HR 191
112th CONGRESS
1st Session
H. R. 191
To amend the Patient Protection and Affordable Care Act to establish
a public health insurance option.
IN THE HOUSE OF REPRESENTATIVES
January 5, 2011
Ms. WOOLSEY (for herself, Mr. GEORGE MILLER of California, Ms. SCHAKOWSKY,
Mr. CONYERS, Mr. STARK, Mr. OLVER, Ms. LEE of California, Ms. MOORE, Mr. FRANK
of Massachusetts, Mr. ENGEL, Mr. JOHNSON of Georgia, Ms. EDWARDS, Mr. HINCHEY,
Ms. ZOE LOFGREN of California, Mr. HONDA, Mr. ACKERMAN, Mr. MURPHY of Connecticut,
Mr. WEINER, Mr. ELLISON, Mr. CAPUANO, Ms. MATSUI, Mr. GARAMENDI, Mr. ROTHMAN
of New Jersey, Ms. DELAURO, Mr. SARBANES, Ms. HIRONO, Mr. FATTAH, Mr. SCOTT
of Virginia, Ms. RICHARDSON, Mr. NADLER, Mr. FARR, Ms. PINGREE of Maine, Mr.
FILNER, Mr. HASTINGS of Florida, Ms. JACKSON LEE of Texas, Mr. RYAN of Ohio,
Ms. BALDWIN, Mr. TONKO, Ms. SLAUGHTER, Mr. GUTIERREZ, Mr. HOLT, Mr. GRIJALVA,
Ms. TSONGAS, Mr. LUJAN, Mr. HIGGINS, Mr. THOMPSON of California, and Mr. COHEN)
introduced the following bill; which was referred to the Committee on Energy
and Commerce
A BILL
To amend the Patient Protection and Affordable Care Act to establish
a public health insurance option.
Be it enacted by the Senate and House of Representatives of the United
States of America in Congress assembled,
SECTION 1. SHORT TITLE.
This Act may be cited as the `Public Option Deficit Reduction Act'.
SEC. 2. PUBLIC HEALTH INSURANCE OPTION.
(a) In General- Part III of subtitle D of title I of the Patient Protection
and Affordable Care Act (Public Law 111-148) is amended by adding at the end
the following new section:
`SEC. 1325. PUBLIC HEALTH INSURANCE OPTION.
`(a) Establishment and Administration of a Public Health Insurance Option-
`(1) ESTABLISHMENT- For years beginning with 2014, the Secretary of Health
and Human Services (in this subtitle referred to as the `Secretary') shall
provide for the offering through Exchanges established under this title
of a health benefits plan (in this Act referred to as the `public health
insurance option') that ensures choice, competition, and stability of affordable,
high-quality coverage throughout the United States in accordance with this
section. In designing the option, the Secretary's primary responsibility
is to create a low-cost plan without compromising quality or access to care.
`(2) OFFERING THROUGH EXCHANGES-
`(A) EXCLUSIVE TO EXCHANGES- The public health insurance option shall
only be made available through Exchanges established under this title.
`(B) ENSURING A LEVEL PLAYING FIELD- Consistent with this section, the
public health insurance option shall comply with requirements that are
applicable under this title to health benefits plans offered through such
Exchanges, including requirements related to benefits, benefit levels,
provider networks, notices, consumer protections, and cost sharing.
`(C) PROVISION OF BENEFIT LEVELS- The public health insurance option--
`(i) shall offer bronze, silver, and gold plans; and
`(ii) may offer platinum plans.
`(3) ADMINISTRATIVE CONTRACTING- The Secretary may enter into contracts
for the purpose of performing administrative functions (including functions
described in subsection (a)(4) of section 1874A of the Social Security Act)
with respect to the public health insurance option in the same manner as
the Secretary may enter into contracts under subsection (a)(1) of such section.
The Secretary has the same authority with respect to the public health insurance
option as the Secretary has under subsections (a)(1) and (b) of section
1874A of the Social Security Act with respect to title XVIII of such Act.
