119-hr3080

[Congressional Bills 119th Congress]
[From the U.S. Government Publishing Office]
[H.R. 3080 Introduced in House

    (IH) ]

<DOC>

119th CONGRESS
 1st Session
 H. R. 3080

 To ensure health care fairness and affordability for all Americans 
 through universal access to equitable health insurance tax credits, 
 reformed health savings accounts, and strengthened consumer 
 protections, and for other purposes.

_______________________________________________________________________

 IN THE HOUSE OF REPRESENTATIVES

 April 29, 2025

 Mr. Sessions introduced the following bill; which was referred to the 
Committee on Energy and Commerce, and in addition to the Committees on 
 Ways and Means, and Education and Workforce, 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 ensure health care fairness and affordability for all Americans 
 through universal access to equitable health insurance tax credits, 
 reformed health savings accounts, and strengthened consumer 
 protections, 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; PURPOSES; TABLE OF CONTENTS.

    (a) Short Title.--This Act may be cited as the ``Health Care 
Fairness for All Act''.

    (b) 

=== Purposes ===
-The purposes of this Act are as follows:

    (1) Elimination of individual and employer mandates.--To 
 eliminate mandates on individuals and employers, and other tax 
 requirements, imposed under Public Law 111-148.

    (2) Providing states with alternative, affordable coverage 
 options.--To provide greater flexibility in providing States 
 with options in making affordable health insurance coverage 
 available by eliminating certain mandates under Public Law 111-
 148, while retaining essential consumer protections, by 
 promoting health savings accounts to pay for such coverage and 
 long-term care coverage, while permitting States to continue 
 coverage as provided under such public law.
            (c) Table of Contents.--The table of contents of this Act is as 
follows:

Sec. 1. Short title; purposes; table of contents.

Sec. 2. Definitions.
 TITLE I--REVISION OF FEDERAL HEALTH LAW

 Subtitle A--Elimination of Employer and Individual Mandates

Sec. 101. Repeal of individual health insurance mandate.

Sec. 102. Repeal of employer health insurance mandate.

Sec. 103. Clarifying employer's ability to reimburse employee premiums 
 for purchase of individual health insurance 
 coverage.
 Subtitle B--Limitation on Application of Federal Health Plan 
 Requirements

Sec. 121. Limiting application of requirements to consumer protections.

Sec. 122. Offering of basic health insurance; protection of assets from 
 liability or attachment or seizure.

Sec. 123. Ensuring access to short-term limited duration insurance.

Sec. 124. Making telehealth flexibilities permanent.
 Subtitle C--Health Insurance Tax Benefit

Sec. 131. Health insurance tax benefit.

Sec. 132. Application of portion of unused tax credits by States for 
 indigent health care.

Sec. 133. Medicaid option of enrollment under private plan and 
 contribution to an HSA.

Sec. 134. Repeal of reporting requirements relating to employee health 
 insurance premiums and health plan 
 benefits.

Sec. 135. Report.
 Subtitle D--Medicare Reforms

Sec. 141. Physician-owned hospitals.

Sec. 142. Prohibiting the use of an inpatient-only list in designating 
 hospital outpatient services under the 
 Medicare program.

Sec. 143. Promoting Medicare site-neutral payments.

Sec. 144. Medicare Advantage contributions to Roth HSAs for chronically 
 ill enrollees.

Sec. 145. Extending acute hospital care at home waiver flexibilities.
 TITLE II--IMPROVING HEALTH SAVINGS ACCOUNTS TO PROMOTE ACCOUNTABILITY

Sec. 201. Transition to non-deductible HSAs.

Sec. 202. Elimination of medical expense deduction.

Sec. 203. Treatment of HSA after death of account beneficiary.

Sec. 204. Treatment of direct patient care arrangements.
TITLE III--STATE FLEXIBILITY IN REGULATION OF HEALTH INSURANCE COVERAGE

Sec. 301. State flexibility in regulation of health insurance coverage.
 TITLE IV--MEDICAID PAYMENT REFORM

Sec. 401. Medicaid payment reform to ensure equitable access to care.
 TITLE V--PRICE TRANSPARENCY

Sec. 501. Promoting transparent hospital prices for consumers.

SEC. 2. DEFINITIONS.

 Except as otherwise provided, in this Act:

    (1) Basic health insurance.--The term ``basic health 
 insurance'' is defined in 

section 122

    (a) .

    (2) Default health insurance coverage.--The term ``default 
 health insurance coverage'' is defined in 

section 121

    (b)

    (4)
        (B) .

    (3) Exchange.--The term ``Exchange'' means an Exchange 
 established under title I of Public Law 111-148.

    (4) Health insurance coverage; group health plan, etc.--The 
 terms defined in 

section 2791 of the Public Health Service Act, 
 including ``health insurance coverage'', ``group health plan'' 
 ``individual market'', shall apply.

    (5) Limited benefit insurance.--The term ``limited benefit 
 insurance'' is defined in 

section 122

    (b) .

    (6) Secretary.--The term ``Secretary'' means the Secretary 
 of Health and Human Services.

    (7) State.--The term ``State'' includes the District of 
 Columbia, Puerto Rico, the United States Virgin Islands, 
 American Samoa, Guam, and the Northern Mariana Islands.

 TITLE I--REVISION OF FEDERAL HEALTH LAW

 Subtitle A--Elimination of Employer and Individual Mandates

SEC. 101. REPEAL OF INDIVIDUAL HEALTH INSURANCE MANDATE.

 

Section 5000A of the Internal Revenue Code of 1986 is amended by 
adding at the end the following new subsection:
 ``

    (h) Termination.--This section shall not apply to months 
beginning after December 31, 2024.''.

SEC. 102. REPEAL OF EMPLOYER HEALTH INSURANCE MANDATE.

    (a) In General.--Chapter 43 of the Internal Revenue Code of 1986 is 
amended--

    (1) by striking 

section 4980H, and

    (2) by striking the item relating to 

section 4980H from the 
 table of sections for such chapter.

    (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 and by striking the item relating to 

section 6056 in the 
table of sections for such subpart.
            (c) Conforming Amendments.--

    (1) Section 6724
            (d) (1)
        (B) of such Code is amended by 
 striking clause
            (xxv) .

    (2) Section 6724
            (d) (2) of such Code is amended by striking 
 subparagraph

    (HH) .

    (3) Section 1513 of Public Law 111-148 is amended by 
 striking subsection
            (c) .
            (d) Effective Dates.--

    (1) In general.--Except as otherwise provided in this 
 subsection, the amendments made by this section shall apply to 
 months and other periods beginning more than 30 days after the 
 date of the enactment of this Act.

    (2) Repeal of study and report.--The amendment made by 
 subsection
            (c) (3) shall take effect on the date of the 
 enactment of this Act.

SEC. 103. CLARIFYING EMPLOYER'S ABILITY TO REIMBURSE EMPLOYEE PREMIUMS 
 FOR PURCHASE OF INDIVIDUAL HEALTH INSURANCE COVERAGE.

 An employer health care arrangement, such as a health or medical 
reimbursement arrangement

    (HRA) or other employment plans, under which 
an employer reimburses an employee for the premiums for the purchase of 
individual health insurance coverage does not constitute a group health 
plan for any purposes, including for purposes of applying any of the 
following:

    (1) The Public Health Service Act (including sections 2711 
 and 2714 of such Act, 42 U.S.C. 300gg-11, 300gg-14).

    (2) Public Law 111-148.

    (3) The Internal Revenue Code of 1986 (other than for 
 purposes of 

section 36B of such Code).

    (4) The Employee Retirement Income Security Act of 1974.

    (5) The HIPAA privacy regulations (as defined in 

section 1180

    (b)

    (3) of the Social Security Act, 42 U.S.C. 1320d-
 9

    (b)

    (3) ).

    (6) The Health Insurance Portability and Accountability Act 
 of 1996.

    (7) COBRA continuation coverage under title XXII of the 
 Public Health Service Act (42 U.S.C. 300bb-1 et seq.), 

section 4980B of the Internal Revenue Code of 1986, or title VI of the 
 Employee Retirement Income Security Act of 1974 (29 U.S.C. 1161 
 et seq.).

 Subtitle B--Limitation on Application of Federal Health Plan 
 Requirements

SEC. 121. LIMITING APPLICATION OF REQUIREMENTS TO CONSUMER PROTECTIONS.

    (a) Removal of Public Law 111-148 Plan Requirements, Other Than 
Certain Consumer Protections.--

    (1) In general.--Notwithstanding any other provision of 
 law, with respect to group health plans and health insurance 
 coverage whether or not offered through an Exchange, except as 
 provided in paragraphs

    (2) and

    (3) , the provisions of title 
 XXVII of the Public Health Service Act (42 U.S.C. 300gg et 
 seq.) as in effect on the day before the date of the enactment 
 of Public Law 111-148 shall apply instead of the provisions of 
 such title as in effect after such date.

    (2) Public law 111-148 consumer protections continuing to 
 be applied.--The following sections of the Public Health 
 Service Act, that were added or amended by subtitles A and C of 
 title I of Public Law 111-148, shall continue to apply to group 
 health plans and to health insurance coverage offered in the 
 individual and group market:
        (A) No lifetime or annual limits.--

Section 2711 (42 
 U.S.C. 300gg-11; relating to no lifetime or annual 
 limits), except in the case of limited benefit 
 insurance (as defined in 

section 122

    (b) ).
        (B) Dependent coverage through age 26.--

Section 2714 (42 U.S.C. 300bb-14; relating to extension of 
 dependent coverage).
            (C) Modified guaranteed availability.--

Section 2702 
 (42 U.S.C. 300gg-1; relating to guaranteed availability 
 of coverage), subject to paragraph

    (3) and subsection
            (c) .
            (D) Guaranteed renewability.--

Section 2703 (42 
 U.S.C. 300gg-2; relating to guaranteed renewability of 
 coverage).
        (E) Prohibiting pre-existing condition 
 exclusions.--

Section 2704 (42 U.S.C. 300gg-3; relating 
 to prohibition on preexisting conditions).
        (F) Prohibiting discrimination based on health 
 status.--

Section 2705 (42 U.S.C. 300gg-4; relating to 
 prohibiting discrimination against individual 
 participants and beneficiaries based on health status), 
 subject to subsection
            (c) .
        (G) Non-discrimination in health care.--

Section 2706 (42 U.S.C. 300gg-5; relating to non-discrimination 
 in health care).

    (3) Application of a late enrollment penalty for those 
 without continuous coverage.--
        (A) In general.--In the case of an individual who 
 seeks to enroll in health insurance coverage and who, 
 as of the effective date of such enrollment, does not 
 have a continuous period of at least 12 months of 
 creditable coverage, there shall be imposed a late 
 enrollment penalty in the form of an increase in the 
 monthly premiums for coverage of under the plan of 20 
 percent of the monthly premium otherwise determined for 
 each consecutive full 12-month period (ending before 
 such effective date) in which the individual was not 
 enrolled in creditable coverage. Such increase shall 
 apply during a period, to be specified under 
 regulations of the Secretary but in no case longer than 
 3 times the length of the most recent period in which 
 the individual did not have continuous coverage.
        (B) State waiver.--A State may apply to the 
 Secretary for a waiver of the provisions of 
 subparagraph
        (A) and the application of alternative 
 provisions providing incentives for State residents to 
 enroll in creditable coverage and maintain continuous 
 creditable coverage. The Secretary shall approve such 
 waiver if the Secretary determines that the alternative 
 provisions provide similar or greater incentives for 
 such enrollment than the incentives otherwise 
 applicable.

