Medicare+Choice Rescue Act of 2000

Summary: Directs the Secretary of Health and Human Services to correct for misestimates in the national per capita Medicare+Choice growth rate by providing for an increase by 3.6 percent in the amount of payment otherwise applicable to Medicare+Choice organizations offering Medicare+Choice plans in 2001. Limits retroactive adjustments.
Amends Medicare part C to provide for: (1) continuous open enrollment and disenrollment under Medicare+Choice and Medicare supplemental policy (Medigap) provisions on coverage election periods; and (2) variations in premiums and benefits under Medicare+Choice within counties.
Directs the Secretary of Health and Human Services to provide that risk-adjustment methodology under Medicare+Choice, insofar as it makes adjustments to capitation rates for health status, shall not only apply to ten percent of 1/12 of the annual Medicare+Choice capitation rate in the case of an eligible individual who is institutionalized until the first year in which the Secretary implements a modification of such methodology based on health status so that such methodology includes medical diagnostic factors from all provider settings (including hospital and nursing facility settings).

SECTION 1. SHORT TITLE.

    This Act may be cited as the ``Medicare+Choice Rescue Act of 
2000''.

SEC. 2. INCREASE IN NATIONAL PER CAPITA MEDICARE+CHOICE GROWTH 
              PERCENTAGE IN 2001 AND 2002.

    Section 1853(c)(6)(B) of the Social Security Act (42 U.S.C. 1395w-
23(c)(6)(B)) is amended--
            (1) in clause (iv), by striking ``for 2001, 0.5 percentage 
        points'' and inserting ``for 2001, 0 percentage points''; and
            (2) in clause (v), by striking ``for 2002, 0.3 percentage 
        points'' and inserting ``for 2002, 0 percentage points''.

SEC. 3. ELIMINATION OF REDUCTION IN MEDICARE+CHOICE PAYMENT RATES BY 
              BUDGET NEUTRALITY ADJUSTMENTS.

    (a) In General.--Section 1853(c)(1)(A) of the Social Security Act 
(42 U.S.C. 1395w-23(c)(1)(A)) is amended by adding at the end the 
following: ``With respect to years beginning on or after January 1, 
2001, in no case shall the budget neutrality adjustment provided for in 
the previous sentence result in a reduction of the payment amount that 
would otherwise be made under this subparagraph but for such 
adjustment.''.

SEC. 4. PAYMENT FLOOR FOR MEDICARE+CHOICE PLANS.

    (a) In General.--Section 1853(c)(1) of the Social Security Act (42 
U.S.C. 1395w-23(c)(1)) is amended--
            (1) in the matter before subparagraph (A), by striking ``or 
        (C)'' and inserting ``(C), or (D)''; and
            (2) by adding at the end the following new subparagraph:
                    ``(D) True floor based on 90 percent of the fee-
                for-service per capita expenditures for medicare+choice 
                plans.--In the case of a plan, 90 percent of an amount 
                equal to the annual per capita rate of payment 
                described in section 1876(a)(1)(C) for the area 
                involved.''.
    (b) Effective Date.--The amendments made by subsection (a) apply to 
payments for months beginning on or after January 2001.

SEC. 5. CORRECTING FOR MISESTIMATES IN THE GROWTH RATE; LIMITING 
              RETROACTIVE ADJUSTMENTS.

    (a) In General.--Notwithstanding any other provision of law, for 
purposes of payments under section 1853(c) of the Social Security Act 
(42 U.S.C. 1395w-23(c)) to Medicare+Choice organizations offering 
Medicare+Choice plans for 2001, the Secretary of Health and Human 
Services shall provide for an increase by 3.6 percent the amount of 
payment otherwise applicable to such plans under that section in 2001.
    (b) Hold Harmless for Errors in Estimates.--Section 1853(c)(6) of 
such Act (42 U.S.C. 1395w-23(c)(6)) is amended--
            (1) in subparagraph (C), by striking ``Beginning with 
        rates'' and inserting ``Subject to subparagraph (D), beginning 
        with rates''; and
            (2) by adding at the end the following new subparagraph:
                    ``(D) Hold harmless for over projections.--
                Beginning with rates calculated for 2002, in making 
                adjustments under subparagraph (C), in no case may the 
                Secretary provide for an adjustment in a year for that 
                results in a reduction of the national per capita 
                Medicare+Choice growth percentage that is greater than 
                0.5 percent.''.

SEC. 6. ADDITIONAL FLOOR FOR ANNUAL INCREASE IN MEDICARE+CHOICE 
              CAPITATION RATES.

