To amend title XVIII of the Social Security Act and section 4626 of the Balanced Budget Act of 1997 to prohibit the Secretary of Health and Human Services from providing any incentive payments to hospitals to reduce the number of residents in graduate medical education programs, and for other purposes.

Summary: Amends title XVIII (Medicare) of the Social Security Act (SSA), as amended by the Balanced Budget Act of 1997, to repeal the authority and mandate for incentive payments under plans for voluntary reduction in the number of residents in a graduate medical education residency training program. 
Amends the Balanced Budget Act of 1997 to prohibit the Secretary of Health and Human Services from approving or providing any payments for any demonstration project that provides for additional Medicare payments in connection with such a reduction for any residency training year beginning on or after July 1, 1998 (currently before July 1, 2006). 
Provides that the April 1995 Health Care Financing Administration interpretation of Medicare secondary payer requirements for group health plans with regard to individuals with end stage renal disease (ESRD) shall not apply retroactively to a group health plan that paid benefits primary to SSA title XVIII (but would have paid benefits secondary to such title in the absence of such requirements) on or after August 10, 1993, and before April 24, 1995, on behalf of certain individuals who became entitled or eligible for the ESRD program. 
Amends the Internal Revenue Code, the Employee Retirement Income Security Act of 1974, and the Public Health Service Act to extend COBRA continuation coverage for qualified ESRD Medicare beneficiaries for 36 months. 
Amends SSA title XVIII to provide for an extension of the Medicare ESRD secondary payer period from 30 to 36 months.

SECTION 1. REPEAL OF INCENTIVE PAYMENTS FOR REDUCTION IN NUMBER OF 
              GRADUATE MEDICAL EDUCATION RESIDENTS.

    (a) In General.--Paragraph (6) of section 1886(h) of the Social 
Security Act (42 U.S.C. 1395ww(h)), as added by section 4626(a) of the 
Balanced Budget Act of 1997 (Public Law 105-33), is repealed.
    (b) Application to New York Demonstration Project; Elimination of 
Any Payment Authority.--Section 4626 of the Balanced Budget Act of 1997 
is amended--
            (1) by amending subsection (b) to read as follows:
    ``(b) Elimination of Payment Authority.--
            ``(1) The Secretary of Health and Human Services is not 
        authorized to approve or provide any payments for any 
        demonstration project described in paragraph (2) for any 
        residency training year beginning on or after July 1, 1998.
            ``(2) A demonstration project described in this paragraph 
        is a project that primarily provides for additional payments 
        under title XVIII of the Social Security Act in connection with 
        a reduction in the number of residents in a medical residency 
        training program.''; and
            (2) by striking subsection (c).

SEC. 2. PAYMENT OFFSETS.

    (a) No Retroactive Application of ESRD Secondary Payer 
Interpretation.--Notwithstanding any other provision of law, the April 
1995 interpretation of section 1862(b)(1)(C) of the Social Security Act 
(42 U.S.C. 1395y(b)(1)(C)) issued by the Health Care Financing 
Administration shall not apply retroactively to a group health plan 
that paid benefits primary to title XVIII of such Act (42 U.S.C. 1395 
et seq.) (but would have paid benefits secondary to such title in the 
absence of such section) on or after August 10, 1993, and before April 
24, 1995, on behalf of an individual who, during such period--
            (1) was entitled to benefits under such title under 
        subsection (a) or (b) of section 226 of such Act (42 U.S.C. 
        426); and
            (2) subsequently became entitled or eligible for benefits 
        under such title under section 226A of such Act (42 U.S.C. 426-
        1).
    (b) Extending COBRA Continuation Coverage for End Stage Renal 
Disease Medicare Beneficiaries for 36 Months.--
            (1) Amendments to the internal revenue code of 1986.--
        Section 4980B(f)(2)(B)(iv) of the Internal Revenue Code of 1986 
        is amended--
                    (A) by striking ``or'' at the end of subclause (I),
                    (B) in subclause (II), by inserting ``other than 
                under section 226A of such Act'' after ``Social 
                Security Act'',
                    (C) by striking the period at the end of subclause 
                (II) and inserting ``, or'', and
                    (D) by adding at the end the following:
                                    ``(III) in the case of a qualified 
                                beneficiary other than a qualified 
                                beneficiary described in subsection 
                                (g)(1)(D) entitled to benefits under 
                                title XVIII of the Social Security Act 
                                under section 226A of such Act for a 
                                period of 36 months.''.
            (2) Amendments to erisa.--Section 602(2)(D) of the Employee 
        Retirement Income Security Act of 1974 (29 U.S.C. 1162(2)(D)) 
        is amended--
                    (A) by striking ``or'' at the end of clause (i),
                    (B) in clause (ii), by inserting ``other than under 
                section 226A of such Act'' after ``Social Security 
                Act'',
                    (C) by striking the period at the end of clause 
                (ii) and inserting ``, or'', and
                    (D) by adding at the end the following:
                            ``(iii) in the case of a qualified 
                        beneficiary other than a qualified beneficiary 
                        described in section 607(3)(C) entitled to 
                        benefits under title XVIII of the Social 
                        Security Act under section 226A of such Act for 
                        a period of 36 months.''.
            (3) Amendments to the public health service act.--Section 
        2202(2)(D) of the Public Health Service Act (42 U.S.C. 300bb-
        2(2)(D)) is amended--
                    (A) by striking ``or'' at the end of clause (i),
                    (B) in clause (ii), by inserting ``other than under 
                section 226A of such Act'' after ``Social Security 
                Act'',
                    (C) by striking the period at the end of clause 
                (ii) and inserting ``, or'', and
                    (D) by adding at the end the following:
                            ``(iii) in the case of a qualified 
                        beneficiary entitled to benefits under title 
                        XVIII of the Social Security Act under section 
                        226A of such Act for a period of 36 months.''.
            (4) Effective date.--The amendments made by this subsection 
        shall apply to individuals who become eligible for benefits 
        under title XVIII of the Social Security Act under section 226A 
        of such Act on and after the date of the enactment of this Act.
    (c) Extension of Medicare ESRD Secondary Payer Period to 36 
Months.--The last sentence of section 1862(b)(1)(C) of the Social 
Security Act (42 U.S.C. 1395y(b)(1)(C)), as added by section 4631(b)(2) 
of the Balanced Budget Act of 1997 (Public Law 105-33), is amended by 
striking ``30-month'' and inserting ``36-month''.