requirements.--In using 
evidence described in subparagraph (A) to support an 
application for conditional approval under this 
section, the sponsor shall consider the guidance of the 
Food and Drug Administration entitled `Data Standards 
for Drug and Biological Product Submissions Containing 
Real-World Data' and dated December 2023 (or successor 
guidance).
``(d) FDA Authority To Withdraw Conditional Approval.--
``(1) In general.--The Secretary may withdraw the 
conditional approval of a drug under this section if--
``(A) after adequate review of appropriate safety 
data, including data from an observational registry 
established under subsection (g), the Secretary 
determines that such data no longer supports 
conditional approval;
``(B) the Secretary determines that the application 
for conditional approval submitted under subsection 
(a)(1) contained an untrue statement of material fact; 
or
``(C) the Secretary determines that the drug is no 
longer eligible under subsection (b).
``(2) FDA examination authority.--
``(A) In general.--For purposes of determining 
whether to withdraw the conditional approval of a drug 
under paragraph (1), the Secretary may--
``(i) review any available clinical data 
made available through clinical trials or an 
observational registry under subsection (g), 
applicable to such drug; and
``(ii) determine whether the sponsor of 
such drug is in violation of a requirement 
established under paragraph (3) or (4) of 
section 505(o) or section 505-1 with respect to 
the drug.
``(B) Transparency.--
``(i) In general.--The Secretary may 
require drug sponsors and observational 
registries under subsection (g) to submit the 
data described in subparagraph (A) for the 
purposes of the review under that subparagraph.
``(ii) Fines.--The Secretary may levy fines 
on sponsors and observational registries that 
do not comply with a request for data under 
clause (i) within such reasonable timeframe as 
is established by the Secretary.
``(3) Effect of withdrawal.--
``(A) Availability to new patients.--
``(i) In general.--If a conditional 
approval is withdrawn under this subsection, 
the sponsor may not make the drug available to 
any new patients, but may continue to make such 
drug available to patients who started taking 
the drug prior to the date of withdrawal.
``(ii) Effect.--Nothing in this 
subparagraph shall be construed to require--
``(I) a patient to continue taking 
a conditionally approved drug if such 
patient decides to stop taking such 
drug; or
``(II) the sponsor to ensure such 
drug continues to be manufactured after 
the date of withdrawal.
``(B) Civil monetary penalty.--Any sponsor who 
makes available to new patients a drug for which 
conditional approval has been withdrawn under this 
subsection shall be subject to such civil monetary 
penalty as is determined by the Secretary.
``(4) Withdrawal notice.--Upon determining to withdraw the 
conditional approval of a drug under paragraph (1), the 
Secretary shall submit written notice to the sponsor of such 
drug and such withdrawal shall be effective on the date that is 
14 days after the date of such submission of notice.
``(5) Appeals.--Not later than 180 days after the date of 
enactment of this section, the Secretary, by rule, shall 
establish a process by which a sponsor of a drug for which 
conditional approval was withdrawn under paragraph (1) may 
appeal such withdrawal.
``(6) Automatic withdrawal.--
``(A) In general.--If the sponsor of a drug that 
receives conditional approval under this section does 
not submit an application for renewal of such 
conditional approval under subsection (f)(2) by the 
deadline under that subsection, such conditional 
approval shall automatically be withdrawn in accordance 
with paragraph (3) on the date on which such 
conditional approval expires.
``(B) Marketing requirement.--If any drug that 
receives conditional approval under this section is not 
brought to market within 1 year of the date on which 
the conditional approval is granted, such conditional 
approval, along with any benefits described in 
subsection (a)(3), shall automatically be withdrawn in 
accordance with paragraph (3) on such date.
``(C) No right to appeal; effect of automatic 
withdrawal.--
``(i) In general.--A sponsor shall not have 
the right to appeal an automatic withdrawal 
under this paragraph.
``(ii) Effect.--The Secretary shall have no 
means or power to prevent an automatic 
withdrawal under this paragraph from occurring.
``(e) Labeling; Review of Materials.--
``(1) In general.--Sponsors may not make available to 
patients a drug conditionally approved under this section, 
unless--
``(A) all labeling and advertising of such drug 
contains the statement `conditionally approved for a 
limited population' in a prominent manner and adjacent 
to, and not more prominent than--
``(i) the proprietary name of such drug, if 
any; or
``(ii) if there is no proprietary name, the 
established name of such drug, if any, as 
defined in section 502(e)(3), or, in the case 
of a drug that is a biological product, the 
proper name, as defined by regulation; and
``(B) the prescribing information for the drug 
required by section 201.57 of title 21, Code of Federal 
Regulations (or any successor regulation), includes the 
following statement: `This drug is conditionally 
approved for use in a limited and specific population. 
This drug has not received full approval by the Food 
and Drug Administration. Conditional approval of this 
drug may be withdrawn at short notice.'.
``(2) Submission.--Not later than 45 days before such 
materials are distributed, all promotional, educational, and 
marketing materials for such drug shall be submitted to the 
Secretary for review.
``(3) Public list.--The Secretary shall maintain a list of 
all drugs conditionally approved under this section on a 
publicly accessible website. Such website shall briefly 
describe what each conditionally approved drug is and list the 
1 or more diseases or conditions for which the drug is 
indicated.
``(f) Renewal of Conditional Approval; Requirement To Bring Drug to 
Market.--
``(1) Duration; renewals.--The conditional approval for a 
drug under this section is effective for a 2-year period. The 
sponsor may request renewal of such conditional approval for up 
to 3 subsequent 2-year periods. Conditional approval with 
respect to a drug shall not exceed a total of 8 years from the 
initial date the drug was granted conditional approval.
``(2) Applications for renewal of conditional approval.--
``(A) In general.--Except as provided in 
subparagraph (C), the sponsor of a drug seeking a 
renewal of conditional approval for such drug under 
this subsection shall submit to the Secretary, not 
later than 180 days before the date on which such 
conditional approval expires, an application that 
contains the applicable information described in 
paragraph (3) in a standardized format determined by 
the Secretary.
``(B) Process for granting renewals.--Not later 
than 180 days after the date of enactment of this 
section, the Secretary, by rule, shall establish the 
process for granting a renewal under this subsection.
``(C) Exemption for small population diseases.--
``(i) In general.--The Secretary shall 
exempt from the requirements of subparagraph 
(A) and paragraph (3) an application for a 
renewal of conditional approval for a drug 
under this subsection if the Secretary 
determines that the population affected by the 
disease or condition that the drug is intended 
to treat does not support additional 
preliminary evidence of effectiveness (as 
defined in paragraph (3)(D)).
``(ii) Application for exemption.--Sponsors 
may submit an application for exemption under 
this subparagraph not later than 180 days 
before the date on which the conditional 
approval expires.
``(iii) Application process.--Not later 
than 180 days after the date of enactment of 
this section, the Secretary shall establish a 
standardized application process for purposes 
of this subparagraph.
``(iv) Deadline.--The Secretary shall 
approve or deny an application under this 
subparagraph before the date on which the 
conditional approval expires.
``(v) Appeals.--Not later than 180 days 
after the date of enactment of this section, 
the Secretary shall establish a process under 
which a sponsor my appeal a denial of an 
application under this subparagraph.
``(3) Additional preliminary evidence of effectiveness.--
The information described in this paragraph is the following:
``(A) For the first approval renewal.--With respect 
to an application under paragraph (2) for the first 
renewal of conditional approval for a drug under this 
subsection, additional preliminary evidence of 
effectiveness of the drug, as compared to the evidence 
provided in the initial application for conditional 
approval for the drug under subsection (c).
``(B) For the second approval renewal.--With 
respect to an application under paragraph (2) for the 
second renewal of conditional approval for a drug under 
this subsection, additional preliminary evidence of 
effectiveness of the drug, as compared to the evidence 
provided in the renewal application described in 
subparagraph (A).
``(C) For the final approval renewal.--With respect 
to an application under paragraph (2) for the third 
renewal of conditional approval for a drug under this 
subsection, a written affirmation from the head of the 
drug's review division of the Office of New Drugs or 
the Office of Therapeutic Products asserting that a 
third renewal is necessary--
``(i) for patients who have benefitted from 
such drug to retain access to such drug; and
``(ii) to generate additional preliminary 
evidence of effectiveness for the purposes of 
attaining approval under section 505 of this 
Act or section 351 of the Public Health Service 
Act.
``(D) Definition.--In this paragraph, the term 
`preliminary evidence of effectiveness' means--
``(i) clinical evidence generated by an 
ongoing or completed clinical trial conducted 
in accordance with section 11.22 of title 42, 
Code of Federal Regulations (or successor 
regulations);
``(ii) real-world evidence (as defined in 
section 505F(b)); or
``(iii) evidence from an observational 
registry under subsection (g).
``(4) Denial of renewal on the basis of data fraud.--The 
Secretary may deny the application for renewal of conditional 
approval for a drug under this subsection if the Secretary, in 
conducting a review under subsection (d)(2), finds that the 
evidence provided in such application under subparagraph (A) or 
(B) of paragraph (3) was fraudulently manipulated by the 
applicable observational registry and that such application 
substantially relies on such data.
``(g) Observational Registries.--
``(1) Establishment.--
``(A) In general.--Subject to subparagraph (C), the 
sponsor of a drug conditionally approved under this 
section shall establish an observational registry, for 
patients who are or will be treated with such drug, 
that pertains to the disease or condition that the drug 
is intended to treat.
``(B) Registries.--In establishing an observational 
registry for a drug under subparagraph (A), the sponsor 
may--
``(i) establish a new observational 
registry;
``(ii) use an existing observational 
registry that pertains to the disease or 
condition such drug is intended to treat;
``(iii) combine 1 or more existing 
observational registries that pertain to the 
disease or condition such drug is intended to 
treat with a new observational registry; or
``(iv) combine 2 or more existing 
observational registries that pertain to the 
disease or condition such drug is intended to 
treat.
``(C) Approval of registry and right to appeal.--
Not later than 180 days after the date of enactment of 
this section, the Secretary shall establish--
``(i) a process to approve or deny the 
establishment of an observational registry 
under subparagraph (A); and
``(ii) a process for sponsors that received 
such a denial to appeal the denial.
``(2) Requirement for patients to enroll in observational 
registry.--
``(A) In general.--A drug conditionally approved 
under this section shall not be made available to a 
patient unless such patient is enrolled in the 
applicable observational registry described in 
paragraph (1).
``(B) Informed consent.--
``(i) In general.--Prior to enrolling in an 
observational registry under subparagraph (A), 
a patient shall provide informed consent in 
accordance with clause (ii).
``(ii) Application of certain 
requirements.--The requirements for informed 
consent under part 50 of subchapter A of 
chapter I of title 21, Code of Federal 
Regulations (or successor regulations), shall 
apply to enrollment an observational registry 
under this paragraph.
``(3) Submission of patient data.--
``(A) In general.--The sponsor of a drug 
conditionally approved under this section shall be 
responsible for obtaining and submitting patient data 
to the applicable observational registry described in 
paragraph (1).
``(B) Submission standards.--Not later than 180 
days after the date of enactment of this section, the 
Secretary shall establish data submission standards for 
sponsors to comply with for purposes of subparagraph 
(A) to ensure that registry data is consistent and 
clinically informed.
``(4) Requirements for registries.--An observational 
registry described in paragraph (1) for a drug conditionally 
approved under this section may be operated by the sponsor of 
such drug or, at the sponsor's discretion, a third party, for-
profit organization, or nonprofit organization.
``(5) Risk and benefit data.--
``(A) In general.--The sponsor of a drug 
conditionally approved under this section shall submit 
relevant risk and benefit data to the applicable 
observational registry described in paragraph (1).
``(B) Online portal.--The Secretary shall operate 
an online portal on an existing website of the 
Secretary for sponsors to submit data described in 
subparagraph (A).
``(6) Accessibility.--
``(A) In general.--An observational registry 
described in paragraph (1) shall--
``(i) not later than 30 days after receipt 
of a request, provide patients (or their 
designated representatives) with access to such 
patient's personal registry information; and
``(ii) provide approved researchers and 
medical professionals access to de-identified 
and aggregated data from the registry for the 
purposes of indication- and disease-specific 
and translational research into conditions and 
diseases relating to the disease or condition 
that the drug tracked by the observational 
registry is intended to treat.
``(B) Approved researchers and medical 
professionals.--Not later than 180 days after the date 
of enactment of this section, the Secretary, by rule, 
shall establish a process for approving researchers and 
medical professionals for purposes of subparagraph 
(A)(ii).
``(7) Effect.--Nothing in this section shall be construed 
to modify or limit the Secretary's authority to require for a 
drug conditionally approved under this section any type of 
postapproval study under any other provision of law, including 
sections 505(o)(3), 505B, and 506.
``(h) Pursuit of a Different Indication.--
``(1) In general.--In the case of a drug conditionally 
approved under this section for which such approval was 
withdrawn under subsection (d), expired under subsection 
(f)(1), or was denied for renewal under subsection (f)(4), not 
later than 2 years after the date of withdrawal, expiration, or 
denial, as applicable, the sponsor of such drug shall have the 
opportunity to petition the Secretary to receive conditional 
approval of such drug, in accordance with this section, for a 
different indication.
``(2) Process.--Not later than 180 days after the date of 
enactment of this section, the Secretary shall establish a 
process for petitions under paragraph (1).
``(i) Transition to Other Forms of Approval.--
``(1) In general.--A drug that receives conditional 
approval under this section may be granted approval under 
section 505 of this Act or section 351 of the Public Health 
Service Act during the period in which such conditional 
approval is in effect. Effective on the date on which approval 
for such drug is granted under section 505 of this Act or 
section 351 of the Public Health Service Act, such conditional 
approval shall be automatically withdrawn in accordance with 
subsection (d)(3).
``(2) Consideration of certain evidence.--In determining 
whether to approve under section 505 of this Act or section 351 
of the Public Health Service Act a drug that has received 
conditional approval under this section, the Secretary may 
consider evidence from the observational registry for the drug 
under subsection (g).
``(j) Informed Consent.--
``(1) In general.--Prior to being prescribed a drug 
conditionally approved under this section, a patient shall 
provide informed consent in accordance with paragraph (2).
``(2) Application of certain requirements.--The 
requirements for informed consent under part 50 of subchapter A 
of chapter I of title 21, Code of Federal Regulations (or 
successor regulations), shall apply to drugs conditionally 
approved under this section.
``(3) Observational registries.--An observational registry 
established for a drug in accordance with subsection (g) may 
obtain, and maintain records of, informed consent of a patient 
on behalf of the drug sponsor, in accordance with paragraph 
(2).
``(4) Common rule.--Drugs conditionally approved under this 
section shall comply with subpart A of part 46 of title 45, 
Code of Federal Regulations (commonly known as the `Common 
Rule') (or successor regulations), if applicable.
``(k) Limitation on Liability.--With respect to any claim under 
State law relating to a drug made available pursuant to a grant of 
conditional approval under this section, no liability shall lie against 
a sponsor or manufacturer of the drug, or any health care provider who 
prescribes or administers the drug, absent intentional wrongdoing.
``(l) Report to Congress.--
``(1) In general.--Not later than 2 years after the date of 
enactment of this section, and once every 2 years thereafter, 
the Secretary, in collaboration with drug sponsors, shall 
submit a report to Congress on all drugs granted conditional 
approval under this section. Such report shall include--
``(A) an estimated number of patients treated with 
each such drug, and the number of patients tracked in 
an observational registry under subsection (g) with 
respect to each such drug, if applicable;
``(B) a discussion, at an aggregate level, of the 
types and amounts of data obtained through 
observational registries under subsection (g), such as 
patient treatments and uses, length of use, side 
effects encountered, relevant biomarkers, scan results, 
cause of death and how long the patient lived, and 
adverse drug effects;
``(C) a list of all such drugs for which an 
application for approval under this section, or an 
application for an extension of conditional approval 
under this section, has been submitted; and
``(D) the number of all applications granted and 
denied conditional approval under this section.
``(2) Sponsor participation.--Not later than 180 days 
before the date on which the Secretary submits a report under 
paragraph (1), the sponsor of a drug conditionally approved 
under this section shall provide to the Secretary the 
information described in subparagraphs (A) and (B) of paragraph 
(1), as applicable.
``(3) Notice authority.--The Secretary may notify sponsors 
of drugs conditionally approved under this section and 
observational registries under subsection (g) as necessary to 
complete a report under paragraph (1).''.
(b) Conforming Amendment.--Section 505(a) of the Federal Food, 
Drug, and Cosmetic Act (21 U.S.C. 355(a)) is amended by inserting ``, 
or there is in effect a conditional approval under section 524C with 
respect to such drug'' before the period.
(c) Reimbursement.--
(1) Private health insurers.--Section 2719A of the Public 
Health Service Act (42 U.S.C. 300gg-19a) is amended by adding 
at the end the following:
``(f) Coverage of Certain Drugs.--A group health plan or health 
insurance issuer offering group or individual health insurance coverage 
shall provide coverage for, and shall not impose any cost sharing 
requirements for, drugs conditionally approved under section 524D of 
the Federal Food, Drug, and Cosmetic Act for patients who have the 
disease or condition the drug is intended to treat.''.
(2) Federal health care programs.--The requirement under 
subsection (f) of section 2719A of the Public Health Service 
Act (as added by paragraph (1)) shall apply with respect to 
coverage determinations under a Federal health care program (as 
defined in section 1128B(f) of the Social Security Act (42 
U.S.C. 1320a-7b(f))) in the same manner such requirement 
applies under such subsection (f).
(3) Conforming amendment.--Section 1927(k)(2)(A)(i) of the 
Social Security Act (42 U.S.C. 1396r-8(k)(2)(A)(i)) is 
amended--
(A) by striking ``or which'' and inserting ``, 
which''; and
(B) by inserting ``, or which is conditionally 
approved under section 524D of such Act'' before the 
semicolon.

SEC. 347. CONSOLIDATING EXCLUSIVITY PERIODS FOR DRUGS TREATING RARE 
DISEASES AND CONDITIONS.

(a) In General.--Section 527(a) of the Federal Food, Drug, and 
Cosmetic Act (21 U.S.C. 360cc(a)) is amended to read as follows:
``(a) Exclusivity.--
``(1) In general.--Except as provided in subsection (b), if 
the Secretary approves an application filed pursuant to section 
505, or issues a license under section 351 of the Public Health 
Service Act, for a drug designated under section 526 for a rare 
disease or condition, the Secretary may not approve an 
application filed pursuant to section 505, or issue a license 
under section 351 of the Public Health Service Act, for the 
same drug for the same disease or condition for a person who is 
not the holder of such approved application or of such license 
until the expiration of the exclusivity period described in 
paragraph (2).
``(2) Exclusivity period described.--The exclusivity period 
described in this paragraph, with respect to a drug designated 
under section 526 for a rare disease or condition, is--
``(A) a single 7-year period of exclusivity with 
respect to the first designation of such drug under 
such section for that rare disease or condition; or
``(B) in the case of a drug that has previously 
received a period of exclusivity under paragraph (1), a 
single 3-year period of exclusivity with respect to any 
subsequent designation of such drug under such section 
for any other rare disease or condition.
``(3) Limitation.--In the case of a drug that has received 
two periods of exclusivity pursuant to paragraph (1), no 
additional exclusivity period under this section is available 
with respect to such drug, regardless of whether such drug has 
been designated under section 526 for a rare disease or 
condition that is distinct from the rare disease or condition 
for which such exclusivity periods were granted.''.
(b) Conforming Amendments.--
(1) Section 505(j)(5)(B)(iv)(II)(dd)(AA) of the Federal 
Food, Drug, and Cosmetic Act (21 U.S.C. 360cc) is amended by 
striking ``7-year period'' and inserting ``period''.
(2) Section 505A(b)(1)(A)(ii) of the Federal Food, Drug, 
and Cosmetic Act (21 U.S.C. 360cc) is amended by striking 
``rather than seven years;'' and inserting ``, or three years 
and six months, rather than seven years or three years, 
respectively;''.
(3) Section 505A(c)(1)(A)(ii) of the Federal Food, Drug, 
and Cosmetic Act (21 U.S.C. 360cc) is amended by striking 
``rather than seven years;'' and inserting ``, or three years 
and six months, rather than seven years or three years, 
respectively;''.
(4) Section 505E(a) of the Federal Food, Drug, and Cosmetic 
Act (21 U.S.C. 360cc) is amended by striking ``7-year period'' 
and inserting ``exclusivity periods''.
(5) Section 527(b) of the Federal Food, Drug, and Cosmetic 
Act (21 U.S.C. 360cc) is amended by striking ``the 7-year 
period'' and inserting ``any exclusivity period''.
(6) Section 351(m)(2)(B) of the Public Health Service Act 
(42 U.S.C. 262) is amended by striking ``rather than 7 years'' 
and inserting ``or 3 years and 6 months, rather than 7 years or 
3 years, respectively''.
(7) Section 351(m)(3)(B) of the Public Health Service Act 
(42 U.S.C. 262) is amended by striking ``rather than 7 years'' 
and inserting ``or 3 years and 6 months, rather than 7 years or 
3 years, respectively''.

SEC. 348. EXCLUSIVITY PERIOD FOR BRAND NAME BIOLOGICAL PRODUCTS.

(a) In General.--Section 351(k)(7)(A) of the Public Health Service 
Act (42 U.S.C. 262(k)(7)(A)) is amended by striking ``12 years'' and 
inserting ``5 years''.
(b) Conforming Changes.--Paragraphs (2)(A) and (3)(A) of section 
351(m) of the Public Health Service Act (42 U.S.C. 262(m)) is amended 
by striking ``12 years'' each place it appears and inserting ``5 
years''.
(c) Applicability.--This section and the amendments made by this 
section apply only with respect to a biological product for which the 
reference product (as such term is used in section 351 of the Public 
Health Service Act (42 U.S.C. 262)) is licensed under subsection (a) of 
such section on or after the date of enactment of this Act.

SEC. 349. REGULATION OF MANUFACTURER-SPONSORED CO-PAY CONTRIBUTIONS.

Notwithstanding any other provision of law, the Secretary of Health 
and Human Services may establish a mechanism to regulate drug 
manufacturers' financial contributions to patient out-of-pocket costs, 
such as drug co-pays.

SEC. 350. ANTITRUST EXEMPTION FOR PRIVATE HEALTH INSURANCE ISSUERS TO 
NEGOTIATE WHOLESALE ACQUISITION PRICES OF PRESCRIPTION 
DRUGS PURCHASED FROM DRUG MANUFACTURERS.

(a) Exemption.--It shall not be a violation of the antitrust laws 
for one or more private health insurance issuers or their designated 
agents to jointly negotiate wholesale acquisition prices of a 
prescription drug with a manufacturer of a prescription drug with 
regards to the reimbursement policies of the insurers of the 
manufacturer's drugs so long as no one single wholesale acquisition 
price is jointly determined between the insurance issuers or their 
designated agents.
(b) Definitions.--For purposes of this section:
(1) Antitrust laws.--The term ``antitrust laws'' has the 
meaning given such term in subsection (a) of the 1st section of 
the Clayton Act (15 U.S.C. 12(a)), except that such term 
includes section 5 of the Federal Trade Commission Act (15 
U.S.C. 45) to the extent such section 5 applies to unfair 
methods of competition.
(2) Health insurance issuer.--The term ``health insurance 
issuer'' means an insurance company, insurance service, or 
insurance organization (including a health maintenance 
organization) which is licensed to engage in the business of 
insurance in a State and which is subject to State law which 
regulates insurance (within the meaning of section 514(b)(2) of 
the Employee Retirement Income Security Act of 1974 (29 U.S.C. 
1144(b)(2))). Such term does not include a group health plan.
(3) Health maintenance organization.--The term ``health 
maintenance organization'' means--
(A) a health maintenance organization (as defined 
in section 1301(a) of the Public Health Service Act (42 
U.S.C. 300e(a)));
(B) an organization recognized under State law as a 
health maintenance organization; or
(C) a similar organization regulated under State 
law for solvency in the same manner and to the same 
extent as such a health maintenance organization.
(4) Manufacturer.--The term ``manufacturer'' means any 
person who is engaged in manufacturing, preparing, propagating, 
compounding, processing, packaging, repackaging, or labeling of 
a prescription drug.
(5) Prescription drug.--The term ``prescription drug'' 
means any human drug required by Federal law or regulation to 
be dispensed only by a prescription, including finished dosage 
forms and active ingredients subject to section 503(b) of the 
Federal Food, Drug, and Cosmetic Act (21 U.S.C. 353(b)).
(c) Effective Date.--This section shall not apply with respect to 
any conduct that occurs before the date of enactment of this Act.

SEC. 351. BIOLOGICAL PRODUCT INNOVATION.

Section 351(j) of the Public Health Service Act (42 U.S.C. 262(j)) 
is amended--
(1) by striking ``except that a product'' and inserting 
``except that--
``(1) a product'';
(2) by striking ``Act.'' and inserting ``Act; and''; and
(3) by adding at the end the following:
``(2) no requirement under such Act regarding an official 
compendium (as defined in section 201(j) of such Act), or other 
reference in such Act to an official compendium (as so 
defined), shall apply with respect to a biological product 
subject to regulation under this section.''.

SEC. 352. BIOSIMILAR BIOLOGICAL PRODUCTS.