    (4) Coordinating implementation of pre-public law 111-148 
 phsa provisions with public law 111-148 consumer protections.--
        (A) In general.--In applying this subsection, the 
 provisions described in paragraph

    (2) shall be treated 
 as if they were included in title XXVII of the Public 
 Health Service Act, as in effect before the date of 
 enactment of Public Law 111-148, and, with respect to 
 group health plans and health insurance coverage 
 offered in connection with such plans, in part 7 of 
 subtitle B of title I of the Employee Retirement and 
 Income Security Act of 1974 (29 U.S.C. 1181 et seq.), 
 and, with respect to group health plans, in chapter 100 
 of the Internal Revenue Code of 1986 as follows:
            (i) Lifetime limits; dependent coverage.--
 The provisions described in paragraphs

    (2)
        (A) and

    (2)
        (B) shall be treated as included--
            (I) with respect to group health 
 plans (and health insurance coverage 
 offered with respect to such plans), 
 under subpart 2 of part A of title 
 XXVII of the Public Health Service Act 
 (42 U.S.C. 300gg-11 et seq.) and 
 subpart B of part 7 of subtitle B of 
 title I of the Employee Retirement and 
 Income Security Act of 1974 (29 U.S.C. 
 1181 et seq.);
            (II) also with respect to group 
 health plans, under subchapter B of 
 chapter 100 of the Internal Revenue 
 Code of 1986; and
            (III) with respect to individual 
 health insurance coverage, under 
 subpart 2 of part B of title XXVII of 
 the Public Health Service Act (42 
 U.S.C. 300gg-15 et seq.).
            (ii) Remaining provisions.--The provision 
 described in paragraph

    (2) (other than in 
 subparagraph
        (A) or
        (B) of such paragraph) 
 shall be treated as included--
            (I) with respect to group health 
 plans (and health insurance coverage 
 offered with respect to such plans), 
 under subpart 1 of part A of title 
 XXVII of the Public Health Service Act 
 (42 U.S.C. 300gg et seq.) and subpart A 
 of part 7 of subtitle B of title I of 
 the Employee Retirement and Income 
 Security Act of 1974 (29 U.S.C. 1181 et 
 seq.);
            (II) also with respect to group 
 health plans, under subchapter A of 
 chapter 100 of the Internal Revenue 
 Code of 1986; and
            (III) with respect to individual 
 health insurance coverage, under 
 subpart 1 of part B of title XXVII of 
 the Public Health Service Act (42 
 U.S.C. 300gg-41 et seq.).
        (B) Conflicting provisions.--In the case described 
 in paragraph

    (1) where there is a conflict between a 
 provision described in paragraph

    (2) and a provision of 
 law described in paragraph

    (1) , the provision described 
 in paragraph

    (2) shall control and the Secretary, in 
 consultation with the Secretary of the Treasury and the 
 Secretary of Labor, shall establish such rules as may 
 be necessary to carry out this subparagraph.

    (5) Conforming amendments.--
        (A) ERISA.--

Section 715 of the Employee Retirement 
 Income Security Act of 1974 (29 U.S.C. 1185d) is 
 amended--
            (i) in subsection

    (a) , by striking 
 ``subsection

    (b) '' and inserting ``subsections

    (b) and
            (c) ''; and
            (ii) by adding at the end the following new 
 subsection:
 ``
            (c) Additional Exception.--Pursuant to 

section 121 of the Health 
Care Fairness for All Act, the provisions of part A of title XXVII of 
the Public Health Service Act referred to in subsection

    (a) , other than 
those provisions specified in 

section 121

    (a)

    (2) of the Health Care 
Fairness for All Act, shall not apply to plans and coverage described 
in subsection

    (a) , whether or not the plans or coverage are offered 
through an Exchange established by Public Law 111-148.''.
        (B) IRC.--

Section 9815 of the Internal Revenue Code 
 of 1986 is amended--
            (i) in subsection

    (a) , by striking 
 ``subsection

    (b) '' and inserting ``subsections

    (b) and
            (c) ''; and
            (ii) by adding at the end the following new 
 subsection:
 ``
            (c) Additional Exception.--Pursuant to 

section 121 of the Health 
Care Fairness for All Act, the provisions of part A of title XXVII of 
the Public Health Service Act referred to in subsection

    (a) , other than 
those provisions specified in 

section 121

    (a)

    (2) of the Health Care 
Fairness for All Act, shall not apply to plans described in subsection

    (a) .''.

    (b) State Flexibility in Ensuring Orderly Health Insurance Market 
Outside of an Exchange.--

    (1) In general.--With respect to health insurance coverage 
 offered in a State, the State may, in consultation with the 
 Secretary, take such steps, such as limiting the availability 
 of general open enrollment periods, imposing delays in the 
 effectiveness for coverage, permitting differentials in 
 premiums based on age and other factors, as the State 
 determines necessary in order to ensure an orderly market for 
 health insurance coverage in the State that is not offered 
 through an Exchange. Such steps may include the establishment 
 of such initial open enrollment period during which qualified 
 residents may enroll in health insurance coverage without the 
 imposition of any underwriting as the State determines to be 
 appropriate in ensuring initial access to such coverage.

    (2) Flexibility in imposing additional requirements.--
 Subject to paragraph

    (5) , nothing in this section shall be 
 construed as preventing a State from continuing to apply, to 
 health insurance coverage issued in the State, requirements 
 under the provisions of title XXVII of the Public Health 
 Service Act (as amended by subtitles A and C of title I of 
 Public Law 111-148) that are not continued under subsection

    (a) .

    (3) State flexibility with respect to exchanges.--A State 
 may waive such provisions of part II of subtitle D of title I 
 of Public Law 111-148 (42 U.S.C. 18031 et seq.), in relation to 
 the establishment of an Exchange in such State, as the State 
 determines appropriate in order for the State to implement and 
 administer a market-based system for the availability of health 
 insurance coverage throughout the State.

    (4) State default enrollment option.--
        (A) Enrollment, subject to individual opt-out.--
 Subject to subparagraph
            (D) , a State may elect to 
 provide for the enrollment of residents of the State 
 who are uninsured in default health insurance coverage 
 (as defined in subparagraph
        (B) ) and establishing a 
 Roth HSA for such residents who do not have a Roth HSA 
 unless the resident has affirmatively elected not to be 
 so enrolled and not to have such an account, 
 respectively. If a State makes such an election, the 
 State shall permit eligible residents to enroll in such 
 coverage on a continuous basis.
        (B) Default health insurance coverage defined.--In 
 this paragraph, the term ``default health insurance 
 coverage'' means, with respect to a State, health 
 insurance coverage that--
            (i) is a high deductible health plan 
 (within the meaning of 

section 223
            (c) (2) of the 
 Internal Revenue Code of 1986) with 
 prescription drug coverage limited to generic 
 drugs for a limited number of chronic 
 conditions (commonly referred to as tier I 
 pharmacy benefit);
            (ii) meets such requirements as may apply 
 to qualify for the payment of plan premiums 
 from a health savings account under 

section 223 
 of such Code (such as age-related premiums and 
 limitation on imposition of preexisting 
 condition exclusions);
            (iii) has a provider network for covered 
 benefits that is adequate (as determined 
 consistent with guidelines issued by the 
 Secretary) to ensure access to health benefits 
 under such plan;
            (iv) provides for coverage of childhood 
 immunizations without cost sharing requirements 
 to the extent such immunizations have in effect 
 a recommendation from the Advisory Committee on 
 Immunization Practices of the Centers for 
 Disease Control and Prevention with respect to 
 the individual involved; and
            (v) meets such other requirements as the 
 State may specify.
            (C) Roth hsa.--In this paragraph, the term ``Roth 
 HSA'' shall have the meaning given such term by 

section 530A
            (c) of the Internal Revenue Code of 1986, as added 
 by 

section 201

    (a) of this Act.
            (D) Simple process for individuals to opt out.--As 
 a condition of a State providing for the enrollment 
 function described in subparagraph
        (A) , the State must 
 establish an easy-to-use and transparent means by which 
 individuals may elect not to be enrolled in default 
 health insurance coverage or to have a Roth HSA 
 established on the individual's behalf, or both.

    (5) Minimum age variation permitted for premium rates.--
 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 State may not limit the variation by 
 age in such rate with respect to a particular plan or coverage 
 involved by less than a factor of 5 to 1 for adults. The 
 previous sentence shall be treated as if it were included in 
 subpart I of part A of title XXVII of the Public Health Service 
 Act (42 U.S.C. 300gg et seq.).
            (c) Inapplicability of Required Essential Health Benefits.--

    (1) In general.--Notwithstanding any other provision of 
 law, no health benefits plan shall be required by reason of 
 Federal law to comply with the requirements of sections 
 1301

    (a)

    (1)
        (B) and 1302 of Public Law 111-148 (42 U.S.C. 
 18021

    (a)

    (1)
        (B) , 18022).

    (2) State flexibility.--Nothing in this subsection shall be 
 construed as preventing a State from applying, at its option 
 with respect to health insurance coverage offered through an 
 Exchange or otherwise in the State, the requirements referred 
 to in paragraph

    (1) .
            (d) Effective Date; Transition.--

    (1) In general.--Subsection

    (a) ,

    (b) , and
            (c) shall apply 
 to plan years beginning after the date of the enactment of this 
 Act.

    (2) Sunsetting required contribution for aca reinsurance 
 program.--No contribution shall be required under 

section 1341 
 of Public Law 111-148 (42 U.S.C. 18061) from any group health 
 plan or health insurance issuer for portions of plans years 
 occurring in months beginning more than 30 days after the date 
 of the enactment of this Act.

    (e) Secretarial Guidance.--The Secretary of Health and Human 
Services, in coordination with the Secretary of Labor and the Secretary 
of the Treasury, shall provide such guidance as may be necessary for 
the coordinated implementation of this section on a timely basis.

    (f) Transferring Health Plan Records Upon Changing Plans.--

    (1) In general.--In the case of an individual who is 
 covered under health insurance coverage or as a beneficiary or 
 participant in a group health plan (as such terms are defined 
 in 

section 2791 of the Public Health Service Act, 42 U.S.C. 
 300gg-91), if such coverage is ended and the individual obtains 
 other health insurance coverage, group health plan coverage, or 
 other creditable coverage (as defined for purposes of title 
 XXVII of such Act), the issuer of the prior coverage or 
 administrator of the prior plan shall forward information 
 respecting such prior coverage to the issuer of the new 
 coverage or administrator of the new plan or coverage, as the 
 case may be, subject to such rules as the Secretary establishes 
 regarding the right of the beneficiary or participant to object 
 to such forwarding of information.