Contracts under this subsection shall not involve the transfer of insurance
risk to such entity.
`(4) OMBUDSMAN- The Secretary shall establish an office of the ombudsman
for the public health insurance option which shall have duties with respect
to the public health insurance option similar to the duties of the Medicare
Beneficiary Ombudsman under section 1808(c)(2) of the Social Security Act.
In addition, such office shall work with States to ensure that information
and notice is provided that the public health insurance option is one of
the health plans available through an Exchange.
`(5) DATA COLLECTION- The Secretary shall collect such data as may be required
to establish premiums and payment rates for the public health insurance
option and for other purposes under this section, including to improve quality
and to reduce racial, ethnic, and other disparities in health and health
care.
`(6) ACCESS TO FEDERAL COURTS- The provisions of Medicare (and related provisions
of title II of the Social Security Act) relating to access of Medicare beneficiaries
to Federal courts for the enforcement of rights under Medicare, including
with respect to amounts in controversy, shall apply to the public health
insurance option and individuals enrolled under such option under this title
in the same manner as such provisions apply to Medicare and Medicare beneficiaries.
`(b) Premiums and Financing-
`(1) ESTABLISHMENT OF PREMIUMS-
`(A) IN GENERAL- The Secretary shall establish geographically adjusted
premium rates for the public health insurance option--
`(i) in a manner that complies with the premium rules under paragraph
(3); and
`(ii) at a level sufficient to fully finance the costs of--
`(I) health benefits provided by the public health insurance option;
and
`(II) administrative costs related to operating the public health
insurance option.
`(B) CONTINGENCY MARGIN- In establishing premium rates under subparagraph
(A), the Secretary shall include an appropriate amount for a contingency
margin.
`(A) ESTABLISHMENT- There is established in the Treasury of the United
States an account for the receipts and disbursements attributable to the
operation of the public health insurance option, including the start-up
funding under subparagraph (B). Section 1854(g) of the Social Security
Act shall apply to receipts described in the previous sentence in the
same manner as such section applies to payments or premiums described
in such section.
`(i) IN GENERAL- In order to provide for the establishment of the public
health insurance option there is hereby appropriated to the Secretary,
out of any funds in the Treasury not otherwise appropriated, $2,000,000,000.
In order to provide for initial claims reserves before the collection
of premiums, there is hereby appropriated to the Secretary, out of any
funds in the Treasury not otherwise appropriated, such sums as necessary
to cover 90 days worth of claims reserves based on projected enrollment.
`(ii) AMORTIZATION OF START-UP FUNDING- The Secretary shall provide
for the repayment of the startup funding provided under clause (i) to
the Treasury in an amortized manner over the 10-year period beginning
with 2014.
`(iii) LIMITATION ON FUNDING- Nothing in this subsection shall be construed
as authorizing any additional appropriations to the account, other than
such amounts as are otherwise provided with respect to other health
benefits plans participating under the Exchange involved.
`(3) INSURANCE RATING RULES- The premium rate charged for the public health
insurance option may not vary except as provided under section 2701 of the
Public Health Service Act.
`(c) Payment Rates for Items and Services-
`(1) RATES ESTABLISHED BY SECRETARY-
`(A) IN GENERAL- The Secretary shall establish payment rates for the public
health insurance option for services and health care providers consistent
with this subsection and may change such payment rates in accordance with
subsection (d).
`(B) INITIAL PAYMENT RULES-
`(i) IN GENERAL- During 2014, 2015, and 2016, the Secretary shall set
the payment rates under this subsection for services and providers described
in subparagraph (A) equal to the payment rates for equivalent services
and providers under parts A and B of Medicare, subject to clause (ii),
paragraphs (2)(A) and (4), and subsection (d).
`(I) Practitioners' SERVICES- Payment rates for practitioners' services
otherwise established under the fee schedule under section 1848 of
the Social Security Act shall be applied without regard to the provisions
under subsection (f) of such section and the update under subsection
(d)(4) under such section for a year as applied under this paragraph
shall be not less than 1 percent.