(a) In General.--Section 351(k) of the Public Health Service Act 
(42 U.S.C. 262(k)) is amended--
(1) in the subsection heading, by striking ``or 
Interchangeable'';
(2) in paragraph (2)--
(A) by striking subparagraph (B);
(B) by redesignating clauses (ii) and (iii) of 
subparagraph (A) as subparagraphs (B) and (C), 
respectively, and adjusting the margins accordingly;
(C) in subparagraph (A)--
(i) in clause (i), by redesignating 
subclauses (I) through (V) as clauses (i) 
through (v), respectively, and adjusting the 
margins accordingly;
(ii) in clause (i), as so redesignated by 
clause (i) of this subparagraph, by 
redesignating items (aa) through (cc) as 
subclauses (I) through (III), respectively, and 
adjusting the margins accordingly; and
(iii) by striking ``(A) in general'' and 
all that follows through ``An application 
submitted under this subsection shall include 
information'' and inserting the following:
``(A) In general.--An application submitted under 
this subsection shall include information'';
(D) in subparagraph (B), as so redesignated by 
subparagraph (B) of this paragraph, by striking 
``clause (i)(I)'' and inserting ``subparagraph 
(A)(i)''; and
(E) in subparagraph (C), as so redesignated by 
subparagraph (B) of this paragraph, by redesignating 
subclauses (I) through (III) as clauses (i) through 
(iii), respectively, and by adjusting the margins 
accordingly;
(3) by amending paragraph (4) to read as follows:
``(4) Interchangeability.--
``(A) In general.--A biological product licensed 
under this subsection shall be deemed to be 
interchangeable with the reference product.
``(B) Congressional briefing prior to certain study 
requirements.--The Secretary may require the sponsor of 
an application submitted under this section to conduct 
a study to evaluate the risk, in terms of safety, 
purity, or potency, of alternating or switching between 
the use of the biological product that is the subject 
of the application and the reference product, if, 
before requiring such a study, the Secretary first 
holds a private briefing with the chair and ranking 
member of the Committee on Health, Education, Labor, 
and Pensions of the Senate and the chair and the 
ranking member of the Committee on Energy and Commerce 
of the House of Representatives, to explain why such a 
study is necessary for the biological product, what 
information the Secretary expects such a study to 
reveal, what alternatives to such study have been 
considered, and why those alternatives are not 
sufficient.'';
(4) by striking paragraph (6);
(5) in paragraph (8)(D)--
(A) in clause (i), by striking ``class; and'' and 
inserting ``class.'';
(B) by striking clause (ii); and
(C) by striking ``description of--'' and all that 
follows through ``criteria that the Secretary'' and 
inserting ``description of the criteria that the 
Secretary''; and
(6) in paragraph (9)(A)(iv), by striking ``paragraph (6) 
or''.
(b) Conforming Amendments.--
(1) Section 351(i)(3) of the Public Health Service Act (42 
U.S.C. 262(i)(3)) is amended by striking ``that is shown to 
meet the standards described in subsection (k)(4)'' and 
inserting ``licensed under subsection (k)''.
(2) Section 352A of the Public Health Service Act (42 
U.S.C. 263-1) is amended by striking ``and interchangeable 
biosimilar biological products'' each place it appears.
(3) Section 744G(14) of the Federal Food, Drug, and 
Cosmetic Act (21 U.S.C. 379j-51(14)) is amended by striking ``, 
including a supplement requesting that the Secretary determine 
that the biosimilar biological product meets the standards for 
interchangeability described in section 351(k)(4) of the Public 
Health Service Act''.
(4) Section 505B(l) of the Federal Food, Drug, and Cosmetic 
Act (21 U.S.C. 355c(l)) is amended to read as follows:
``(l) Biosimilar Biological Products.--A biological product for 
which an application is submitted under section 351(k) of the Public 
Health Service Act shall be considered to have a new active ingredient 
for purposes of this section, except that a pediatric assessment shall 
not be required for a claimed indication in a relevant pediatric 
population if the assessment would involve--
``(1) a condition of use that has not been previously 
approved for the reference product; or
``(2) a dosage form, strength, or route of administration 
that differs from that of the reference product.''.
(c) Application.--The amendment made by subsection (a)(4) to 
section 351(k)(6) of the Public Health Service Act (42 U.S.C. 
262(k)(6)) shall apply only with respect to applications approved under 
section 351(k) of such Act on or after the date of enactment of this 
Act. Any period of exclusivity granted under section 351(k)(6) of such 
Act with respect to an application approved under such section 351(k) 
before the date of enactment of this Act shall apply in accordance with 
such section 351(k)(6), as in effect on the day before the date of 
enactment of this Act.

SEC. 353. PROMPT APPROVAL OF DRUGS RELATED TO SAFETY INFORMATION.

Section 505 of the Federal Food, Drug, and Cosmetic Act (21 U.S.C. 
355) is amended by adding at the end the following:
``(aa) Prompt Approval of Drugs When Safety Information Is Added to 
Labeling.--
``(1) General rule.--A drug for which an application has 
been submitted or approved under subsection (b)(2) or (j) shall 
not be considered ineligible for approval under this section or 
misbranded under section 502 on the basis that the labeling of 
the drug omits safety information, including contraindications, 
warnings, precautions, dosing, administration, or other 
information pertaining to safety, when the omitted safety 
information is protected by exclusivity under clause (iii) or 
(iv) of subsection (j)(5)(F), clause (iii) or (iv) of 
subsection (c)(3)(E), or section 527(a), or by an extension of 
such exclusivity under section 505A or 505E.
``(2) Labeling.--Notwithstanding clauses (iii) and (iv) of 
subsection (j)(5)(F), clauses (iii) and (iv) of subsection 
(c)(3)(E), or section 527, the Secretary shall require that the 
labeling of a drug approved pursuant to an application 
submitted under subsection (b)(2) or (j) that omits safety 
information described in paragraph (1) include a statement of 
any appropriate safety information that the Secretary considers 
necessary to ensure safe use.
``(3) Availability and scope of exclusivity.--This 
subsection does not affect--
``(A) the availability or scope of exclusivity or 
an extension of exclusivity described in subparagraph 
(A) or (B) of section 505A(o)(3);
``(B) the question of the eligibility for approval 
under this section of any application described in 
subsection (b)(2) or (j) that omits any other aspect of 
labeling protected by exclusivity under--
``(i) clause (iii) or (iv) of subsection 
(j)(5)(F);
``(ii) clause (iii) or (iv) of subsection 
(c)(3)(E); or
``(iii) section 527(a); or
``(C) except as expressly provided in paragraphs 
(1) and (2), the operation of this section or section 
527.''.

SEC. 354. CONGRESSIONAL REVIEW OF THE FOOD AND DRUG ADMINISTRATION 
RULEMAKING.

(a) Congressional Review.--Part I of title 5, United States Code, 
is amended by inserting after chapter 8 the following:

``CHAPTER 8a--CONGRESSIONAL REVIEW OF FOOD AND DRUG ADMINISTRATION 
RULEMAKING

``Sec.
``810. Applicability.
``811. Congressional review.
``812. Congressional approval procedure for major rules.
``813. Congressional disapproval procedure for nonmajor rules.
``814. Definitions.
``815. Judicial review.
``816. Exemption for monetary policy.
``817. Effective date of certain rules.
``818. Regulatory cut-go requirement.
``819. Review of rules currently in effect.
``Sec. 810. Applicability
``This chapter applies in lieu of chapter 8 with respect to the 
Food and Drug Administration.
``Sec. 811. Congressional review
``(a)(1)(A) Before a rule may take effect, the Food and Drug 
Administration shall satisfy the requirements of section 818 and shall 
publish in the Federal Register a list of information on which the rule 
is based, including data, scientific and economic studies, and cost-
benefit analyses, and identify how the public can access such 
information online, and shall submit to each House of the Congress and 
to the Comptroller General a report containing--
``(i) a copy of the rule;
``(ii) a concise general statement relating to the rule;
``(iii) a classification of the rule as a major or nonmajor 
rule, including an explanation of the classification 
specifically addressing each criteria for a major rule 
contained within sections 814(2)(A), 814(2)(B), and 814(2)(C);
``(iv) a list of any other related regulatory actions 
intended to implement the same statutory provision or 
regulatory objective as well as the individual and aggregate 
economic effects of those actions; and
``(v) the proposed effective date of the rule.
``(B) On the date of the submission of the report under 
subparagraph (A), the Food and Drug Administration shall submit to the 
Comptroller General and make available to each House of Congress--
``(i) a complete copy of the cost-benefit analysis of the 
rule, if any, including an analysis of any jobs added or lost, 
differentiating between public and private sector jobs;
``(ii) the Food and Drug Administration's actions pursuant 
to sections 603, 604, 605, 607, and 609 of this title;
``(iii) the Food and Drug Administration's actions pursuant 
to sections 202, 203, 204, and 205 of the Unfunded Mandates 
Reform Act of 1995; and
``(iv) any other relevant information or requirements under 
any other Act and any relevant Executive orders.
``(C) Upon receipt of a report submitted under subparagraph (A), 
each House shall provide copies of the report to the chairman and 
ranking member of each standing committee with jurisdiction under the 
rules of the House of Representatives or the Senate to report a bill to 
amend the provision of law under which the rule is issued.
``(2)(A) The Comptroller General shall provide a report on each 
major rule to the committees of jurisdiction by the end of 15 calendar 
days after the submission or publication date. The report of the 
Comptroller General shall include an assessment of the Food and Drug 
Administration's compliance with procedural steps required by paragraph 
(1)(B) and an assessment of whether the major rule imposes any new 
limits or mandates on private-sector activity.
``(B) The Food and Drug Administration shall cooperate with the 
Comptroller General by providing information relevant to the 
Comptroller General's report under subparagraph (A).
``(3) A major rule relating to a report submitted under paragraph 
(1) shall take effect upon enactment of a joint resolution of approval 
described in section 812 or as provided for in the rule following 
enactment of a joint resolution of approval described in section 812, 
whichever is later.
``(4) A nonmajor rule shall take effect as provided by section 813 
after submission to Congress under paragraph (1).
``(5) If a joint resolution of approval relating to a major rule is 
not enacted within the period provided in subsection (b)(2), then a 
joint resolution of approval relating to the same rule may not be 
considered under this chapter in the same Congress by either the House 
of Representatives or the Senate.
``(b)(1) A major rule shall not take effect unless the Congress 
enacts a joint resolution of approval described under section 812.
``(2) If a joint resolution described in subsection (a) is not 
enacted into law by the end of 70 session days or legislative days, as 
applicable, beginning on the date on which the report referred to in 
section 811(a)(1)(A) is received by Congress (excluding days either 
House of Congress is adjourned for more than 3 days during a session of 
Congress), then the rule described in that resolution shall be deemed 
not to be approved and such rule shall not take effect.
``(c)(1) Notwithstanding any other provision of this section 
(except subject to paragraph (3)), a major rule may take effect for one 
90-calendar-day period if the President makes a determination under 
paragraph (2) and submits written notice of such determination to the 
Congress.
``(2) Paragraph (1) applies to a determination made by the 
President by Executive order that the major rule should take effect 
because such rule is--
``(A) necessary because of an imminent threat to health or 
safety or other emergency;
``(B) necessary for the enforcement of criminal laws;
``(C) necessary for national security; or
``(D) issued pursuant to any statute implementing an 
international trade agreement.
``(3) An exercise by the President of the authority under this 
subsection shall have no effect on the procedures under section 812.
``(d)(1) In addition to the opportunity for review otherwise 
provided under this chapter, in the case of any rule for which a report 
was submitted in accordance with subsection (a)(1)(A) during the period 
beginning on the date occurring--
``(A) in the case of the Senate, 60 session days; or
``(B) in the case of the House of Representatives, 60 
legislative days,
before the date the Congress is scheduled to adjourn a session of 
Congress through the date on which the same or succeeding Congress 
first convenes its next session, sections 812 and 813 shall apply to 
such rule in the succeeding session of Congress.
``(2)(A) In applying sections 812 and 813 for purposes of such 
additional review, a rule described under paragraph (1) shall be 
treated as though--
``(i) such rule were published in the Federal Register on--
``(I) in the case of the Senate, the 15th session 
day; or
``(II) in the case of the House of Representatives, 
the 15th legislative day,
after the succeeding session of Congress first convenes; and
``(ii) a report on such rule were submitted to Congress 
under subsection (a)(1) on such date.
``(B) Nothing in this paragraph shall be construed to affect the 
requirement under subsection (a)(1) that a report shall be submitted to 
Congress before a rule can take effect.
``(3) A rule described under paragraph (1) shall take effect as 
otherwise provided by law (including other subsections of this 
section).
``Sec. 812. Congressional approval procedure for major rules
``(a)(1) For purposes of this section, the term `joint resolution' 
means only a joint resolution addressing a report classifying a rule as 
major pursuant to section 811(a)(1)(A)(iii) that--
``(A) bears no preamble;
``(B) bears the following title (with blanks filled as 
appropriate): `Approving the rule submitted by ___ relating to 
___.';
``(C) includes after its resolving clause only the 
following (with blanks filled as appropriate): `That Congress 
approves the rule submitted by ___ relating to ___.'; and
``(D) is introduced pursuant to paragraph (2).
``(2) After a House of Congress receives a report classifying a 
rule as major pursuant to section 811(a)(1)(A)(iii), the majority 
leader of that House (or his or her respective designee) shall 
introduce (by request, if appropriate) a joint resolution described in 
paragraph (1)--
``(A) in the case of the House of Representatives, within 3 
legislative days; and
``(B) in the case of the Senate, within 3 session days.
``(3) A joint resolution described in paragraph (1) shall not be 
subject to amendment at any stage of proceeding.
``(b) A joint resolution described in subsection (a) shall be 
referred in each House of Congress to the committees having 
jurisdiction over the provision of law under which the rule is issued.
``(c) In the Senate, if the committee or committees to which a 
joint resolution described in subsection (a) has been referred have not 
reported it at the end of 15 session days after its introduction, such 
committee or committees shall be automatically discharged from further 
consideration of the resolution and it shall be placed on the calendar. 
A vote on final passage of the resolution shall be taken on or before 
the close of the 15th session day after the resolution is reported by 
the committee or committees to which it was referred, or after such 
committee or committees have been discharged from further consideration 
of the resolution.
``(d)(1) In the Senate, when the committee or committees to which a 
joint resolution is referred have reported, or when a committee or 
committees are discharged (under subsection (c)) from further 
consideration of a joint resolution described in subsection (a), it is 
at any time thereafter in order (even though a previous motion to the 
same effect has been disagreed to) for a motion to proceed to the 
consideration of the joint resolution, and all points of order against 
the joint resolution (and against consideration of the joint 
resolution) are waived. The motion is not subject to amendment, or to a 
motion to postpone, or to a motion to proceed to the consideration of 
other business. A motion to reconsider the vote by which the motion is 
agreed to or disagreed to shall not be in order. If a motion to proceed 
to the consideration of the joint resolution is agreed to, the joint 
resolution shall remain the unfinished business of the Senate until 
disposed of.
``(2) In the Senate, debate on the joint resolution, and on all 
debatable motions and appeals in connection therewith, shall be limited 
to not more than 2 hours, which shall be divided equally between those 
favoring and those opposing the joint resolution. A motion to further 
limit debate is in order and not debatable. An amendment to, or a 
motion to postpone, or a motion to proceed to the consideration of 
other business, or a motion to recommit the joint resolution is not in 
order.
``(3) In the Senate, immediately following the conclusion of the 
debate on a joint resolution described in subsection (a), and a single 
quorum call at the conclusion of the debate if requested in accordance 
with the rules of the Senate, the vote on final passage of the joint 
resolution shall occur.
``(4) Appeals from the decisions of the Chair relating to the 
application of the rules of the Senate to the procedure relating to a 
joint resolution described in subsection (a) shall be decided without 
debate.
``(e) In the House of Representatives, if any committee to which a 
joint resolution described in subsection (a) has been referred has not 
reported it to the House at the end of 15 legislative days after its 
introduction, such committee shall be discharged from further 
consideration of the joint resolution, and it shall be placed on the 
appropriate calendar. On the second and fourth Thursdays of each month 
it shall be in order at any time for the Speaker to recognize a Member 
who favors passage of a joint resolution that has appeared on the 
calendar for at least 5 legislative days to call up that joint 
resolution for immediate consideration in the House without 
intervention of any point of order. When so called up a joint 
resolution shall be considered as read and shall be debatable for 1 
hour equally divided and controlled by the proponent and an opponent, 
and the previous question shall be considered as ordered to its passage 
without intervening motion. It shall not be in order to reconsider the 
vote on passage. If a vote on final passage of the joint resolution has 
not been taken by the third Thursday on which the Speaker may recognize 
a Member under this subsection, such vote shall be taken on that day.
``(f)(1) If, before passing a joint resolution described in 
subsection (a), one House receives from the other a joint resolution 
having the same text, then--
``(A) the joint resolution of the other House shall not be 
referred to a committee; and
``(B) the procedure in the receiving House shall be the 
same as if no joint resolution had been received from the other 
House until the vote on passage, when the joint resolution 
received from the other House shall supplant the joint 
resolution of the receiving House.
``(2) This subsection shall not apply to the House of 
Representatives if the joint resolution received from the Senate is a 
revenue measure.
``(g) If either House has not taken a vote on final passage of the 
joint resolution by the last day of the period described in section 
811(b)(2), then such vote shall be taken on that day.
``(h) This section and section 813 are enacted by Congress--
``(1) as an exercise of the rulemaking power of the Senate 
and House of Representatives, respectively, and as such is 
deemed to be part of the rules of each House, respectively, but 
applicable only with respect to the procedure to be followed in 
that House in the case of a joint resolution described in 
subsection (a) and superseding other rules only where 
explicitly so; and
``(2) with full recognition of the Constitutional right of 
either House to change the rules (so far as they relate to the 
procedure of that House) at any time, in the same manner and to 
the same extent as in the case of any other rule of that House.
``Sec. 813. Congressional disapproval procedure for nonmajor rules
``(a) For purposes of this section, the term `joint resolution' 
means only a joint resolution introduced in the period beginning on the 
date on which the report referred to in section 811(a)(1)(A) is 
received by Congress and ending 60 days thereafter (excluding days 
either House of Congress is adjourned for more than 3 days during a 
session of Congress), the matter after the resolving clause of which is 
as follows: `That Congress disapproves the nonmajor rule submitted by 
the ___ relating to ___, and such rule shall have no force or effect.' 
(The blank spaces being appropriately filled in).
``(b) A joint resolution described in subsection (a) shall be 
referred to the committees in each House of Congress with jurisdiction.
``(c) In the Senate, if the committee to which is referred a joint 
resolution described in subsection (a) has not reported such joint 
resolution (or an identical joint resolution) at the end of 15 session 
days after the date of introduction of the joint resolution, such 
committee may be discharged from further consideration of such joint 
resolution upon a petition supported in writing by 30 Members of the 
Senate, and such joint resolution shall be placed on the calendar.
``(d)(1) In the Senate, when the committee to which a joint 
resolution is referred has reported, or when a committee is discharged 
(under subsection (c)) from further consideration of a joint resolution 
described in subsection (a), it is at any time thereafter in order 
(even though a previous motion to the same effect has been disagreed 
to) for a motion to proceed to the consideration of the joint 
resolution, and all points of order against the joint resolution (and 
against consideration of the joint resolution) are waived. The motion 
is not subject to amendment, or to a motion to postpone, or to a motion 
to proceed to the consideration of other business. A motion to 
reconsider the vote by which the motion is agreed to or disagreed to 
shall not be in order. If a motion to proceed to the consideration of 
the joint resolution is agreed to, the joint resolution shall remain 
the unfinished business of the Senate until disposed of.
``(2) In the Senate, debate on the joint resolution, and on all 
debatable motions and appeals in connection therewith, shall be limited 
to not more than 10 hours, which shall be divided equally between those 
favoring and those opposing the joint resolution. A motion to further 
limit debate is in order and not debatable. An amendment to, or a 
motion to postpone, or a motion to proceed to the consideration of 
other business, or a motion to recommit the joint resolution is not in 
order.
``(3) In the Senate, immediately following the conclusion of the 
debate on a joint resolution described in subsection (a), and a single 
quorum call at the conclusion of the debate if requested in accordance 
with the rules of the Senate, the vote on final passage of the joint 
resolution shall occur.
``(4) Appeals from the decisions of the Chair relating to the 
application of the rules of the Senate to the procedure relating to a 
joint resolution described in subsection (a) shall be decided without 
debate.
``(e) In the Senate, the procedure specified in subsection (c) or 
(d) shall not apply to the consideration of a joint resolution 
respecting a nonmajor rule--
``(1) after the expiration of the 60 session days beginning 
with the applicable submission or publication date; or
``(2) if the report under section 811(a)(1)(A) was 
submitted during the period referred to in section 811(d)(1), 
after the expiration of the 60 session days beginning on the 
15th session day after the succeeding session of Congress first 
convenes.
``(f) If, before the passage by one House of a joint resolution of 
that House described in subsection (a), that House receives from the 
other House a joint resolution described in subsection (a), then the 
following procedures shall apply:
``(1) The joint resolution of the other House shall not be 
referred to a committee.
``(2) With respect to a joint resolution described in 
subsection (a) of the House receiving the joint resolution--
``(A) the procedure in that House shall be the same 
as if no joint resolution had been received from the 
other House; but
``(B) the vote on final passage shall be on the 
joint resolution of the other House.
``Sec. 814. Definitions
``For purposes of this chapter:
``(1) The term `major rule' means any rule of the Food and 
Drug Administration, including an interim final rule, that the 
Administrator of the Office of Information and Regulatory 
Affairs of the Office of Management and Budget finds has 
resulted in or is likely to result in--
``(A) an annual cost on the economy of $100,000,000 
or more, adjusted annually for inflation;
``(B) a major increase in costs or prices for 
consumers, individual industries, Federal, State, or 
local government agencies, or geographic regions; or
``(C) significant adverse effects on competition, 
employment, investment, productivity, innovation, or on 
the ability of United States-based enterprises to 
compete with foreign-based enterprises in domestic and 
export markets.
``(2) The term `nonmajor rule' means any rule of the Food 
and Drug Administration that is not a major rule.
``(3) The term `rule' has the meaning given such term in 
section 551, except that such term does not include--
``(A) any rule of particular applicability;
``(B) any rule relating to agency management or 
personnel; or
``(C) any rule of agency organization, procedure, 
or practice that does not substantially affect the 
rights or obligations of non-agency parties.
``(4) The term `submission date or publication date', 
except as otherwise provided in this chapter, means--
``(A) in the case of a major rule, the date on 
which the Congress receives the report submitted under 
section 811(a)(1); and
``(B) in the case of a nonmajor rule, the later 
of--
``(i) the date on which the Congress 
receives the report submitted under section 
811(a)(1); and
``(ii) the date on which the nonmajor rule 
is published in the Federal Register, if so 
published.
``Sec. 815. Judicial review
``(a) No determination, finding, action, or omission under this 
chapter shall be subject to judicial review.
``(b) Notwithstanding subsection (a), a court may determine whether 
the Food and Drug Administration has completed the necessary 
requirements under this chapter for a rule to take effect.
``(c) The enactment of a joint resolution of approval under section 
812 shall not be interpreted to serve as a grant or modification of 
statutory authority by Congress for the promulgation of a rule, shall 
not extinguish or affect any claim, whether substantive or procedural, 
against any alleged defect in a rule, and shall not form part of the 
record before the court in any judicial proceeding concerning a rule 
except for purposes of determining whether or not the rule is in 
effect.
``Sec. 816. Exemption for monetary policy
``Nothing in this chapter shall apply to rules that concern 
monetary policy proposed or implemented by the Board of Governors of 
the Federal Reserve System or the Federal Open Market Committee.
``Sec. 817. Effective date of certain rules
``Notwithstanding section 811, any rule other than a major rule 
which the Food and Drug Administration for good cause finds (and 
incorporates the finding and a brief statement of reasons therefore in 
the rule issued) that notice and public procedure thereon are 
impracticable, unnecessary, or contrary to the public interest, shall 
take effect at such time as the Food and Drug Administration 
determines.
``Sec. 818. Regulatory cut-go requirement
``In making any new rule, the Food and Drug Administration shall 
identify a rule or rules that may be amended or repealed to completely 
offset any annual costs of the new rule to the United States economy. 
Before the new rule may take effect, the Food and Drug Administration 
shall make each such repeal or amendment. In making such an amendment 
or repeal, the Food and Drug Administration shall comply with the 
requirements of subchapter II of chapter 5, but the Food and Drug 
Administration may consolidate proceedings under subchapter II (of 
chapter 5) with proceedings on the new rule.
``Sec. 819. Review of rules currently in effect
``(a) Annual Review.--Beginning on the date that is 6 months after 
the date of enactment of this section and annually thereafter for the 9 
years following, the Food and Drug Administration shall designate not 
less than 10 percent of eligible rules made by the Food and Drug 
Administration for review, and shall submit a report including each 
such eligible rule in the same manner as a report under section 
811(a)(1). Section 811, section 812, and section 813 shall apply to 
each such rule, subject to subsection (c) of this section. No eligible 
rule previously designated may be designated again.
``(b) Sunset for Eligible Rules Not Extended.--Beginning after the 
date that is 10 years after the date of enactment of this section, if 
Congress has not enacted a joint resolution of approval for that 
eligible rule, that eligible rule shall not continue in effect.
``(c) Consolidation; Severability.--In applying sections 811, 812, 
and 813 to eligible rules under this section, the following shall 
apply:
``(1) The words `take effect' shall be read as `continue in 
effect'.
``(2) Except as provided in paragraph (3), a single joint 
resolution of approval shall apply to all eligible rules in a 
report designated for a year, and the matter after the 
resolving clause of that joint resolution is as follows: `That 
Congress approves the rules submitted by the __ for the year 
__.' (The blank spaces being appropriately filled in).
``(3) It shall be in order to consider any amendment that 
provides for specific conditions on which the approval of a 
particular eligible rule included in the joint resolution is 
contingent.
``(4) A member of either House may move that a separate 
joint resolution be required for a specified rule.
``(d) Definition.--In this section, the term `eligible rule' means 
a rule that is in effect as of the date of enactment of this 
section.''.
(b) Budgetary Effects of Rules Subject to Section 922 of Title 5, 
United States Code.--Section 257(b)(2) of the Balanced Budget and 
Emergency Deficit Control Act of 1985 is amended by adding at the end 
the following new subparagraph:
``(E) Budgetary effects of rules subject to section 
922 of title 5, united states code.--Any rules subject 
to the congressional approval procedure set forth in 
section 922 of chapter 8 of title 5, United States 
Code, affecting budget authority, outlays, or receipts 
shall be assumed to be effective unless it is not 
approved in accordance with such section.''.
(c) Government Accountability Office Study of Rules.--
(1) In general.--The Comptroller General of the United 
States shall conduct a study to determine, as of the date of 
the enactment of this Act--
(A) how many rules (as such term is defined in 
section 814 of title 5, United States Code) of the Food 
and Drug Administration were in effect;
(B) how many major rules (as such term is defined 
in section 814 of title 5, United States Code) of the 
Food and Drug Administration were in effect; and
(C) the total estimated economic cost imposed by 
all such rules.
(2) Report.--Not later than 1 year after the date of the 
enactment of this Act, the Comptroller General of the United 
States shall submit a report to Congress that contains the 
findings of the study conducted under paragraph (1).
(d) Effective Date.--Subsections (a) and (b), and the amendments 
made by such sections, shall take effect beginning on the date that is 
1 year after the date of enactment of this Act.

SEC. 355. GOVERNMENT ACCOUNTABILITY OFFICE STUDY OF RULES.

(a) In General.--The Comptroller General of the United States shall 
conduct a study to determine, as of the date of the enactment of this 
Act--
(1) how many rules (as such term is defined in section 804 
of title 5, United States Code) were in effect;
(2) how many major rules (as such term is defined in 
section 804 of title 5, United States Code) were in effect; and
(3) the total estimated economic cost imposed by all such 
rules.
(b) Report.--Not later than 1 year after the date of the enactment 
of this Act, the Comptroller General of the United States shall submit 
a report to Congress that contains the findings of the study conducted 
under subsection (a).

SEC. 356. PROVISIONAL APPROVAL OF NEW HUMAN DRUGS.

(a) In General.--Subchapter A of chapter V of the Federal Food, 
Drug, and Cosmetic Act (21 U.S.C. 351 et seq.) is amended by adding at 
the end the following:

``SEC. 524B. PROVISIONAL APPROVAL OF NEW HUMAN DRUGS.