    (2) Treatment as plan requirement under phsa, erisa, irc.--
 The requirement of paragraph

    (1) shall apply as if it were a 
 section under part A of title XXVII of the Public Health 
 Service Act, including for purposes of applying 

section 715 of 
 the Employee Retirement Income Security Act of 1976 (29 U.S.C. 
 1185d) and 

section 9815 of the Internal Revenue Code of 1986.

    (g) Application of Risk Adjustment.--

    (1) In general.--Any issuer that offers health insurance 
 coverage in the individual market in any of the 50 States or 
 the District of Columbia shall participate in a risk adjustment 
 mechanism under this subsection with respect to any health 
 insurance coverage it so offers in such market, whether or not 
 such coverage is offered through an Exchange.

    (2) Form and design of risk adjustment mechanism.--The 
 Secretary shall, in consultation with the National Association 
 of Insurance Commissioners and other interested parties, 
 develop a mechanism to permit the adjustment of risk among 
 health insurance coverage offered in the individual market 
 throughout the 50 States and the District of Columbia. Such 
 mechanism shall be designed to effect the same type of risk 
 adjustment among such coverage that is applicable to risk 
 adjustment of payments among Medicare Advantage organizations 
 under part C of title XVIII of the Social Security Act (42 
 U.S.C. 1395w-21 et seq.).

    (3) Transition for new coverage.--The mechanism developed 
 under paragraph

    (2) shall provide for transitional protection, 
 over a 3-year period, in the case of health insurance coverage 
 that has not been previously marketed.

    (4) Development of further risk adjustment mechanism.--The 
 Secretary shall request the National Association of Insurance 
 Commissioners to develop a permanent model for adjustment of 
 risk among health insurance issuers with respect to health 
 insurance coverage offered in the individual market, with the 
 intention that such a model would substitute for the mechanism 
 developed under paragraph

    (2) .

    (5) Treatment as plan requirement under phsa, erisa, irc.--
 The requirement of paragraph

    (1) shall apply as if it were a 
 section under part A of title XXVII of the Public Health 
 Service Act (42 U.S.C. 300gg et seq.), including for purposes 
 of applying 

section 715 of the Employee Retirement Income 
 Security Act of 1976 (29 U.S.C. 1185d) and 

section 9815 of the 
 Internal Revenue Code of 1986.

SEC. 122. OFFERING OF BASIC HEALTH INSURANCE; PROTECTION OF ASSETS FROM 
 LIABILITY OR ATTACHMENT OR SEIZURE.

    (a) Requirement for Exchanges.--

    (1) In general.--No tax credit shall be allowable under 
 

section 36B or 36C of the Internal Revenue Code of 1986 for 
 residents of a State unless any Exchange established in the 
 State provides for the offering of basic health insurance in 
 all areas of the State.

    (2) Basic health insurance defined.--In this subsection, 
 the term ``basic health insurance'' means, with respect to a 
 State, such health insurance coverage as the State may specify 
 and includes limited benefit insurance (as defined in 
 subsection

    (b) ).

    (b) Limited Benefit Insurance Defined.--

    (1) In general.--In this title, the term ``limited benefit 
 insurance'' means individual health insurance coverage that, 
 with respect to a plan year, imposes (consistent with paragraph

    (2) ) an annual limit on the amounts that may be payable under 
 the coverage with respect to expenses incurred for items and 
 services furnished in that plan year.

    (2) Specification of annual limit; variation in limit for 
 individual and family coverage.--The Secretary shall specify, 
 from year to year, the annual limit (or range of annual limits) 
 that may be applied under paragraph

    (1) . Such a limit may 
 distinguish between coverage that is only provided for an 
 individual and coverage that is provided also for family 
 members of the individual.
            (c) Protection of Certain Assets in Case of Individuals Covered 
Under Limited Benefit Insurance.--

    (1) In general.--Notwithstanding any other provision of 
 law, if an individual is covered under limited benefit 
 insurance for a plan year and benefits under such insurance 
 have reached the annual limit under such insurance for items 
 and services furnished in the plan year, the individual is not 
 liable for debt incurred and arising from the provision of 
 subsequently furnished items and services during the plan year, 
 regardless of whether benefits are otherwise covered for such 
 items and services under such policy, insofar as the liability 
 attributable to such items and services exceeds--
        (A) the bankruptcy valuation of the individual's 
 property at the time the debt is incurred; reduced by
        (B) such annual limit of benefits under the limited 
 benefit insurance for the plan year.
 Property in the amount so protected from liability shall be 
 exempt and immune from attachment or seizure with respect to 
 any judgment related to such debt.

    (2) Bankruptcy valuation defined.--In this subsection, the 
 term ``bankruptcy valuation'' means, with respect to property 
 of an individual as of a date, the value of the property as of 
 such date as determined as if the individual were a debtor in a 
 bankruptcy case that could have been filed under title 11 of 
 the United States Code and the property could not be exempt 
 under 

section 522 of such title.

    (3) No requirement for providers to furnish subsequent 
 services without ensuring payment.--Except as may be explicitly 
 provided in other law (such as under 

section 1867 of the Social 
 Security Act, 42 U.S.C. 1395dd; popularly known as EMTALA), a 
 health care provider is not required to furnish any items or 
 services to an individual who has exhausted benefits under 
 limited benefit insurance for a plan year without the 
 individual (or another person on the individual's behalf) 
 providing for such advance or guarantee of payment for such 
 items and services as may be arranged between the health care 
 provider and the individual.

SEC. 123. ENSURING ACCESS TO SHORT-TERM LIMITED DURATION INSURANCE.

 

Section 2791

    (b)

    (5) of the Public Health Service Act (42 U.S.C. 
300gg-91

    (b)

    (5) ) is amended by inserting ``(as defined in the rule 
entitled `Short-Term, Limited Duration Insurance' (83 Fed. Reg. 38212 
(August 3, 2018)))'' after ``short-term limited duration insurance''.

SEC. 124. MAKING TELEHEALTH FLEXIBILITIES PERMANENT.

 Notwithstanding any other provision of law, in the case of any 
provision of 

section 1834
            (m) of the Social Security Act (42 U.S.C. 
1395m
            (m) ) that would, absent this section, end on the last day of the 
emergency period described in 

section 1135

    (g)

    (1)
        (B) of the Social 
Security Act (42 U.S.C. 1320b-5

    (a)

    (1)
        (B) ) or December 1, 2026, such 
provision shall be deemed to continue to apply on or after such last 
day or such date (as applicable).

 Subtitle C--Health Insurance Tax Benefit

SEC. 131. HEALTH INSURANCE TAX BENEFIT.

    (a) In General.--Subpart C of part IV of subchapter A of chapter 1 
of the Internal Revenue Code of 1986 is amended by inserting after 

section 36B the following new section:

``

SEC. 36C. HEALTH INSURANCE TAX CREDIT.

 ``

    (a) In General.--In the case of an individual who is a qualified 
resident, there shall be allowed as a credit against the tax imposed by 
this subtitle for any taxable year an amount equal to the health credit 
amount of the taxpayer for the taxable year.
 ``

    (b) Health Credit Amount.--For purposes of this section--
 ``

    (1) In general.--The term `health credit amount' means 
 the sum of the amounts determined under paragraph

    (2) with 
 respect to all months of the taxpayer for the taxable year.
 ``

    (2) Monthly credit amount.--
 ``
        (A) In general.--Subject to paragraph

    (4) , the 
 amount determined under this paragraph with respect to 
 any month shall be an amount equal to the sum of--
 ``
            (i) \1/12\ of $4,000 in the case of any 
 month the first day of which the taxpayer is a 
 qualified resident and is covered by creditable 
 coverage (twice such amount in the case of a 
 joint return if both spouses are so covered by 
 creditable coverage and are qualified 
 residents), plus
 ``
            (ii) \1/12\ of an amount equal to $2,000 
 multiplied by the number of qualifying children 
 (within the meaning of 

section 152) who are 
 qualified residents and--
 ``
            (I) for whom the taxpayer is 
 allowed a deduction under 

section 151 
 for the taxable year in which such 
 month ends, and
 ``
            (II) who are covered by 
 creditable coverage on the first day of 
 such month.
 ``
        (B) Carryforward of monthly credit amount in case 
 credit amount exceeds hsa contributions and premium 
 payments.--In the case of any month for which the 
 credit amount determined with respect to the taxpayer 
 under subparagraph
        (A) exceeds the limitation amount 
 determined with respect to the taxpayer for such month 
 under paragraph

    (3) , such excess may be carried forward 
 to any subsequent month during the taxable year for 
 purposes of determining the credit amount for such 
 month under this paragraph.
 ``

    (3) Monthly limitation.--
 ``
        (A) In general.--The amount determined under 
 paragraph

    (2) for any month of the taxpayer shall not 
 exceed the sum of--
 ``
            (i) the amounts contributed to a health 
 savings account of the taxpayer for such month, 
 plus
 ``
            (ii) the premiums paid by the taxpayer 
 for creditable coverage.
 ``
        (B) Carryforward of monthly limitation in case 
 hsa contributions and premium payments exceed monthly 
 credit amount.--In the case of any month for which the 
 amount determined with respect to the taxpayer under 
 subparagraph
        (A) exceeds the credit amount determined 
 with respect to the taxpayer for such month under 
 paragraph

    (2) , such excess may be carried forward to 
 any subsequent month during the taxable year for 
 purposes of determining the limitation under 
 subparagraph
        (A) .
 ``

    (4) Adjustment for limited benefit insurance.--In the 
 case of a taxpayer whose only health insurance coverage for a 
 month is limited benefit insurance (as defined in 

section 123

    (b) of the Health Care Fairness for All Act), the amount 
 determined under paragraph

    (2) shall be decreased by such 
 proportion as the Secretary, in consultation with the Secretary 
 of Health and Human Services, determines appropriate, taking 
 into account the ratio of the actuarial value of such limited 
 benefit insurance to the average actuarial value of health 
 insurance coverage that is not limited benefit insurance.
 ``
            (c) Coordination With Employer-Provided Health Insurance Tax 
Subsidy.--
 ``

    (1) Credit limited by employer-provided health insurance 
 tax subsidy.--The credit allowed under this section for any 
 taxable year shall not exceed an amount equal to the excess (if 
 any) of--
 ``
        (A) the maximum credit which would be allowed for 
 all months of the taxpayer during the taxable year 
 (determined under subsection

    (b)

    (2) and without regard 
 to this subsection, the limitation under subsection

    (b)

    (3) , and any reduction under subsection
            (d) (1) ), 
 over
 ``
        (B) the taxpayer's employer-provided health 
 insurance tax subsidy for the taxable year.
 ``

    (2) Excess employer-provided health insurance tax subsidy 
 included in gross income.--In the case of a taxpayer for whom 
 subparagraph
        (B) of paragraph

    (1) exceeds subparagraph
        (A) of 
 such paragraph for the taxable year, the tax imposed by this 
 chapter shall be increased for such taxable year by the amount 
 of such excess.
 ``

