,,ii  #aac? ,,congress  #a/ ,session    
,s4 #aghg  ,,9 ,,! ,,s5ate ,,( ,,!      
,,unit$ ,,/ates  ,decemb] #aj1 #bjac,mr4
 ,rockefell] introduc$ ! foll[+ bill2   
:i* 0 read twice & ref]r$ to !          
,committee on ,f9ance  ,a ,,bill  ,to   
require a m$ical loss ratio ( #he p]c5t 
= ,m$icaid manag$ c>e plans1 & = o!r    
purposes4  #a4 ,%ort title ,?is ,act may
 be cit$ z ! ,m$icaid ,manag$ ,c>e      
,responsibility & ,equity ,act4  #b4    
,m9imum m$ical loss ratio requirem5ts = 
,m$icaid & ,,*ip manag$ c>e plans  7a7  
,m9imum m$ical loss ratio requirem5ts = 
,m$icaid & ,,*ip manag$ c>e plans       
,section #aijc7m7 ( ! ,social ,security 
,act 7#db ,u4,s4,c4 #acif;b7m77 is      
am5d$-- 7#a7 9 p>agraph 7#b77;,a7-- 7,a7
 by /rik+ & at ! end ( clause 7xii72    
7,b7 by realign+ ! left m>g9 ( clause   
7xiii7 s z to align ) ! left m>g9 (     
clause 7xii7 & by /rik+ ! p]iod at ! end
 ( clause 7xiii7 & ins]t+ 2 &2 &  7,c7  
by add+ at ! end ! foll[+ new clause3   
7xiv7 su* contract provides t if !      

,secret>y det]m9es = a contract ye>     
7beg9n+ on or aft] ,octob] #a1 #bjag7 t 
! entity has fail$ to h a m$ical loss   
ratio1 z det]m9$ 9 accordance ) p>agraph
 7#c71 ( at lea/ 4#he 74#hj 9 ! case (  
an entity 9 :i* at lea/ #aj p]c5t ( !   
individuals enroll$ 9 ! plan are        
optional t>get$ l[-income *ildr5        
describ$ 9 section #aije7u77#b77;,b77-- 
7,i7 ! entity %all remit 7n lat] ?an    
,janu>y #a ( ! fir/ cal5d> ye> t beg9s  
on or aft] ! fir/ day ( ! contract ye>7 
to ! ,/ate an am\nt equal to ! product (
 ! total rev5ue ( ! entity "u ! ,/ate   
plan "u ?is title 7or "u a waiv] ( su*  
plan7 = ! contract ye> & ! diff]5ce     
betwe5 4#he 7or 4#hj1 if applicable7 & !
 m$ical loss ratio 7z s det]m9$7 & t any
 su* remittances paid by an entity %all 
be treat$ z an ov]paym5t "u section     
#aijc7;d77#c77;,a72  7,,ii7 = #c        
consecutive contract ye>s1 ! ,/ate %all 
n p]mit ! enrollm5t ( new enrollees ) ! 
entity = cov]age dur+ ! second succe$+  
contract ye>2 &  7,,iii7 ! ,/ate %all   

t]m9ate ! contract if ! entity fails to 
h su* a m$ical loss ratio = #e          
consecutive contract ye>s4  2 &  7#b7 by
 ins]t+ aft] p>agraph 7#b71 ! foll[+3   
7#c7 7,a7 ,= purposes ( p>agraph        
7#b77;,a77xiv71 ! m$ical loss ratio = an
 entity ) a contract "u ?is subsection  
%all be equal to ! ratio (-- 7i7 ! sum (
 ! am\nt ( contract rev5ue 7z det]m9$ 9 
accordance ) subp>agraph 7,b77 exp5d$ by
 ! entity-- 7,i7 = provid+ m$ical       
assi/ance to individuals :o are eligible
 "u ! ,/ate plan "u ?is title or "u a   
waiv] ( su* plan & :o are enroll$ ) !   
entity2 &  7,,ii7 = quality improvem5t  
activities 7z det]m9$ 9 accordance )    
subp>agraph 7,c772 to  7ii7 ! total     
am\nt ( contract rev5ue 7z det]m9$ 9    
accordance ) subp>agraph 7,b774  7,b7 ,=
 purposes ( subp>agraph 7,a71 !         
,secret>y %all by regulation specify h[ 
contract rev5ue %all be det]m9$ )       
respect to an entity ) a contract ) !   
,/ate "u ?is subsection & a contract    
ye>4 ,! regulations %all provide t !    