``(a) Priority Review and Evaluation of Applications.--
``(1) In general.--The Secretary shall establish a priority 
review system to evaluate applications submitted under this 
pathway for provisional approval within 90 days of receipt of a 
completed application.
``(2) Review of applications during epidemics and 
pandemics.--In the case of an epidemic or pandemic, including 
with respect to COVID-19, the Secretary shall accept and review 
various portions of an application submitted under the pathway 
under this section for provisional approval on a rolling basis, 
and the review of any part of an application so submitted shall 
be completed not later than 3 weeks after submission.
``(3) Other designations.--If a drug submitted for review 
under the pathway under this section is eligible for a special 
designation by the Secretary under this Act, including as a 
drug for a rare disease or condition under section 526, all 
benefits of such other designation shall be available for use 
under provisional approval, including any tax credits and 
waiving of fees under chapter VII.
``(b) Eligibility.--A drug may be eligible for provisional approval 
under this section if the Secretary determines that the drug is 
intended for the treatment, prevention, or medical diagnosis of--
``(1) a serious or life-threatening disease or condition 
for which there is a reasonable likelihood that premature death 
will occur without early medical intervention for an individual 
contracting or being diagnosed with such disease or condition; 
or
``(2) a disease or condition that poses a threat of 
epidemic or pandemic.
``(c) Standard of Review for Approval.--
``(1) Requirements.--An application for provisional 
approval under this section may be approved only if the 
Secretary determines that--
``(A) there is substantial evidence of safety for 
the drug, such that there is evidence consisting of 
adequate and well-controlled investigations, including 
clinical investigations, by experts qualified by 
scientific training and experience to evaluate the 
safety of the drug involved, on the basis of which it 
could fairly and responsibly be concluded that the drug 
will have the effect it purports or is represented to 
have under the conditions of use prescribed, 
recommended, or suggested in the labeling or proposed 
labeling; and
``(B) there is relevant early evidence based on 
adequate and well-controlled investigations, including 
early-stage clinical investigations, to establish 
that--
``(i) the drug provides a positive 
therapeutic outcome; and
``(ii) the outcome of the drug is 
consistent with or greater than currently 
marketed on-label therapies, with equal or 
fewer side effects, if there are currently 
marketed on-label therapies.
``(2) Protocols.--The Secretary shall promulgate rules that 
establish the appropriate protocols for a sponsor of an 
application for provisional approval under this section and the 
Commissioner to follow to enable rolling, real-time, mid-trial 
submission while preserving the integrity of the ongoing trial 
and without penalizing the sponsor for making use of this 
pathway.
``(3) Real world evidence.--The Secretary shall allow the 
use of real world evidence (as defined in section 505F(b)), 
including real world data used to generate real world evidence, 
to support an application for provisional approval under this 
section, and to fulfill the follow-up requirements and support 
applications for full approval as described under section 505 
or section 351 of the Public Health Service Act, as applicable.
``(4) Use of scientifically substantiated surrogates.--
``(A) In general.--The sponsor of an application 
for provisional approval under this section may use 
scientifically substantiated surrogates to support such 
application.
``(B) Definition.--In subparagraph (A), the term 
`scientifically substantiated surrogates' means 
surrogate endpoints to predict clinical benefit other 
than such endpoints previously validated by the 
Secretary, based on--
``(i) epidemiologic, therapeutic, 
pathophysiologic, or other evidence; or
``(ii) an effect on a clinical endpoint 
other than survival or irreversible morbidity 
of interest.
``(d) Transparency and Patient Monitoring Requirements.--
``(1) Registries.--
``(A) In general.--The sponsor of a drug 
provisionally approved under this section shall require 
that all patients who use such drug participate in an 
observational registry and consent to the sponsor's 
collection, and submission to the registry, of data 
related to the patient's use of such drug until such 
drug receives full approval under section 505 or 
section 351 of the Public Health Service Act, or the 
provisional approval is rescinded.
``(B) Requirements for registries.--An 
observational registry described in subparagraph (A) 
may be run by a third party, such as a government, for 
profit, or non-profit organization, and shall track all 
patients who use the provisionally approved drug.
``(C) Accessibility.--An observational registry 
described in subparagraph (A) shall be easily 
accessible for--
``(i) all patients who are participating in 
any registry related to a provisionally 
approved drug that allows for easy, 
unrestricted (or transparent) access for such 
patients to their patient data and related 
information regarding their usage of the 
provisionally approved drug; and
``(ii) approved researchers and medical 
professionals who may access data maintained in 
the registry, which access shall be for public 
health research and only in a de-identified, 
aggregated manner.
``(2) Funding.--An observational registry under this 
subsection shall be maintained, as applicable--
``(A) by the sponsor of the drug provisionally 
approved under this section that is the subject of the 
registry;
``(B) by a third party, such as a government, for 
profit, or nonprofit organization; or
``(C) the Federal Government, in the case of any 
drug so approved that is intended to treat a disease or 
condition associated with an epidemic or pandemic.
``(3) Sponsor requirements.--
``(A) In general.--For any drug application 
provisionally approved under this section, the 
Secretary shall notify the sponsor of the exact data 
such sponsor is required to submit to an observational 
registry.
``(B) Annual review of the registry; penalties.--
The Secretary shall conduct an annual review of 
observational registries established under this 
subsection. If, at such an annual review, less than 90 
percent of patients are participating in an 
observational registry with respect to a drug approved 
under this section, the Secretary shall issue to the 
sponsor of such drug a civil monetary penalty of not 
more than $100,000. If a violation of this section is 
not corrected within the 30-day period following 
notification, the sponsor shall, in addition to any 
penalty under this subparagraph be subject to a civil 
monetary penalty of not more than $10,000 for each day 
of the violation after such period until the violation 
is corrected. If application patient participation in 
an observational registry is not at or above 90 percent 
within 6 months of issuance of such penalty, the 
provisional approval shall be withdrawn.
``(4) Annual report to congress.--The Secretary shall 
submit an annual report to Congress on all drugs granted 
provisional approval under this section. Such report shall 
include--
``(A) the number of patients treated with each such 
drug, and the number of patients tracked in an 
observational registry with respect to each such drug;
``(B) a discussion of the minimum amount of data 
required in the registries, including patient 
treatments and uses, length of use, side effects 
encountered, relevant biomarkers or scientifically 
substantiated surrogates, scan results, cause of death 
and how long the patient lived, and adverse drug 
effects;
``(C) a list of all such drugs for which an 
application for full approval under section 505 of this 
Act or section 351 of the Public Health Service Act, or 
an application for an extension of provisional approval 
under this section, has been submitted; and
``(D) a list of all applications denied provisional 
approval under this section, together with an 
explanation for the decisions to deny each such 
application.
``(e) Withdrawal of Provisional Approval.--
``(1) In general.--The Secretary shall withdraw provisional 
approval under this section if there are a significant numbers 
of patients who experience serious adverse effects, compared to 
the other currently marketed on-label therapies that are 
available for the applicable disease or condition.
``(2) Effect of withdrawal.--If a provisional approval is 
withdrawn under this subsection, the sponsor may not make the 
drug available to any new patients, but may be allowed to 
continue to make such drug available to patients who started 
taking the drug prior to the date of withdrawal, for as long a 
period as dictated by patient need, as determined by the 
Secretary.
``(f) Transparency.--Any scientific, medical, academic, or health 
care journal publishing an article explaining, releasing, conveying or 
announcing research findings which were funded by the Department of 
Health and Human Services shall be prohibited from publishing such 
research unless--
``(1) such article conveying research findings is made 
publicly available on the journal's internet website without a 
paywall or charge not later than 3 months after the date on 
which such article was first provided to subscribers of such 
journal (or first made available for purchase); and
``(2) the article's author or researcher or author's 
institution (or, in the case of multiple authors, researchers, 
or institutions, all such authors, researchers, or 
institutions) received less than 30 percent of funding for such 
research from the Department of Health and Human Services 
throughout the period of time the research was conducted.
``(g) Informed Consent.--Prior to receiving a drug provisionally 
approved under this section, the sponsor of the drug shall receive from 
each patient, or the patient's representative, informed consent, 
through a signed informed consent form, acknowledging that such patient 
understands that the drug did not undergo the usual process for full 
approval of a drug by the Food and Drug Administration, and that such 
patient is willing to accept the risks involved in taking such drug.
``(h) Postmarket Controls and Labeling.--
``(1) FDA annual review of registry data.--The Secretary 
shall annually review the data made available through the 
observational registries under subsection (d) and make a 
determination regarding whether the side effect profile of any 
drug approved under this pathway does not support the benefit 
provided, or the data shows the benefit is less than the 
benefits offered through other, fully approved drugs.
``(2) Labeling.--The sponsor of the provisionally approved 
drug shall ensure that all labeling and promotional materials 
for the drug bear the statement `provisionally approved by the 
FDA pending a full demonstration of effectiveness under 
application number ______' (specifying the application number 
assigned by the Secretary in place of the blank). All 
promotional, educational and marketing materials for 
provisionally approved products shall be reviewed and approved 
by the Secretary before such materials are distributed.
``(3) Rescission of provisional approval.--If the Secretary 
determines that the side effect profile of any drug included in 
such observational registries does not support the benefit 
provided by such drug, or that the data shows that the benefit 
is less than the benefits offered through other, fully approved 
drugs, the Secretary shall rescind such provisional approval.
``(i) Duration of Provisional Approval; Requirement To Bring Drug 
to Market.--
``(1) Duration; renewals.--The period of provisional 
approval for a drug approved under this section is effective 
for a 2-year period. The sponsor may request renewal for 
provisional approval status for up to 3 subsequent 2-year 
periods by the Secretary. Provisional approval status with 
respect to a drug shall not exceed a total of 6 years from the 
initial date the sponsor was awarded provisional approval 
status.
``(2) Marketing requirement.--If any drug that receives 
provisional approval status under this section is not brought 
to market within 180 days of the approval, such approval shall 
be rescinded.
``(j) Limitation on Liability.--With respect to any claim under 
State law alleging that a drug sold or otherwise made available 
pursuant to a grant of provisional approval under this section is 
unsafe or ineffective, no liability in a cause of action shall lie 
against a sponsor or manufacturer, unless the relevant conduct 
constitutes reckless or willful misconduct, gross negligence, or an 
intentional tort under any applicable State law.
``(k) Applying for Full Approval.--
``(1) In general.--Except as provided under paragraph (2), 
the sponsor of a drug granted provisional approval pursuant to 
this section may, at any point, submit an application for full 
approval of such drug under section 505 of this Act or section 
351 of the Public Health Service Act, as applicable.
``(2) Effect of recession on approval and automatic 
approval.--
``(A) In general.--The sponsor of a drug granted 
provisional approval pursuant to this section that has 
been rescinded under subsection (h)(3), may submit an 
application for full approval of such drug under 
section 505 of this Act or section 351 of the Public 
Health Service Act at any time.
``(B) Automatic approval.--Such full approval may 
be awarded at any time for any drug granted provisional 
approval pursuant to this section if the sponsor of the 
drug establishes a 15 percent improvement in an 
important endpoint, including surrogate endpoints not 
validated by the Food and Drug Administration, compared 
to a standard drug.
``(3) Real-time epidemic and pandemic vaccine approval.--
``(A) In general.--In the case of a vaccine 
developed in response to an epidemic or pandemic, 
including COVID-19, the Secretary shall share data 
information regarding the approval of the vaccine with 
the Advisory Committee on Immunization Practices of the 
Centers for Disease Control and Prevention as the 
review nears completion.
``(B) Evaluation.--Any vaccine that has been 
approved by the Secretary for an epidemic or pandemic-
related disease, including COVID-19, shall be evaluated 
by the Advisory Committee on Immunization Practices of 
the Centers for Disease Control and Prevention not 
later than 1 week after the date of submission to the 
Advisory Committee by the Secretary of the vaccine.
``(l) Patient Advocate General.--Not later than 6 months after the 
date of enactment of the Promising Pathway Act, the Secretary shall 
establish within the Office of the Commissioner, the position of 
Patient Advocate General, who shall provide assistance to patients and 
their families who use drugs under evaluation in this pathway or drugs 
reviewed or approved under section 505 or section 351 of the Public 
Health Service Act. Such assistance shall include providing bi-
informational communication about maintaining patient health, delivery 
of proper informed consent, participating in clinical investigations, 
completing required documentation in order to participate in the 
applicable programs, and providing other information.''.
(b) Conforming Amendment.--Section 505(a) of the Federal Food, 
Drug, and Cosmetic Act (21 U.S.C. 355(a)) is amended by inserting ``, 
or there is in effect a provisional approval under section 524B with 
respect to such drug'' before the period.
(c) Reimbursement.--
(1) Private health insurers.--Section 2719A of the Public 
Health Service Act (42 U.S.C. 300gg-19a) is amended by adding 
at the end the following:
``(e) Treatment of Certain Drugs.--A group health plan or health 
insurance issuer of group or individual health insurance coverage shall 
not deny coverage of any drug provisionally approved under section 524B 
of the Federal Food, Drug, and Cosmetic Act on the basis of such drug 
being experimental. In determining coverage under the applicable plan 
or coverage, a group health plan or health insurance issuer shall treat 
a drug provisionally approved under such section in the same manner as 
such plan or coverage would treat a drug approved under section 505 of 
the Federal Food, Drug, and Cosmetic Act or section 351 of this Act. 
Nothing in this subsection shall be construed to require a group health 
plan or health insurance issuer to cover any specific drug 
provisionally approved under such section 524B.''.
(2) Federal health care programs.--The requirement under 
subsection (e) of section 2719A of the Public Health Service 
Act (as added by paragraph (1)) shall apply with respect to 
coverage determinations under a Federal health care program (as 
defined in section 1128B(f) of the Social Security Act (42 
U.S.C. 1320a-7b(f))) in the same manner such requirement 
applies under such subsection (e).
(3) Conforming amendment.--Section 1927(k)(2)(A)(i) of the 
Social Security Act (42 U.S.C. 1396r-8(k)(2)(A)(i)) is 
amended--
(A) by striking ``or which'' and inserting ``, 
which''; and
(B) by inserting ``, or which is provisionally 
approved under section 524B of such Act'' before the 
semicolon.

Subtitle D--Prescription Drug and Pharmacy Benefit Manager Transparency

SEC. 361. PATENT DISCLOSURE REQUIREMENTS.

(a) In General.--Section 351 of the Public Health Service Act (42 
U.S.C. 262) is amended by adding at the end the following:
``(o) Additional Requirements With Respect to Patents.--
``(1) Approved application holder listing requirements.--
``(A) In general.--Beginning on the date of 
enactment of this subsection, within 30 days of 
approval of an application under subsection (a) or (k), 
the holder of such approved application shall submit to 
the Secretary a list of each patent required to be 
disclosed (as described in paragraph (3)).
``(B) Previously approved or licensed biological 
products.--
``(i) Products approved under section 351 
of the phsa.--Not later than 30 days after the 
date of enactment of the Fair Care Act of 2026, 
the holder of a biological product license that 
was approved under subsection (a) or (k) before 
the date of enactment of such Act shall submit 
to the Secretary a list of each patent required 
to be disclosed (as described in paragraph 
(3)).
``(ii) Products approved under section 505 
of the ffdca.--Not later than 30 days after 
March 23, 2026, the holder of an approved 
application for a biological product under 
section 505 of the Federal Food, Drug, and 
Cosmetic Act that is deemed to be a license for 
the biological product under this section on 
March 23, 2026, shall submit a list of each 
patent required to be disclosed (as described 
in paragraph (3)).
``(C) Updates.--The holder of a biological product 
license approved under subsection (a) or (k) shall 
submit to the Secretary a list that includes--
``(i) any patent first required to be 
disclosed (as described in paragraph (3)) after 
the submission under subparagraph (A) or (B), 
as applicable, within 30 days of the earlier 
of--
``(I) the date of issuance of such 
patent by the United States Patent and 
Trademark Office; or
``(II) the date of approval of a 
supplemental application for the 
biological product; and
``(ii) any patent, or any claim with 
respect to a patent, included on the list 
pursuant to this paragraph with respect to the 
biological product subsequently determined to 
be invalid or unenforceable, within 30 days of 
a determination of patent invalidity.
``(2) Publication of information.--
``(A) In general.--Within 1 year of the date of 
enactment of the Fair Care Act of 2026, the Secretary 
shall publish and make available to the public a 
single, easily searchable, list that includes--
``(i) the official and proprietary name of 
each biological product licensed under 
subsection (a) or (k), and of each biological 
product application approved under section 505 
of the Federal Food, Drug, and Cosmetic Act and 
deemed to be a license for the biological 
product under this section on March 23, 2026;
``(ii) with respect to each biological 
product described in clause (i), each patent 
submitted in accordance with paragraph (1);
``(iii) the date of licensure and 
application number for each such biological 
product;
``(iv) the marketing status, dosage form, 
route of administration, strength, and, if 
applicable, reference product, for each such 
biological product;
``(v) the licensure status for each such 
biological product, including whether the 
license at the time of listing is approved, 
withdrawn, or revoked;
``(vi) any period of any exclusivity under 
subsection (k)(7)(A) or subsection (k)(7)(B) of 
this section or section 527 of the Federal 
Food, Drug, and Cosmetic Act, and any extension 
of such period in accordance with subsection 
(m) of this section with respect to each such 
biological product, and the date on which such 
exclusivity expires;
``(vii) information regarding any 
determination related to biosimilarity or 
interchangeability for each such biological 
product; and
``(viii) information regarding approved 
indications for each such biological product, 
in such manner as the Secretary determines 
appropriate.
``(B) Updates.--Every 30 days after the publication 
of the first list under subparagraph (A), the Secretary 
shall revise the list to include--
``(i)(I) each biological product licensed 
under subsection (a) or (k) during the 30-day 
period; and
``(II) with respect to each biological 
product described in subclause (I), the 
information described in clauses (i) through 
(viii) of subparagraph (A); and
``(ii) any updates to information 
previously published in accordance with 
subparagraph (A).
``(3) Patents required to be disclosed.--In this section, a 
`patent required to be disclosed' is any patent for which the 
holder of a biological product license approved under 
subsection (a) or (k), or a biological product application 
approved under section 505 of the Federal Food, Drug, and 
Cosmetic Act and deemed to be a license for a biological 
product under this section on March 23, 2026, believes a claim 
of patent infringement could reasonably be asserted by the 
holder, or by a patent owner that has granted an exclusive 
license to the holder with respect to the biological product 
that is the subject of such license, if a person not licensed 
by the holder engaged in the making, using, offering to sell, 
selling, or importing into the United States of the biological 
product that is the subject of such license.''.
(b) Disclosure of Patents.--Section 351(l)(3)(A)(i) of the Public 
Health Service Act (42 U.S.C. 262(l)(3)(A)(i)) is amended by inserting 
``included in the list provided by the reference product sponsor under 
subsection (o)(1)'' after ``a list of patents''.
(c) Restriction on Claims of Patent Infringement.--Section 271(e) 
of title 35, United States Code, is amended by adding at the end the 
following:
``(7) The owner of a patent that should have been included 
in the list described in section 351(o)(1) of the Public Health 
Service Act (42 U.S.C. 262(o)(1)), including any updates 
required under subparagraph (C) of that section, but was not 
timely included in such list, may not bring an action under 
this section for infringement of the patent.''.
(d) Regulations.--The Secretary of Health and Human Services may 
promulgate regulations to carry out subsection (o) of section 351 of 
the Public Health Service Act (42 U.S.C. 262), as added by subsection 
(a).
(e) Rule of Construction.--Nothing in this Act, including an 
amendment made by this Act, shall be construed to require or allow the 
Secretary of Health and Human Services to delay the licensing of a 
biological product under section 351 of the Public Health Service Act 
(42 U.S.C. 262).

SEC. 362. REQUIREMENTS WITH RESPECT TO PRESCRIPTION DRUG BENEFITS.

(a) In General.--Subpart II of part A of title XXVII of the Public 
Health Service Act (42 U.S.C. 300gg-11 et seq.) is amended by adding at 
the end the following:

``SEC. 2729A. REQUIREMENTS WITH RESPECT TO PRESCRIPTION DRUG BENEFITS.

``A group health plan or a health insurance issuer offering group 
or individual health insurance coverage shall not, and shall ensure 
that any entity that provides pharmacy benefits management services 
under a contract with any such health plan or health insurance coverage 
does not, receive from a drug manufacturer a reduction in price or 
other remuneration with respect to any prescription drug received by an 
enrollee in the plan or coverage and covered by the plan or coverage, 
unless--
``(1) any such reduction in price is reflected at the point 
of sale to the enrollee; and
``(2) any such other remuneration is a flat fee-based 
service fee that a manufacturer of prescription drugs pays to a 
pharmacy benefit manager for services rendered to the 
manufacturer that relate to arrangements by the pharmacy 
benefit manager to provide pharmacy benefit management services 
to a health plan or health insurance issuer, if certain 
conditions established by the Secretary are met, including 
requirements that the fees are transparent to the health plan 
or health insurance issuer.''.
(b) Effective Date.--Section 2729A of the Public Health Service 
Act, as added by subsection (a), shall take effect on January 1, 2026.

SEC. 363. PBM TRANSPARENCY AND ELIMINATION OF DIR FEES.

(a) Prohibiting Medicare PDP Sponsors and MA-PD Organizations From 
Retroactively Reducing Payment on Clean Claims Submitted by 
Pharmacies.--
(1) In general.--Section 1860D-12(b)(4)(A) of the Social 
Security Act (42 U.S.C. 1395w-112(b)(4)(A)) is amended by 
adding at the end the following new clause:
``(iv) Prohibiting retroactive reductions 
in payments on clean claims.--Each contract 
entered into with a PDP sponsor under this part 
with respect to a prescription drug plan 
offered by such sponsor shall provide that 
after the date of receipt of a clean claim 
submitted by a pharmacy, the PDP sponsor (or an 
agent of the PDP sponsor) may not retroactively 
reduce payment on such claim directly or 
indirectly through aggregated effective rate or 
otherwise except in the case such claim is 
found to not be a clean claim (such as in the 
case of a claim lacking required substantiating 
documentation) during the course of a routine 
audit as permitted pursuant to written 
agreement between the PDP sponsor (or such an 
agent) and such pharmacy. The previous sentence 
shall not prohibit any retroactive increase in 
payment to a pharmacy pursuant to a written 
agreement between a PDP sponsor (or an agent of 
such sponsor) and such pharmacy.''.
(2) Effective date.--The amendment made by subsection (a) 
shall apply with respect to contracts entered into on or after 
January 1, 2026.
(b) Elimination of DIR Fees.--
(1) Pharmacy benefits manager standards under the medicare 
program for prescription drug plans and ma-pd plans.--
(A) In general.--Section 1860D-12(b) of the Social 
Security Act (42 U.S.C. 1395w-112(b)) is amended by 
adding at the end the following new paragraph:
``(7) Pharmacy benefits manager transparency 
requirements.--Each contract entered into with a PDP sponsor 
under this part with respect to a prescription drug plan 
offered by such sponsor or with an MA organization offering an 
MA-PD plan under part C shall provide that the sponsor or 
organization, respectively, may not enter into a contract with 
any pharmacy benefits manager (referred to in this paragraph as 
a `PBM') to manage the prescription drug coverage provided 
under such plan, or to control the costs of the prescription 
drug coverage under such plan, unless the PBM adheres to the 
following criteria when handling personally identifiable 
utilization and claims data or other sensitive patient data:
``(A) The PBM may not transmit any personally 
identifiable utilization, protected health information, 
or claims data, with respect to a plan enrollee, to a 
pharmacy owned by a PBM if the plan enrollee has not 
voluntarily elected in writing or via secure electronic 
means to fill that particular prescription at the PBM-
owned pharmacy.
``(B) The PBM may not require that a plan enrollee 
use a retail pharmacy, mail order pharmacy, specialty 
pharmacy, or other pharmacy entity providing pharmacy 
services in which the PBM has an ownership interest or 
that has an ownership interest in the PBM, or provide 
an incentive to a plan enrollee to encourage the 
enrollee to use a retail pharmacy, mail order pharmacy, 
specialty pharmacy, or other pharmacy entity providing 
pharmacy services in which the PBM has an ownership 
interest or that has an ownership interest in the PBM, 
if the incentive is applicable only to such 
pharmacies.''.
(B) Regular update of prescription drug pricing 
standard.--Paragraph (6) of section 1860D-12(b) of the 
Social Security Act (42 U.S.C. 1395w-112(b)) is amended 
to read as follows:
``(6) Regular update of prescription drug pricing 
standard.--
``(A) In general.--If the PDP sponsor of a 
prescription drug plan (or MA organization offering an 
MA-PD plan) uses a standard for reimbursement (as 
described in subparagraph (B)) of pharmacies based on 
the cost of a drug, each contract entered into with 
such sponsor under this part (or organization under 
part C) with respect to the plan shall provide that the 
sponsor (or organization) shall--
``(i) update such standard not less 
frequently than once every 7 days, beginning 
with an initial update on January 1 of each 
year, to accurately reflect the market price of 
acquiring the drug;
``(ii) disclose to applicable pharmacies 
and the contracting entities of such pharmacies 
the sources used for making any such update 
immediately without requirement of request;
``(iii) if the source for such a standard 
for reimbursement is not publicly available, 
disclose to the applicable pharmacies and the 
respective contracting entities of such 
pharmacies all individual drug prices to be so 
updated in advance of the use of such prices 
for the reimbursement of claims;
``(iv) establish a process to appeal, 
investigate, and resolve disputes regarding 
individual drug prices that are less than the 
pharmacy acquisition price for such drug, which 
must be adjudicated within 7 days of the 
pharmacy filing its appeal; and
``(v) provide all such pricing data in an 
.xml spreadsheet format or a comparable easily 
accessible and complete spreadsheet format.
``(B) Prescription drug pricing standard defined.--
For purposes of subparagraph (A), a standard for 
reimbursement of a pharmacy is any methodology or 
formula for varying the pricing of a drug or drugs 
during the term of the pharmacy reimbursement contract 
that is based on the cost of the drug involved, 
including drug pricing references and amounts that are 
based upon average wholesale price, wholesale average 
cost, average manufacturer price, average sales price, 
maximum allowable cost (MAC), or other costs, whether 
publicly available or not.''.
(C) Effective date.--The amendments made by this 
section shall apply to plan years beginning on or after 
January 1, 2026.
(2) Regular update of prescription drug pricing standard 
under tricare retail pharmacy program.--Section 1074g(d) of 
title 10, United States Code, is amended by adding at the end 
the following new paragraph:
``(3) To the extent practicable, with respect to the TRICARE retail 
pharmacy program described in subsection (a)(2)(E)(ii), the Secretary 
shall ensure that a contract entered into with a TRICARE managed care 
support contractor includes requirements described in section 1860D-
12(b)(6) of the Social Security Act (42 U.S.C. 1395w-112(b)(6)) to 
ensure the provision of information regarding the pricing standard for 
prescription drugs.''.
(3) Prescription drug transparency in the federal employees 
health benefits program.--
(A) In general.--Section 8902 of title 5, United 
States Code, is amended by adding at the end the 
following new subsections:
``(p) A contract may not be made or a plan approved under this 
chapter under which a carrier has an agreement with a pharmacy benefits 
manager (in this subsection referred to as a `PBM') to manage 
prescription drug coverage or to control the costs of the prescription 
drug coverage unless the carrier and PBM adhere to the following 
criteria:
``(1) The PBM may not transmit any personally identifiable 
utilization, protected health information, or claims data with 
respect to an individual enrolled under such contract or plan 
to a pharmacy owned by the PBM if the individual has not 
voluntarily elected in writing or via secure electronic means 
to fill that particular prescription at such a pharmacy.
``(2) The PBM may not require that an individual enrolled 
under such contract or plan use a retail pharmacy, mail order 
pharmacy, specialty pharmacy, or other pharmacy entity 
providing pharmacy services in which the PBM has an ownership 
interest or that has an ownership interest in the PBM or 
provide an incentive to a plan enrollee to encourage the 
enrollee to use a retail pharmacy, mail order pharmacy, 
specialty pharmacy, or other pharmacy entity providing pharmacy 
services in which the PBM has an ownership interest or that has 
an ownership interest in the PBM, if the incentive is 
applicable only to such pharmacies.
``(q)(1) If a contract made or plan approved under this chapter 
provides for a standard for reimbursement (as described in paragraph 
(2)) with respect to a prescription drug plan, such contract or plan 
shall provide that the applicable carrier--
``(A) update such standard not less frequently than once 
every 7 days, beginning with an initial update on January 1 of 
each year, to accurately reflect the market price of acquiring 
the drug;
``(B) disclose to applicable pharmacies and the contracting 
entities of such pharmacies the sources used for making any 
such update immediately without requirement of request;
``(C) if the source for such a standard for reimbursement 
is not publicly available, disclose to the applicable 
pharmacies and contracting entities of such pharmacies all 
individual drug prices to be so updated in advance of the use 
of such prices for the reimbursement of claims;
``(D) establish a process to appeal, investigate, and 
resolve disputes regarding individual drug prices that are less 
than the pharmacy acquisition price for such drug, which must 
be adjudicated within 7 days of the pharmacy filing its appeal; 
and
``(E) provide all such pricing data in an .xml spreadsheet 
format or a comparable easily accessible and complete 
spreadsheet format.
``(2) For purposes of paragraph (1), a standard for reimbursement 
of a pharmacy is any methodology or formula for varying the pricing of 
a drug or drugs during the term of the pharmacy reimbursement contract 
that is based on the cost of the drug involved, including drug pricing 
references and amounts that are based upon average wholesale price, 
wholesale average cost, average manufacturer price, average sales 
price, maximum allowable cost, or other costs, whether publicly 
available or not.''.
(B) Application.--The amendment made by 
subparagraph (A) shall apply to any contract entered 
into under section 8902 of title 5, United States Code, 
on or after the date of enactment of this section.

