Title I, SEC. 1351. PAYMENT TO REGIONAL ALLIANCE HEALTH PLANS. 
      (a) Computation of Blended Plan Per Capita Payment Amount. For purposes 
    of making payments to plans under this section, each regional alliance 
    shall compute, under section 6201(a), a blended plan per capita payment 
    amount for each regional alliance health plan for enrollment in the 
    alliance for a year. 

      (b) Amount of Payment to Plans. 

        (1) In general. Subject to subsection (e) and section 6121(b)(5)(B), 
      each regional alliance shall provide for payment to each regional 
      alliance health plan, in which an alliance eligible individual is 
      enrolled, an amount equal to the net blended rate (described in paragraph 
      (2)) adjusted (consistent with subsection (c)) to take into account the 
      relative actuarial risk associated with the coverage with respect to the 
      individual. 

        (2) Net blended rate. The net blended rate described in this paragraph 
      is the blended plan per capita payment amount (determined under section 
      6201(a)), reduced by 

          (A) the consolidated set aside percentage specified under subsection 
        (d), and 

          (B) any plan payment reduction imposed under section 6011 for the 
        plan for the year. 

      (c) Application of Risk Adjustment and Reinsurance Methodology. Each 
    regional alliance shall use the risk adjustment methodology developed under 
    section 1541 in making payments to regional alliance health plans under 
    this section, except as provided in section 1542. 

      (d) Consolidated Set Aside Percentage. The consolidated set aside 
    percentage, for a regional alliance for a year, is the sum of 

        (1) the administrative allowance percentage for the regional alliance, 
      computed by the alliance under section 1352(b); and 

        (2) 1.5 percentage points. 

        Amounts attributable to paragraph (2) are paid to the Federal 
      Government (for academic health centers and graduate medical education) 
      under section 1353. 

      (e) Treatment of Veterans, Military, and Indian Health Plans and 
    Programs. 

        (1) Veterans health plan. In applying this subtitle (and title VI) in 
      the case of a regional alliance health plan that is a veterans health 
      plan of the Department of Veterans Affairs, the following rules apply: 

          (A) For purposes of applying subtitle A of title VI, families 
        enrolled under the plan shall not be taken into account. 

          (B) The provisions of subtitle A of title VI shall not apply to the 
        plan, other than such provisions as require the plan to submit a per 
        capita amount for each regional alliance area on a timely basis, which 
        amount shall be treated as the final accepted bid of the plan for the 
        area for purposes of subtitle B of such title and this section. This 
        amount shall not be subject to negotiation and not subject to reduction 
        under section 6011. 

          (C) For purposes of computing the blended plan per capita payment 
        amount under this section, the AFDC and SSI proportions (under section 
        6202(a)) are deemed to be 0 percent. 

        (2) Uniformed services health plan. In applying this subtitle (and 
      title VI) in the case of a regional alliance health plan that is a 
      Uniformed Services Health Plan of the Department of Defense, the 
      following rules apply: 

          (A) For purposes of applying subtitle A of title VI, families 
        enrolled under the plan shall not be taken into account. 

          (B) The provisions of subtitle A of title VI shall not apply to the 
        plan, other than such provisions as require the plan to submit a per 
        capita amount on a timely basis, which amount shall be treated as the 
        final accepted bid of the plan for the area involved for purposes of 
        subtitle B of such title and this section. This amount shall not be 
        subject to negotiation and not subject to reduction under section 6011. 
        The Board, in consultation with the Secretary of Defense, shall 
        establish rules relating to the area (or areas) in which such a bid 
        shall apply. 

          (C) For purposes of computing the blended plan per capita payment 
        amount under this section, the AFDC and SSI proportions (under section 
        6202(a)) are deemed to be 0 percent. 

        (3) Indian health programs. In applying this subtitle (and title VI) in 
      the case of a health program of the Indian Health Service, the following 
      rules apply: 

          (A) Except as provided in this paragraph, the plan shall not be 
        considered or treated to be a regional alliance health plan and for 
        purposes of applying title VI, families enrolled under the program 
        shall not be taken into account. 

          (B) In accordance with rules established by the Secretary, regional 
        alliances shall act as agents for the collection of employer premium 
        payments (including payments of corporate alliance employers) required 
        under subtitle B of title VI with respect to qualifying employees who 
        are enrolled under a health program of the Indian Health Service. The 
        Secretary shall permit such alliances to retain a nominal fee to 
        compensate them for such collection activities. In applying this 
        subparagraph, the family share of premium for such employees is deemed 
        to be zero for electing Indians (as defined in section 1012(d)(3)) and 
        for other employees is the amount of the premium established under 
        section 8306(b)(4)(A), employees are deemed to be residing in the area 
        of residence (or area of employment), as specified under rules of the 
        Secretary, and the class of enrollment shall be such class (or classes) 
        as specified under rules of the Secretary.