foll[+ %all be disreg>d$ f ! det]m9ation
 ( contract rev5ue = a contract ye>3 7i7
 7,i7 ,only 9 ! case ( an entity t is   
exempt f ,f$]al income tax1 community   
b5efit exp5ditures made by ! entity 7n  
to exce$ ! limit describ$ 9 subclause   
7,,ii77 & res]ve funds 7n to exce$ !    
limit describ$ 9 subclause 7,,iv774     
7,,ii7 ,! limit describ$ 9 ?is subclause
 is ! am\nt equal to #c p]c5t ( !       
contract rev5ue = ! contract ye> or !   
am\nt equal to ! product ( ! highe/     
premium tax rate 9 ! ,/ate & ! contract 
rev5ue1 :i*ev] is great]4  7,,iii7 ,9   
?is clause1 ! t]m community b5efit      
exp5ditures means exp5ditures =         
activities or programs t seek to a*ieve 
! objectives ( improv+ access to heal?  
s]vices1 enhanc+ public heal?1 & reliev+
 gov]nm5t burd54  7,,iv7 ,! limit       
describ$ 9 ?is subclause is ! am\nt     
equal to #c p]c5t ( ! contract rev5ue = 
! contract ye> except t an entity t is  
exempt f ,f$]al income tax may increase 
! am\nt ( res]ve funds to be disreg>d$ =

 a contract ye> up to a limit t does n  
exce$ ! am\nt equal to ! sum ( #c p]c5t 
( ! contract rev5ue = ! contract ye> & !
 total am\nt ( ! res]ve funds disreg>d$ 
= ! #b prec$+ contract ye>s or #i p]c5t 
( ! contract rev5ues dur+ su* #c-ye>    
p]iod1 :i*ev] is great]4  7ii7          
,exp5ditures = provid+ m$ical assi/ance 
to a new b5efici>y population enroll$ ) 
! entity = ! fir/ #b contract ye>s ( su*
 population's enrollm5t4  7,c7 7i7 ,=   
purposes ( subp>agraph 7,a71 quality    
improvem5t activities are activities    
design$ to d any ( ! foll[+3 7,i7 ,to   
improve heal? outcomes by implem5t+     
activities su* z effective case         
managem5t1 c>e coord9ation1 quality     
report+1 *ronic disease managem5t or    
m$ication & c>e compliance activities4  
7,,ii7 ,to prev5t hospital readmissions1
 includ+ a compreh5sive program =       
hospital dis*>ge t includes pati5t      
education & c\nsel+1 dis*>ge plann+1 &  
po/-dis*>ge foll[-up by an appropriate  
heal? c>e pr(essional4  7,,iii7 ,to     

improve pati5t safety & r$uce m$ical    
errors ?r\gh ! use ( be/ cl9ical        
practices1 evid5ce-bas$ m$ic9e1 & heal? 
in=mation te*nology4  7,,iv7 ,to        
implem5t a significant inve/m5t 7z def9$
 by ! ,secret>y & bas$ on a #b-ye>      
av]age ( exp5ditures7 9 te*nology       
improvem5ts su* z ?r\gh electronic      
m$ical records1 telem$ic9e1 & sm>t phone
 or tablet te*nology4  7,v7 ,to implem5t
 wellness & heal? promotion activities1 
includ+ programs design$ to address !   
social det]m9ants ( heal? 7z def9$ 9    
clause 7iii77,i77 or to promote pati5t  
engagem5t 7z def9$ 9 clause             
7iii77,,ii774  7ii7 ,= purposes (       
subp>agraph 7,a71 an exp5diture only    
%all be consid]$ to be an exp5diture = a
 quality improvem5t activity if !       
exp5diture satisfies #a or m ( ! foll[+ 
requirem5ts3 7,i7 ,! exp5diture is      
design$ to improve heal?c>e quality4    
7,,ii7 ,! exp5diture is design$ to      
increase ! likelihood ( desir$ heal?    
outcomes 9 ways t c be objectively      