SEC. 364. HEALTH PLAN OVERSIGHT OF PHARMACY BENEFIT MANAGER SERVICES.

Subpart II of part A of title XXVII of the Public Health Service 
Act (42 U.S.C. 300gg-11 et seq.), as amended by the preceding sections, 
is further amended by adding at the end the following:

``SEC. 2729E. HEALTH PLAN OVERSIGHT OF PHARMACY BENEFIT MANAGER 
SERVICES.

``(a) In General.--A group health plan or health insurance issuer 
offering group health insurance coverage or an entity or subsidiary 
providing pharmacy benefits management services shall not enter into a 
contract with a drug manufacturer, distributor, wholesaler, 
subcontractor, rebate aggregator, or any associated third party that 
limits the disclosure of information to plan sponsors in such a manner 
that prevents the plan or coverage, or an entity or subsidiary 
providing pharmacy benefits management services on behalf of a plan or 
coverage from making the reports described in subsection (b).
``(b) Reports to Group Plan Sponsors.--
``(1) In general.--Beginning with the first plan year that 
begins after the date of enactment of the Fair Care Act of 
2026, not less frequently than once every 6 months, a health 
insurance issuer offering group health insurance coverage or an 
entity providing pharmacy benefits management services on 
behalf of a group health plan shall submit to the plan sponsor 
(as defined in section 3(16)(B) of the Employee Retirement 
Income Security Act of 1974) of such group health plan or 
health insurance coverage a report in accordance with this 
subsection and make such report available to the plan sponsor 
in a machine-readable format. Each such report shall include, 
with respect to the applicable group health plan or health 
insurance coverage--
``(A) information collected from drug manufacturers 
by such issuer or entity on the total amount of 
copayment assistance dollars paid, or copayment cards 
applied, that were funded by the drug manufacturer with 
respect to the enrollees in such plan or coverage;
``(B) a list of each covered drug dispensed during 
the reporting period, including, with respect to each 
such drug during the reporting period--
``(i) the brand name, chemical entity, and 
National Drug Code;
``(ii) the number of enrollees for whom the 
drug was filled during the plan year, the total 
number of prescription fills for the drug 
(including original prescriptions and refills), 
and the total number of dosage units of the 
drug dispensed across the plan year, including 
whether the dispensing channel was by retail, 
mail order, or specialty pharmacy;
``(iii) the wholesale acquisition cost, 
listed as cost per days supply and cost per 
pill, or in the case of a drug in another form, 
per dose;
``(iv) the total out-of-pocket spending by 
enrollees on such drug, including enrollee 
spending through copayments, coinsurance, and 
deductibles; and
``(v) for any drug for which gross spending 
of the group health plan or health insurance 
coverage exceeded $10,000 during the reporting 
period--
``(I) a list of all other available 
drugs in the same therapeutic category 
or class, including brand name drugs 
and biological products and generic 
drugs or biosimilar biological products 
that are in the same therapeutic 
category or class; and
``(II) the rationale for preferred 
formulary placement of a particular 
drug or drugs in that therapeutic 
category or class;
``(C) a list of each therapeutic category or class 
of drugs that were dispensed under the health plan or 
health insurance coverage during the reporting period, 
and, with respect to each such therapeutic category or 
class of drugs, during the reporting period--
``(i) total gross spending by the plan, 
before manufacturer rebates, fees, or other 
manufacturer remuneration;
``(ii) the number of enrollees who filled a 
prescription for a drug in that category or 
class;
``(iii) if applicable to that category or 
class, a description of the formulary tiers and 
utilization mechanisms (such as prior 
authorization or step therapy) employed for 
drugs in that category or class;
``(iv) the total out-of-pocket spending by 
enrollees, including enrollee spending through 
copayments, coinsurance, and deductibles; and
``(v) for each therapeutic category or 
class under which 3 or more drugs are included 
on the formulary of such plan or coverage--
``(I) the amount received, or 
expected to be received, from drug 
manufacturers in rebates, fees, 
alternative discounts, or other 
remuneration--
``(aa) to be paid by drug 
manufacturers for claims 
incurred during the reporting 
period; or
``(bb) that is related to 
utilization of drugs, in such 
therapeutic category or class;
``(II) the total net spending, 
after deducting rebates, price 
concessions, alternative discounts or 
other remuneration from drug 
manufacturers, by the health plan or 
health insurance coverage on that 
category or class of drugs; and
``(III) the net price per course of 
treatment or 30-day supply incurred by 
the health plan or health insurance 
coverage and its enrollees, after 
manufacturer rebates, fees, and other 
remuneration for drugs dispensed within 
such therapeutic category or class 
during the reporting period;
``(D) total gross spending on prescription drugs by 
the plan or coverage during the reporting period, 
before rebates and other manufacturer fees or 
remuneration;
``(E) total amount received, or expected to be 
received, by the health plan or health insurance 
coverage in drug manufacturer rebates, fees, 
alternative discounts, and all other remuneration 
received from the manufacturer or any third party, 
other than the plan sponsor, related to utilization of 
drug or drug spending under that health plan or health 
insurance coverage during the reporting period;
``(F) the total net spending on prescription drugs 
by the health plan or health insurance coverage during 
the reporting period; and
``(G) amounts paid directly or indirectly in 
rebates, fees, or any other type of remuneration to 
brokers, consultants, advisors, or any other individual 
or firm who referred the group health plan's or health 
insurance issuer's business to the pharmacy benefit 
manager.
``(2) Privacy requirements.--Health insurance issuers 
offering group health insurance coverage and entities providing 
pharmacy benefits management services on behalf of a group 
health plan shall provide information under paragraph (1) in a 
manner consistent with the privacy, security, and breach 
notification regulations promulgated under section 264(c) of 
the Health Insurance Portability and Accountability Act of 1996 
(or successor regulations), and shall restrict the use and 
disclosure of such information according to such privacy 
regulations.
``(3) Disclosure and redisclosure.--
``(A) Limitation to business associates.--A group 
health plan receiving a report under paragraph (1) may 
disclose such information only to business associates 
of such plan as defined in section 160.103 of title 45, 
Code of Federal Regulations (or successor regulations).
``(B) Clarification regarding public disclosure of 
information.--Nothing in this section prevents a health 
insurance issuer offering group health insurance 
coverage or an entity providing pharmacy benefits 
management services on behalf of a group health plan 
from placing reasonable restrictions on the public 
disclosure of the information contained in a report 
described in paragraph (1), except that such issuer or 
entity may not restrict disclosure of such report to 
governmental agencies pursuant to an investigation or 
enforcement action.
``(C) Limited form of report.--The Secretary shall 
define through rulemaking a limited form of the report 
under paragraph (1) required of plan sponsors who are 
drug manufacturers, drug wholesalers, or other direct 
participants in the drug supply chain, in order to 
prevent anti-competitive behavior.
``(c) Limitations on Spread Pricing.--
``(1) Prescription drug transactions with pharmacies 
independent of the issuer or pharmacy benefits manager.--If the 
pharmacy that dispenses a prescription drug to an enrollee in a 
group health plan or group or individual health insurance 
coverage is not wholly or partially owned by such plan, such 
issuer, or an entity providing pharmacy benefit management 
services under such plan or coverage, such plan, issuer, or 
entity shall not charge the plan, issuer, or enrollee a price 
for such prescription drug that exceeds the price paid to the 
pharmacy.
``(2) Intra-company prescription drug transactions.--If the 
mail order, specialty, or retail pharmacy that dispenses a 
prescription drug to an enrollee in a group health plan or 
health insurance coverage is wholly or partially owned by, and 
submits claims to, such health insurance issuer or an entity 
providing pharmacy benefit management services under a group 
health plan or group or individual health insurance coverage, 
the price charged for such drug by such pharmacy to such group 
health plan or health insurance issuer offering group or 
individual health insurance coverage may not exceed the lesser 
of--
``(A) the amount paid to the pharmacy for 
acquisition of the drug; or
``(B) the median price charged to the group health 
plan or health insurance issuer when the same drug is 
dispensed to enrollees in the plan or coverage by other 
similarly situated pharmacies not wholly or partially 
owned by the health insurance issuer or entity 
providing pharmacy benefits management services, as 
described in paragraph (1).
``(3) Supplementary reporting for intra-company 
prescription drug transactions.--A health insurance issuer of 
group health insurance coverage or an entity providing pharmacy 
benefits management services under a group health plan or group 
health insurance coverage that conducts transactions with a 
wholly or partially owned pharmacy, as described in paragraph 
(2), shall submit, together with the report under subsection 
(b), a supplementary report every 6 months to the plan sponsor 
that includes--
``(A) an explanation of any benefit design 
parameters that encourage enrollees in the plan or 
coverage to fill prescriptions at mail order, 
specialty, or retail pharmacies that are wholly or 
partially owned by that issuer or entity;
``(B) the percentage of total prescriptions charged 
to the plan, coverage, or enrollees in the plan or 
coverage, that were dispensed by mail order, specialty, 
or retail pharmacies that are wholly or partially owned 
by the issuer or entity providing pharmacy benefits 
management services; and
``(C) a list of all drugs dispensed by such wholly 
or partially owned pharmacy and charged to the plan or 
coverage, or enrollees of the plan or coverage, during 
the applicable quarter, and, with respect to each 
drug--
``(i) the amount charged per course of 
treatment or 30-day supply with respect to 
enrollees in the plan or coverage, including 
amounts charged to the plan or coverage and 
amounts charged to the enrollee;
``(ii) the median amount charged to the 
plan or coverage, per course of treatment or 
30-day supply, including amounts paid by the 
enrollee, when the same drug is dispensed by 
other pharmacies that are not wholly or 
partially owned by the issuer or entity and 
that are included in the pharmacy network of 
that plan or coverage;
``(iii) the interquartile range of the 
costs, per course of treatment or 30-day 
supply, including amounts paid by the enrollee, 
when the same drug is dispensed by other 
pharmacies that are not wholly or partially 
owned by the issuer or entity and that are 
included in the pharmacy network of that plan 
or coverage; and
``(iv) the lowest cost per course of 
treatment or 30-day supply, for such drug, 
including amounts charged to the plan or issuer 
and enrollee, that is available from any 
pharmacy included in the network of the plan or 
coverage.
``(d) Full Rebate Pass-Through to Plan.--
``(1) In general.--A pharmacy benefits manager, a third-
party administrator of a group health plan, a health insurance 
issuer offering group health insurance coverage, or an entity 
providing pharmacy benefits management services under such 
health plan or health insurance coverage shall remit 100 
percent of rebates, fees, alternative discounts, and all other 
remuneration received from a pharmaceutical manufacturer, 
distributor or any other third party, that are related to 
utilization of drugs under such health plan or health insurance 
coverage, to the group health plan.
``(2) Form and manner of remittance.--Such rebates, fees, 
alternative discounts, and other remuneration shall be--
``(A) remitted to the group health plan in a timely 
fashion after the period for which such rebates, fees, 
or other remuneration is calculated, and in no case 
later than 90 days after the end of such period;
``(B) fully disclosed and enumerated to the group 
health plan sponsor, as described in (b)(1);
``(C) available for audit by the plan sponsor, or a 
third party designated by a plan sponsor no less than 
once per plan year; and
``(D) returned to the issuer or entity providing 
pharmacy benefits management services by the group 
health plan if audits by such issuer or entity indicate 
that the amounts received are incorrect after such 
amounts have been paid to the group health plan.
``(3) Audit of rebate contracts.--A pharmacy benefits 
manager, a third-party administrator of a group health plan, a 
health insurance issuer offering group health insurance 
coverage, or an entity providing pharmacy benefits management 
services under such health plan or health insurance coverage 
shall make rebate contracts with drug manufacturers available 
for audit by such plan sponsor or designated third party, 
subject to confidentiality agreements to prevent re-disclosure 
of such contracts.
``(e) Enforcement.--
``(1) In general.--The Secretary, in consultation with the 
Secretary of Labor and the Secretary of the Treasury, shall 
enforce this section.
``(2) Failure to provide timely information.--A health 
insurance issuer or an entity providing pharmacy benefit 
management services that violates subsection (a), fails to 
provide information required under subsection (b), engages in 
spread pricing as defined in subsection (c), or fails to comply 
with the requirements of subsection (d), or a drug manufacturer 
that fails to provide information under subsection (b)(1)(A), 
in a timely manner shall be subject to a civil monetary penalty 
in the amount of $10,000 for each day during which such 
violation continues or such information is not disclosed or 
reported.
``(3) False information.--A health insurance issuer, entity 
providing pharmacy benefit management services, or drug 
manufacturer that knowingly provides false information under 
this section shall be subject to a civil money penalty in an 
amount not to exceed $100,000 for each item of false 
information. Such civil money penalty shall be in addition to 
other penalties as may be prescribed by law.
``(4) Procedure.--The provisions of section 1128A of the 
Social Security Act, other than subsection (a) and (b) and the 
first sentence of subsection (c)(1) of such section shall apply 
to civil monetary penalties under this subsection in the same 
manner as such provisions apply to a penalty or proceeding 
under section 1128A of the Social Security Act.
``(5) Safe harbor.--The Secretary may waive penalties under 
paragraph (2), or extend the period of time for compliance with 
a requirement of this section, for an entity in violation of 
this section that has made a good-faith effort to comply with 
this section.
``(f) Rule of Construction.--Nothing in this section shall be 
construed to prohibit payments to entities offering pharmacy benefits 
management services for bona fide services using a fee structure not 
contemplated by this section, provided that such fees are transparent 
to group health plans and health insurance issuers.
``(g) Definitions.--In this section--
``(1) the term `similarly situated pharmacy' means, with 
respect to a particular pharmacy, another pharmacy that is 
approximately the same size (as measured by the number of 
prescription drugs dispensed), and that serves patients in the 
same geographical area, whether through physical locations or 
mail order; and
``(2) the term `wholesale acquisition cost' has the meaning 
given such term in section 1847A(c)(6)(B) of the Social 
Security Act.''.

SEC. 365. STUDY BY COMPTROLLER GENERAL OF THE UNITED STATES.

(a) In General.--The Comptroller General of the United States 
(referred to in this section as the ``Comptroller General'') shall, in 
consultation with appropriate stakeholders, conduct a study on the role 
of pharmacy benefit managers.
(b) Permissible Examination.--In conducting the study required 
under subsection (a), the Comptroller General may examine various 
qualitative and quantitative aspects of the role of pharmacy benefit 
managers, such as the following:
(1) The role that pharmacy benefit managers play in the 
pharmaceutical supply chain.
(2) The state of competition among pharmacy benefit 
managers, including the market share for the Nation's largest 
pharmacy benefit managers.
(3) The use of rebates and fees by pharmacy benefit 
managers, including--
(A) the extent to which rebates are passed on to 
health plans and whether such rebates are passed on to 
individuals enrolled in such plans;
(B) the extent to which rebates are kept by such 
pharmacy benefit managers; and
(C) the role of any fees charged by such pharmacy 
benefit managers.
(4) Whether pharmacy benefit managers structure their 
formularies in favor of high-rebate prescription drugs over 
lower-cost, lower-rebate alternatives.
(5) The average prior authorization approval time for 
pharmacy benefit managers.
(6) Factors affecting the use of step therapy by pharmacy 
benefit managers.
(c) Report.--Not later than 3 years after the date of enactment of 
this Act, the Comptroller General shall submit to the Secretary of 
Health and Human Services, the Committee on Health, Education, Labor, 
and Pensions of the Senate, and the Committee on Energy and Commerce of 
the House of Representatives a report containing the results of the 
study conducted under subsection (a), including policy recommendations.

Subtitle E--Medicare and Medicaid Prescription Drug Reforms

SEC. 371. MARKET BASED PART B PRICING INDEX.

Notwithstanding any provision of part B of title XVIII of the 
Social Security Act, the Secretary of Health and Human Services may 
make payments for drugs payable under such part based on an 
international pricing index. In using such an index, the Secretary 
shall take into account whether the market of each country included in 
such index is a price-controlled or free market and give more weight 
under such index to countries with market-based drug policies.

SEC. 372. INNOVATION MODEL TESTING OF MEDICARE DRUG PAYMENTS.

Notwithstanding any provision of section 1115A, the Secretary of 
Health and Human Services may, under such section, test a model to 
integrate benefits provided for drugs under parts A, B, and D of title 
XVIII of the Social Security Act.

Subtitle F--Medical Malpractice Reform

SEC. 381. DEFINITIONS.

In this Act:
(1) Alternative dispute resolution system; adr.--The term 
``alternative dispute resolution system'' or ``ADR'' means a 
system that provides for the resolution of health care lawsuits 
in a manner other than through a civil action brought in a 
State or Federal court.
(2) Claimant.--The term ``claimant'' means any person who 
brings a health care lawsuit, including a person who asserts or 
claims a right to legal or equitable contribution, indemnity, 
or subrogation, arising out of a health care liability claim or 
action, and any person on whose behalf such a claim is asserted 
or such an action is brought, whether deceased, incompetent, or 
a minor.
(3) Collateral source benefits.--The term ``collateral 
source benefits'' means any amount paid or reasonably likely to 
be paid in the future to or on behalf of the claimant, or any 
service, product, or other benefit provided or reasonably 
likely to be provided in the future to or on behalf of the 
claimant, as a result of the injury or wrongful death, pursuant 
to--
(A) any State or Federal health, sickness, income-
disability, accident, or workers' compensation law;
(B) any health, sickness, income-disability, or 
accident insurance that provides health benefits or 
income-disability coverage;
(C) any contract or agreement of any group, 
organization, partnership, or corporation to provide, 
pay for, or reimburse the cost of medical, hospital, 
dental, or income-disability benefits; and
(D) any other publicly or privately funded program.
(4) Contingent fee.--The term ``contingent fee'' includes 
all compensation to any person or persons which is payable only 
if a recovery is effected on behalf of one or more claimants.
(5) Economic damages.--The term ``economic damages'' means 
objectively verifiable monetary losses incurred as a result of 
the provision or use of (or failure to provide or use) health 
care services or medical products, such as past and future 
medical expenses, loss of past and future earnings, cost of 
obtaining domestic services, loss of employment, and loss of 
business or employment opportunities, unless otherwise defined 
under applicable State law. In no circumstances shall damages 
for health care services or medical products exceed the amount 
actually paid or incurred by or on behalf of the claimant.
(6) Future damages.--The term ``future damages'' means any 
damages that are incurred after the date of judgment, 
settlement, or other resolution (including mediation, or any 
other form of alternative dispute resolution).
(7) Health care lawsuit.--The term ``health care lawsuit'' 
means any health care liability claim concerning the provision 
of goods or services for which coverage was provided in whole 
or in part via a Federal program, subsidy or tax benefit, or 
any health care liability action concerning the provision of 
goods or services for which coverage was provided in whole or 
in part via a Federal program, subsidy or tax benefit, brought 
in a State or Federal court or pursuant to an alternative 
dispute resolution system, against a health care provider 
regardless of the theory of liability on which the claim is 
based, or the number of claimants, plaintiffs, defendants, or 
other parties, or the number of claims or causes of action, in 
which the claimant alleges a health care liability claim. Such 
term does not include a claim or action which is based on 
criminal liability; which seeks civil fines or penalties paid 
to Federal, State, or local government; or which is grounded in 
antitrust.
(8) Health care liability action.--The term ``health care 
liability action'' means a civil action brought in a State or 
Federal court or pursuant to an alternative dispute resolution 
system, against a health care provider regardless of the theory 
of liability on which the claim is based, or the number of 
plaintiffs, defendants, or other parties, or the number of 
causes of action, in which the claimant alleges a health care 
liability claim.
(9) Health care liability claim.--The term ``health care 
liability claim'' means a demand by any person, whether or not 
pursuant to ADR, against a health care provider, including, but 
not limited to, third-party claims, cross-claims, counter-
claims, or contribution claims, which are based upon the 
provision or use of (or the failure to provide or use) health 
care services or medical products, regardless of the theory of 
liability on which the claim is based, or the number of 
plaintiffs, defendants, or other parties, or the number of 
causes of action.
(10) Health care provider.--The term ``health care 
provider'' means any person or entity required by State or 
Federal laws or regulations to be licensed, registered, or 
certified to provide health care services, and being either so 
licensed, registered, or certified, or exempted from such 
requirement by other statute or regulation, as well as any 
other individual or entity defined as a health care provider, 
health care professional, or health care institution under 
State law.
(11) Health care services.--The term ``health care 
services'' means the provision of any goods or services 
(including safety, professional, or administrative services 
directly related to health care) by a health care provider, or 
by any individual working under the supervision of a health 
care provider, that relates to the diagnosis, prevention, or 
treatment of any human disease or impairment, or the assessment 
or care of the health of human beings.
(12) Medical product.--The term ``medical product'' means a 
drug, device, or biological product intended for humans, and 
the terms ``drug'', ``device'', and ``biological product'' have 
the meanings given such terms in sections 201(g)(1) and 201(h) 
of the Federal Food, Drug and Cosmetic Act (21 U.S.C. 321(g)(1) 
and (h)) and section 351(a) of the Public Health Service Act 
(42 U.S.C. 262(a)), respectively, including any component or 
raw material used therein, but excluding health care services.
(13) Noneconomic damages.--The term ``noneconomic damages'' 
means damages for physical and emotional pain, suffering, 
inconvenience, physical impairment, mental anguish, 
disfigurement, loss of enjoyment of life, loss of society and 
companionship, loss of consortium (other than loss of domestic 
service), hedonic damages, injury to reputation, and all other 
nonpecuniary losses of any kind or nature incurred as a result 
of the provision or use of (or failure to provide or use) 
health care services or medical products, unless otherwise 
defined under applicable State law.
(14) Recovery.--The term ``recovery'' means the net sum 
recovered after deducting any disbursements or costs incurred 
in connection with prosecution or settlement of the claim, 
including all costs paid or advanced by any person. Costs of 
health care incurred by the plaintiff and the attorneys' office 
overhead costs or charges for legal services are not deductible 
disbursements or costs for such purpose.
(15) Representative.--The term ``representative'' means a 
legal guardian, attorney, person designated to make decisions 
on behalf of a patient under a medical power of attorney, or 
any person recognized in law or custom as a patient's agent.
(16) State.--The term ``State'' means each of the several 
States, the District of Columbia, the Commonwealth of Puerto 
Rico, the Virgin Islands, Guam, American Samoa, the Northern 
Mariana Islands, the Trust Territory of the Pacific Islands, 
and any other territory or possession of the United States, or 
any political subdivision thereof.

SEC. 382. ENCOURAGING SPEEDY RESOLUTION OF CLAIMS.

(a) Statute of Limitations.--
(1) In general.--Except as provided in paragraph (2), the 
time for the commencement of a health care lawsuit shall be, 
whichever occurs first of the following:
(A) Three years after the date of the occurrence of 
the breach or tort.
(B) Three years after the date the medical or 
health care treatment that is the subject of the claim 
is completed.
(C) One year after the claimant discovers, or 
through the use of reasonable diligence should have 
discovered, the injury.
(2) Tolling.--In no event shall the time for commencement 
of a health care lawsuit exceed 3 years after the date of the 
occurrence of the breach or tort or 3 years after the date the 
medical or health care treatment that is the subject of the 
claim is completed (whichever occurs first) unless tolled for 
any of the following--
(A) upon proof of fraud;
(B) intentional concealment; or
(C) the presence of a foreign body, which has no 
therapeutic or diagnostic purpose or effect, in the 
person of the injured person.
(3) Actions by a minor.--Actions by a minor shall be 
commenced within 3 years after the date of the occurrence of 
the breach or tort or 3 years after the date of the medical or 
health care treatment that is the subject of the claim is 
completed (whichever occurs first) except that actions by a 
minor under the full age of 6 years shall be commenced within 3 
years after the date of the occurrence of the breach or tort, 3 
years after the date of the medical or health care treatment 
that is the subject of the claim is completed, or 1 year after 
the injury is discovered, or through the use of reasonable 
diligence should have been discovered, or prior to the minor's 
8th birthday, whichever provides a longer period. Such time 
limitation shall be tolled for minors for any period during 
which a parent or guardian and a health care provider have 
committed fraud or collusion in the failure to bring an action 
on behalf of the injured minor.
(b) State Flexibility.--No provision of subsection (a) shall be 
construed to preempt any State law (whether effective before, on, or 
after the date of the enactment of this Act) that--
(1) specifies a time period of less than 3 years after the 
date of injury or less than 1 year after the claimant 
discovers, or through the use of reasonable diligence should 
have discovered, the injury, for the filing of a health care 
lawsuit;
(2) that specifies a different time period for the filing 
of lawsuits by a minor;
(3) that triggers the time period based on the date of the 
alleged negligence; or
(4) establishes a statute of repose for the filing of a 
health care lawsuit.

SEC. 383. COMPENSATING PATIENT INJURY.

