Title VI, SEC. 6011. PLAN PAYMENT REDUCTION. (a) Plan Payment Reduction. In order to assure that payments to regional alliance health plans by a regional alliance are consistent with the applicable regional alliance per capita target for the alliance (computed under this subtitle), each noncomplying plan (as defined in subsection (b)(2)) for a year is subject to a reduction in plan payment (under section 1351) by the amount equal to plan payment reduction specified in subsection (c) for the year. (b) Noncomplying Alliance and Noncomplying Plan Defined. In this part: (1) Noncomplying alliance. The term ``noncomplying alliance'' means, for a year, a regional alliance for which the weighted average accepted bid (computed under section 6004(c)) exceeds the regional alliance per capita target for the year. (2) Noncomplying plan. The term ``noncomplying plan'' means, for a year, a regional alliance health plan offered through a noncomplying alliance if the final accepted bid for the year exceeds the maximum complying bid (as defined in subsection (d)) for the year. No plan shall be a noncomplying plan for a year before the first year in which the plan is offered by a regional alliance. (c) Amount of Plan Payment Reduction. (1) In general. The amount of the plan payment reduction, for a noncomplying plan offered by an alliance, is the alliance-wide reduction percentage (as defined in paragraph (2)) of the excess bid amount (as defined in paragraph (3)). (2) Alliance-wide reduction percentage. (A) In general. In paragraph (1), the term ``alliance-wide reduction percentage'' means, for a noncomplying plan offered by an alliance for a year (i) the amount by which (I) the weighted average accepted bid (computed under section 6004(c)(1)) for the alliance for the year, exceeds the regional alliance per capita target for the alliance for the year; divided by (ii) the sum, for noncomplying plans offered by the alliance, of the plan proportions of alliance excess bid amount (described in subparagraph (B)(i)) for the year. (B) Plan proportion of alliance excess bid amount described. (i) In general. The ``plan proportion of alliance excess bid amount'' described in this clause, for a noncomplying plan, is the product of (I) the excess bid amount (as defined in paragraph (4)) for the plan, and (II) the plan enrollment proportion (as defined in clause (ii)) for the plan. (ii) Plan enrollment proportion. In clause (i)(II), the term ``plan enrollment proportion'' means, with respect to a health plan offered by a regional alliance, the total enrollment of alliance eligible individuals enrolled in such plan expressed as a percentage of the total enrollment of alliance eligible individuals in all regional alliance plans offered by the alliance. Such proportion shall be computed based on the information used in computing the weighted average accepted bid for the alliance under section 6004(c)(1). (3) Excess bid amount. In this subsection, the ``excess bid amount'', with respect to a noncomplying plan for a year, is the amount by which (i) the accepted bid for the year (not taking into account any voluntary reduction under section 6004(e)), exceeds (ii) the maximum complying bid (as defined in subsection (d)) for the plan for the year. (d) Maximum Complying Bid. (1) First year. In this part, subject to paragraph (3), for the first year, the ``maximum complying bid'' for each plan offered by a regional alliance, is the regional alliance per capita premium target for the alliance (determined under section 6002) for the year. (2) Subsequent years. In this part, subject to paragraph (3), for a subsequent year, the ``maximum complying bid'', for a plan offered by an alliance for a year, is the sum of the following: (A) Net previous year accepted bid for plan. The accepted bid for the previous year (not taking into account any voluntary reduction under section 6004(e)), minus the amount of any plan payment reduction for the plan for that year. (B) Alliance-wide inflation allowance. The amount by which (i) regional alliance per capita premium target for the year, exceeds (ii) such target for the previous year, or, if less, the weighted average accepted bid (computed under section 6004(c)(1)) for such year. (3) Special rules for new plans. (A) In general. Subject to subparagraph (B), in the case of a plan that is first offered by a regional alliance in a year after the first year the maximum complying bid shall be the regional alliance per capita premium target for the year. (B) Authority. The Board or a State may establish rules to modify the application of subparagraph (A) for regional alliance health plans in the State in order (i) to prevent abusive premium practices by entities previously offering plans, or (ii) to encourage the availability of all types of plans in the State and to permit establishment of new plans.