    (3) Employer-provided health insurance tax subsidy.--For 
 purposes of this subsection--
 ``
        (A) In general.--The term `employer-provided 
 health insurance tax subsidy' means, with respect to 
 any taxpayer for a taxable year, the sum of--
 ``
            (i) the Federal income tax subsidy of the 
 taxpayer for the taxable year, plus
 ``
            (ii) the Federal payroll tax subsidy of 
 the taxpayer for the taxable year.
 ``
        (B) Federal income tax subsidy.--The term 
 `Federal income tax subsidy' means, with respect to any 
 taxpayer for the taxable year, the excess (if any) of--
 ``
            (i) the amount of tax that would have 
 been imposed by this chapter for the taxable 
 year had such tax been determined without 
 regard to this section and by including amounts 
 otherwise excluded from gross income which were 
 paid by or on behalf of the taxpayer for 
 employer-provided insurance that constitutes 
 medical care, over
 ``
            (ii) the amount of tax imposed by this 
 chapter for the taxable year (determined 
 without regard to this section).
 ``
            (C) Federal payroll tax subsidy.--The term 
 `Federal payroll tax subsidy' means, with respect to 
 any taxpayer for the taxable year, the excess (if any) 
 of--
 ``
            (i) the sum of--
 ``
            (I) the amount of tax that would 
 have been imposed by chapter 21 with 
 respect to any wages of the taxpayer 
 paid during the taxable year had such 
 tax been determined by including 
 amounts otherwise excluded from wages 
 which were paid by or on behalf of the 
 taxpayer during the taxable year for 
 employer-provided insurance that 
 constitutes medical care, plus
 ``
            (II) the amount of tax that would 
 have been imposed by chapter 2 on any 
 self-employment income of the taxpayer 
 for such taxable year had self-
 employment income been determined 
 without regard to any deduction from 
 gross income for amounts paid for 
 insurance which constitutes medical 
 care for the taxpayer, the taxpayer's 
 spouse, and any qualifying children 
 (within the meaning of 

section 152) for 
 whom the taxpayer is allowed a 
 deduction under 

section 151 for the 
 taxable year, over
 ``
            (ii) the amount of tax imposed with 
 respect to the taxpayer during such taxable 
 year under chapter 21 and for such taxable year 
 under chapter 2.
 ``
            (d) Reconciliation of Credit and Advance Credit.--
 ``

    (1) In general.--The amount of the credit allowed under 
 this section for any taxable year (after the application of 
 subsections

    (b) and
            (c) ) shall be reduced (but not below zero) 
 by the amount of any advance payment of such credit under 
 subsection

    (e)

    (1) .
 ``

    (2) Excess advance payments.--
 ``
        (A) In general.--If the advance payments to a 
 taxpayer under subsection

    (e)

    (1) for a taxable year 
 exceed the credit allowed by this section (determined 
 without regard to paragraph

    (1) ), the tax imposed by 
 this chapter for the taxable year shall be increased by 
 the amount of such excess.
 ``
        (B) Limitation on increase.--In the case of a 
 taxpayer whose household income is less than 400 
 percent of the poverty line for the size of the family 
 involved for the taxable year, the amount of the 
 increase under subparagraph
        (A) shall in no event 
 exceed an amount equal to the applicable percentage of 
 the amount of the credit allowed under this section for 
 the taxable year, determined in accordance with the 
 following table (one-half of such amount so determined 
 in the case of a taxpayer whose tax is determined under 
 

section 1
            (c) for the taxable year):

------------------------------------------------------------------------
``If the household income (expressed as a percent The applicable
 of poverty line) is: percentage is:
------------------------------------------------------------------------
Less than 200%.................................... 30%
At least 200% but less than 300%.................. 50%
At least 300% but less than 400%.................. 80%
------------------------------------------------------------------------

 ``

    (e) Special Rules.--For purpose of this section--
 ``

    (1) Advance payment program.--
 ``
        (A) In general.--The Secretary of the Treasury, 
 in consultation with the Secretary of Health and Human 
 Services, shall establish a program--
 ``
            (i) to make advance determinations with 
 respect to the eligibility of individuals for 
 the credit allowed under this section, and
 ``
            (ii) to make advance payments of the 
 credit allowed under this section, at the 
 election of any such individual so eligible, 
 directly to the health savings account of any 
 such individual, or, as a subsidy to the cost 
 of health insurance coverage provided to any 
 such individual, to the health insurance issuer 
 providing such coverage or the person that 
 administers the plan benefits with respect to 
 such coverage.
 ``
        (B) Program requirements.--Such program shall be 
 established under rules similar to the rules of 

section 1412 of Public Law 111-148, as in effect on the day 
 before the date of the enactment of this section, 
 except that advance determinations and advance payments 
 shall be made on request of the individual with respect 
 to whom the determination is to be made.
 ``

    (2) Information requirements.--
 ``
        (A) In general.--Each person providing health 
 insurance coverage which constitutes medical care, and 
 each trustee of a health savings account, shall provide 
 the following information to the Secretary and to the 
 taxpayer with respect to such coverage or such account:
 ``
            (i) The total premium for the coverage 
 without regard to the credit under this 
 section.
 ``
            (ii) The aggregate amount of any advance 
 payment of such credit made with respect to 
 such coverage or to such account.
 ``
            (iii) The name, address, age, and TIN of 
 the primary insured or account holder (as the 
 case may be) and the name, age, and TIN of each 
 other individual obtaining coverage under such 
 policy of insurance.
 ``
            (iv) Any information provided to such 
 person necessary to determine eligibility for, 
 and the amount of, such credit.
 ``
            (v) Information necessary to determine 
 whether a taxpayer has received excess advance 
 payments.
 ``
        (B) Exception.--Subparagraph
        (A) shall not apply 
 to any coverage with respect to which reporting under 
 

section 6051 is required.
 ``

    (3) Indexing.--
 ``
        (A) In general.--In the case of any calendar year 
 beginning after 2026, each of the dollar amounts in 
 subsection

    (b)

    (2) and in the table contained under 
 subsection
            (d) (2)
        (B) shall be equal to such dollar 
 amount multiplied by the ratio of--
 ``
            (i) the current dollar gross domestic 
 product (as determined based on the third 
 estimate of the Bureau of Economic Analysis of 
 the Department of Commerce for the second 
 quarter of the previous year), to
 ``
            (ii) the current dollar gross domestic 
 product (as so determined) for the second 
 quarter of 2025.
 ``
        (B) Rounding.--If the amount of any change under 
 subparagraph
        (A) is not a multiple of $50, such change 
 shall be rounded to the next lowest multiple of $50.
 ``

    (f) 

=== Definitions. ===
-For purposes of this section--
 ``

    (1) Creditable coverage.--
 ``
        (A) In general.--The term `creditable coverage' 
 has the meaning given such term for purposes of title 
 XXVII of the Public Health Service Act. Such term shall 
 not include coverage under any health plan that 
 includes coverage for abortions (other than any 
 abortion described in subparagraph
        (B) ).
 ``
        (B) Exception.--The second sentence of 
 subparagraph
        (A) shall not apply to an abortion--
 ``
            (i) if the pregnancy is the result of an 
 act of rape or incest, or
 ``
            (ii) in the case where a woman suffers 
 from a physical disorder, physical injury, or 
 physical illness that would, as certified by a 
 physician, place the woman in danger of death 
 unless an abortion is performed, including a 
 life-endangering physical condition caused by 
 or arising from the pregnancy itself.
 ``
            (C) Separate abortion coverage or plan allowed.--
 ``
            (i) Option to purchase separate coverage 
 or plan.--Nothing in subparagraph
        (A) shall be 
 construed as prohibiting any individual from 
 purchasing separate coverage for abortions 
 described in such subparagraph, or a health 
 plan that includes such abortions, so long as 
 no credit is allowed under this section with 
 respect to the premiums for such coverage or 
 plan.
 ``
            (ii) Option to offer coverage or plan.--
 Nothing in subparagraph
        (A) shall restrict any 
 non-Federal health insurance issuer offering a 
 health plan from offering separate coverage for 
 abortions described in such subparagraph, or a 
 plan that includes such abortions, so long as 
 premiums for such separate coverage or plan are 
 not paid for with any amount attributable to 
 the credit allowed under this section (or the 
 amount of any advance payment of the credit).
 ``

    (2) Qualified resident.--The term `qualified resident' 
 means an individual who is a citizen or national of the United 
 States or otherwise lawfully residing in the United States 
 under color of law.''.

    (b) Disqualification From Exchange Plan Subsidies for Individual 
Once They Elect Tax Benefits.--

Section 36B
            (c) (1) of such Code is 
amended by adding at the end the following new subparagraph:
 ``
        (F) Denial of credit for those electing universal 
 credit.--In the case of an individual who is allowed a 
 credit under 

section 36C for any taxable year, no 
 credit shall be allowed under this section to such 
 individual for such taxable year or any subsequent 
 taxable year.''.
            (c) Guidance.--The Secretary of the Treasury shall issue such 
guidance as is necessary--

    (1) to assist employees and employers in adjusting Federal 
 income tax withholding to take into account the health 
 insurance tax credit under 

section 36C of the Internal Revenue 
 Code of 1986 (and any advance payment thereof), and

    (2) to require employers to report to each employee with 
 respect to periods not longer than quarterly the employer-
 provided health insurance tax subsidy (as defined in 

section 36C
            (c) (2) of such Code) with respect to such employee for such 
 period.
            (d) Transfers to Federal Old-Age and Survivors Insurance Trust 
Fund.--With respect to each individual for whom tax is increased under 

section 36C
            (c) (2) , there are hereby appropriated to the Federal Old Age 
and Survivors Trust Fund and the Disability Insurance Trust Fund 
established under 

section 201 of the Social Security Act amounts equal 
to the amount which bears the same ratio to the amount of such increase 
as--

    (1) the Federal payroll tax subsidy (as defined in 

section 36C
            (c) (3) ) of such individual for the taxable year, bears to

    (2) the employer-provided health insurance tax subsidy (as 
 defined in such section) of the individual for the taxable 
 year.

    (e) Clerical Amendment.--The table of sections for subpart C of 
part IV of subchapter A of chapter 1 of the Internal Revenue Code of 
1986 is amended by inserting after the item relating to 

section 36B the 
following new item:

``

Sec. 36C. Health insurance tax credit.''.

    (f) Effective Date.--The amendments made by this section shall 
apply to taxable years beginning after December 31, 2025.

SEC. 132. APPLICATION OF PORTION OF UNUSED TAX CREDITS BY STATES FOR 
 INDIGENT HEALTH CARE.

    (a) Computation of Unused Credits.--The Secretary, in consultation 
with the Secretary of the Treasury, shall calculate for each State for 
each year, beginning with 2026, using the most recent data available--

    (1) the maximum aggregate amount of credits under 

section 36C of the Internal Revenue Code of 1986 that would have been 
 allowed for the year for qualified residents of the State for 
 taxable years ending in the year if all eligible qualified 
 residents had qualified for such credits;

    (2) the aggregate amount of credits under such section that 
 were allowed for taxable years ending in the year by qualified 
 residents of such State; and

    (3) 25 percent of the amount by which--
        (A) the amount determined under paragraph

    (1) with 
 respect to qualified residents of the State for such 
 year; exceeds
        (B) the amount determined under paragraph

    (2) for 
 such State for that year.