(a) Unlimited Amount of Damages for Actual Economic Losses in 
Health Care Lawsuits.--In any health care lawsuit, nothing in this Act 
shall limit a claimant's recovery of the full amount of the available 
economic damages, notwithstanding the limitation in subsection (b).
(b) Additional Noneconomic Damages.--In any health care lawsuit, 
the amount of noneconomic damages, if available, shall not exceed 
$250,000, regardless of the number of parties against whom the action 
is brought or the number of separate claims or actions brought with 
respect to the same injury.
(c) No Discount of Award for Noneconomic Damages.--For purposes of 
applying the limitation in subsection (b), future noneconomic damages 
shall not be discounted to present value. The jury shall not be 
informed about the maximum award for noneconomic damages. An award for 
noneconomic damages in excess of $250,000 shall be reduced either 
before the entry of judgment, or by amendment of the judgment after 
entry of judgment, and such reduction shall be made before accounting 
for any other reduction in damages required by law. If separate awards 
are rendered for past and future noneconomic damages and the combined 
awards exceed $250,000, the future noneconomic damages shall be reduced 
first.
(d) Fair Share Rule.--In any health care lawsuit, each party shall 
be liable for that party's several share of any damages only and not 
for the share of any other person. Each party shall be liable only for 
the amount of damages allocated to such party in direct proportion to 
such party's percentage of responsibility. Whenever a judgment of 
liability is rendered as to any party, a separate judgment shall be 
rendered against each such party for the amount allocated to such 
party. For purposes of this section, the trier of fact shall determine 
the proportion of responsibility of each party for the claimant's harm.
(e) State Flexibility.--No provision of this section shall be 
construed to preempt any State law (whether effective before, on, or 
after the date of the enactment of this Act) that specifies a 
particular monetary amount of economic or noneconomic damages (or the 
total amount of damages) that may be awarded in a health care lawsuit, 
regardless of whether such monetary amount is greater or lesser than is 
provided for under this section.

SEC. 384. MAXIMIZING PATIENT RECOVERY.

(a) Court Supervision of Share of Damages Actually Paid to 
Claimants.--In any health care lawsuit, the court shall supervise the 
arrangements for payment of damages to protect against conflicts of 
interest that may have the effect of reducing the amount of damages 
awarded that are actually paid to claimants. In particular, in any 
health care lawsuit in which the attorney for a party claims a 
financial stake in the outcome by virtue of a contingent fee, the court 
shall have the power to restrict the payment of a claimant's damage 
recovery to such attorney, and to redirect such damages to the claimant 
based upon the interests of justice and principles of equity. In no 
event shall the total of all contingent fees for representing all 
claimants in a health care lawsuit exceed the following limits:
(1) Forty percent of the first $50,000 recovered by the 
claimant(s).
(2) Thirty-three and one-third percent of the next $50,000 
recovered by the claimant(s).
(3) Twenty-five percent of the next $500,000 recovered by 
the claimant(s).
(4) Fifteen percent of any amount by which the recovery by 
the claimant(s) is in excess of $600,000.
(b) Applicability.--The limitations in this section shall apply 
whether the recovery is by judgment, settlement, mediation, 
arbitration, or any other form of alternative dispute resolution. In a 
health care lawsuit involving a minor or incompetent person, a court 
retains the authority to authorize or approve a fee that is less than 
the maximum permitted under this section. The requirement for court 
supervision in the first two sentences of subsection (a) applies only 
in civil actions.
(c) State Flexibility.--No provision of this section shall be 
construed to preempt any State law (whether effective before, on, or 
after the date of the enactment of this Act) that specifies a lesser 
percentage or lesser total value of damages which may be claimed by an 
attorney representing a claimant in a health care lawsuit.

SEC. 385. AUTHORIZATION OF PAYMENT OF FUTURE DAMAGES TO CLAIMANTS IN 
HEALTH CARE LAWSUITS.

(a) In General.--In any health care lawsuit, if an award of future 
damages, without reduction to present value, equaling or exceeding 
$50,000 is made against a party with sufficient insurance or other 
assets to fund a periodic payment of such a judgment, the court shall, 
at the request of any party, enter a judgment ordering that the future 
damages be paid by periodic payments, in accordance with the Uniform 
Periodic Payment of Judgments Act promulgated by the National 
Conference of Commissioners on Uniform State Laws.
(b) Applicability.--This section applies to all actions which have 
not been first set for trial or retrial before the effective date of 
this Act.
(c) State Flexibility.--No provision of this section shall be 
construed to preempt any State law (whether effective before, on, or 
after the date of the enactment of this Act) that specifies periodic 
payments for future damages at any amount other than $50,000 or that 
mandates such payments absent the request of either party.

SEC. 386. PRODUCT LIABILITY FOR HEALTH CARE PROVIDERS.

A health care provider who prescribes, or who dispenses pursuant to 
a prescription, a medical product approved, licensed, or cleared by the 
Food and Drug Administration shall not be named as a party to a product 
liability lawsuit involving such product and shall not be liable to a 
claimant in a class action lawsuit against the manufacturer, 
distributor, or seller of such product.

SEC. 387. EFFECT ON OTHER LAWS.

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

SEC. 388. LIMITATION ON EXPERT WITNESS TESTIMONY.

(a) In General.--No person in a health care profession requiring 
licensure under the laws of a State shall be competent to testify in 
any court of law to establish the following facts--
(1) the recognized standard of acceptable professional 
practice and the specialty thereof, if any, that the defendant 
practices, which shall be the type of acceptable professional 
practice recognized in the defendant's community or in a 
community similar to the defendant's community that was in 
place at the time the alleged injury or wrongful action 
occurred;
(2) that the defendant acted with less than or failed to 
act with ordinary and reasonable care in accordance with the 
recognized standard; and
(3) that as a proximate result of the defendant's negligent 
act or omission, the claimant suffered injuries which would not 
otherwise have occurred,
unless the person was licensed to practice, in the State or a 
contiguous bordering State, a profession or specialty which would make 
the person's expert testimony relevant to the issues in the case and 
had practiced this profession or specialty in one of these States 
during the year preceding the date that the alleged injury or wrongful 
act occurred.
(b) Applicability.--The requirements set forth in subsection (a) 
shall also apply to expert witnesses testifying for the defendant as 
rebuttal witnesses.
(c) Waiver Authority.--The court may waive the requirements in this 
subsection if it determines that the appropriate witnesses otherwise 
would not be available.

SEC. 389. EXPERT WITNESS QUALIFICATIONS.

(a) In General.--In any health care lawsuit, an individual shall 
not give expert testimony on the appropriate standard of practice or 
care involved unless the individual is licensed as a health 
professional in one or more States and the individual meets the 
following criteria:
(1) If the party against whom or on whose behalf the 
testimony is to be offered is or claims to be a specialist, the 
expert witness shall specialize at the time of the occurrence 
that is the basis for the lawsuit in the same specialty or 
claimed specialty as the party against whom or on whose behalf 
the testimony is to be offered. If the party against whom or on 
whose behalf the testimony is to be offered is or claims to be 
a specialist who is board certified, the expert witness shall 
be a specialist who is board certified in that specialty or 
claimed specialty.
(2) During the 1-year period immediately preceding the 
occurrence of the action that gave rise to the lawsuit, the 
expert witness shall have devoted a majority of the 
individual's professional time to one or more of the following:
(A) The active clinical practice of the same health 
profession as the defendant and, if the defendant is or 
claims to be a specialist, in the same specialty or 
claimed specialty.
(B) The instruction of students in an accredited 
health professional school or accredited residency or 
clinical research program in the same health profession 
as the defendant and, if the defendant is or claims to 
be a specialist, in an accredited health professional 
school or accredited residency or clinical research 
program in the same specialty or claimed specialty.
(3) If the defendant is a general practitioner, the expert 
witness shall have devoted a majority of the witness's 
professional time in the 1-year period preceding the occurrence 
of the action giving rise to the lawsuit to one or more of the 
following:
(A) Active clinical practice as a general 
practitioner.
(B) Instruction of students in an accredited health 
professional school or accredited residency or clinical 
research program in the same health profession as the 
defendant.
(b) Lawsuits Against Entities.--If the defendant in a health care 
lawsuit is an entity that employs a person against whom or on whose 
behalf the testimony is offered, the provisions of subsection (a) apply 
as if the person were the party or defendant against whom or on whose 
behalf the testimony is offered.
(c) Power of Court.--Nothing in this section shall limit the power 
of the trial court in a health care lawsuit to disqualify an expert 
witness on grounds other than the qualifications set forth under this 
subsection.
(d) Limitation.--An expert witness in a health care lawsuit shall 
not be permitted to testify if the fee of the witness is in any way 
contingent on the outcome of the lawsuit.
(e) State Flexibility.--No provision of this section shall be 
construed to preempt any State law (whether effective before, on, or 
after the date of the enactment of this Act) that places additional 
qualification requirements upon any individual testifying as an expert 
witness.

SEC. 390. COMMUNICATIONS FOLLOWING UNANTICIPATED OUTCOME.

(a) Provider Communications.--In any health care liability action, 
any and all statements, affirmations, gestures, or conduct expressing 
apology, fault, sympathy, commiseration, condolence, compassion, or a 
general sense of benevolence which are made by a health care provider 
or an employee of a health care provider to the patient, a relative of 
the patient, or a representative of the patient and which relate to the 
discomfort, pain, suffering, injury, or death of the patient as the 
result of the unanticipated outcome of medical care shall be 
inadmissible for any purpose as evidence of an admission of liability 
or as evidence of an admission against interest.
(b) State Flexibility.--No provision of this section shall be 
construed to preempt any State law (whether effective before, on, or 
after the date of the enactment of this Act) that makes additional 
communications inadmissible as evidence of an admission of liability or 
as evidence of an admission against interest.

SEC. 391. AFFIDAVIT OF MERIT.

(a) Required Filing.--Subject to subsection (b), the plaintiff in a 
health care lawsuit alleging negligence or, if the plaintiff is 
represented by an attorney, the plaintiff's attorney shall file 
simultaneously with the health care lawsuit an affidavit of merit 
signed by a health professional who meets the requirements for an 
expert witness under section 242 of this Act. The affidavit of merit 
shall certify that the health professional has reviewed the notice and 
all medical records supplied to him or her by the plaintiff's attorney 
concerning the allegations contained in the notice and shall contain a 
statement of each of the following:
(1) The applicable standard of practice or care.
(2) The health professional's opinion that the applicable 
standard of practice or care was breached by the health 
professional or health facility receiving the notice.
(3) The actions that should have been taken or omitted by 
the health professional or health facility in order to have 
complied with the applicable standard of practice or care.
(4) The manner in which the breach of the standard of 
practice or care was the proximate cause of the injury alleged 
in the notice.
(5) A listing of the medical records reviewed.
(b) Filing Extension.--Upon motion of a party for good cause shown, 
the court in which the complaint is filed may grant the plaintiff or, 
if the plaintiff is represented by an attorney, the plaintiff's 
attorney an additional 28 days in which to file the affidavit required 
under subsection (a).
(c) State Flexibility.--No provision of this section shall be 
construed to preempt any State law (whether effective before, on, or 
after the date of the enactment of this Act) that establishes 
additional requirements for the filing of an affidavit of merit or 
similar pre-litigation documentation.

SEC. 392. NOTICE OF INTENT TO COMMENCE LAWSUIT.

(a) Advance Notice.--A person shall not commence a health care 
lawsuit against a health care provider unless the person has given the 
health care provider 90 days written notice before the action is 
commenced.
(b) Exceptions.--A health care lawsuit against a health care 
provider filed within 6 months of the statute of limitations expiring 
as to any claimant, or within 1 year of the statute of repose expiring 
as to any claimant, shall be exempt from compliance with this section.
(c) State Flexibility.--No provision of this section shall be 
construed to preempt any State law (whether effective before, on, or 
after the date of the enactment of this Act) that establishes a 
different time period for the filing of written notice.

SEC. 393. LIMITATION ON LIABILITY FOR VOLUNTEER HEALTH CARE 
PROFESSIONALS.

(a) In General.--Title II of the Public Health Service Act (42 
U.S.C. 202 et seq.) is amended by inserting after section 224 the 
following:

``SEC. 224A. LIMITATION ON LIABILITY FOR VOLUNTEER HEALTH CARE 
PROFESSIONALS.

``(a) Limitation on Liability.--A physician shall not be liable 
under Federal or State law in any civil action for any harm caused by 
an act or omission of such physician, or attending medical personnel 
supporting such physician, if such act or omission--
``(1) occurs in the course of furnishing qualified charity 
care (as such term is defined in section 199B of the Internal 
Revenue Code of 1986); and
``(2) was not grossly negligent.
``(b) Preemption.--This section preempts the laws of a State or any 
political subdivision of a State to the extent that such laws are 
inconsistent with this section, unless such laws provide greater 
protection from liability for a defendant.
``(c) Definitions.--In this section:
``(1) Physician.--The term `physician' has the meaning 
given such term by section 1861(r) of the Social Security Act.
``(2) Attending medical personnel.--The term `attending 
medical personnel' means an individual who is licensed to 
directly support a physician in furnishing medical services.''.
(b) Effective Date.--The amendments made by this section shall 
apply to any claim filed to the extent that it is with respect to acts 
or omissions occurring after the date of the enactment of this Act.

SEC. 394. RULES OF CONSTRUCTION.

(a) Health Care Lawsuits.--Unless otherwise specified in this 
subtitle, the provisions governing health care lawsuits set forth in 
this subtitle preempt, subject to subsections (b) and (c), State law to 
the extent that State law prevents the application of any provisions of 
law established by or under this subtitle. The provisions governing 
health care lawsuits set forth in this subtitle supersede chapter 171 
of title 28, United States Code, to the extent that such chapter--
(1) provides for a greater amount of damages or contingent 
fees, a longer period in which a health care lawsuit may be 
commenced, or a reduced applicability or scope of periodic 
payment of future damages, than provided in this subtitle; or
(2) prohibits the introduction of evidence regarding 
collateral source benefits, or mandates or permits subrogation 
or a lien on collateral source benefits.
(b) Protection of States' Rights and Other Laws.--Any issue that is 
not governed by any provision of law established by or under this 
subtitle (including State standards of negligence) shall be governed by 
otherwise applicable State or Federal law.
(c) State Flexibility.--No provision of this subtitle shall be 
construed to preempt any defense available to a party in a health care 
lawsuit under any other provision of State or Federal law.

SEC. 395. EFFECTIVE DATE.

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

TITLE IV--MEDICARE AND MEDICAID REFORMS

Subtitle A--Medicaid Reforms

SEC. 401. MEDICAID PAYMENT REFORM.

(a) In General.--Title XIX of the Social Security Act (42 U.S.C. 
1396 et seq.) is amended by inserting after section 1903 the following 
section:

``SEC. 1903A. REFORMED PAYMENT TO STATES.