    Section 1853(c)(3)(C) of the Social Security Act (42 U.S.C. 1395w-
23(c)(3)(C)) is amended--
            (1) in clause (ii), by inserting ``(before 2002)'' after 
        ``For a subsequent year''; and
            (2) by adding at the end the following new clause:
                            ``(iii) For 2002 and each subsequent year, 
                        the greater of (I) 102 percent of the annual 
                        Medicare+Choice capitation rate under this 
                        paragraph for the area for the previous year, 
                        or (II) such rate for the previous year 
                        increased by the national per capita 
                        Medicare+Choice growth percentage, described in 
                        paragraph (6)(A) for the succeeding year.''.

SEC. 7. APPLICATION OF BUDGET NEUTRALITY PRINCIPLE TO THE NEW 
              MEDICARE+CHOICE RISK ADJUSTMENT METHODOLOGY.

    (a) In General.--Section 1853(a)(3) of the Social Security Act (42 
U.S.C. 1395w-23(a)(3)) is amended by adding at the end the following 
new subparagraph:
                    ``(E) Implementation in a budget neutral manner.--
                The methodology under this paragraph shall be designed 
                and implemented in a manner so that it does not result 
                in any material change in the aggregate level of 
                expenditures under this title compared to the level 
                that would have occurred if such methodology had not 
                been implemented (and if the previous risk adjustment 
                methodology used in 1998 had continued to be 
                implemented).''.
    (b) Effective Date.--The amendment made by subsection (a) takes 
effect on the date of the enactment of this Act and applies to payments 
for months beginning on or after January 2001.

SEC. 8. PROVIDING FOR CONTINUOUS OPEN ENROLLMENT AND DISENROLLMENT.

    (a) In General.--Section 1851(e)(2) of the Social Security Act (42 
U.S.C. 1395w-21(e)(2)) is amended to read as follows:
            ``(2) Continuous open enrollment and disenrollment.--
        Subject to paragraph (5), a Medicare+Choice eligible individual 
        may change the election under subsection (a)(1) at any time.''.
    (b) Conforming Amendments.--
            (1) Medicare+choice.--Section 1851(e) of such Act (42 
        U.S.C. 1395w-21(e)) is amended--
                    (A) in paragraph (4)--
                            (i) by striking ``Effective as of January 
                        1, 2002, an'' and inserting ``An'';
                            (ii) by striking ``other than during an 
                        annual, coordinated election period'';
                            (iii) by inserting ``in a special election 
                        period for such purpose'' after ``make a new 
                        election under this section''; and
                            (iv) by striking the second sentence; and
                    (B) in paragraphs (5)(B) and (6)(A), by striking 
                ``the first sentence of''.
            (2) Medigap.--Section 1882(s)(3)(B) of such Act (42 U.S.C. 
        1395ss(s)(3)(B)) is amended--
                    (A) in clause (ii), by striking ``permitting 
                discontinuance of the individual's election of the plan 
                under the first sentence of section 1851(e)(4)'' and 
                inserting ``providing the individual a special election 
                period under section 1851(e)(4)''; and
                    (B) in clause (iii), by striking ``permit 
                discontinuance of an individual's election of coverage 
                under the first sentence of section 1851(e)(4)'' and 
                inserting ``provide the individual a special election 
                period under section 1851(e)(4)''.
    (c) Effective Date.--The amendments made by this section apply with 
respect to plan years beginning on or after January 1, 2002.

SEC. 9. ALLOWING VARIATION IN PREMIUMS AND BENEFITS WITHIN COUNTIES.

    (a) In General.--Subsections (c) and (f)(1)(D) of section 1854 of 
the Social Security Act (42 U.S.C. 1395w-24) are each amended by 
inserting before the period at the end the following: ``, expect that 
the Secretary shall provide for exceptions based on provider catchment 
area that may be a geographic area that is smaller than a county or a 
catchment area that crosses the boundaries of two or more counties''.
    (b) Effective Date.--The amendments made by subsection (a) apply 
with respect to years beginning on or after January 1, 2001.

SEC. 10. MODIFYING PHASE-IN OF MEDICARE+CHOICE RISK-ADJUSTMENT 
              METHODOLOGY FOR INSTITUTIONALIZED MEDICARE BENEFICIARIES.

    The Secretary of Health and Human Services shall provide that the 
risk-adjustment methodology applied under section 1853(a) of the Social 
Security Act (42 U.S.C. 1395w-23(a)), insofar as it makes adjustments 
to capitation rates for health status, shall only apply to 10 percent 
of \1/12\ of the annual Medicare+Choice capitation rate in the case of 
an eligible individual who is institutionalized (as defined for 
purposes of section 1851(e)(2)(D) of such Act (42 U.S.C. 1395w-
21(e)(2)(D))) until the first year in which the Secretary implements a 
modification of such methodology based on health status so that such 
methodology includes medical diagnostic factors from all provider 
settings (including hospital and nursing facility settings).