    (b) Appropriation.--For the purpose of making grants to States 
under this section, there is hereby appropriated to the Secretary, out 
of any funds in the Treasury not otherwise appropriated, for each year 
(beginning with 2025) an amount equivalent to the amount determined 
under subsection

    (a)

    (3) for all States under subsection

    (a) for the 
year in which such fiscal year ends, subject to adjustment under 
subsection
            (d) (2) .
            (c) Grants to States for Indigent Assistance.--

    (1) Application.--A State may file with the Secretary (in a 
 form and manner specified by the Secretary) an application to 
 provide assistance in furnishing health services to indigent 
 individuals residing in the State. Such application shall 
 demonstrate the manner in which such assistance is furnished in 
 an equitable manner to individuals residing in all parts of the 
 State.

    (2) Amount of funds.--From the funds appropriated under 
 subsection

    (b) for a year, the amount of funds paid to any 
 State in any year under this section with an application filed 
 in accordance with paragraph

    (1) is equal to an amount 
 specified in the application, but not to exceed the amount 
 computed under subsection

    (a)

    (3) for the State and the year.

    (3) Use of funds.--Funds paid to a State under this 
 subsection may be used only to assist in the furnishing of 
 health services to uninsured individuals residing in the State 
 or for purposes of increasing the payment adjustments made 
 under sections 1886
            (d) (5)
        (F) and 1923 of the Social Security 
 Act (42 U.S.C. 1395ww
            (d) (5)
        (F) , 1396r-4) to hospitals that 
 serve a disproportionate share of such individuals in the 
 State.
            (d) Initial Estimate; Final Calculation and Reconciliation.--

    (1) Use of estimates.--The calculations under subsection

    (a) for a year shall initially be estimated before the 
 beginning of the year. Payments under this section to a State 
 for a year shall be made, subject to reconciliation under 
 paragraph

    (2) , based on the amount so estimated.

    (2) Reconciliation based on final calculation.--The 
 calculations under subsection

    (a) for a year shall also be made 
 after the end of the year. Insofar as the amount calculated 
 under this paragraph for subsection

    (a)

    (3) for a State for a 
 year exceeds (or is less than) by a material amount from the 
 amount for subsection

    (a)

    (3) estimated and applied for the 
 State and year under paragraph

    (1) , the amount calculated under 
 subsection

    (a)

    (3) for the State for the 2nd year beginning 
 after such year, shall be reduced or increased, respectively by 
 the amount of such excess or deficit.

SEC. 133. MEDICAID OPTION OF ENROLLMENT UNDER PRIVATE PLAN AND 
 CONTRIBUTION TO AN HSA.

    (a) In General.--Notwithstanding any other provision of law, a 
State plan under title XIX of the Social Security Act (42 U.S.C. 1396 
et seq.) may make available to an individual, who is entitled to 
medical assistance for a full range of acute care items and services 
under such title and at the individual's option, instead of the medical 
assistance otherwise provided, medical assistance consisting of 
coverage under a health plan that qualifies for a tax credit under 

section 36C of the Internal Revenue Code of 1986, but only if the State 
provides for the individual medical assistance, in the form of a 
deposit into a health savings account for the individual, an amount 
equivalent to the amount by which the amount of tax credit for the 
individual under such section exceeds the cost of coverage of the 
individual under the plan.

    (b) FFP Treatment.--The payments by a State described in subsection

    (a) for coverage under a health plan and for deposit into a health 
savings account shall be treated as medical assistance for purposes of 

section 1903 of the Social Security Act (42 U.S.C. 1396b) and subject 
to Federal financial participating, including the application of State 
matching payments, in the same manner as other medical assistance 
furnished under title XIX of such Act, except that such amount shall be 
reduced by the amount of any health insurance credits provided under 

section 36C of the Internal Revenue Code of 1986 with respect to such 
coverage or deposit.

SEC. 134. REPEAL OF REPORTING REQUIREMENTS RELATING TO EMPLOYEE HEALTH 
 INSURANCE PREMIUMS AND HEALTH PLAN BENEFITS.

    (a) Reporting Requirements.--

Section 6051

    (a) of the Internal 
Revenue Code of 1986 is amended by striking paragraph

    (14) and by 
redesignating paragraphs

    (15) ,

    (16) , and

    (17) as paragraphs

    (14) ,

    (15) , 
and

    (16) , respectively.

    (b) Effective Dates.--The amendment made by this section shall 
apply to calendar years beginning after December 31, 2018.

SEC. 135. REPORT.

 For each year beginning on or after the date of the enactment of 
this Act, the Secretary of Health and Human Services shall submit to 
Congress a report on the extent to which health insurance tax credits 
allowed under 

section 36C of the Internal Revenue Code of 1986, as 
added by this Act, are sufficient to cover the cost of health insurance 
coverage for individuals electing to purchase such coverage.

 Subtitle D--Medicare Reforms

SEC. 141. PHYSICIAN-OWNED HOSPITALS.

 The amendments made by 

section 6001 of Public Law 111-148 are 
repealed and the provisions amended by such section are restored as if 
such amendments had never occurred.

SEC. 142. PROHIBITING THE USE OF AN INPATIENT-ONLY LIST IN DESIGNATING 
 HOSPITAL OUTPATIENT SERVICES UNDER THE MEDICARE PROGRAM.

 

Section 1833

    (t)

    (1) of the Social Security Act (42 U.S.C. 
1395l

    (t)

    (1) ) is amended by adding at the end the following new 
subparagraph:
 ``
            (C) Prohibition on use of an inpatient-only 
 list.--In designating outpatient hospital services 
 pursuant to subparagraph
        (B)
            (i) , the Secretary may not 
 refuse to so designate such a service based solely on 
 the Secretary's determination that such service may 
 only be safely furnished in an inpatient setting.''.

SEC. 143. PROMOTING MEDICARE SITE-NEUTRAL PAYMENTS.

    (a) Removing Certain Exceptions to the Definition of an Off-Campus 
Outpatient Department of a Provider.--

    (1) In general.--

Section 1833

    (t)

    (21)
        (B) of the Social 
 Security Act (42 U.S.C. 1395l

    (t)

    (21)
        (B) ) is amended to read as 
 follows:
 ``
        (B) Off-campus outpatient department of a 
 provider.--For purposes of paragraph

    (1)
        (B)
            (v) and this 
 paragraph, the term `off-campus outpatient department 
 of a provider' means a department of a provider (as 
 defined in 

section 413.65

    (a)

    (2) of title 42 of the Code 
 of Federal Regulations, as in effect as of the date of 
 the enactment of the Bipartisan Budget Act of 2015) 
 that is not located--
 ``
            (i) on the campus (as defined in such 
 

section 413.65

    (a)

    (2) ) of such provider; or
 ``
            (ii) within the distance (described in 
 such definition of campus) from a remote 
 location of a hospital facility (as defined in 
 such 

section 413.65

    (a)

    (2) ).''.

    (2) Effective date.--The amendment made by paragraph

    (1) shall apply with respect to items and services furnished on or 
 after January 1, 2026.

    (3) Removing site-neutral exception for off-campus 
 emergency departments.--

Section 1833

    (t)

    (21)
        (A) of the Social 
 Security Act (42 U.S.C. 1395l

    (t)

    (21)
        (A) ) is amended by 
 inserting ``before January 1, 2026'' after ``furnished''.

    (4) Clarifying secretarial authority to promote site-
 neutral payments.--

Section 1833

    (t)

    (2)
        (F) of the Social Security 
 Act (42 U.S.C. 1395l

    (t)

    (2)
        (F) ) is amended by adding at the end 
 the following new sentence: ``Such method may include actions 
 determined appropriate by the Secretary to promote site-neutral 
 payment policies to reduce expenditures attributable to items 
 and services furnished under this part, such as actions to 
 prevent hospitals from billing for items and services furnished 
 at an off-campus outpatient department of a provider as if such 
 items and services were furnished at such hospital.''.

    (b) Ensuring Separate NPIs for Off-Campus Outpatient Departments of 
a Provider.--

    (1) In general.--

Section 1173

    (b) of the Social Security Act 
 (42 U.S.C. 1320d-2

    (b) ) is amended by adding at the end the 
 following new paragraph:
 ``

    (3) Ensuring separate npis for off-campus outpatient 
 departments of a provider.--The standards specified under 
 paragraph

    (1) shall ensure that, not later than January 1, 
 2026, each off-campus outpatient department of a provider (as 
 defined in 

section 1833

    (t)

    (21)
        (B) ) is assigned a separate 
 unique health identifier from such provider.''.

    (2) Treatment of certain departments as subparts of a 
 hospital.--Not later than January 1, 2026, the Secretary of 
 Health and Human Services shall revise sections 162.408 and 
 162.410 of title 45, Code of Federal Regulations, to ensure 
 that each off-campus outpatient department of a provider (as 
 defined in 

section 1833

    (t)

    (21)
        (B) of the Social Security Act 
 (42 U.S.C. 1395l

    (t)

    (21)
        (B) )) is treated as a subpart (as 
 described in such sections) of such provider and assigned a 
 unique health identifier pursuant to 

section 1173

    (b)

    (3) of such 
 Act (as added by paragraph

    (1) ).

SEC. 144. MEDICARE ADVANTAGE CONTRIBUTIONS TO ROTH HSAS FOR CHRONICALLY 
 ILL ENROLLEES.

 

Section 1852

    (a)

    (3)
            (D) 
            (ii) 
            (I) of the Social Security Act (42 U.S.C. 
1395w-22

    (a)

    (3)
            (D) 
            (ii) 
            (I) ) is amended--

    (1) by striking ``are supplemental benefits'' and inserting 
 the following: ``are
 ``

    (aa) supplemental 
 benefits'';

    (2) by striking the period at the end of item

    (aa) , as 
 inserted by paragraph

    (1) , and inserting ``; and''; and

    (3) by adding at the end the following new item:
 ``

    (bb) deposits made to a 
 Roth HSA (as described in 
 

section 530A of the Internal 
 Revenue Code of 1986) of a 
 chronically ill enrollee.''.

SEC. 145. EXTENDING ACUTE HOSPITAL CARE AT HOME WAIVER FLEXIBILITIES.