``(a) Reformed Payment System.--
``(1) In general.--For quarters beginning on or after the 
implementation date (as defined in subsection (k)(1)), in the 
case of a State that elects (in a time and manner specified by 
the Secretary) to apply this section, in lieu of amounts 
otherwise payable to such State under this title (including any 
payments attributable to section 1923), except as otherwise 
provided in this section, the amount payable to such State 
shall be equal to the sum of the following:
``(A) Adjusted aggregate beneficiary-based 
amount.--The aggregate beneficiary-based amount 
specified in subsection (b) for the quarter and the 
State, adjusted under subsection (e).
``(B) Chronic care quality bonus.--The amount (if 
any) of the chronic care quality bonus payment 
specified in subsection (f) for the quarter for the 
State.
``(2) Requirement of state share.--
``(A) In general.--A State shall make, from non-
Federal funds, expenditures in an amount equal to its 
State share (as determined under subparagraph (B)) for 
a quarter for items, services, and other costs for 
which, but for paragraph (1), Federal funds would have 
been payable under this title.
``(B) State share.--The State share for a State for 
a quarter in a fiscal year is equal to the product of--
``(i) the aggregate beneficiary-based 
amount specified in subsection (b) for the 
quarter and the State; and
``(ii) the ratio of--
``(I) the State percentage 
described in subparagraph (D)(ii) for 
such State and fiscal year; to
``(II) the Federal percentage 
described in subparagraph (D)(i) for 
such State and fiscal year.
``(C) Nonpayment for failure to pay state share.--
``(i) In general.--If a State fails to 
expend the amount required under subparagraph 
(A) for a quarter in a fiscal year, the amount 
payable to the State under paragraph (1) shall 
be reduced by the product of the amount by 
which the State payment is less than the State 
share and the ratio of--
``(I) the Federal percentage 
described in subparagraph (D)(i) for 
such State and fiscal year; to
``(II) the State percentage 
described in subparagraph (D)(ii) for 
such State and fiscal year.
``(ii) Grace period.--A State shall not be 
considered to have failed to provide payment of 
its required State share for a quarter under 
subparagraph (A) if the aggregate State payment 
towards the State's required State share for 
the 4-quarter period beginning with such 
quarter exceeds the required State share amount 
for such 4-quarter period.
``(D) Federal and state percentages.--In this 
paragraph, with respect to a State and a fiscal year:
``(i) Federal percentage.--The Federal 
percentage described in this clause is 75 
percent or, if higher, the Federal medical 
assistance percentage for such State for such 
fiscal year.
``(ii) State percentage.--The State 
percentage described in this clause is 100 
percent minus the Federal percentage described 
in clause (i).
``(E) Rules for crediting toward state share.--
``(i) General limitation to matchable 
expenditures.--A payment for expenditures shall 
not be counted toward the State share under 
subparagraph (A) unless Federal payments may be 
used for such expenditures consistent with 
paragraph (3)(B).
``(ii) Further limitations on allowable 
expenditures.--A payment for expenditures shall 
not be counted towards the State share under 
subparagraph (A) if the expenditure is for any 
of the following:
``(I) Abortion.--Expenditures for 
an abortion.
``(II) Intergovernmental 
transfers.--An expenditure that is 
attributable to an intergovernmental 
transfer.
``(III) Certified public 
expenditures.--An expenditure that is 
attributable to certified public 
expenditures.
``(iii) Crediting fraud and abuse 
recoveries.--Amounts recovered by a State 
through the operation of its Medicaid fraud and 
abuse control unit described in section 1903(q) 
shall be fully counted toward the State share 
under subparagraph (A).
``(F) Construction.--Nothing in the paragraph shall 
be construed as preventing a State from expending, from 
non-Federal funds, an amount under this title in excess 
of the amount of the State share.
``(G) Determination based upon submitted claims.--
In applying this paragraph with respect to expenditures 
of a State for a quarter, the determination of the 
expenditures for such State for such quarter shall be 
made after the end of the period (which, as of the date 
of the enactment of this section, is 2 years) for which 
the Secretary accepts claims for payment under this 
title with respect to such quarter.
``(3) Use of federal payments.--
``(A) Application of medicaid limitations.--A State 
may only use Federal payments received under subsection 
(a) for expenditures for which Federal funds would have 
been payable under this title but for this section.
``(B) Limitation for certain eligibles.--
``(i) Application of 100 percent federal 
poverty line limit on eligibility.--Subject to 
clause (iii), a State may not use such Federal 
payments to provide medical assistance for an 
individual who has an income (as determined 
under clause (ii)) that exceeds 100 percent of 
the poverty line (as defined in section 
2110(c)(5)) applicable to a family of the size 
involved.
``(ii) Determination of income using 
modified adjusted gross income without any 5 
percent increase.--In determining income for 
purposes of clause (i) under section 
1902(e)(14) (relating to modified adjusted 
gross income), the following rules shall apply:
``(I) Application of spend down.--
The State shall take into account the 
costs incurred for medical care or for 
any other type of remedial care 
recognized under State law in the same 
manner and to the same extent that such 
State takes such costs into account for 
purposes of section 1902(a)(17).
``(II) Disregard of 5 percent 
increase.--Subparagraph (I) of section 
1902(e)(14) (relating to a 5 percent 
reduction) shall not apply.
``(iii) Exception.--Clause (i) shall not 
apply to an individual who is--
``(I) a woman described in clause 
(i) of section 1903(v)(4)(A);
``(II) a child who is an individual 
described in clause (i) of section 
1905(a);
``(III) enrolled in a State plan 
under this title as of the date of the 
enactment of this section for the 
period of continuous enrollment; or
``(IV) described in section 
1902(e)(14)(D) (relating to modified 
adjusted gross income).
``(iv) Clarification related to community 
spouse.--Nothing in this subparagraph shall 
supersede the application of section 1924 
(related to community spouse income and 
assets).
``(4) Exceptions for pass-through payments.--
``(A) In general.--Paragraph (1) shall not apply, 
and amounts shall continue to be payable under this 
title (and not under subsection (a)), in the case of 
the following payments (and related administrative 
costs and expenditures):
``(i) Payments to territories.--Payments to 
a State other than the 50 States and the 
District of Columbia.
``(ii) Medicare cost-sharing.--Payments 
attributable to Medicare cost-sharing under 
section 1905(p).
``(iii) Pediatric vaccines.--Payments 
attributable to section 1928.
``(iv) Emergency services for certain 
individuals.--Payments for treatment of 
emergency medical conditions attributable to 
the application of section 1903(v)(2).
``(v) Indian health care facilities.--
Payments for medical assistance described in 
the third sentence of section 1905(b).
``(vi) Employer-sponsored insurance 
(esi).--Payments for medical assistance 
attributable to payments to employers for 
employer-sponsored health benefits coverage.
``(vii) Other populations with limited 
benefit coverage.--Other payments that are 
determined by the Secretary to be related to a 
specified population for which the medical 
assistance under this title is limited and does 
not include any inpatient, nursing facility, or 
long-term care services.
``(B) Certain expenses.--Paragraph (1) shall not 
apply, and amounts shall continue to be payable under 
this title (and not under subsection (a)), in the case 
of the following:
``(i) Administration of medicare 
prescription drug benefit.--Expenditures 
described in section 1935(b) (relating to 
administration of the Medicare prescription 
drug benefit).
``(ii) Payments for hit bonuses.--Payments 
under section 1903(a)(3)(F) (relating to 
payments to encourage the adoption and use of 
certified EHR technology).
``(iii) Payments for design, development, 
and installation of mmis and eligibility 
systems.--Payments under subparagraphs (A)(i) 
and (H)(i) of section 1903(a)(3) for 
expenditures for design, development, and 
installation of the Medicaid management 
information systems and mechanized verification 
and information retrieval systems (related to 
eligibility).
``(5) Payment of amounts.--
``(A) In general.--Except as the Secretary may 
otherwise provide, amounts shall be payable to a State 
under subsection (a) in the same manner as amounts are 
payable under subsection (d) of section 1903 to a State 
under subsection (a) of such section.
``(B) Information and forms.--
``(i) Submission.--As a condition of 
receiving payment under subsection (a), a State 
shall submit such information, in such form, 
and manner, as the Secretary shall specify, 
including information necessary to make the 
computations under subsections (c)(2)(C) and 
(e).
``(ii) Uniform reporting.--The Secretary 
shall develop such forms as may be needed to 
ensure a system of uniform reporting of such 
information across States.
``(C) Required reporting of information on medical 
loss ratios for managed care.--The information required 
to be reported under subparagraph (B)(i) shall include 
information on the medical loss ratio with respect to 
coverage provided under each Medicaid managed care plan 
with a contract with the State under section 1903(m) or 
1932.
``(b) Aggregate Beneficiary-Based Amount.--
``(1) In general.--The aggregate beneficiary-based amount 
specified in this subsection for a State for a quarter is equal 
to the sum of the products, for each of the categories of 
Medicaid beneficiaries specified in paragraph (2), of the 
following:
``(A) Beneficiary-based quarterly amount.--The 
beneficiary-based quarterly amount for such category 
computed under subsection (c) for such State for such 
quarter.
``(B) Number of individuals in category.--Subject 
to subsection (d), the average number of Medicaid 
beneficiaries enrolled in such category in the State in 
such quarter.
``(2) Categories.--The categories specified in this 
paragraph are the following:
``(A) Elderly.--A category of Medicaid 
beneficiaries who are 65 years of age or older.
``(B) Blind or disabled.--A category of Medicaid 
beneficiaries not described in subparagraph (A) who are 
described in section 1937(a)(2)(B)(ii).
``(C) Children.--A category of Medicaid 
beneficiaries not described in subparagraph (B) who are 
under 21 years of age.
``(D) Other adults.--A category of any Medicaid 
beneficiaries who are not described in a previous 
subparagraph of this paragraph.
``(c) Computation of Per Beneficiary, Per Category Quarterly 
Amount.--
``(1) In general.--For a State, for each category of 
beneficiary for a quarter--
``(A) First reform year.--For quarters in the first 
reform year (as defined in subsection (k)(2)), the 
beneficiary-based quarterly amount is equal to \1/4\ of 
the base average per beneficiary Federal payments for 
such State for such category determined under paragraph 
(2), increased by a factor that reflects the sum of the 
following:
``(i) Historical medical care component of 
cpi through previous reform year.--The 
percentage increase in the historical medical 
care component of the Consumer Price Index for 
all urban consumers (U.S. city average) from 
the midpoint of the base fiscal year (as 
defined in paragraph (6)) to the midpoint of 
the fiscal year preceding the first reform 
year.
``(ii) Projected medical care component of 
cpi for the first reform year.--The percentage 
increase in the projected medical care 
component of the Consumer Price Index for all 
urban consumers (U.S. city average) from the 
midpoint of the previous fiscal year referred 
to in clause (i) to the midpoint of the first 
reform year.
``(B) Second and third reform years.--The 
beneficiary-based quarterly amount for a State for a 
category for quarters in the second reform year or the 
third reform year is equal to the beneficiary-based 
quarterly amount under this paragraph for such State 
and category for the previous reform year increased by 
the per beneficiary percentage increase (as defined in 
subparagraph (E)) for such category and reform year.
``(C) Fourth through tenth reform years.--The 
beneficiary-based quarterly amount for a State for a 
category for quarters in a reform year beginning with 
the fourth reform year and ending with the tenth reform 
year is--
``(i) in the case of a State that is a high 
per beneficiary State or a low per beneficiary 
State (as defined in paragraph (4)(B)(iii)) for 
the category, the amount determined under 
clause (i) or (ii) of paragraph (4)(B) for such 
State, category, and reform year; or
``(ii) in the case of any other State, the 
beneficiary-based quarterly amount under this 
paragraph for such State and category for the 
previous reform year increased by the per 
beneficiary percentage increase for such 
category and reform year.
``(D) Eleventh reform year and subsequent reform 
years.--The beneficiary-based quarterly amount for a 
State for a category for quarters in a reform year 
beginning with the eleventh reform year is equal to the 
beneficiary-based quarterly amount under this paragraph 
for such State and category for the previous reform 
year increased by the per beneficiary percentage 
increase for such category and reform year.
``(E) Annual percentage increase beginning with 
second reform year.--For purposes of this subsection, 
the term `per beneficiary percentage increase' means, 
for a reform year, the sum of--
``(i) the projected percentage change in 
nominal gross domestic product from the 
midpoint of the previous reform year to the 
midpoint of the reform year for which the 
percentage increase is being applied; and
``(ii) one percentage point.
``(2) Base per beneficiary, per category amount for each 
state.--
``(A) Average per category.--
``(i) In general.--The Secretary shall 
determine, consistent with this paragraph and 
paragraph (3), a base per beneficiary, per 
category amount for each of the 50 States and 
the District of Columbia equal to the average 
amount, per Medicaid beneficiary, of Federal 
payments under this title, including payments 
attributable to disproportionate share hospital 
payments under section 1923, for each of the 
categories of beneficiaries under subsection 
(b)(2) for the base fiscal year for each of the 
50 States and the District of Columbia.
``(ii) Best available data.--The 
determination under clause (i) shall initially 
be estimated by the Secretary, based upon the 
best available data at the time the 
determination is made.
``(iii) Updates.--The determination under 
clause (i) shall be updated by the Secretary on 
an annual basis based upon improved data. The 
Secretary shall adjust the amounts under 
subsection (a)(1)(A) to reflect changes in the 
amounts so determined based on such updates.
``(B) Exclusion of pass-through payments.--In 
computing base per beneficiary, per category amounts 
under subparagraph (A)(i) the Secretary shall exclude 
payments described in subsection (a)(4).
``(C) Standardization.--
``(i) In general.--In computing each such 
amount, the Secretary shall standardize the 
amount in order to remove the variation 
attributable to the following:
``(I) Risk factors.--Such risk 
factors as age, health and disability 
status (including high cost medical 
conditions), gender, institutional 
status, and such other factors as the 
Secretary determines to be appropriate, 
so as to ensure actuarial equivalence.
``(II) Geographic.--Variations in 
costs on a county-by-county basis.
``(ii) Method of standardization.--
``(I) Consultation in development 
of risk standardization.--In developing 
the methodology for risk 
standardization for purposes of clause 
(i)(I), the Secretary shall consult 
with the Medicaid and CHIP Payment and 
Access Commission, the Medicare Payment 
Advisory Commission, and the National 
Association of Medicaid Directors.
``(II) Method for risk 
standardization.--In carrying out 
clause (i)(I), the Secretary may apply 
the hierarchal condition category 
methodology under section 
1853(a)(1)(C). If the Secretary uses 
such methodology, the Secretary shall 
adjust the application of such 
methodology to take into account the 
differences in services provided under 
this title compared to title XVIII, 
such as the coverage of long term care, 
pregnancy, and pediatric services.
``(III) Method for geographic 
standardization.--The Secretary shall 
apply the standardization under clause 
(i)(II) in a manner similar to that 
applied under section 
1853(c)(4)(A)(iii).
``(iii) Application on a national, budget 
neutral basis.--The standardization under 
clause (i) shall be designed and implemented on 
a uniform national basis and shall be budget 
neutral so as to not result in any aggregate 
change in payments under subsection (a).
``(iv) Response to new risk.--Subject to 
clause (iii), the Secretary may adjust the 
standardization under clause (i) to respond 
promptly to new instances of communicable 
diseases and other public health hazards.
``(v) Reference to application of risk 
adjustment.--For rules related to the 
application of risk adjustment to amounts under 
subsection (a)(1)(A), see subsection (e).
``(D) Adjustment for temporary fmap increases.--In 
computing each base per beneficiary, per category 
amounts under subparagraph (A)(i) the Secretary shall 
disregard portions of payments that are attributable to 
a temporary increase in the Federal matching rates, 
including those attributable to the following:
``(i) PPACA disaster fmap.--Section 
1905(aa).
``(ii) ARRA.--Section 5001 of the American 
Recovery and Reinvestment Act of 2009 (42 
U.S.C. 1396d note).
``(iii) Extraordinary employer pension 
contribution.--Section 614 of the Children's 
Health Insurance Program Reauthorization Act of 
2009 (42 U.S.C. 1396d note).
``(3) Allocation of nonmedical assistance payments.--The 
Secretary shall establish rules for the allocation of payments 
under this title (other than those payments described in 
paragraph (1) or (5) of section 1903(a) and including such 
payments attributable to section 1923)--
``(A) among different categories of beneficiaries; 
and
``(B) between payments included under subsection 
(a)(1) and payments described in subsection (a)(4).
``(4) Transition to a corridor around the national 
average.--
``(A) Determination of national average base per 
beneficiary, per category amount.--Subject to 
subparagraph (C), the Secretary shall determine a 
national average base per beneficiary, per category 
amount equal to the average of the base per 
beneficiary, per category amounts for each of the 50 
States and the District of Columbia determined under 
paragraph (2), weighted by the average number of 
beneficiaries in each such category and State as 
determined by the Secretary consistent with subsection 
(d) for the base fiscal year.
``(B) Transition adjustment.--
``(i) High per beneficiary states.--In the 
case of a high per beneficiary State (as 
defined in clause (iii)(I)) for a category, the 
beneficiary-based quarterly amount for such 
State and category for a quarter in a reform 
year (beginning with the fourth reform year and 
ending with the tenth reform year) is equal to 
the sum of--
``(I) the product of the State-
specific factor for such reform year 
(as defined in clause (iv)) and the 
beneficiary-based quarterly amount that 
would otherwise be determined under 
paragraph (1) for such State and 
category if the State were a State 
described in clause (ii) of paragraph 
(1)(C), instead of a State described in 
clause (i) of such paragraph; and
``(II) the product of 1 minus the 
State-specific factor for such reform 
year and the beneficiary-based 
quarterly amount that would otherwise 
be determined under paragraph (1) for a 
State and category if the base per 
beneficiary, per category amount 
determined under paragraph (2) for the 
State and category were equal to 110 
percent of the national average base 
per beneficiary, per category amount 
determined under subparagraph (A) for 
such category.
``(ii) Low per beneficiary states.--In the 
case of a low per beneficiary State (as defined 
in clause (iii)(II)) for a category, the 
beneficiary-based quarterly amount for such 
State and category for a quarter in a reform 
year (beginning with the fourth reform year and 
ending with the tenth reform year) is equal to 
the sum of--
``(I) the product of the State-
specific factor for such reform year 
and the beneficiary-based quarterly 
amount that would otherwise be 
determined under paragraph (1) for such 
State and category if the State were a 
State described in clause (ii) of 
paragraph (1)(C), instead of a State 
described in clause (i) of such 
paragraph; and
``(II) the product of 1 minus the 
State-specific factor for such reform 
year and the beneficiary-based 
quarterly amount that would otherwise 
be determined under paragraph (1) for a 
State and category if the base per 
beneficiary, per category amount 
determined under paragraph (2) for the 
State and category were equal to 90 
percent of the national average base 
per beneficiary, per category amount 
determined under subparagraph (A) for 
such category.
``(iii) High and low per beneficiary states 
defined.--In this subparagraph:
``(I) High per beneficiary state.--
The term `high per beneficiary State' 
means, with respect to a category, a 
State for which the base per 
beneficiary, per category amount 
determined under paragraph (2) for such 
category is greater than 110 percent of 
the national average base per 
beneficiary, per category amount 
determined under subparagraph (A) for 
such category.
``(II) Low per beneficiary state.--
The term `low per beneficiary State' 
means, with respect to a category, a 
State for which the base per 
beneficiary, per category amount 
determined under paragraph (2) for such 
category is less than 90 percent of the 
national average base per beneficiary, 
per category amount determined under 
subparagraph (A) for such category.
``(iv) State-specific factor.--In this 
subparagraph, the term `State-specific factor' 
means--
``(I) for the fourth reform year, 
\7/8\; and
``(II) for a subsequent reform 
year, the State-specific factor under 
this clause for the previous reform 
year minus \1/8.\
``(C) No additional expenditures.--
``(i) Determination of increase in federal 
expenditures.--For each category for each 
reform year (beginning with the fourth reform 
year and ending with the tenth reform year), 
the Secretary shall determine whether the 
application of this paragraph--
``(I) to the category for the 
reform year will result in an aggregate 
increase in the aggregate Federal 
expenditures under subsection (a); and
``(II) to all the categories for 
the reform year will result in a net 
aggregate increase in the aggregate 
Federal expenditures under subsection 
(a).
``(ii) Adjustment.--If the Secretary 
determines under clause (i)(II) that the 
application of this paragraph to all the 
categories for a reform year will result in a 
net aggregate increase in the aggregate Federal 
expenditures under subsection (a), the 
Secretary shall reduce the national average 
base per beneficiary, per category amount 
computed under subparagraph (A) for each of the 
categories determined under clause (i)(I) for 
which there will be an aggregate increase in 
the aggregate Federal expenditures under 
subsection (a) by such uniform percentage as 
will ensure that there is no net aggregate 
Federal expenditure increase described in 
clause (i)(II) for the reform year.
``(5) Reports on per beneficiary rates; appeals.--
``(A) Report to states.--Not later than 8 months 
after the date of the enactment of this section, the 
Secretary shall submit to each State the Secretary's 
initial determination of--
``(i) the base per beneficiary, per 
category amounts under paragraph (2) for such 
State; and
``(ii) the national average base per 
beneficiary, per category amounts under 
paragraph (4)(A).
``(B) Opportunity to appeal.--Not later than 3 
months after the date a State receives notice of the 
Secretary's initial determination of such base per 
beneficiary, per category amounts for such State under 
subparagraph (A)(i), the State may file with the 
Secretary, in a form and manner specified by the 
Secretary, an appeal of such determination.
``(C) Determination on appeal.--Not later than 3 
months after receiving such an appeal, the Secretary 
shall make a final determination on such amounts for 
such State. If no such appeal is received for a State, 
the Secretary's initial determination under 
subparagraph (A)(i) shall become final.
``(6) Base fiscal year defined.--In this section, the term 
`base fiscal year' means the latest fiscal year, ending before 
the date of the enactment of this section, for which the 
Secretary determines that adequate data are available to make 
the computations required under this subsection.
``(d) Not Counting Individuals To Account for Excluded Payments.--
Under rules specified by the Secretary, individuals shall not be 
counted as Medicaid beneficiaries for purposes of subsection (b)(1)(B) 
and subsection (c)(2)(A) to the extent that such individuals--
``(1) are receiving medical assistance for which payments 
described under subsection (a)(4)(A) are made; or
``(2) would not have been eligible to enroll under the 
State plan (or waiver of such plan) in the State in which such 
individual is so enrolled if the rules for eligibility for 
enrollment under such plan (or waiver) were the same as such 
rules for eligibility in effect as of January 1, 2009.
``(e) Risk Adjustment.--
``(1) In general.--The amount under subsection (a)(1)(A) 
shall be adjusted under this subsection in an appropriate 
manner, specified by the Secretary and consistent with 
paragraph (2), to take into account--
``(A) the factors described in subsection 
(c)(2)(C)(i)(I) within a category of beneficiaries; and
``(B) variations in costs on a county-by-county 
basis for medical assistance and administrative 
expenses.
``(2) Method of adjustment.--
``(A) In general.--The adjustments under paragraph 
(1) shall be made in a manner similar to the manner in 
which similar adjustments are made under subsection 
(c)(2)(C) and consistent with the requirements of 
clause (iii) of such subsection and subparagraph (B).
``(B) Biannual update of risk adjustment 
methodology.--In applying clause (i)(I) of subsection 
(c)(2)(C) for purposes of subparagraph (A), the 
Secretary shall, in consultation with the entities 
described in clause (ii)(I) of such subsection, update 
the risk adjustment methodology applied as appropriate 
not less often than every 2 years.
``(f) Chronic Care Quality Bonus Payments.--
``(1) Determination of bonus payments.--If the Secretary 
determines that, based on the reports under paragraph (5), with 
respect to categories of chronic disease for which chronic care 
performance targets had been established under paragraph (3) 
for each category of Medicaid beneficiaries specified under 
subsection (b)(2) such targets have been met by a State for a 
reform year, the Secretary shall make an additional payment to 
such State in the amount specified in paragraph (6) for each 
quarter in the succeeding reform year. Such payments shall be 
made in a manner specified by the Secretary and may only be 
used consistent with subsection (a)(3).
``(2) Identification of categories of chronic disease.--The 
Secretary shall determine the categories of chronic disease for 
which bonus payments may be available under this subsection for 
each category of Medicaid beneficiaries.
``(3) Adoption of quality measurement system and 
identification of performance targets.--
``(A) System and data.--With respect to the 
categories of chronic disease under paragraph (2), the 
Secretary shall adopt a quality measurement system that 
uses data described in paragraph (4) and is similar to 
the Five-Star Quality Rating System used to indicate 
the performance of Medicare Advantage plans under part 
C of title XVIII.
``(B) Targets.--Using such system and data, the 
Secretary shall establish for each reform year the 
chronic care performance targets for purposes of the 
payments under paragraph (1). Such performance targets 
shall be established in consultation with States, 
associations representing individuals with chronic 
illnesses, entities providing treatment to such 
individuals for such chronic illnesses, and other 
stakeholders, including the National Association of 
Medicaid Directors and the National Governors 
Association.
``(4) Data to be used.--The data to be used under paragraph 
(3) shall include--
``(A) data collected through methods such as--
``(i) the `Healthcare Effectiveness Data 
and Information Set' (also known as `HEDIS') 
(or an appropriate successor performance 
measurement tool);
``(ii) the `Consumer Assessment of 
Healthcare Providers and Systems' (also known 
as `CAHPS') (or an appropriate successor 
performance measurement tool); and
``(iii) the `Health Outcomes Survey' (also 
known as `HOS') (or an appropriate successor 
performance measurement tool); and
``(B) other data collected by the State.
``(5) Reports.--
``(A) In general.--Each State shall collect, 
analyze, and report to the Secretary, at a frequency 
and in a manner to be established by the Secretary, 
data described in paragraph (4) that permit the 
Secretary to monitor the State's performance relative 
to the chronic care performance targets established 
under paragraph (3).
``(B) Review and verification.--The Secretary may 
review the data collected by the State under 
subparagraph (A) to verify the State's analysis of such 
data with respect to the performance targets under 
paragraph (3).
``(6) Amount of bonus payments.--
``(A) In general.--Subject to subparagraphs (B) and 
(C), with respect to each category of Medicaid 
beneficiaries, in the case of a State that the 
Secretary determines, based on the chronic care 
performance targets set under paragraph (3) for a 
reform year for such category, performs--
``(i) in the top five States in such 
category, subject to subparagraph (C)(ii), the 
amount of the bonus for each quarter in the 
succeeding reform year shall be 10 percent of 
the payment amount otherwise paid to the State 
under subsection (a) for individuals enrolled 
under the plan within such category;
``(ii) in the next five States in such 
category, subject to subparagraph (C)(ii), the 
amount of the bonus for each such quarter shall 
be 5 percent of the payment amount otherwise 
paid to the State under subsection (a) for 
individuals enrolled under the plan within such 
category;
``(iii) in the next five States in such 
category, subject to clauses (i) and (iii) of 
subparagraph (C), the amount of the bonus for 
each such quarter shall be 3 percent of the 
payment amount otherwise paid to the State 
under subsection (a) for individuals enrolled 
under the plan within such category;
``(iv) in the next five States in such 
category, subject to clauses (i) and (iii) of 
subparagraph (C), the amount of the bonus for 
each such quarter shall be 2 percent of the 
payment amount otherwise paid to the State 
under subsection (a) for individuals enrolled 
under the plan within such category; and
``(v) in the next five States in such 
category, subject to clauses (i) and (iii) of 
subparagraph (C), the amount of the bonus for 
each such quarter shall be 1 percent of the 
payment amount otherwise paid to the State 
under subsection (a) for individuals enrolled 
under the plan within such category.
``(B) Aggregate annual limit for each category of 
medicaid beneficiaries.--
``(i) In general.--In no case may the 
aggregate amount of bonuses under this 
subsection for quarters in a reform year for a 
category of Medicaid beneficiaries exceed the 
limit specified in clause (ii) for the reform 
year.
``(ii) Limit.--The limit specified in this 
clause--
``(I) for the second reform year is 
equal to $250,000,000; or
``(II) for a subsequent reform year 
is equal to the limit specified in this 
clause for the previous reform year 
increased by the per beneficiary 
percentage increase determined under 
paragraph (1)(E) of subsection (c).
``(C) Limitation and proration of bonuses based on 
application of aggregate limit.--
``(i) No bonus for third or subsequent 
tiers unless aggregate limit not reached on 
first two tiers.--No bonus shall be payable 
under clause (iii), (iv), or (v) of 
subparagraph (A) for a category of Medicaid 
beneficiaries for a quarter in a reform year 
unless the aggregate amount of bonuses under 
clauses (i) and (ii) of such subparagraph for 
such category and reform year is less than the 
limit specified in subparagraph (B)(ii) for the 
reform year.
``(ii) Proration for first two tiers.--If 
the aggregate amount of bonuses under clauses 
(i) and (ii) of subparagraph (A) for a category 
of Medicaid beneficiaries for quarters in a 
reform year exceeds the limit specified in 
subparagraph (B)(ii) for the reform year, the 
amount of each such bonus shall be prorated in 
a manner so the aggregate amount of such 
bonuses is equal to such limit.
``(iii) Proration for next three tiers.--If 
the aggregate amount of bonuses under clauses 
(i) and (ii) of subparagraph (A) for a category 
of Medicaid beneficiaries for quarters in a 
reform year is less than the limit specified in 
subparagraph (B)(ii) for the reform year, but 
the aggregate amount of bonuses under clauses 
(i) through (v) of subparagraph (A) for the 
category and such quarters in the reform year 
exceeds the limit specified in subparagraph 
(B)(ii) for the reform year, the amount of each 
bonus in clauses (iii), (iv), and (v) of 
subparagraph (A) shall be prorated in a manner 
so the aggregate amount of all the bonuses 
under subparagraph (A) is equal to such limit.
``(g) State Option for Receiving Medicare Payments for Full-Benefit 
Dual Eligible Individuals.--
``(1) In general.--Under this subsection a State may elect 
for quarters beginning on or after the implementation date in a 
reform year to receive payment from the Secretary under 
paragraph (3). As a condition of receiving such payment, the 
State shall agree to provide to full-benefit dual eligible 
individuals eligible for medical assistance under the State 
plan--
``(A) the medical assistance to which such eligible 
individuals would otherwise be entitled under this 
title; and
``(B) any items and services which such eligible 
individuals would otherwise receive under title XVIII.
``(2) Provider payment requirement.--
``(A) In general.--A State electing the option 
under this subsection shall provide payment to health 
care providers for the items and services described 
under paragraph (1)(B) at a rate that is not less than 
the rate at which payments would be made to such 
providers for such items and services under title 
XVIII.
``(B) Flexibility in payment methods.--Nothing in 
subparagraph (A) shall be construed as preventing a 
State from using alternative payment methodologies 
(such as bundled payments or the use of accountable 
care organizations (as such term is used in section 
1899)) for purposes of making payments to health care 
providers for items and services provided to dual 
eligible individuals in the State under the option 
under this subsection.
``(3) Payments to states in lieu of medicare payments.--
With respect to a full-benefit dual eligible individual, in the 
case of a State that elects the option under paragraph (1) for 
quarters in a reform year--
``(A) the Secretary shall not make any payment 
under title XVIII for items and services furnished to 
such individual for such quarters; and
``(B) the Secretary shall pay to the State, in 
addition to the amounts paid to such State under 
subsection (a), the amount that the Secretary would, 
but for this subsection, otherwise pay under title 
XVIII for items and services furnished to such an 
individual in such State for such quarters.
``(4) Full-benefit dual eligible individual defined.--In 
this subsection, the term `full-benefit dual eligible 
individual' means an individual who meets the requirements of 
section 1935(c)(6)(A)(ii).
``(h) Audits.--The Secretary shall conduct such audits on the 
number and classification of Medicaid beneficiaries under such 
subsections and expenditures under this section as may be necessary to 
ensure appropriate payments under this section.
``(i) Treatment of Waivers.--
``(1) No impact on current waivers.--In the case of a 
waiver of requirements of this title pursuant to section 1115 
or other law that is in effect as of the date of the enactment 
of this section, nothing in this section shall be construed to 
affect such waiver for the period of the waiver as approved as 
of such date.
``(2) Application of budget neutrality to subsequent 
waivers and renewals taking section into account.--In the case 
of a waiver of requirements of this title pursuant to section 
1115 or other law that is approved or renewed after the date of 
the enactment of this section, to the extent that such approval 
or renewal is conditioned upon a demonstration of budget 
neutrality, budget neutrality shall be determined taking into 
account the application of this section.
``(j) Report to Congress.--Not later than January 1 of the second 
reform year, the Secretary shall submit to Congress a report on the 
implementation of this section.
``(k) Definitions.--In this section:
``(1) Implementation date.--The term `implementation date' 
means--
``(A) July 1, 2027, if this section is enacted on 
or before July 1, 2026; or
``(B) July 1, 2028, if this section is enacted 
after July 1, 2026.
``(2) Reform years.--
``(A) The term `reform year' means a fiscal year 
beginning with the first reform year.
``(B) The term `first reform year' means the fiscal 
year in which the implementation date occurs.
``(C) The terms `second', `third', and successive 
similar terms mean, with respect to a reform year, the 
second, third, or successive reform year, respectively, 
succeeding the first reform year.''.
(b) Conforming Amendments.--
(1) Continued application of clawback provisions.--
(A) Continued application.--Subsections (a) and 
(c)(1)(C) of section 1935 of such Act (42 U.S.C. 1396u-
5) are each amended by inserting ``or 1903A(a)'' after 
``1903(a)''.
(B) Technical amendment.--Section 1935(d)(1) of the 
Social Security Act (42 U.S.C. 1396u-5(d)(1)) is 
amended by inserting ``except as provided in section 
1903A(g)'' after ``any other provision of this title''.
(2) Payment rules under section 1903.--
(A) Section 1903(a) of the Social Security Act (42 
U.S.C. 1396b(a)) is amended, in the matter before 
paragraph (1), by inserting ``and section 1903A'' after 
``except as otherwise provided in this section''.
(B) Section 1903(d) of such Act (42 U.S.C. 
1396b(d)) is amended--
(i) in paragraph (1), by inserting ``and 
under section 1903A'' after ``subsections (a) 
and (b)'';
(ii) in paragraph (2)--
(I) in subparagraph (A), by 
inserting ``or section 1903A'' after 
``was made under this section''; and
(II) in subparagraph (B), by 
inserting ``or section 1903A'' after 
``under subsection (a)'';
(iii) in paragraph (4)--
(I) by striking ``under this 
subsection'' and inserting ``, with 
respect to this section or section 
1903A, under this subsection''; and
(II) by striking ``under this 
section'' and inserting ``under the 
respective section''; and
(iv) in paragraph (5), by inserting ``or 
section 1903A'' after ``overpayment under this 
section''.
(3) Conforming waiver authority.--Section 1115(a)(2)(A) of 
the Social Security Act (42 U.S.C. 1315(a)(2)(A)) is amended by 
striking ``or 1903'' and inserting ``1903, or 1903A''.
(4) Report on additional conforming amendments needed.--Not 
later than 6 months after the date of the enactment of this 
Act, the Secretary of Health and Human Services shall submit to 
Congress a report that includes a description of any additional 
technical and conforming amendments to law that are required to 
properly carry out this Act.

SEC. 402. INCOME LIMITATIONS FOR REFUNDABLE CREDITS FOR COVERAGE UNDER 
A QUALIFIED HEALTH PLAN.

(a) In General.--Subparagraphs (A) and (B) of section 36B(c)(1) of 
the Internal Revenue Code of 1986 are amended by inserting after ``100 
percent'' each place such term appears the following: ``(or, in the 
case of a taxpayer enrolled through an Exchange utilized by such State 
that makes the election described in section 1903A of the Social 
Security Act, the percentage established by such State under part A of 
title IV of such Act for purposes of eligibility under title XIX of 
such Act as of January 1, 2009)''.
(b) Effective Date.--The amendments made by this section shall 
apply with respect to taxable years beginning after the date of the 
enactment of this Act.

SEC. 403. MEDICAID ELIGIBILITY DETERMINATIONS.

(a) State Flexibility To Use Contractors To Make Eligibility 
Determinations on Behalf of State.--Section 1902(a)(5) of the Social 
Security Act (42 U.S.C. 1396a(a)(5)) is amended by inserting before the 
semicolon at the end the following: ``, but such determinations of 
eligibility may be made, at the option of a State, under a contract 
with another State or local agency or a contractor so long as the 
contract does not provide incentives for the agency or contractor to 
delay eligibility determinations or to deny eligibility for individuals 
otherwise eligible for medical assistance''.
(b) Frequency of Eligibility Redeterminations.--Section 1902(e)(14) 
of the Social Security Act (42 U.S.C. 1396a(e)(14)) is amended by 
adding at the end the following:
``(L) Frequency of eligibility redeterminations.--
Beginning on October 1, 2026, and notwithstanding 
subparagraph (H), in the case of an individual whose 
eligibility for medical assistance under the State plan 
under this title (or a waiver of such plan) is 
determined based on the application of modified 
adjusted gross income under subparagraph (A) and who is 
so eligible on the basis of clause (i)(VIII), (ii)(XX), 
or (ii)(XXIII) of subsection (a)(10)(A), at the option 
of the State, the State plan may provide that the 
individual's eligibility shall be redetermined every 6 
months (or such shorter number of months as the State 
may elect).''.

SEC. 404. LOWERING SAFE HARBOR THRESHOLD WITH RESPECT TO STATE TAXES ON 
HEALTH CARE PROVIDERS.

Section 1903(w)(4)(C)(ii) of the Social Security Act (42 U.S.C. 
1396b(w)(4)(C)(ii)) is amended--
(1) by striking ``of fiscal years beginning'' and inserting 
``of fiscal years--
``(I) beginning''; and
(2) by striking ``it appears.'' and inserting the 
following: ``it appears;
``(II) beginning on or after January 1, 2027, and 
before January 1, 2036, `4 percent' shall be 
substituted for `6 percent' each place it appears;
``(III) beginning on or after January 1, 2036, and 
before January 1, 2041, `3 percent' shall be 
substituted for `6 percent' each place it appears;
``(IV) beginning on or after January 1, 2041, and 
before January 1, 2046, `2 percent' shall be 
substituted for `6 percent' each place it appears;
``(V) beginning on or after January 1, 2046, and 
before January 1, 2051, `1 percent' shall be 
substituted for `6 percent' each place it appears; and
``(VI) beginning on or after January 1, 2051, `0 
percent' shall be substituted for `6 percent' each 
place it appears.''.

SEC. 405. PROVIDING FOR STATE APPROVAL AND IMPLEMENTATION OF SPECIFIED 
WAIVERS UNDER THE MEDICAID PROGRAM.

Section 1115 of the Social Security Act (42 U.S.C. 1315) is 
amended--
(1) in subsection (d)--
(A) in paragraph (1), by striking ``An 
application'' and inserting ``Subject to paragraph (4), 
an application''; and
(B) by adding at the end the following new 
paragraph:
``(4)(A) An experimental, pilot, or demonstration project 
undertaken under subsection (a) may be approved or renewed by a 
State if such project is described in subparagraph (B).
``(B) An experimental, pilot, or demonstration project is 
described in this subparagraph if such project provides for a 
waiver of requirements with respect to a State plan (or a 
waiver of such plan) under title XIX such that--
``(i) individuals enrolled under such plan (or such 
waiver) may elect to participate in such project with 
respect to a year; and
``(ii) such individuals who elect to so participate 
are furnished with primary care services (as described 
in section 223(c)(1)(D)(ii)(I) of the Internal Revenue 
Code of 1986) through a direct primary care service 
arrangement (as defined in such section).
``(C) For purposes of a State's approval or renewal of an 
experimental, pilot, or demonstration project under 
subparagraph (A), each reference to `the Secretary' in 
subsection (a) shall be deemed to be a reference to `the 
State'.''; and
(2) in subsection (e), by inserting ``(other than such a 
project that is described in paragraph (4)(B))'' before the 
period at the end.