`(II) ADJUSTMENTS- The Secretary may determine the extent to which
Medicare adjustments applicable to base payment rates under parts
A and B of Medicare for graduate medical education and disproportionate
share hospitals shall apply under this section.
`(C) FOR NEW SERVICES- The Secretary shall modify payment rates described
in subparagraph (B) in order to accommodate payments for services, such
as well-child visits, that are not otherwise covered under Medicare.
`(D) PRESCRIPTION DRUGS- Payment rates under this subsection for prescription
drugs that are not paid for under part A or part B of Medicare shall be
at rates negotiated by the Secretary.
`(2) INCENTIVES FOR PARTICIPATING PROVIDERS-
`(A) INITIAL INCENTIVE PERIOD-
`(i) IN GENERAL- The Secretary shall provide, in the case of services
described in clause (ii) furnished during 2014, 2015, and 2016, for
payment rates that are 5 percent greater than the rates established
under paragraph (1).
`(ii) SERVICES DESCRIBED- The services described in this clause are
items and professional services, under the public health insurance option
by a physician or other health care practitioner who participates in
both Medicare and the public health insurance option.
`(iii) SPECIAL RULES- A pediatrician and any other health care practitioner
who is a type of practitioner that does not typically participate in
Medicare (as determined by the Secretary) shall also be eligible for
the increased payment rates under clause (i).
`(B) SUBSEQUENT PERIODS- Beginning with 2017 and for subsequent years,
the Secretary shall continue to use an administrative process to set such
rates in order to promote payment accuracy, to ensure adequate beneficiary
access to providers, and to promote affordability and the efficient delivery
of medical care consistent with subsection (a)(1). Such rates shall not
be set at levels expected to increase average medical costs per enrollee
covered under the public health insurance option beyond what would be
expected if the process under paragraph (1)(B) and subparagraph (A) were
continued, as certified by the Office of the Actuary of the Centers for
Medicare & Medicaid Services.
`(C) ESTABLISHMENT OF A PROVIDER NETWORK- Health care providers participating
under Medicare are participating providers in the public health insurance
option unless they opt out in a process established by the Secretary.
`(3) ADMINISTRATIVE PROCESS FOR SETTING RATES- Chapter 5 of title 5, United
States Code shall apply to the process for the initial establishment of
payment rates under this subsection but not to the specific methodology
for establishing such rates or the calculation of such rates.
`(4) CONSTRUCTION- Nothing in this section shall be construed as limiting
the Secretary's authority to correct for payments that are excessive or
deficient, taking into account the provisions of subsection (a)(1) and any
appropriate adjustments based on the demographic characteristics of enrollees
covered under the public health insurance option, but in no case shall the
correction of payments under this paragraph result in a level of expenditures
per enrollee that exceeds the level of expenditures that would have occurred
under paragraphs (1)(B) and (2)(A), as certified by the Office of the Actuary
of the Centers for Medicare & Medicaid Services.
`(5) CONSTRUCTION- Nothing in this section shall be construed as affecting
the authority of the Secretary to establish payment rates, including payments
to provide for the more efficient delivery of services, such as the initiatives
provided for under subsection (d).
`(6) LIMITATIONS ON REVIEW- There shall be no administrative or judicial
review of a payment rate or methodology established under this subsection
or under subsection (d).
`(d) Modernized Payment Initiatives and Delivery System Reform-
`(1) IN GENERAL- For plan years beginning with 2014, the Secretary may utilize
innovative payment mechanisms and policies to determine payments for items
and services under the public health insurance option. The payment mechanisms
and policies under this subsection may include patient-centered medical
home and other care management payments, accountable care organizations,
value-based purchasing, bundling of services, differential payment rates,
performance or utilization based payments, partial capitation, and direct
contracting with providers. Payment rates under such payment mechanisms
and policies shall not be set at levels expected to increase average medical
costs per enrollee covered under the public health insurance option beyond
what would be expected if the process under paragraphs (1)(B) and (2)(A)
of subsection (c) were continued, as certified by the Office of the Actuary
of the Centers for Medicare & Medicaid Services.