 

Section 1812 of the Social Security Act (42 U.S.C. 1395d) is 
amended--

    (1) by redesignating subsection

    (g) as subsection

    (h) ; and

    (2) by inserting after subsection

    (f) the following new 
 subsection:
 ``

    (g)

    (1) Beginning on the date of the enactment of this subsection, 
inpatient hospital services or inpatient critical access hospital 
services described in subsection

    (a)

    (1) shall include services 
(including telehealth services as defined in 

section 1834
            (m) ) furnished 
to an individual by an Acute Hospital Care at Home Program (as defined 
by the Secretary).
 ``

    (2) With respect to telehealth services furnished by an Acute 
Hospital Care at Home Program described in paragraph

    (1) , the 
requirements described in 

section 1834
            (m) (4)
            (C) 
            (i) shall not apply and 
the sites described in 

section 1834
            (m) (4)
            (C) 
            (ii) shall include the home 
or temporary residence of the individual.
 ``

    (3) With respect to services furnished in the home or temporary 
residence of the individual through an Acute Hospital Care at Home 
Program, the requirement for providing 24-hour nursing services and 
immediate availability of nursing services as conditions of 
participation shall also be satisfied by providing virtual access to 
nurses, advanced practice providers, or physicians 24 hours per day.
 ``

    (4) With respect to services furnished in the home or temporary 
residence of the individual through an Acute Hospital Care at Home 
Program, life safety code requirements shall be deemed satisfied for 
homes or temporary residences determined to be safe and appropriate for 
this care by the Acute Hospital Care at Home Program.
 ``

    (5) Not later than 12 months after the date of the enactment of 
this subsection, the Secretary shall issue regulations establishing 
health and safety requirements for Acute Hospital Care at Home 
Programs.''.

 TITLE II--IMPROVING HEALTH SAVINGS ACCOUNTS TO PROMOTE ACCOUNTABILITY

SEC. 201. TRANSITION TO NON-DEDUCTIBLE HSAS.

    (a) Non-Deductible HSAs.--Subchapter F of chapter 1 of the Internal 
Revenue Code of 1986 is amended by adding at the end the following new 
part:

 ``PART IX--ROTH HEALTH SAVINGS ACCOUNTS

``

Sec. 530A. Roth HSAs.

``

SEC. 530A. ROTH HSAS.

 ``

    (a) In General.--A Roth HSA shall be exempt from taxation under 
this subtitle. Notwithstanding the preceding sentence, the Roth HSA 
shall be subject to the taxes imposed by 

section 511 (relating to 
imposition of tax on unrelated business income of charitable 
organizations). No deduction shall be allowed for any contribution to a 
Roth HSA.
 ``

    (b) Dollar Limitation.--
 ``

    (1) In general.--The aggregate amount of contributions 
 for any taxable year to all Roth HSAs maintained for the 
 benefit of an individual shall not exceed the sum of the 
 monthly limitations for any month during such taxable year that 
 the individual is an eligible individual.
 ``

    (2) Monthly limitation.--The monthly limitation for any 
 month is \1/12\ of--
 ``
        (A) in the case of an eligible individual who has 
 self-only creditable coverage as of the first day of 
 such month, $5,000, and
 ``
        (B) in the case of an eligible individual who has 
 family creditable coverage as of the first day of such 
 month, the amount in effect under subparagraph
        (A) for 
 the taxable year multiplied by the number of 
 individuals (including the eligible individual) covered 
 under such family creditable coverage as of such day.
 ``

    (3) Additional contributions for individuals 55 or 
 older.--In the case of an individual who has attained age 55 
 before the close of the taxable year, the applicable limitation 
 under subparagraphs
        (A) and
        (B) of paragraph

    (2) shall be 
 increased by $1,000.
 ``

    (4) Coordination with other contributions.--The 
 limitation which would (but for this paragraph) apply under 
 this subsection to an individual for any taxable year shall be 
 reduced (but not below zero) by the sum of--
 ``
        (A) the aggregate amount paid for such taxable 
 year to Archer MSAs of such individual,
 ``
        (B) the aggregate amount contributed to Roth HSAs 
 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
 ``
            (C) the aggregate amount contributed to Roth HSAs 
 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) ).
 Subparagraph
        (A) shall not apply with respect to any individual 
 to whom paragraph

    (5) applies.
 ``

    (5) Special rule for married individuals.--In the case of 
 individuals who are married to each other, if either spouse has 
 family coverage--
 ``
        (A) both spouses shall be treated as having only 
 such family coverage (and if such spouses each have 
 family coverage under different plans, as having the 
 family coverage with the lowest annual deductible), and
 ``
        (B) the limitation under paragraph

    (1) (after the 
 application of subparagraph
        (A) and without regard to 
 any additional contribution amount under paragraph

    (3) )--
 ``
            (i) shall be reduced by the aggregate 
 amount paid to Archer MSAs of such spouses for 
 the taxable year, and
 ``
            (ii) after such reduction, shall be 
 divided equally between them unless they agree 
 on a different division.
 ``

    (6) Denial of deduction to dependents.--No contribution 
 may be made to a Roth HSA under this section by 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.
 ``

    (7) 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 high deductible health plan in 
 which the individual was enrolled for the last 
 month of such taxable year.
 ``
        (B) Failure to maintain creditable 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 Roth HSA 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) Roth HSA.--For purposes of this section--
 ``

    (1) In general.--The term `Roth HSA' means a trust 
 created or organized in the United States as a Roth HSA 
 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 sum 
 of--
 ``
            (I) the dollar amount in effect 
 under subsection

    (b)

    (2)
        (B) , and
 ``
            (II) the dollar amount in effect 
 under subsection

    (b)

    (3) .
 ``
        (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) Qualified medical expenses.--For purposes of this 
 section--
 ``
        (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.
 ``
        (B) Limitation on health insurance purchased from 
 account.--Such term shall not include any payment for 
 health benefits coverage that is not creditable 
 coverage (as defined in 

section 36C).
 ``
            (C) Exceptions.--Subparagraph
        (B) 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).
 ``

    (3) Account beneficiary.--The term `account beneficiary' 
 means the individual on whose behalf the Roth HSA was 
 established.
 ``

    (4) Certain rules to apply.--Rules similar to the 
 following rules shall apply for purposes of this section:
 ``
        (A) Section 219

    (f)

    (3) (relating to time when 
 contributions deemed made).
 ``
        (B) Except as provided in 

section 106
            (d) , 

section 219

    (f)

    (5) (relating to employer payments).
 ``
            (C) Section 408

    (g) (relating to community 
 property laws).
 ``
            (D) Section 408

    (h) (relating to custodial 
 accounts).
 ``
            (d) Eligible Individual; Creditable Coverage.--For purposes of 
this section--
 ``

    (1) Eligible individual.--
 ``
        (A) In general.--The term `eligible individual' 
 means, with respect to any month, any individual if 
 such individual is covered under creditable coverage as 
 of the first day of such month.
 ``
        (B) Exception.--An individual shall not be 
 treated as an eligible individual for any month for 
 which a credit is determined with respect to the 
 individual under 

section 36B.
 ``

    (2) Creditable coverage.--The term `creditable coverage' 
 shall have the meaning given such term in 

section 36C

    (f) .
 ``

    (e) Tax Treatment of Distributions.--
 ``

    (1) Amounts used for qualified medical expenses.--Any 
 amount paid or distributed out of a Roth HSA 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 Roth HSA 
 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 Roth HSA of an 
 individual, paragraph

    (2) shall not apply to 
 distributions from the Roth HSAs 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 
 exceeds the contribution limitation with respect to the 
 individual for the taxable year.
 ``

    (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 Roth 
 HSA of such beneficiary which is includible in gross 
 income under paragraph

    (2) shall be increased by 10 
 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 (as defined in 

section 223) or a Roth HSA to 
 the account beneficiary to the extent the amount 
 received is paid into a Roth HSA 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 or a Roth 
 HSA 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 or Roth HSA which was not 
 includible in the individual's gross income because of 
 the application of this paragraph.
 ``

    (6) Transfer of account incident to divorce.--The 
 transfer of an individual's interest in a Roth HSA to an 
 individual's spouse or former spouse under a divorce or 
 separation instrument described in subparagraph
        (A) of 

section 71

    (b)

    (2) 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 Roth HSA with respect to which such spouse is the 
 account beneficiary.
 ``

    (7) Treatment after death of account beneficiary.--If an 
 individual acquires an account beneficiary's interest in a 
 health savings account by reason of the death of the account 
 beneficiary, such health savings account shall be treated as if 
 the individual were the account beneficiary.
 ``

    (f) Cost-of-Living Adjustment.--
 ``

    (1) In general.--In the case of any calendar year 
 beginning after 2026, the $5,000 dollar amount in subsection

    (b)

    (2) 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, 
 determined--
 ``
            (i) by substituting `calendar year 2023' 
 for `calendar year 1992' in subparagraph
        (B) thereof, and
 ``
            (ii) by substituting `CPI medical care 
 component' for `CPI'.
 ``

    (2) CPI medical care component.--For purposes of this 
 paragraph, the term `CPI medical care component' means the 
 medical care component for the Consumer Price Index for All 
 Urban Consumers published by the Department of Labor.
 ``

    (3) Rounding.--If the amount of any increase under the 
 preceding sentence is not a multiple of $50, such increase 
 shall be rounded to the next lowest multiple of $50.
 ``

    (g) Reports.--The Secretary may require--
 ``

    (1) the trustee of a Roth HSA 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 creditable 
 coverage to make such reports to the Secretary and to the 
 account beneficiary with respect to such plan as the Secretary 
 determines appropriate.
The reports required by this subsection shall be filed at such time and 
in such manner and furnished to such individuals at such time and in 
such manner as may be required by the Secretary.
 ``

    (h) Cross-Reference.--For contributions from Medicare Advantage 
plans of chronically ill enrollees, see 

section 1852

    (a)

    (3)
            (D) 
            (ii) 
            (I) of 
the Social Security Act.''.

    (b) Limit on Contributions to Deductible Health Savings Accounts.--

Section 223 of such Code is amended by adding at the end the following 
new subsection:
 ``
            (i) Limited Contributions After 2025.--
 ``

    (1) In general.--No contribution may be accepted by a 
 health savings account after December 31, 2025.
 ``

    (2) Exceptions.--Paragraph

    (1) shall not apply--
 ``
        (A) in the case of a rollover contribution 
 described in subsection

    (f)

    (5) or 

section 220

    (f)

    (5) , or
 ``
        (B) in the case of a month for which an 
 individual is covered by insurance that constitutes 
 medical care and that is provided by an employer with 
 respect to which an election is in effect for such 
 month under 

section 131

    (b) of the Health Care Fairness 
 for All Act.''.
            (c) Clerical Amendment.--The table of parts for subchapter F of 
chapter 1 of such Code is amended by adding at the end the following 
new item:

 ``Part IX. Roth Health Savings Accounts''.
            (d) Effective Date.--The amendments made by this section shall 
apply to taxable years beginning after December 31, 2025.

SEC. 202. ELIMINATION OF MEDICAL EXPENSE DEDUCTION.

 

Section 213 of the Internal Revenue Code of 1986 is amended by 
adding at the end the following new subsection:
 ``

    (f) Termination.--Except in the case of long-term care premiums 
(as defined in subsection
            (d) (10) ), subsection

    (a) shall not apply to 
any amounts paid during any taxable year beginning after December 31, 
2025.''.

SEC. 203. TREATMENT OF HSA AFTER DEATH OF ACCOUNT BENEFICIARY.

    (a) In General.--

Section 223

    (f)

    (8) of the Internal Revenue Code of 
1986 is amended to read as follows:
 ``

    (8) Treatment after death of account beneficiary.--If an 
 individual acquires an account beneficiary's interest in a 
 health savings account by reason of the death of the account 
 beneficiary, such health savings account shall be treated as if 
 the individual were the account beneficiary.''.