SEC. 406. DEDUCTION FOR QUALIFIED CHARITY CARE.

(a) In General.--Part VI of subchapter B of chapter 1 of the 
Internal Revenue Code of 1986 is amended by adding at the end the 
following new section:

``SEC. 199B. QUALIFIED CHARITY CARE.

``(a) In General.--There shall be allowed as a deduction for the 
taxable year an amount equal to--
``(1) in the case of a direct primary care physician, an 
amount equal to the sum of--
``(A) the fee (as published on a publicly available 
website of such physician) for physicians' services 
that are qualified charity care furnished by such 
taxpayer during such year, and
``(B) for each visit by a patient to such physician 
during which qualified charity care is furnished, half 
of so much of the lowest subscription fee of such 
physician that is attributable to a month, and
``(2) in the case of any other individual, the unreimbursed 
Medicare-based value of qualified charity care furnished by 
such taxpayer during such year.
``(b) Definitions.--For purposes of this section:
``(1) Unreimbursed medicare-based value.--The term 
`unreimbursed Medicare-based value' means, with respect to 
physicians' services, the amount payable for such services 
under the physician fee schedule established under section 1848 
of the Social Security Act.
``(2) Qualified charity care.--The term `qualified charity 
care' means physicians' services that are furnished--
``(A) without expectation of reimbursement, and
``(B) to an individual enrolled--
``(i) under a State plan under title XIX of 
the Social Security Act (or a waiver of such 
plan), or
``(ii) under a State child health plan 
under title XXI of the Social Security Act (or 
a waiver of such plan).
``(3) Direct primary care physician.--The term `direct 
primary care physician' means a physician (as defined in 
section 1861(r) of the Social Security Act) who provides 
primary care--
``(A) to individuals who have paid a periodic 
subscription fee, and
``(B) in exchange for a fee that is published on a 
publicly available website of such physician.
``(4) Physicians' services.--The term `physicians' 
services' has the meaning given such term by section 1861(q) of 
the Social Security Act.
``(c) Limitation.--The amount allowed as a deduction under 
subsection (a) for a taxable year shall not exceed the gross receipts 
attributable to physicians' services furnished by the taxpayer during 
the taxable year.''.
(b) Clerical Amendment.--The table of sections for part VI of 
subchapter B of chapter 1 of the Internal Revenue Code of 1986 is 
amended by adding at the end the following new item:

``Sec. 199B. Qualified charity care.''.

Subtitle B--Medicare Reforms

SEC. 411. OFF-CAMPUS PROVIDER-BASED DEPARTMENT MEDICARE SITE NEUTRAL 
PAYMENT.

(a) In General.--Section 1834 of the Social Security Act (42 U.S.C. 
1395m) is amended by adding at the end the following new subsection:
``(x) Off-Campus Provider-Based Department Medicare Site Neutral 
Payment.--
``(1) In general.--With respect to items and services 
furnished in an off-campus provider-based department, payment 
under this section for such items and services shall be the 
amount determined under the fee schedule under section 1848 for 
such items and services furnished if furnished in a physician 
office setting.
``(2) Off-campus provider-based department.--For purposes 
of this subsection, the term `off-campus provider-based 
department' has such meaning as specified by the Secretary.''.
(b) Effective Date.--The amendment made by subsection (a) shall 
apply with respect to items and services furnished on or after January 
1, 2026.

SEC. 412. ELIMINATING FEHBP ELIGIBILITY FOR ANNUITANTS.

Section 8905(b) of title 5, United States Code, is amended--
(1) in the matter preceding paragraph (1), by striking 
``An'' and inserting ``Consistent with the last sentence of 
this subsection, an''; and
(2) by adding at the end the following: ``. An individual 
who is entitled to benefits under part A of title XVIII of the 
Social Security Act (42 U.S.C. 1395c et seq.) by reason of 
section 226 or 226A of such Act (42 U.S.C. 426, 426-1), or 
otherwise eligible to enroll under such part pursuant to 
section 1818 or 1818A of such Act (42 U.S.C. 1395i-2, 1395i-
2a), and who first becomes an annuitant after the date of 
enactment of this sentence may not continue enrollment in any 
health benefits plan under this chapter.''.

SEC. 413. ELIMINATION OF MEDICARE ELIGIBILITY FOR CERTAIN INDIVIDUALS.

(a) Enrollment Prohibition.--
(1) Part b.--Section 1836 of the Social Security Act (42 
U.S.C. 1395o) is amended by striking the period at the end and 
inserting ``, except that an individual who attains age 65 on 
or after January 1, 2032, and is an individual who, upon 
attaining such age, has earned $10,000,000 or more in lifetime 
wages, shall not be eligible to so enroll.''.
(2) Part d.--Section 1860D-1(a)(3)(A) of such Act (42 
U.S.C. 1395w-101(a)(3)(A)) is amended by striking the period at 
the end and inserting ``, excluding an individual who, upon 
attaining age 65, has earned $10,000,000 or more in lifetime 
wages.''.
(b) Medigap.--Section 1882 of the Social Security Act (42 U.S.C. 
1395ss) is amended by adding at the end the following new subsection:
``(aa) Additional Limitation on Newly Eligible Beneficiaries.--
``(1) In general.--Notwithstanding any other provision of 
this section, on or after January 1, 2032, a medicare 
supplemental policy may not be sold or issued to a targeted 
newly eligible Medicare beneficiary.
``(2) Targeted newly eligible medicare beneficiary.--For 
purposes of this subsection, the term `targeted newly eligible 
Medicare beneficiary' means an individual who, upon attaining 
the age of 65, has earned $10,000,000 or more in lifetime 
wages.''.

SEC. 414. MEDICARE PART D TAX DEDUCTION.

(a) In General.--Section 139A of the Internal Revenue Code of 1986 
is amended by adding at the end the following: ``This section shall not 
be taken into account for purposes of determining whether any deduction 
is allowable with respect to any cost taken into account in determining 
such payment.''.
(b) Effective Date.--The amendment made by this section shall apply 
to taxable years beginning after December 31, 2026.

SEC. 415. REPEAL OF NET INVESTMENT INCOME TAX.

(a) In General.--Subtitle A of the Internal Revenue Code of 1986 is 
amended by striking chapter 2A.
(b) Effective Date.--The amendment made by this section shall apply 
to taxable years beginning after December 31, 2026.

SEC. 416. MEDICARE COVERAGE OF BAD DEBT.

Section 1861(v)(1) of the Social Security Act (42 U.S.C. 
1395(v)(1)) is amended--
(1) in subparagraph (T)--
(A) in clause (iv), by striking ``and'' at the end;
(B) in clause (v)--
(i) by striking ``during fiscal year'' and 
inserting ``during fiscal years'';
(ii) by striking ``or a subsequent fiscal 
year'' and inserting ``through 2026''; and
(iii) by striking the period at the end and 
inserting ``, and''; and
(C) by adding at the end the following new clause:
``(vi) for cost reporting periods beginning during fiscal 
year 2027 or a subsequent fiscal year, by the percent 
applicable for cost reporting periods beginning during the 
previous fiscal year, increased (through fiscal year 2029) by 
10 percentage points.'';
(2) in subparagraph (V)--
(A) in clause (i)--
(i) in subclause (III), by striking ``and'' 
at the end;
(ii) in subclause (IV)--
(I) by striking ``during fiscal 
year'' and inserting ``during fiscal 
years 2017 through 2026''; and
(II) by striking the period at the 
end and inserting ``; and''; and
(iii) by adding at the end the following 
new subclause:
``(V) for cost reporting periods beginning during 
fiscal year 2027 or a subsequent fiscal year, the 
percent applicable for cost reporting periods beginning 
during the previous fiscal year, increased (through 
fiscal year 2029) by 10 percentage points.''; and
(B) in clause (ii)--
(i) in subclause (III), by striking ``and'' 
at the end; and
(ii) in subclause (IV)--
(I) by striking ``a subsequent 
fiscal year'' and inserting ``fiscal 
years 2015 through 2026'';
(II) by striking the period at the 
end and inserting ``; and''; and
(III) by adding at the end the 
following new subclause:
``(V) for cost reporting periods beginning during 
fiscal year 2027 or a subsequent fiscal year, shall be 
reduced by the percent applicable for cost reporting 
periods beginning during the previous fiscal year, 
increased (through fiscal year 2029) by 10 percentage 
points.''; and
(3) in subparagraph (W)(i)--
(A) in subclause (II), by striking ``and'' at the 
end;
(B) in subclause (III)--
(i) by striking ``during a subsequent 
fiscal year'' and inserting ``during fiscal 
years 2015 through 2026''; and
(ii) by striking the period at the end and 
inserting ``; and''; and
(C) by adding at the end the following new 
subclause:
``(IV) for cost reporting periods beginning during fiscal 
year 2027 or a subsequent fiscal year, by the percent 
applicable for cost reporting periods beginning during the 
previous fiscal year, increased (through fiscal year 2029) by 
10 percentage points.''.

Subtitle C--Medicare Choice and Competition

SEC. 421. COMPETITIVE BIDDING AND PREMIUMS UNDER UNIFIED MEDICARE.

(a) In General.--Part E of title XVIII of the Social Security Act, 
as added by section 101 and amended by section 103, is further amended 
by adding at the end the following:

``Subpart 3--Competitive Bidding and Premiums

``SEC. 1860E-31. APPLICATION OF COMPETITIVE BIDDING IN ENROLLMENT.

``(a) In General.--Notwithstanding any other provision of this 
title, the Secretary shall, beginning with plan year 2026, establish a 
method whereby individuals enrolling under this title so enroll through 
an online process designed to highlight enrollment options for such 
individuals and allow such individuals to compare costs of enrollment 
in such options.
``(b) Enrollment Options.--For purposes of subsection (a), the 
Secretary shall make the following options available to individuals for 
enrollment under this title:
``(1) Traditional fee-for-service coverage.
``(2) Provider-led risk-bearing plans (also known as ACOs).
``(3) Medicare Advantage plans.
``(c) Medicare Advantage Plan Actuarial Value Requirement.--Each 
Medicare Advantage plan offered through the process described in 
subsection (a) shall have an actuarial value equal to traditional fee-
for-service coverage under parts A and B.
``(d) MA Direct Deposit of Certain Rebates.--In the case of an 
Medicare Advantage plan with a bid for a year that involves a premium 
differential between such bid and the benchmark for such year and plan, 
such plan shall provide for a direct deposit of such differential if 
the applicable enrollee in such plan does not elect any supplemental 
coverage under such plan.
``(e) Enrollment in Prescription Drug Coverage.--As part of the 
method described in subsection (a), the Secretary shall establish a 
process to allow an individual to enroll in prescription drug coverage. 
In the case of an individual who enrolls in a Medicare Advantage plan, 
such coverage shall be provided under such plan. In a case of an 
individual who enrolls in an ACO, such coverage shall be provided under 
such network. In the case of an individual who enrolls under 
traditional fee-for-service coverage, such drug coverage shall be 
provided through a prescription drug plan.
``(f) Supplemental Benefits.--
``(1) MA plans.--An MA plan is allowed to offer two 
different packages of supplemental benefits (these packages are 
available only to individuals who select such plans).
``(2) ACOs.--ACOs may limit supplemental options for their 
enrollees to Medigap plans with contractual ties.
``(3) Fee-for-service.--Fee-for-service individuals may 
select supplemental coverage from Medigap policies.

``SEC. 1860E-32. COMPETITION.

``(a) Bid Areas.--Market areas used for bid submissions for 
Medicare Advantage plans, ACOs, and for calculation per person fee-for-
services costs shall be metropolitan statistical regions plus 
associated regions.
``(b) Premiums.--Medicare payment benchmark by market area shall be 
calculated based on weighted average (by enrollment in previous year) 
of the premium bids from MA plans, ACOs, and the per person costs of 
fee-for-service, less the statutory part B premium.
``(c) Beneficiary Responsibility.--Beneficiaries shall pay the 
difference between Medicare payment and required premium of the plan 
they choose, and get 100 percent of the savings by choosing a plan with 
a premium below the benchmark.
``(d) Transition.--For beneficiaries who are in fee-for-service at 
the time of the enactment of this section, there shall be a limit on 
the amount of a premium increase allowable by year of no more than $20 
per month compared to what such premium would have otherwise been if 
this subpart had not been enacted for each year through the fifth year.
``(e) Multiyear Contracts.--A Medicare Advantage plan may offer to 
beneficiaries multiyear contracts with guaranteed premiums over such 
years, bearing the risk of any change in payments from the Secretary in 
subsequent years. A beneficiary enrolling under such a contract shall 
be exempt from the method described in subsection (a).''.
(b) Conforming Amendments.--
(1) Section 1853(a)(1)(A) of the Social Security Act is 
amended by striking ``and section 1859(e)(4)'' and inserting 
``, section 1859(e)(4), and subpart 3 of part E''.
(2) Section 1853(j) of such Act is amended by inserting 
``and subpart 3 of part E'' after ``subsection (o)''.
(3) Section 1854 of such Act is amended--
(A) in subsection (a), after the heading, by 
inserting ``Subject to subpart 3 of part E:'';
(B) in subsection (b), after the heading, by 
inserting ``Subject to subpart 3 of part E:'';
(C) in subsection (d), after the heading, by 
inserting ``Subject to subpart 3 of part E:''; and
(D) in subsection (e), after the heading, by 
inserting ``Subject to subpart 3 of part E:''.

SEC. 422. NEW UNIFIED ELIGIBILITY AND ENROLLMENT RULES.

(a) In General.--Title XVIII of the Social Security Act is 
amended--
(1) by redesignating part E as part F; and
(2) by inserting after part D the following new part:

``PART E--MEDICARE WITH CHOICE AND COMPETITION

``Subpart 1--Opt-Out and Auto-Enrollment

``SEC. 1860E-11. PART A OPT-OUT AND MA AUTO-ENROLLMENT.

``(a) Permitting Individuals To Opt Out of Part A Coverage Without 
Losing Social Security Benefits.--
``(1) In general.--The Secretary shall establish--
``(A) a process by which an individual otherwise 
entitled to benefits under part A may elect (at a time 
and in a manner specified under the process) to waive 
such entitlement; and
``(B) a process by which an individual who elects 
to waive such entitlement may revoke (at a time and in 
a manner specified under the process) such waiver.
The process under subparagraph (B) shall be coordinated with 
the enrollment process under section 1837 for part B.
``(2) Application of late enrollment penalty.--An 
individual who revokes a waiver under paragraph (1)(B) shall be 
subject to a late enrollment penalty as applied under section 
1860E-32(c)(2)(C).
``(3) No impact on title ii benefits.--Notwithstanding any 
other provision of law, an election of an individual to waive 
entitlement to benefits under part A under paragraph (1)(A) 
shall not result in any loss of benefits under title II.
``(4) Deemed opt-out.--
``(A) An election of an individual to waive 
entitlement to benefits under part A under paragraph 
(1)(A) is also deemed the filing of a notice of 
termination of benefits under part B pursuant to 
section 1838(b)(1).
``(B) The termination of benefits under part B 
pursuant to section 1838(b) is also deemed to be a 
waiver of any entitlement to benefits under part A.
``(b) Special Open Enrollment Period Without Late Enrollment 
Penalty for Current Part A Only or Part B Only Enrollees.--
Notwithstanding any other provision of law, in the case of an 
individual who as of the general effective date, is entitled to 
benefits under part A but not enrolled under part B, or who is enrolled 
under part B but not entitled to benefits (or enrolled) under part A, 
beginning as of such date, such individual shall be deemed to be 
enrolled under part B or part A, respectively, unless such individual 
elects to be enrolled (or entitled to benefits) under neither of such 
parts during a special open enrollment period specified by the 
Secretary. No increase in the monthly premium of an individual pursuant 
to section 1839(b) or section 1818(c) shall be effected in the case of 
any such individual who is deemed enrolled under part B or part A 
pursuant to the previous sentence with respect to any period prior to 
the date of such enrollment.
``(c) Auto Enrollment of Dual Eligible Individuals Under Medicare 
Advantage Plans.--
``(1) In general.--Except in the case of a State that has 
elected the maintenance of effort option described in section 
1944(b)(2), in the case of an individual described in 
subparagraph (A)(ii) of section 1935(c)(6) (taking into account 
the application of subparagraph (B) of such section), the 
Secretary shall establish a process for the enrollment in an 
MA-PD plan that is a managed care plan under part C that has a 
monthly beneficiary premium that does not exceed the premium 
assistance available under section 1860E-41(b)(1)(A). If there 
is more than one such plan available, the Secretary shall 
enroll such an individual on a random basis among all such 
plans in the PDP region.
``(2) Right to disenroll.--Nothing in paragraph (1) shall 
prevent such an individual from declining enrollment in any 
such plan (and thereby obtaining coverage under Medicare fee-
for-service) or from changing enrollment in such a plan to 
another MA-PD plan.

``SEC. 1860E-12. COORDINATION WITH PART D.

``(a) Deemed Enrollment Under Part D.--
``(1) In general.--The Secretary shall establish a process 
that, beginning as of the general effective date, provides for 
the enrollment in a prescription drug plan that has a monthly 
base beneficiary premium that does not exceed the weighted 
average of premiums for such plans that provide standard 
prescription drug coverage (as defined in section 1860D-2(b)) 
with respect to the area involved (on a random basis among all 
such plans in the applicable PDP region) of each Medicare 
enrollee (as defined in section 1860E-51) who--
``(A) failed to enroll in such a prescription drug 
plan during the applicable enrollment or coverage 
election period under section 1860D-1(b); and
``(B) failed to elect not to enroll in such a 
prescription drug plan during an applicable opt-out 
period described in paragraph (2).
Nothing in the previous sentence shall prevent such an 
individual from declining or changing such enrollment. Such 
process shall be carried out in the same manner as the process 
described in section 1860D-1(b)(1)(C).
``(2) Opt-out periods.--The process under paragraph (1) 
shall provide for the opportunity to make an election described 
in subparagraph (B) of such paragraph during an opt-out period 
that is coordinated with the relevant enrollment or coverage 
election period under section 1860D-1.
``(3) Late enrollment penalties.--In the case of an 
individual who makes an election described in paragraph (1)(B) 
and then enrolls in a prescription drug plan, the late 
enrollment penalty under section 1860D-13(b) shall apply to the 
monthly beneficiary premium of such individual, except that in 
applying such section, any reference to the initial enrollment 
period of such individual shall be deemed to be a reference to 
the opt-out period under paragraph (2) during which the 
individual elected not to enroll in a prescription drug plan.
``(4) No late enrollment penalty for current fee-for-
service beneficiaries without drug coverage.--In the case of an 
individual who is a Medicare enrollee before the date of 
enactment of this section and who was not enrolled under a 
prescription drug plan before being enrolled under such a plan 
pursuant to paragraph (1), there shall be no increase in the 
base beneficiary premium of an individual under section 1860D-
13 by a late enrollment penalty under subsection (b) of such 
section with respect to any period prior to the date of such 
enrollment.
``(b) Reference to Required Prescription Drug Coverage Under Part 
C.--For provision requiring coverage under MA plans to include 
prescription drug coverage, see section 1860E-26.''.
(b) Limitation on Medicaid Benefits for Full-Benefit Dual Eligible 
Individuals.--Section 1902 of the Social Security Act (42 U.S.C. 1396a) 
is amended by adding at the end the following new subsection:
``(ll) Limitation on Benefits for Full-Benefit Dual Eligible 
Individuals.--Effective as of the general effective date (as specified 
in section 1860E-62), except in the case of a State which has elected 
the option described in section 1944(b)(2), in the case of an 
individual described in subparagraph (A)(ii) of section 1935(c)(6) 
(taking into account the application of subparagraph (B) of such 
section), notwithstanding any other provision of law, medical 
assistance shall not be available under this title for any items and 
services for which payment may be made under title XVIII.''.
(c) Medicaid Maintenance of Effort and Alternatives.--Title XIX of 
the Social Security Act is amended by inserting after section 1943 the 
following new section:

``maintenance of effort options for full-benefit dual eligible 
individuals

``Sec. 1944. (a) In General.--Effective as of the general 
effective date (as specified in section 1860E-62), a State shall elect, 
in a form and manner specified by the Secretary, a maintenance of 
effort option described in subsection (b). In the case of a State that 
fails to make such an election, the State shall be deemed to have 
elected the option described in subsection (b)(3).
``(b) Maintenance of Effort Options Described.--The following are 
maintenance of effort options described in this subsection for a State, 
which shall apply to all individuals described in subparagraph (A)(ii) 
of section 1935(c)(6) (taking into account the application of 
subparagraph (B) of such section) for such State:
``(1) Enrollment of dual eligibles in comprehensive 
medicaid managed care plan.--
``(A) In general.--The State enrolls all such 
individuals in a comprehensive Medicaid managed care 
plan offered by a managed care entity under section 
1932.
``(B) Payment of subsidy amount to state.--In the 
case of a State that elects the option under this 
paragraph with respect to an individual, the Secretary 
established under section 1860E-51 shall pay to the 
State the same amount that the individual would be 
entitled to have paid as an income-related premium 
subsidy under section 1860E-41(b)(1)(A) plus the amount 
that the Secretary estimates would have been paid with 
respect to the individual under part D (including the 
actuarial value of subsidy payments under sections 
1860D-13 and 1860D-14). Such payment shall be made in 
appropriate part from the Federal Hospital Insurance 
Trust Fund under section 1817 and the Federal 
Supplementary Medical Insurance Trust Fund under 
section 1841.
``(C) Relation to part d rules.--In the case of a 
State that has elected the option under this paragraph, 
notwithstanding any other provision of law--
``(i) the coverage provided under this 
option shall be in lieu of any coverage that 
may otherwise be provided under part D; and
``(ii) the payment to the State under 
subparagraph (B) shall be in lieu of any 
payments otherwise made with respect to such 
individual under such part.
``(2) Other innovative alternatives.--
``(A) In general.--The State submits to the 
Secretary, and has approved by the Secretary, an 
innovative alternative proposal relating to 
coordinating coverage of such individuals under 
Medicare and the State plan under title XIX.
``(B) Process for review.--With respect to 
proposals submitted to the Secretary under subparagraph 
(A), the Secretary shall approve such a proposal if the 
State demonstrates with respect to the proposal that--
``(i) there would be no increased cost to 
the Federal Government if it were approved; and
``(ii) there would be no reduction in the 
quality of care provided to such individuals if 
the proposal were approved.''.
(d) Conforming Amendments.--
(1) Section 226.--Section 226 of the Social Security Act 
(42 U.S.C. 426) is amended--
(A) in subsection (a), in the matter preceding 
paragraph (1), by inserting ``, subject to section 
1860E-11(a)'' after ``individual who'';
(B) in subsection (b), in the matter preceding 
paragraph (1), by inserting ``, subject to section 
1860E-11(a)'' after ``individual who''; and
(C) in subsection (c), in the matter preceding 
paragraph (1), by inserting ``, subject to section 
1860E-11(a)'' after ``subsection (a)''.
(2) Section 226A.--Section 226A(a) of such Act (42 U.S.C. 
426-1(a)) is amended, in the matter preceding paragraph (1), by 
inserting ``and subject to section 1860E-11(a)'' after ``or 
title XVIII''.
(3) Section 1932.--Section 1932(a)(2)(B) of the Social 
Security Act (42 U.S.C. 1396u-2(a)(2)(B)) is amended by 
striking ``A State'' and inserting ``Except in the case of a 
State that has elected the maintenance of effort option 
described in section 1944(b)(2), a State''.

SEC. 423. NEW BENEFIT STRUCTURE UNDER UNIFIED MEDICARE.

(a) In General.--Part E of title XVIII of the Social Security Act, 
as added by section 251, is amended by adding at the end the following:

``Subpart 2--Out-of-Pocket Limit

``SEC. 1860E-21. OUT-OF-POCKET LIMIT.

``(a) In General.--Beginning with 2026, in the case of a Medicare 
enrollee, if the amount of the out-of-pocket cost-sharing of such 
enrollee for a calendar year equals or exceeds the catastrophic limit 
under subsection (b) for that year--
``(1) the enrollee shall not be responsible for additional 
out-of-pocket cost-sharing incurred during that year; and
``(2) the Secretary shall establish procedures under which 
the Secretary shall, in appropriate part from the Part A 
Medicare FFS Account under section 1817 and the Part B Medicare 
FFS Account under section 1841--
``(A) pay on behalf of the enrollee the amount of 
the additional out-of-pocket cost-sharing described in 
paragraph (1) attributable to deductibles and 
coinsurance described in subsection (c)(1); and
``(B) reimburse the enrollee the amount of the 
additional out-of-pocket cost-sharing described in 
paragraph (1) attributable to deductibles and 
coinsurance described in subsection (c)(2).
``(b) Catastrophic Limit.--The amount of the catastrophic limit 
under this subsection for a year shall be the dollar amount in effect 
under section 223(c)(2)(A)(ii) of the Internal Revenue Code of 1986 for 
self-only coverage for taxable years beginning in such year.
``(c) Out-of-Pocket Cost-Sharing Defined.--In this section, the 
term `out-of-pocket cost-sharing' means, with respect to an individual, 
the amount of costs incurred by the individual that are attributable 
to--
``(1) deductibles and coinsurance imposed under part A or 
part B; and
``(2) deductibles and coinsurance imposed under standard 
prescription drug coverage pursuant to section 1860D-2(b) or 
alternative prescription drug coverage pursuant to section 
1860D-2(c) offered by a prescription drug plan.''.
(b) Application of Out-of-Pocket Limit to MA-PD Plans.--
(1) In general.--Section 1852(a)(1)(B) of the Social 
Security Act (42 U.S.C. 1395w-22(a)(1)(B)) is amended--
(A) in clause (i), by striking ``clause (iii)'' and 
inserting ``clauses (iii) and (vi)''; and
(B) by adding at the end the following new clause:
``(vi) Out-of-pocket limit.--The provisions 
of section 1860E-21--
``(I) shall apply to individuals 
enrolled under an MA-PD plan in the 
same manner as such provisions apply to 
Medicare enrollees under such section, 
except that in lieu of the application 
of subsection (a)(2) of such section 
the MA-PD plan shall establish 
procedures to provide for payment of 
any additional out-of-pocket cost-
sharing described in subsection (a)(1) 
of such section incurred by individuals 
enrolled under the MA-PD plan; and
``(II) as applied under subclause 
(I), may not be waived by application 
of this subparagraph.
In applying subsection (b) of section 1860E-21 
pursuant to the previous sentence, an MA-PD 
plan may substitute a dollar amount that is 
less than the dollar amount specified under 
such subsection.''.
(2) Exempting ma-pd plans offering alternative prescription 
drug coverage from part d deductible and out-of-pocket limit 
requirements.--Section 1860D-2(c) of the Social Security Act 
(42 U.S.C. 1395w-102(c)) is amended--
(A) in paragraph (2), by striking ``The 
deductible'' and inserting ``In the case of a 
prescription drug plan, the deductible''; and
(B) in paragraph (3), by striking ``The coverage 
provides'' and inserting ``In the case of a 
prescription drug plan, the coverage provides''.
(c) Prescription Drug Plans Required To Report Enrollees' Out-of-
Pocket Cost-Sharing.--Section 1860D-12(b) of the Social Security Act 
(42 U.S.C. 1395w-112(b)) is amended by adding at the end the following 
new paragraph:
``(7) Out-of-pocket cost-sharing reports.--Each contract 
entered into with a PDP sponsor under this part with respect to 
a prescription drug plan offered by such sponsor shall require 
that, with respect to each claim submitted for items or 
services furnished to an individual enrolled under the plan 
pursuant to the contract, the sponsor submits to the Secretary 
information on the amount of out-of-pocket cost-sharing (as 
defined in section 1860E-23(c)) applicable to such enrollee for 
such items or services.''.
(d) Conforming Amendments.--
(1) Section 1813 of the Social Security Act (42 U.S.C. 
1395e) is amended--
(A) in subsection (a), by inserting ``Subject to 
subpart 2 of part E:'' before paragraph (1); and
(B) in subsection (b), by inserting ``Subject to 
subpart 2 of part E:'' before paragraph (1).
(2) Section 1833 of such Act (42 U.S.C. 1395l) is amended--
(A) in subsection (a), in the matter preceding 
paragraph (1), by inserting ``and subpart 2 of part E'' 
after ``succeeding provisions of this section'';
(B) in subsection (b), in the first sentence, by 
striking ``Before applying'' and inserting ``Subject to 
subpart 2 of part E, before applying'';
(C) in subsection (c)(1), in the matter preceding 
subparagraph (A), by inserting ``subject to subpart 2 
of part E,'' after ``this part,'';
(D) in subsection (f), by striking ``In 
establishing'' and inserting ``Subject to subpart 2 of 
part E, in establishing''; and
(E) in subsection (g)(1), by inserting ``and 
subpart 2 of part E'' and ``paragraphs (4) and (5)''.
(3) Section 1882(a)(2) of such Act is amended by striking 
``No medicare'' and inserting ``Subject to section 1860E-24(c), 
no medicare''.