`(2) REQUIREMENTS FOR INNOVATIVE PAYMENTS- The Secretary shall design and
implement the payment mechanisms and policies under this subsection in a
manner that--
`(i) improve health outcomes;
`(ii) reduce health disparities (including racial, ethnic, and other
disparities);
`(iii) provide efficient and affordable care;
`(iv) address geographic variation in the provision of health services;
or
`(v) prevent or manage chronic illness; and
`(B) promotes care that is integrated, patient-centered, high-quality,
and efficient.
`(3) ENCOURAGING THE USE OF HIGH VALUE SERVICES- To the extent allowed by
the benefit standards applied to all health benefits plans participating
under the Exchange involved, the public health insurance option may modify
cost sharing and payment rates to encourage the use of services that promote
health and value.
`(4) NON-UNIFORMITY PERMITTED- Nothing in this subtitle shall prevent the
Secretary from varying payments based on different payment structure models
(such as accountable care organizations and medical homes) under the public
health insurance option for different geographic areas.
`(e) Provider Participation-
`(1) IN GENERAL- The Secretary shall establish conditions of participation
for health care providers under the public health insurance option.
`(2) LICENSURE OR CERTIFICATION- The Secretary shall not allow a health
care provider to participate in the public health insurance option unless
such provider is appropriately licensed or certified under State law.
`(3) PAYMENT TERMS FOR PROVIDERS-
`(A) PHYSICIANS- The Secretary shall provide for the annual participation
of physicians under the public health insurance option, for which payment
may be made for services furnished during the year, in one of 2 classes:
`(i) PREFERRED PHYSICIANS- Those physicians who agree to accept the
payment rate established under this section (without regard to cost-sharing)
as the payment in full.
`(ii) PARTICIPATING, NON-PREFERRED PHYSICIANS- Those physicians who
agree not to impose charges (in relation to the payment rate described
in subsection (c) for such physicians) that exceed the ratio permitted
under section 1848(g)(2)(C) of the Social Security Act.
`(B) OTHER PROVIDERS- The Secretary shall provide for the participation
(on an annual or other basis specified by the Secretary) of health care
providers (other than physicians) under the public health insurance option
under which payment shall only be available if the provider agrees to
accept the payment rate established under subsection (c) (without regard
to cost-sharing) as the payment in full.
`(4) EXCLUSION OF CERTAIN PROVIDERS- The Secretary shall exclude from participation
under the public health insurance option a health care provider that is
excluded from participation in a Federal health care program (as defined
in section 1128B(f) of the Social Security Act).
`(f) Application of Fraud and Abuse Provisions- Provisions of law (other than
criminal law provisions) identified by the Secretary by regulation, in consultation
with the Inspector General of the Department of Health and Human Services,
that impose sanctions with respect to waste, fraud, and abuse under Medicare,
such as the False Claims Act (31 U.S.C. 3729 et seq.), shall also apply to
the public health insurance option.
`(g) Medicare Defined- For purposes of this section, the term `Medicare' means
the health insurance programs under title XVIII of the Social Security Act.'.
(b) Conforming Amendments-
(1) TREATMENT AS QUALIFIED HEALTH PLAN- Section 1301(a)(2) of the Patient
Protection and Affordable Care Act, as amended by section 10104(a) of such
Act, is amended--
(A) in the heading, by inserting `, THE PUBLIC HEALTH INSURANCE OPTION,'
before `AND'; and
(B) by inserting `the public health insurance option under section 1325,'
before `and a multi-State plan'.
(2) LEVEL PLAYING FIELD- Section 1324(a) of such Act, as amended by section
10104(n) of such Act, is amended by inserting `the public health insurance
option under section 1325,' before `or a multi-State qualified health plan'.
END
