A bill to amend title XVIII of the Social Security Act to expand and make permanent the medicare subvention demonstration project for military retirees and dependents

Summary: Increases the number of authorized sites for the Medicare subvention demonstration project for certain Medicare-eligible military retirees and their dependents (a project established by the Balanced Budget Act of 1997 under title XVIII (Medicare) of the Social Security Act).  Provides for the future repeal of the limitation on the number of such sites (thus allowing the project to be conducted at any site designed by the Secretary of Health and Human Services and the Secretary of Defense acting jointly).  Makes the project permanent. 
Makes further changes regarding the project, permitting payment under it to be made on a fee-for-service basis for certain Medicare-eligible eligible military retirees and their dependents not enrolled in the project, and eliminating certain restrictive project participation policy.  Applies to certain Medigap (Medicare supplemental health insurance policy) enrollees the same protections (prohibitions against issuer discrimination) as apply to enrollment (and termination of enrollment) with a Medicare+Choice organization in a Medicare+Choice plan under Medicare part C (Medicare+Choice).

SECTION 1. MEDICARE SUBVENTION FOR MILITARY RETIREES AND DEPENDENTS.

    (a) Expansion of Sites.--
            (1) Expansion to 16 sites.--Effective January 1, 2000, 
        subsection (b)(2) of section 1896 of the Social Security Act 
        (42 U.S.C. 1395ggg) is amended by striking ``6'' and inserting 
        ``16''.
            (2) Future repeal of limitation on number of sites.--
        Effective October 1, 2002, paragraph (2) of section 1896(b) of 
        such Act is amended to read as follows:
            ``(2) Location of sites.--
                    ``(A) In general.--Subject to subparagraph (B), the 
                program shall be conducted in any site designated 
                jointly by the administering Secretaries.
                    ``(B) Fee-for-service.--If feasible, at least 1 of 
                the sites designated under subparagraph (A) shall be 
                conducted using the fee-for-service reimbursement 
                method described in subsection (l).''.
    (b) Making Project Permanent; Changes in Project References.--
            (1) Elimination of time limitation.--Paragraph (4) of 
        section 1896(b) of such Act is repealed.
            (2) Conforming changes of references to demonstration 
        project.--Section 1896 of such Act is further amended--
                    (A) in the heading, by striking ``demonstration 
                project'' and inserting ``program'';
                    (B) by amending subsection (a)(2) to read as 
                follows:
            ``(2) Program.--The term `program' means the program 
        carried out under this section.'';
                    (C) in the heading to subsection (b), by striking 
                ``Demonstration Project'' and inserting ``Program'';
                    (D) by striking ``demonstration project'' or 
                ``project'' each place either appears and inserting 
                ``program''; and
                    (E) in subsection (k)(2)--
                            (i) in the heading, by striking ``extension 
                        and expansion of demonstration project'' and 
                        inserting ``program''; and
                            (ii) by striking subparagraphs (A) through 
                        (C) and inserting the following:
                    ``(A) whether there is a cost to the health care 
                program under this title in conducting the program 
                under this section; and
                    ``(B) whether the terms and conditions of the 
                program should be modified.''.
            (3) Repeal of obsolete reporting requirement.--Paragraph 
        (5) of section 1896(b) of such Act is repealed.
    (c) Permitting Payment on a Fee-for-Service Basis.--
            (1) In general.--Section 1896 of the Social Security Act is 
        further amended by adding at the end the following new 
        subsection:
    ``(l) Reimbursement on Fee-for-Service Basis For Services Provided 
to Unenrolled Individuals.--Notwithstanding subsection (i), in the case 
of medicare-eligible military retirees or dependents who are not 
enrolled in the program under this section, the Secretary may reimburse 
the Secretary of Defense for medicare health care services provided to 
such retirees or dependents at a military treatment facility under the 
program at a rate that does not exceed the rate of payment that would 
otherwise be made under this title for such services if sections 
1814(c) and 1835(d), and paragraphs (2) and (3) of section 1862(a), did 
not apply.''.
            (2) Conforming amendments.--Such section is further 
        amended--
                    (A) in subsections (b)(1)(B)(v) and 
                (b)(1)(B)(viii)(I), by inserting ``or subsection (l)'' 
                after ``subsection (i)'';
                    (B) in subsection (b)(2), by adding at the end the 
                following: ``If feasible, at least 1 of the sites shall 
                be conducted using the fee-for-service reimbursement 
                method described in subsection (l).'';
                    (C) in subsection (d)(1)(A), by inserting 
                ``(insofar as it provides for the enrollment of 
                individuals and payment on the basis described in 
                subsection (i))'' before ``shall meet'';
                    (D) in subsection (d)(1)(A), by inserting ``and the 
                program (insofar as it provides for payment for 
                medicare health care services provided at a military 
                treatment facility on the basis described in subsection 
                (l)) shall meet all requirements that are applicable to 
                facilities that provide such services under this 
                title'' after ``medicare payments'';
                    (E) in subsection (d)(2), by inserting ``, insofar 
                as it provides for the enrollment of individuals and 
                payment on the basis described in subsection (i),'' 
                before ``shall comply'';
                    (F) in subsection (g)(1), by inserting ``, insofar 
                as it provides for the enrollment of individuals and 
                payment on the basis described in subsection (i),'' 
                before ``the Secretary of Defense'';
                    (G) in subsection (i)(1), by inserting ``and 
                subsection (l)'' after ``of this subsection'';
                    (H) in subsection (i)(4), by inserting ``and 
                subsection (l)'' after ``under this subsection''; and
                    (I) in subsection (j)(2)(B)(ii), by inserting ``or 
                subsection (l)'' after ``subsection (i)(1)''.
            (3) Effective date.--The amendments made by this subsection 
        take effect on January 1, 2000, and apply to services furnished 
        on or after such date.
    (d) Elimination of Restriction on Eligibility.--Section 1896(b)(1) 
of such Act is amended by adding at the end the following new 
subparagraph:
                    ``(C) Elimination of restrictive policy.--If the 
                enrollment capacity in the program has been reached at 
                a particular site designated under paragraph (2) and 
                the Secretary therefore limits enrollment at the site 
                to medicare-eligible military retirees and dependents 
                who are enrolled in TRICARE Prime (as defined for 
                purposes of chapter 55 of title 10, United States Code) 
                at the site immediately before attaining 65 years of 
                age, participation in the program by a retiree or 
                dependent at such site shall not be restricted based on 
                whether the retiree or dependent has a civilian primary 
                care manager instead of a military primary care 
                manager.''.
    (e) Medigap Protection for Enrollees.--Section 1896 of such Act is 
further amended by adding at the end the following new subsection:
    ``(m) Medigap Protection for Enrollees.--
            ``(1) In General.--Subject to paragraph (2), the provisions 
        of section 1882(s)(3) (other than clauses (i) through (iv) of 
        subparagraph (B)) and 1882(s)(4) shall apply to any enrollment 
        (and termination of enrollment) in the program (for which 
        payment is made on the basis described in subsection (i)) in 
        the same manner as they apply to enrollment (and termination of 
        enrollment) with a Medicare+Choice organization in a 
        Medicare+Choice plan.
            ``(2) Rule of construction.--In applying paragraph (1)--
            ``(A) in the case of enrollments occurring before January 
        1, 2000, any reference in clause (v) or (vi) of section 
        1882(s)(3)(B) to 12 months is deemed a reference to the period 
        ending on December 31, 2000; and
            ``(B) the notification required under section 1882(s)(3)(D) 
        shall be provided in a manner specified by the Secretary of 
        Defense in consultation with the Director of the Office of 
        Personnel Management.''.