SEC. 424. LATE ENROLLMENT PENALTY NOT TO APPLY FOR MONTHS OF ANY HEALTH 
COVERAGE.

(a) In General.--Section 1839(b) of the Social Security Act (42 
U.S.C. 1395r) is amended in the second sentence, by inserting before 
the period at the end the following: ``or months during which the 
individual has any other health coverage''.
(b) Effective Date.--The amendment made by paragraph (1) shall 
apply for months of coverage beginning after the date of the enactment 
of this Act.

SEC. 425. MEDIGAP REFORM.

Notwithstanding any provision of section 1882 of the Social 
Security Act (42 U.S.C. 1395ss), as of the date of the enactment of 
this Act, no policy may be offered under such section that does not 
provide guaranteed coverage (without regard to an individual's 
preexisting conditions, if any) to all individuals eligible to enroll 
under such policy.

SEC. 426. ACO REVISION.

(a) Enrollment.--Enrollment in such an ACO under such title shall 
be based on the method established under part E of such title. Such a 
network shall bear full risk in the event payments under such title do 
not equal or exceed liabilities under such network.
(b) Direction of Payment.--An ACO may direct that any payments 
under such title be made to a centralized entity rather than to an 
individual provider or supplier.
(c) Bids.--The Secretary of Health and Human Services shall 
establish a process whereby such networks compete using a bidding 
process similar to that described in part E of such title for Medicare 
Advantage plans.

SEC. 427. PRIMARY CARE OPTIONS.

(a) Selection of Primary Care Physician.--The Secretary shall 
establish a mechanism under which an individual enrolled under part B 
of title XVIII of the Social Security Act may select such individual's 
primary care physician. Such an individual shall not be liable for more 
than $5 for each visit to such selected physician.
(b) Payment to Physician.--A physician selected under subsection 
(a) shall receive a monthly fee in lieu of any other payment under such 
part B for evaluation and monitoring of such individual. The Secretary 
shall provide a list of standardized benefits that are included in such 
payment, including telephone and email communications, office visits, 
preventive care, and vaccinations.

SEC. 428. GENERAL PROVISIONS; EFFECTIVE DATE.

Part E of title XVIII of the Social Security Act, as inserted by 
section 101(a)(2) and as previously amended, is further amended by 
adding at the end the following new subpart:

``Subpart 5.--General Provisions

``SEC. 1860E-51. APPLICABILITY; DEFINITIONS.

``(a) In General.--The provisions of this Act are superseded to the 
extent inconsistent with the provisions of this part.
``(b) Terminology.--For purposes of this part:
``(1) Medicare enrollee.--
``(A) In general.--The term `Medicare enrollee' 
means--
``(i) an individual entitled to (or 
enrolled for benefits) under part A and 
enrolled under part B; and
``(ii) except as otherwise specified, an 
individual described in section 1860E-11(a)(3).
``(B) Treatment.--Any reference in this Act (or any 
other Act) in effect before the date of the enactment 
of this part, to an individual entitled to benefits 
under part A or enrolled under part B shall be deemed a 
reference to a Medicare enrollee.
``(2) Medicare fee-for-service.--The term `Medicare fee-
for-service' means the original Medicare fee-for-service 
program under parts A and B, as modified by this part, and does 
not include part C or part D.
``(3) Medicare fee-for-service enrollee.--The term 
`Medicare fee-for-service enrollee' means a Medicare enrollee 
who is not enrolled under a Medicare Advantage plan under part 
C.

``SEC. 1860E-61. GENERAL EFFECTIVE DATE.

``Except as otherwise specified, the provisions of this part shall 
apply to items and services furnished on or after January 1, 2026, and 
to plan years beginning on or after such date (referred to in this 
title as the `general effective date').''.

Subtitle D--Telehealth Improvements and Expansion

SEC. 431. EXPANSION OF COVERAGE OF TELEHEALTH SERVICES.

(a) Covered Services.--Section 1834(m)(4)(F)(i) of the Social 
Security Act (42 U.S.C. 1395m(m)(4)(F)(i)) is amended--
(1) by striking ``and office'' and inserting ``office''; 
and
(2) by inserting: ``respiratory services, audiology 
services (as defined in section 1861(ll)), outpatient therapy 
services (including physical therapy, occupational therapy, and 
speech-language pathology services)'' after ``the 
Secretary)),''.
(b) Providers.--Subsection (m) of section 1834 of such Act (42 
U.S.C. 1395m) is amended--
(1) in paragraph (1), by striking ``or a practitioner 
(described in section 1842(b)(18)(C))'' and inserting ``, a 
practitioner (described in section 1842(b)(18)(C)), or an 
applicable professional (as defined in paragraph (4)(G))'';
(2) by striking ``physician or practitioner'' each time it 
appears in such subsection and inserting ``physician, 
practitioner, or applicable professional'';
(3) in paragraph (3)(A)--
(A) in the heading, by striking ``Physician and 
practitioner'' and inserting ``Physician, practitioner, 
and applicable professional''; and
(B) by striking ``physicians or practitioners'' and 
inserting ``physicians, practitioners, or applicable 
professionals''; and
(4) in paragraph (4), by adding at the end the following 
new subparagraph:
``(G) Applicable professional.--The term 
`applicable professional' means, with respect to 
services furnished on or after the date that is 6 
months after the date of the enactment of this 
subparagraph, a certified diabetes educator or 
licensed--
``(i) respiratory therapist;
``(ii) audiologist;
``(iii) occupational therapist;
``(iv) physical therapist; or
``(v) speech language pathologist.''.
(c) Home-Based Monitoring Services for Congestive Heart Failure and 
Chronic Obstructive Pulmonary Disease.--
(1) Coverage of remote patient monitoring services for 
certain chronic health conditions.--Section 1861(s)(2) of the 
Social Security Act (42 U.S.C. 1395x(s)(2)) is amended--
(A) in subparagraph (GG), by striking ``and'' at 
the end;
(B) in subparagraph (HH), by inserting ``and'' at 
the end; and
(C) by inserting after subparagraph (HH) the 
following new subparagraph:
``(II) applicable remote patient monitoring 
services (as defined in paragraph (1)(A) of subsection 
(iii));''.
(2) Services described.--Section 1861 of the Social 
Security Act (42 U.S.C. 1395x) is amended by adding at the end 
the following new subsection:
``(kkk) Remote Patient Monitoring Services for Chronic Health 
Conditions.--
``(1)(A) The term `applicable remote patient monitoring 
services' means remote patient monitoring services (as defined 
in subparagraph (B)) furnished to provide for the monitoring, 
evaluation, and management of an individual with a covered 
chronic condition (as defined in paragraph (2)), insofar as 
such services are for the management of such chronic condition.
``(B) The term `remote patient monitoring services' means 
services furnished through remote patient monitoring technology 
(as defined in subparagraph (C)).
``(C) The term `remote patient monitoring technology' means 
a coordinated system that uses one or more home-based or mobile 
monitoring devices that automatically transmit vital sign data 
or information on activities of daily living and may include 
responses to assessment questions collected on the devices 
wirelessly or through a telecommunications connection to a 
server that complies with the Federal regulations (concerning 
the privacy of individually identifiable health information) 
promulgated under section 264(c) of the Health Insurance 
Portability and Accountability Act of 1996, as part of an 
established plan of care for that patient that includes the 
review and interpretation of that data by a health care 
professional.
``(2) For purposes of paragraph (1), the term `covered 
chronic health condition' means applicable conditions (as 
defined in and applied under section 1886(q)(5)) when under 
chronic care management (identified as of July 1, 2015, by 
HCPCS code 99490 (and as subsequently modified by the 
Secretary)).
``(3)(A) Payment may be made under this part for applicable 
remote patient monitoring services provided to an individual 
during a period of up to 90 days and such additional period as 
provided for under subparagraph (B).
``(B) The 90-day period described in subparagraph (A), with 
respect to an individual, may be renewed by the physician who 
provides chronic care management to such individual if the 
individual continues to qualify for such management.''.
(3) Payment under the physician fee schedule.--Section 1848 
of the Social Security Act (42 U.S.C. 1395w-4) is amended--
(A) in subsection (c)--
(i) in paragraph (2)(B)--
(I) in clause (ii)(II), by striking 
``and (v)'' and inserting ``(v), and 
(vii)''; and
(II) by adding at the end the 
following new clause:
``(vii) Budgetary treatment of certain 
services.--The additional expenditures 
attributable to services described in section 
1861(s)(2)(II) shall not be taken into account 
in applying clause (ii)(II).''; and
(ii) by adding at the end the following new 
paragraph:
``(7) Treatment of applicable remote patient monitoring 
services.--
``(A) In determining relative value units for 
applicable remote patient monitoring services (as 
defined in section 1861(iii)(1)(A)), the Secretary, in 
consultation with appropriate physician groups, 
practitioner groups, and supplier groups, shall take 
into consideration--
``(i) physician or practitioner resources, 
including physician or practitioner time and 
the level of intensity of services provided, 
based on--
``(I) the frequency of evaluation 
necessary to manage the individual 
being furnished the services;
``(II) the complexity of the 
evaluation, including the information 
that must be obtained, reviewed, and 
analyzed; and
``(III) the number of possible 
diagnoses and the number of management 
options that must be considered;
``(ii) practice expense costs associated 
with such services, including the direct costs 
associated with installation and information 
transmission, costs of remote patient 
monitoring technology (including equipment and 
software), device delivery costs, and resource 
costs necessary for patient monitoring and 
followup (but not including costs of any 
related item or non-physician service otherwise 
reimbursed under this title); and
``(iii) malpractice expense resources.
``(B) Using the relative value units determined in 
subparagraph (A), the Secretary shall provide for 
separate payment for such services and shall not adjust 
the relative value units assigned to other services 
that might otherwise have been determined to include 
such separately paid remote patient monitoring 
services.''; and
(B) in subsection (j)(3), by inserting ``(2)(II),'' 
after ``health risk assessment),''.

SEC. 432. EXPANDING THE USE OF TELEHEALTH THROUGH THE WAIVER OF CERTAIN 
REQUIREMENTS.

(a) In General.--Section 1834(m) of the Social Security Act (42 
U.S.C. 1395m(m)) is amended--
(1) in paragraph (4)(C)(i), by striking ``and (7)'' and 
inserting ``(7), and (8)''; and
(2) by adding at the end the following:
``(8) Authority to waive requirements and limitations if 
certain conditions met.--
``(A) In general.--Notwithstanding the preceding 
provisions of this subsection, in the case of 
telehealth services furnished on or after January 1, 
2026, the Secretary may waive any restriction 
applicable to payment for telehealth services under 
this subsection that is described in subparagraph (B), 
but only if the Secretary determines that such waiver 
would not deny or limit the coverage or provision of 
benefits under this title, and--
``(i) the Secretary determines that the 
waiver is expected to reduce spending under 
this title without reducing the quality of care 
or improve the quality of patient care without 
increasing spending; or
``(ii) the waiver would apply to telehealth 
services furnished in originating sites located 
in a high-need health professional shortage 
area (as designated pursuant to section 
332(a)(1)(A) of the Public Health Service Act 
(42 U.S.C. 254e(a)(1)(A))).
``(B) Restrictions described.--For purposes of this 
paragraph, restrictions applicable to payment for 
telehealth services under paragraph (1) are--
``(i) requirements relating to 
qualifications for an originating site under 
paragraph (4)(C)(ii);
``(ii) any geographic limitations under 
paragraph (4)(C)(i) (other than applicable 
State law requirements, including State 
licensure requirements);
``(iii) any limitation on the type of 
technology used to furnish telehealth services;
``(iv) any limitation on the type of 
provider of services or supplier who may 
furnish telehealth services (other than the 
requirement that the provider of services or 
supplier is enrolled under this title);
``(v) any limitation on specific services 
designated as telehealth services pursuant to 
this subsection (provided the Secretary 
determines that such services are clinically 
appropriate to furnish remotely); or
``(vi) any other limitation relating to the 
furnishing of telehealth services under this 
title identified by the Secretary.
``(C) Public comment.--The Secretary shall 
establish a process by which stakeholders may (on at 
least an annual basis) provide public comment for 
waivers under this paragraph.
``(D) Periodic review of waivers.--The Secretary 
shall periodically, but not more often than every 3 
years, reassess each waiver under this paragraph to 
determine whether the waiver continues to meet the 
conditions applicable under subparagraph (A).''.
(b) Posting of Information.--Not later than 2 years after the date 
on which a waiver under section 1834(m)(8) of the Social Security Act, 
as added by subsection (a), first becomes effective, and at least 
biennially thereafter, the Secretary of Health and Human Services shall 
post on the internet website of the Centers for Medicare & Medicaid 
Services--
(1) the number of Medicare beneficiaries receiving 
telehealth services by reason of each waiver under such 
section;
(2) the impact of such waivers on expenditures and 
utilization under title XVIII of the Social Security Act (42 
U.S.C. 1395 et seq.); and
(3) other outcomes, as determined appropriate by the 
Secretary.

SEC. 433. EXPANDING THE USE OF TELEHEALTH FOR MENTAL HEALTH SERVICES.

(a) In General.--Section 1834(m) of the Social Security Act (42 
U.S.C. 1395m(m)), as amended by the preceding sections, is amended--
(1) in paragraph (4)(C)(i), by striking ``and (8)'' and 
inserting ``(8), and (9)''; and
(2) by adding at the end the following:
``(9) Treatment of mental health services furnished through 
telehealth.--The geographic requirements described in paragraph 
(4)(C)(i) (other than applicable State law requirements, 
including State licensure requirements) shall not apply with 
respect to telehealth services that are mental health services 
(as determined by the Secretary) furnished on or after January 
1, 2026, to an eligible telehealth individual at an originating 
site described in paragraph (4)(C)(ii) (other than an 
originating site described in subclause (IX) of such 
paragraph).''.
(b) Inclusion of the Home as an Originating Site.--Section 
1834(m)(4)(C)(ii)(X) of such Act (42 U.S.C. 1395m(m)(4)(C)(ii)(X)) is 
amended by striking ``paragraph (7)'' and inserting ``paragraphs (7) 
and (9)''.
(c) Additional Services.--As part of the implementation of the 
amendments made by this section, the Secretary of Health and Human 
Services shall consider whether additional services should be added to 
the services specified in paragraph (4)(F)(i) of section 1834(m) of 
such Act (42 U.S.C. 1395m) for authorized payment under paragraph (1) 
of such section.

SEC. 434. USE OF TELEHEALTH IN EMERGENCY MEDICAL CARE.

(a) In General.--Section 1834(m) of the Social Security Act (42 
U.S.C. 1395m(m)), as amended by the preceding sections, is amended--
(1) in paragraph (4)(C)(i), by striking ``and (9)'' and 
inserting ``(9), and (10)''; and
(2) by adding at the end the following:
``(10) Treatment of emergency medical care furnished 
through telehealth.--The geographic requirements described in 
paragraph (4)(C)(i) (other than applicable State law 
requirements, including State licensure requirements) shall not 
apply with respect to telehealth services that are services for 
emergency medical care (as determined by the Secretary) 
furnished on or after January 1, 2026, to an eligible 
telehealth individual at an originating site described in 
subclause (II), (V), or (VII) of paragraph (4)(C)(ii).''.
(b) Additional Services.--As part of the implementation of the 
amendments made by this section, the Secretary of Health and Human 
Services shall consider whether additional services should be added to 
the services specified in paragraph (4)(F)(i) of section 1834(m) of 
such Act (42 U.S.C. 1395m) for authorized payment under paragraph (1) 
of such section.

SEC. 435. IMPROVEMENTS TO THE PROCESS FOR ADDING TELEHEALTH SERVICES.

The Secretary shall undertake a review of the process established 
pursuant to section 1834(m)(4)(F)(ii) of the Social Security Act (42 
U.S.C. 1395m(m)(4)(F)(ii)), and based on the results of such review--
(1) implement revisions to the process so that the criteria 
to add services prioritizes, as appropriate, improved access to 
care through telehealth services; and
(2) provide clarification on what requests to add 
telehealth services under such process should include.

SEC. 436. RURAL HEALTH CLINICS AND FEDERALLY QUALIFIED HEALTH CENTERS.

(a) Expansion of Originating Sites.--Section 1834(m)(4)(C) of the 
Social Security Act (42 U.S.C. 1395m(m)(4)(C)), as amended by the 
preceding sections, is amended--
(1) in clause (i), by striking ``and (10)'' and inserting 
``and (10), and subject to clause (iii),''; and
(2) by adding at the end the following new clause:
``(iii) Rural health clinics and federally 
qualified health centers.--The term 
`originating site' shall also include any 
Federally qualified health center and any rural 
health clinic (as such terms are defined in 
section 1861(aa)) at which the eligible 
telehealth individual is located at the time 
the service is furnished via a 
telecommunications system, whether or not the 
individual is located in an area described in 
clause (i), insofar as such sites are not 
otherwise included in the definition of 
originating site under such clause, subject to 
applicable State law requirements, including 
State licensure requirements.''.
(b) Expansion of Distant Sites.--Section 1834(m) of the Social 
Security Act (42 U.S.C. 1395m(m)) is amended--
(1) in the first sentence of paragraph (1)--
(A) by striking ``or a practitioner (described in 
section 1842(b)(18)(C))'' and inserting ``, a 
practitioner (described in section 1842(b)(18)(C)), a 
Federally qualified health center, or a rural health 
clinic''; and
(B) by striking ``or practitioner'' and inserting 
``, practitioner, Federally qualified health center, or 
rural health clinic'';
(2) in paragraph (2)(A)--
(A) by inserting ``or to a Federally qualified 
health center or rural health clinic that serves as a 
distant site'' after ``a distant site''; and
(B) by striking ``such physician or practitioner'' 
and inserting ``such physician, practitioner, Federally 
qualified health center, or rural health clinic''; and
(3) in paragraph (4)--
(A) in subparagraph (A), by inserting ``and 
includes a Federally qualified health center or rural 
health clinic that furnishes a telehealth service to an 
eligible individual'' before the period at the end; and
(B) in subparagraph (F), by adding at the end the 
following new clause:
``(iii) Inclusion of rural health clinic 
services and federally qualified health center 
services furnished using telehealth.--For 
purposes of this subparagraph, the term 
`telehealth services' includes a rural health 
clinic service or Federally qualified health 
center service that is furnished using 
telehealth to the extent that payment codes 
corresponding to services identified by the 
Secretary under clause (i) or (ii) are listed 
on the corresponding claim for such rural 
health clinic service or Federally qualified 
health center service.''.
(c) Effective Date.--The amendments made by this section shall 
apply to services furnished on or after January 1, 2026.

SEC. 437. NATIVE AMERICAN HEALTH FACILITIES.

(a) In General.--Section 1834(m)(4)(C) of the Social Security Act 
(42 U.S.C. 1395m(m)(4)(C)), as amended by the preceding sections, is 
amended--
(1) in clause (i), by striking ``clause (iii)'' and 
inserting ``clauses (iii) and (iv)''; and
(2) by adding at the end the following new clause:
``(iv) Native american health facilities.--
The originating site requirements described in 
clauses (i) and (ii) shall not apply with 
respect to a facility of the Indian Health 
Service, whether operated by such Service, or 
by an Indian tribe (as that term is defined in 
section 4 of the Indian Health Care Improvement 
Act (25 U.S.C. 1603)) or a tribal organization 
(as that term is defined in section 4 of the 
Indian Self-Determination and Education 
Assistance Act (25 U.S.C. 5304)), or a facility 
of the Native Hawaiian health care systems 
authorized under the Native Hawaiian Health 
Care Improvement Act (42 U.S.C. 11701 et 
seq.).''.
(b) No Originating Site Facility Fee for New Sites.--Section 
1834(m)(2)(B)(i) of the Social Security Act (42 U.S.C. 
1395m(m)(2)(B)(i)) is amended, in the matter preceding subclause (I), 
by inserting ``(other than an originating site that is only described 
in clause (iv) of paragraph (4)(C), and does not meet the requirement 
for an originating site under clause (i) of such paragraph)'' after 
``the originating site''.
(c) Effective Date.--The amendments made by this section shall 
apply to services furnished on or after January 1, 2026.

SEC. 438. WAIVER OF TELEHEALTH RESTRICTIONS DURING NATIONAL 
EMERGENCIES.

Section 1135(b) of the Social Security Act (42 U.S.C. 1320b-5(b)) 
is amended--
(1) in paragraph (6), by striking ``and'' after the 
semicolon;
(2) in paragraph (7), by striking the period at the end and 
inserting ``; and''; and
(3) by adding at the end the following:
``(8) requirements for payment for telehealth services 
under section 1834(m).''.

SEC. 439. USE OF TELEHEALTH IN RECERTIFICATION FOR HOSPICE CARE.

(a) In General.--Section 1814(a)(7)(D)(i) of the Social Security 
Act (42 U.S.C. 1395f(a)(7)(D)(i)) is amended by inserting ``(including 
through use of telehealth, notwithstanding the requirements in section 
1834(m)(4)(C))'' after ``face-to-face encounter''.
(b) GAO Report.--Not later than 3 years after the date of enactment 
of this Act, the Comptroller General of the United States shall submit 
a report to Congress evaluating the impact of the amendment made by 
subsection (a) on--
(1) the number and percentage of beneficiaries recertified 
for the Medicare hospice benefit at 180 days and for subsequent 
benefit periods;
(2) the appropriateness for hospice care of the patients 
recertified through the use of telehealth; and
(3) any other factors determined appropriate by the 
Comptroller General.

SEC. 440. CLARIFICATION FOR FRAUD AND ABUSE LAWS REGARDING TECHNOLOGIES 
PROVIDED TO BENEFICIARIES.

Section 1128A(i)(6) of the Social Security Act (42 U.S.C. 1320a-
7a(i)(6)) is amended--
(1) in subparagraph (I), by striking ``; or'' and inserting 
a semicolon;
(2) in subparagraph (J), by striking the period at the end 
and inserting ``; or''; and
(3) by adding at the end the following new subparagraph:
``(K) the provision of technologies (as defined by 
the Secretary) on or after the date of the enactment of 
this subparagraph, by a provider of services or 
supplier (as such terms are defined for purposes of 
title XVIII) directly to an individual who is entitled 
to benefits under part A of title XVIII, enrolled under 
part B of such title, or both, for the purpose of 
furnishing telehealth services, remote patient 
monitoring services, or other services furnished 
through the use of technology (as defined by the 
Secretary), if--
``(i) the technologies are not offered as 
part of any advertisement or solicitation; and
``(ii) the provision of the technologies 
meets any other requirements set forth in 
regulations promulgated by the Secretary.''.

SEC. 441. STUDY AND REPORT ON INCREASING ACCESS TO TELEHEALTH SERVICES 
IN THE HOME.

(a) MedPAC Study.--The Medicare Payment Advisory Commission (in 
this section referred to as the ``Commission'') shall conduct a study 
on increasing access under the Medicare program under title XVIII of 
the Social Security Act (42 U.S.C. 1395 et seq.) to telehealth services 
in the home. Such study shall include an analysis of the following:
(1) How different payers allow the home to be an 
originating site for telehealth services.
(2) Particular types of telehealth services or subgroups of 
beneficiaries with respect to which allowing the home to be an 
originating site under the Medicare program would be suitable.
(b) Report.--Not later than 24 months after the date of the 
enactment of this Act, the Commission shall submit to Congress a report 
containing the results of the study conducted under subsection (a), 
together with recommendations for such legislation and administrative 
action as the Commission determines appropriate.

SEC. 442. ANALYSIS OF TELEHEALTH WAIVERS IN ALTERNATIVE PAYMENT MODELS.

The second sentence of section 1115A(g) of the Social Security Act 
(42 U.S.C. 1315a(g)) is amended by inserting ``an analysis of waivers 
under section (d)(1) related to telehealth and the impact on quality 
and spending under the applicable titles of such waivers,'' after 
``subsection (c),''.

SEC. 443. MODEL TO ALLOW ADDITIONAL HEALTH PROFESSIONALS TO FURNISH 
TELEHEALTH SERVICES.

Section 1115A(b)(2)(B) of the Social Security Act (42 U.S.C. 
1315a(b)(2)(B)) is amended by adding at the end the following new 
clause:
``(xxviii) Allowing health professionals 
who are not otherwise eligible under section 
1834(m) to furnish telehealth services to 
furnish such services.''.

SEC. 444. TESTING OF MODELS TO EXAMINE THE USE OF TELEHEALTH UNDER THE 
MEDICARE PROGRAM.

Section 1115A(b)(2) of the Social Security Act (42 U.S.C. 
1315a(b)(2)) is amended by adding at the end the following new 
subparagraph:
``(D) Testing models to examine use of telehealth 
under medicare.--The Secretary shall consider testing 
under this subsection models to examine the use of 
telehealth under title XVIII.''.
<all>