measur$1 & t c produce v]ifiable results
 & a*ievem5ts4  7,,iii7 ,! exp5diture is
 direct$ t[>d individual enrollees1     
incurr$ = specific segm5ts ( enrollees1 
or provides heal? improvem5ts to a      
population beyond ! population enroll$ 9
 cov]age ) ! entity s long z no         
additional co/s are incurr$ due to !    
non-enrollees4  7,,iv7 ,! exp5diture is 
gr\nd$ 9 evid5ce bas$ m$ic9e 7includ+   
promis+ practices :i*1 ) docum5t$       
ju/ification1 g beyond ! exi/+ evid5ce  
base71 or widely accept$ be/ cl9ical    
practice1 or crit]ia issu$ by recogniz$ 
pr(essional m$ical associations1        
accr$itation bodies1 gov]nm5t ag5cies1  
or o!r nationally recogniz$ heal? c>e   
quality or heal? improvem5t             
organizations4  7iii7 7,i7 ,= purposes (
 clause 7i77,,iv71 ! t]m social         
det]m9ants ( heal? means conditions 9 ! 
environm5ts 9 :i* p are born1 live1     
le>n1 "w1 play1 wor%ip1 & age2 t affect 
a wide range ( heal?1 function+1 &      
quality-(-life outcomes1 risks1 patt]ns 

( social engagem5t & s5se ( security &  
well-be+1 & h a significant influ5ce on 
population heal? outcomes4 ,^!          
conditions include1 b are n limit$ to1  
safe & af=dable h\s+1 access to         
education1 public safety1 availability (
 heal?y foods1 local em]g5cy & local    
heal? s]vices1 & environm5ts free (     
life-?reat5+ tox9s4  7,,ii7 ,= purposes 
( clause 7i77,,iv71 ! t]m pati5t        
engagem5t means actions individuals mu/ 
take to obta9 ! greate/ b5efit = ! heal?
 c>e s]vices available to !m1 & ?r\gh   
:i* process an individual h>monizes     
robu/ in=mation & pr(essional advice ) !
 individual's own ne$s1 pref]5ces &     
abilities 9 ord] to prev5t1 manage &    
cure disease4  7,d7 ,! ,secret>y may    
waive ! application ( a requirem5t ( ?is
 p>agraph or ( p>agraph 7#b77;,a77xiv7  
to a ,m$icaid manag$ c>e organization = 
n m ?an #b ye>s1 bas$ on ! foll[+3 7i7  
,! ext5t to :i* ! organization is likely
 to cease (f]+ cov]age )\t ! waiv]4     
7ii7 ,! numb] ( individuals 9 ! plan    

likely to be affect$ by loss ( cov]age4 
7iii7 ,! impact ( ! loss ( cov]age on ! 
ability ( ! b5efici>ies to receive      
cov]age "u ano!r plan & to h cont9uity (
 c>e4  7iv7 ,! impact on ! rates        
calculat$ = o!r ,m$icaid manag$ c>e     
organizations t w\ld provide cov]age = !
 b5efici>ies t w\ld be affect$ by !     
t]m9ation ( cov]age4  7v7 ,^u ! reque/ (
 a ,m$icaid manag$ c>e organization1 to 
p]mit implem5tation ( major plan *anges 
7b only = #a contract ye>74  7vi7 ,any  
o!r relevant in=mation submitt$ by !    
,m$icaid manag$ c>e organization or !   
,/ate4  4  7b7 ,application to manag$   
c>e plans "u ,,*ip ,section             
#bajc7;f77#c7 ( su* ,act 7#db ,u4,s4,c4 
#acig;cc7f77#c77 is am5d$-- 7#a7 by     
ins]t+ subsection 7m77#b77;,a77xiv7 (   
section #aijc 7relat+ to m9imum m$ical  
loss ratio requirem5ts1 except t !      
m9imum m$ical loss ratio applicable to  
manag$ c>e organizations "u ?is title   
%all be 4#hj7 & aft] application (2 &   
7#b7 by ins]t+ o!r be=e requirem5ts =4  

7c7 ,regulations ,n lat] ?an ,octob] #a1
 #bjae1 ! ,secret>y ( ,heal? & ,human   
,s]vices %all promulgate regulations    
implem5t+ ! am5dm5ts made by ?is        
section4 ,! regulations %all require t  
initial te/ report+ ( m$ical loss ratios
 by ,m$icaid manag$ c>e organizations be
 made n lat] ?an ,octob] #a1 #bjaf4