    (b) Effective Date.--The amendment made by this section shall apply 
with respect to interests acquired after the date of the enactment of 
this Act.

SEC. 204. TREATMENT OF DIRECT PATIENT CARE ARRANGEMENTS.

    (a) HSAs.--

    (1) Roth hsa.--

Section 530A
            (c) (2)
        (A) of the Internal 
 Revenue Code of 1986, as added by 

section 201 of this Act, is 
 amended by adding at the end the following: ``Such term shall 
 include the payment of a monthly or other prepaid amount for 
 the furnishing (or access to the furnishing) by a physician or 
 group of physicians of physician professional services (and 
 ancillary services).''.

    (2) HSA.--

Section 223
            (d) (2)
        (A) of such Code is amended by 
 adding at the end the following: ``The term `qualified medical 
 expenses' shall include the payment of a monthly or other 
 prepaid amount for the furnishing (or access to the furnishing) 
 by a physician or group of physicians of physician professional 
 services (and ancillary services).''.

    (b) Not Treated as Health Insurance Coverage.--

    (1) In general.--For purposes of title XXVII of the Public 
 Health Service Act (42 U.S.C. 300gg), subtitle B of title I of 
 the Employee Retirement and Income Security Act of 1974 (29 
 U.S.C. 1021 et seq.), Public Law 111-148, and this Act, the 
 offering of direct patient care arrangements shall not be 
 treated as the offering of health insurance coverage and shall 
 not be subject to regulations as such coverage under such Acts.

    (2) Direct patient care arrangement defined.--In this 
 subsection, the term ``direct patient care arrangement'' means 
 the furnishing (or access to the furnishing) by a physician or 
 group of physicians of physician professional services (and 
 ancillary services) in return for payment of a monthly or other 
 prepaid amount.

TITLE III--STATE FLEXIBILITY IN REGULATION OF HEALTH INSURANCE COVERAGE

SEC. 301. STATE FLEXIBILITY IN REGULATION OF HEALTH INSURANCE COVERAGE.

    (a) In General.--States are given the flexibility under 

section 122

    (b) to revise their regulations of the health insurance marketplace, 
without regard to many of the requirements imposed under Public Law 
111-148, in order to promote freedom of choice of affordable health 
insurance coverage options offered outside of an Exchange.

    (b) Construction.--Nothing in the Employee Retirement and Income 
Security Act of 1974 (29 U.S.C. 1001 et seq.) or of any amendments made 
by the Health Insurance Portability and Accountability Act of 1996 
(Public Law 104-191) shall be interpreted as preventing an employer 
from offering, or making an employer contribution towards, individual 
health insurance coverage for employees and dependent family members.
            (c) Association Health Plans.--Nothing in this Act shall be 
construed as prohibiting the formation of association health plans (as 
defined under State law).
            (d) High-Risk Pools.--Nothing in this Act shall be construed as 
prohibiting States from establishing pooling arrangements for high-risk 
individuals.

 TITLE IV--MEDICAID PAYMENT REFORM

SEC. 401. MEDICAID PAYMENT REFORM TO ENSURE EQUITABLE ACCESS TO CARE.

    (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 lieu 
 of amounts otherwise payable to a State under this title 
 (including any payments attributable to 

section 1923), except 
 as otherwise provided in this section, the amount payable to 
 such State shall be equal to the sum of the following:
 ``
        (A) Adjusted aggregate beneficiary-based 
 amount.--The aggregate beneficiary-based amount 
 specified in subsection

    (b) for the quarter and the 
 State, adjusted under subsection

    (e) .
 ``
        (B) Chronic care quality bonus.--The amount (if 
 any) of the chronic care quality bonus payment 
 specified in subsection

    (f) for the quarter for the 
 State.
 ``

    (2) Requirement of state share.--
 ``
        (A) In general.--A State shall make, from non-
 Federal funds, expenditures in an amount equal to its 
 State share (as determined under subparagraph
        (B) ) for 
 a quarter for items, services, and other costs for 
 which, but for paragraph

    (1) , Federal funds would have 
 been payable under this title.
 ``
        (B) State share.--The State share for a State for 
 a quarter in a fiscal year is equal to the product of--
 ``
            (i) the aggregate beneficiary-based 
 amount specified in subsection

    (b) for the 
 quarter and the State; and
 ``
            (ii) the ratio of--
 ``
            (I) the State percentage 
 described in subparagraph
            (D) 
            (ii) for 
 such State and fiscal year; to
 ``
            (II) the Federal percentage 
 described in subparagraph
            (D) 
            (i) for 
 such State and fiscal year.
 ``
            (C) Nonpayment for failure to pay state share.--
 ``
            (i) In general.--If a State fails to 
 expend the amount required under subparagraph
        (A) for a quarter in a fiscal year, the amount 
 payable to the State under paragraph

    (1) shall 
 be reduced by the product of the amount by 
 which the State payment is less than the State 
 share and the ratio of--
 ``
            (I) the Federal percentage 
 described in subparagraph
            (D) 
            (i) for 
 such State and fiscal year; to
 ``
            (II) the State percentage 
 described in subparagraph
            (D) 
            (ii) for 
 such State and fiscal year.
 ``
            (ii) Grace period.--A State shall not be 
 considered to have failed to provide payment of 
 its required State share for a quarter under 
 subparagraph
        (A) if the aggregate State payment 
 towards the State's required State share for 
 the 4-quarter period beginning with such 
 quarter exceeds the required State share amount 
 for such 4-quarter period.
 ``
            (D) Federal and state percentages.--In this 
 paragraph, with respect to a State and a fiscal year:
 ``
            (i) Federal percentage.--The Federal 
 percentage described in this clause is 75 
 percent or, if higher, the Federal medical 
 assistance percentage for such State for such 
 fiscal year.
 ``
            (ii) State percentage.--The State 
 percentage described in this clause is 100 
 percent minus the Federal percentage described 
 in clause
            (i) .
 ``
        (E) Rules for crediting toward state share.--
 ``
            (i) General limitation to matchable 
 expenditures.--A payment for expenditures shall 
 not be counted toward the State share under 
 subparagraph
        (A) unless Federal payments may be 
 used for such expenditures consistent with 
 paragraph

    (3)
        (B) .
 ``
            (ii) Further limitations on allowable 
 expenditures.--A payment for expenditures shall 
 not be counted towards the State share under 
 subparagraph
        (A) if the expenditure is for any 
 of the following:
 ``
            (I) Abortion.--Expenditures for 
 an abortion.
 ``
            (II) Intergovernmental 
 transfers.--An expenditure that is 
 attributable to an intergovernmental 
 transfer.
 ``
            (III) Certified public 
 expenditures.--An expenditure that is 
 attributable to certified public 
 expenditures.
 ``
            (iii) Crediting fraud and abuse 
 recoveries.--Amounts recovered by a State 
 through the operation of its Medicaid fraud and 
 abuse control unit described in 

section 1903

    (q) shall be fully counted toward the State share 
 under subparagraph
        (A) .
 ``
        (F) Construction.--Nothing in the paragraph shall 
 be construed as preventing a State from expending, from 
 non-Federal funds, an amount under this title in excess 
 of the amount of the State share.
 ``
        (G) Determination based upon submitted claims.--
 In applying this paragraph with respect to expenditures 
 of a State for a quarter, the determination of the 
 expenditures for such State for such quarter shall be 
 made after the end of the period (which, as of the date 
 of the enactment of this section, is 2 years) for which 
 the Secretary accepts claims for payment under this 
 title with respect to such quarter.
 ``

    (3) Use of federal payments.--
 ``
        (A) Application of medicaid limitations.--A State 
 may only use Federal payments received under subsection

    (a) for expenditures for which Federal funds would have 
 been payable under this title but for this section.
 ``
        (B) Limitation for certain eligibles.--
 ``
            (i) Application of 100 percent federal 
 poverty line limit on eligibility.--Subject to 
 clause
            (iii) , a State may not use such Federal 
 payments to provide medical assistance for an 
 individual who has an income (as determined 
 under clause
            (ii) ) that exceeds 100 percent of 
 the poverty line (as defined in 

section 2110
            (c) (5) ) applicable to a family of the size 
 involved.
 ``
            (ii) Determination of income using 
 modified adjusted gross income without any 5 
 percent increase.--In determining income for 
 purposes of clause
            (i) under 

section 1902

    (e)

    (14) (relating to modified adjusted 
 gross income), the following rules shall apply:
 ``
            (I) Application of spend down.--
 The State shall take into account the 
 costs incurred for medical care or for 
 any other type of remedial care 
 recognized under State law in the same 
 manner and to the same extent that such 
 State takes such costs into account for 
 purposes of 

section 1902

    (a)

    (17) .
 ``
            (II) Disregard of 5 percent 
 increase.--Subparagraph
            (I) of 

section 1902

    (e)

    (14) (relating to a 5 percent 
 reduction) shall not apply.
 ``
            (iii) Exception.--Clause
            (i) shall not 
 apply to an individual who is--
 ``
            (I) a woman described in clause
            (i) of 

section 1903
            (v) (4)
        (A) ;
 ``
            (II) a child who is an individual 
 described in clause
            (i) of 

section 1905

    (a) ;
 ``
            (III) enrolled in a State plan 
 under this title as of the date of the 
 enactment of this section for the 
 period of continuous enrollment; or
 ``
            (IV) described in 

section 1902

    (e)

    (14)
            (D) (relating to modified 
 adjusted gross income).
 ``
            (iv) Clarification related to community 
 spouse.--Nothing in this subparagraph shall 
 supersede the application of 

section 1924 
 (related to community spouse income and 
 assets).
 ``

    (4) Exceptions for pass-through payments.--
 ``
        (A) In general.--Paragraph

    (1) shall not apply, 
 and amounts shall continue to be payable under this 
 title (and not under subsection

    (a) ), in the case of 
 the following payments (and related administrative 
 costs and expenditures):
 ``
            (i) Payments to territories.--Payments to 
 a State other than the 50 States and the 
 District of Columbia.
 ``
            (ii) Medicare cost sharing.--Payments 
 attributable to Medicare cost sharing under 
 

section 1905

    (p) .
 ``
            (iii) Pediatric vaccines.--Payments 
 attributable to 

section 1928.
 ``
            (iv) Emergency services for certain 
 individuals.--Payments for treatment of 
 emergency medical conditions attributable to 
 the application of 

section 1903
            (v) (2) .
 ``
            (v) Indian health care facilities.--
 Payments for medical assistance described in 
 the third sentence of 

section 1905

    (b) .
 ``
            (vi) Employer-sponsored insurance

    (esi) .--Payments for medical assistance 
 attributable to payments to employers for 
 employer-sponsored health benefits coverage.
 ``
            (vii) Other populations with limited 
 benefit coverage.--Other payments that are 
 determined by the Secretary to be related to a 
 specified population for which the medical 
 assistance under this title is limited and does 
 not include any inpatient, nursing facility, or 
 long-term care services.
 ``
        (B) Certain expenses.--Paragraph

    (1) shall not 
 apply, and amounts shall continue to be payable under 
 this title (and not under subsection

    (a) ), in the case 
 of the following:
 ``
            (i) Administration of medicare 
 prescription drug benefit.--Expenditures 
 described in 

section 1935

    (b) (relating to 
 administration of the Medicare prescription 
 drug benefit).
 ``
            (ii) Payments for hit bonuses.--Payments 
 under 

section 1903

    (a)

    (3)
        (F) (relating to 
 payments to encourage the adoption and use of 
 certified EHR technology).
 ``
            (iii) Payments for design, development, 
 and installation of mmis and eligibility 
 systems.--Payments under subparagraphs
        (A)
            (i) and
        (H)
            (i) of 

section 1903

    (a)

    (3) for 
 expenditures for design, development, and 
 installation of the Medicaid management 
 information systems and mechanized verification 
 and information retrieval systems (related to 
 eligibility).
 ``

    (5) Payment of amounts.--
 ``
        (A) In general.--Except as the Secretary may 
 otherwise provide, amounts shall be payable to a State 
 under subsection

    (a) in the same manner as amounts are 
 payable under subsection
            (d) of 

section 1903 to a State 
 under subsection

    (a) of such section.
 ``
        (B) Information and forms.--
 ``
            (i) Submission.--As a condition of 
 receiving payment under subsection

    (a) , a State 
 shall submit such information, in such form, 
 and manner, as the Secretary shall specify, 
 including information necessary to make the 
 computations under subsections
            (c) (2)
            (C) and

    (e) .
 ``
            (ii) Uniform reporting.--The Secretary 
 shall develop such forms as may be needed to 
 assure a system of uniform reporting of such 
 information across States.
 ``
            (C) Required reporting of information on medical 
 loss ratios for managed care.--The information required 
 to be reported under subparagraph
        (B)
            (i) shall include 
 information on the medical loss ratio with respect to 
 coverage provided under each Medicaid managed care plan 
 with a contract with the State under 

section 1903
            (m) or 
 1932.
 ``

    (b) Aggregate Beneficiary-Based Amount.--
 ``

    (1) In general.--The aggregate beneficiary-based amount 
 specified in this subsection for a State for a quarter is equal 
 to the sum of the products, for each of the categories of 
 Medicaid beneficiaries specified in paragraph

    (2) , of the 
 following:
 ``
        (A) Beneficiary-based quarterly amount.--The 
 beneficiary-based quarterly amount for such category 
 computed under subsection
            (c) for such State for such 
 quarter.
 ``
        (B) Number of individuals in category.--Subject 
 to subsection
            (d) , the average number of Medicaid 
 beneficiaries enrolled in such category in the State in 
 such quarter.
 ``

    (2) Categories.--The categories specified in this 
 paragraph are the following:
 ``
        (A) Elderly.--A category of Medicaid 
 beneficiaries who are 65 years of age or older.
 ``
        (B) Blind or disabled.--A category of Medicaid 
 beneficiaries not described in subparagraph
        (A) who are 
 described in 

section 1937

    (a)

    (2)
        (B)
            (ii) .
 ``
            (C) Children.--A category of Medicaid 
 beneficiaries not described in subparagraph
        (B) who are 
 under 21 years of age.
 ``
            (D) Other adults.--A category of any Medicaid 
 beneficiaries who are not described in a previous 
 subparagraph of this paragraph.
 ``
            (c) Computation of Per Beneficiary, Per Category Quarterly 
Amount.--
 ``

    (1) In general.--For a State, for each category of 
 beneficiary for a quarter--
 ``
        (A) First reform year.--For quarters in the first 
 reform year (as defined in subsection

    (k)

    (2) ), the 
 beneficiary-based quarterly amount is equal to \1/4\ of 
 the base average per beneficiary Federal payments for 
 such State for such category determined under paragraph

    (2) , increased by a factor that reflects the sum of the 
 following:
 ``
            (i) Historical medical care component of 
 cpi through previous reform year.--The 
 percentage increase in the historical medical 
 care component of the Consumer Price Index for 
 all urban consumers (U.S. city average) from 
 the midpoint of the base fiscal year (as 
 defined in paragraph

    (6) ) to the midpoint of 
 the fiscal year preceding the first reform 
 year.
 ``
            (ii) Projected medical care component of 
 cpi for the first reform year.--The percentage 
 increase in the projected medical care 
 component of the Consumer Price Index for all 
 urban consumers (U.S. city average) from the 
 midpoint of the previous fiscal year referred 
 to in clause
            (i) to the midpoint of the first 
 reform year.
 ``
        (B) Second and third reform years.--The 
 beneficiary-based quarterly amount for a State for a 
 category for quarters in the second reform year or the 
 third reform year is equal to the beneficiary-based 
 quarterly amount under this paragraph for such State 
 and category for the previous reform year increased by 
 the per beneficiary percentage increase (as defined in 
 subparagraph
        (E) ) for such category and reform year.
 ``
            (C) Fourth through tenth reform years.--The 
 beneficiary-based quarterly amount for a State for a 
 category for quarters in a reform year beginning with 
 the fourth reform year and ending with the tenth reform 
 year is--
 ``
            (i) in the case of a State that is a high 
 per beneficiary State or a low per beneficiary 
 State (as defined in paragraph

    (4)
        (B)
            (iii) ) for 
 the category, the amount determined under 
 clause
            (i) or
            (ii) of paragraph

    (4)
        (B) for such 
 State, category, and reform year; or
 ``
            (ii) in the case of any other State, the 
 beneficiary-based quarterly amount under this 
 paragraph for such State and category for the 
 previous reform year increased by the per 
 beneficiary percentage increase for such 
 category and reform year.
 ``
            (D) Eleventh reform year and subsequent reform 
 years.--The beneficiary-based quarterly amount for a 
 State for a category for quarters in a reform year 
 beginning with the eleventh reform year is equal to the 
 beneficiary-based quarterly amount under this paragraph 
 for such State and category for the previous reform 
 year increased by the per beneficiary percentage 
 increase for such category and reform year.
 ``
        (E) Annual percentage increase beginning with 
 second reform year.--For purposes of this subsection, 
 the term `per beneficiary percentage increase' means, 
 for a reform year, the sum of--
 ``
            (i) the projected percentage change in 
 nominal gross domestic product from the 
 midpoint of the previous reform year to the 
 midpoint of the reform year for which the 
 percentage increase is being applied; and
 ``
            (ii) one percentage point.
 ``

    (2) Base per beneficiary, per category amount for each 
 state.--
 ``
        (A) Average per category.--
 ``
            (i) In general.--The Secretary shall 
 determine, consistent with this paragraph and 
 paragraph

    (3) , a base per beneficiary, per 
 category amount for each of the 50 States and 
 the District of Columbia equal to the average 
 amount, per Medicaid beneficiary, of Federal 
 payments under this title, including payments 
 attributable to disproportionate share hospital 
 payments under 

section 1923, for each of the 
 categories of beneficiaries under subsection

    (b)

    (2) for the base fiscal year for each of the 
 50 States and the District of Columbia.
 ``
            (ii) Best available data.--The 
 determination under clause
            (i) shall initially 
 be estimated by the Secretary, based upon the 
 best available data at the time the 
 determination is made.
 ``
            (iii) Updates.--The determination under 
 clause
            (i) shall be updated by the Secretary on 
 an annual basis based upon improved data. The 
 Secretary shall adjust the amounts under 
 subsection

    (a)

    (1)
        (A) to reflect changes in the 
 amounts so determined based on such updates.
 ``
        (B) Exclusion of pass-through payments.--In 
 computing base per beneficiary, per category amounts 
 under subparagraph
        (A)
            (i) the Secretary shall exclude 
 payments described in subsection

    (a)

    (4) .
 ``
            (C) Standardization.--
 ``
            (i) In general.--In computing each such 
 amount, the Secretary shall standardize the 
 amount in order to remove the variation 
 attributable to the following:
 ``
            (I) Risk factors.--Such risk 
 factors as age, health and disability 
 status (including high cost medical 
 conditions), gender, institutional 
 status, and such other factors as the 
 Secretary determines to be appropriate, 
 so as to ensure actuarial equivalence.
 ``
            (II) Geographic.--Variations in 
 costs on a county-by-county basis.
 ``
            (ii) Method of standardization.--
 ``
            (I) Consultation in development 
 of risk standardization.--In developing 
 the methodology for risk 
 standardization for purposes of clause
            (i) 
            (I) , the Secretary shall consult 
 with the Medicaid and CHIP Payment and 
 Access Commission, the Medicare Payment 
 Advisory Commission, and the National 
 Association of Medicaid Directors.
 ``
            (II) Method for risk 
 standardization.--In carrying out 
 clause
            (i) 
            (I) , the Secretary may apply 
 the hierarchal condition category 
 methodology under 

section 1853

    (a)

    (1)
            (C) . If the Secretary uses 
 such methodology, the Secretary shall 
 adjust the application of such 
 methodology to take into account the 
 differences in services provided under 
 this title compared to title XVIII, 
 such as the coverage of long term care, 
 pregnancy, and pediatric services.
 ``
            (III) Method for geographic 
 standardization.--The Secretary shall 
 apply the standardization under clause
            (i) 
            (II) in a manner similar to that 
 applied under 

section 1853
            (c) (4)
        (A)
            (iii) .
 ``
            (iii) Application on a national, budget 
 neutral basis.--The standardization under 
 clause
            (i) shall be designed and implemented on 
 a uniform national basis and shall be budget 
 neutral so as to not result in any aggregate 
 change in payments under subsection

    (a) .
 ``
            (iv) Response to new risk.--Subject to 
 clause
            (iii) , the Secretary may adjust the 
 standardization under clause
            (i) to respond 
 promptly to new instances of communicable 
 diseases and other public health hazards.
 ``
            (v) Reference to application of risk 
 adjustment.--For rules related to the 
 application of risk adjustment to amounts under 
 subsection

    (a)

    (1)
        (A) , see subsection

    (e) .
 ``
            (D) Adjustment for temporary fmap increases.--In 
 computing each base per beneficiary, per category 
 amounts under subparagraph
        (A)
            (i) the Secretary shall 
 disregard portions of payments that are attributable to 
 a temporary increase in the Federal matching rates, 
 including those attributable to the following:
 ``
            (i) Public law 111-148 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) in proportion to the extent that such 
individuals are receiving medical assistance for which payments 
described under subsection

    (a)

    (4)
        (A) are made.
 ``

    (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, 2022, if this section is enacted on 
 or before July 1, 2021; or
 ``
        (B) July 1, 2022, if this section is enacted 
 after July 1, 2021.
 ``

    (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.

 TITLE V--PRICE TRANSPARENCY

SEC. 501. PROMOTING TRANSPARENT HOSPITAL PRICES FOR CONSUMERS.

 The provisions of the rule entitled ``Price Transparency 
Requirements for Hospitals to Make Standard Charges Public'' published 
by the Department of Health and Human Services on November 27, 2019 (85 
Fed. Reg. 65524), shall have the force and effect of law.
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