SECTION 1. SHORT TITLE.

    This Act may be cited as the ``Seniors Health Choice Preservation 
Act of 2000''.

SEC. 2. 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. 3. CHANGES TO HEALTH-STATUS RISK ADJUSTMENT.

    (a) Implementation of Health-status Risk Adjustment Through 
Negotiated Rulemaking.--Section 1853(c) of the Social Security Act (42 
U.S.C. 1395w-23(c)) is further amended by adding at the end the 
following new paragraph:
            ``(4) Implementation of health-status risk adjustment 
        through negotiated rulemaking.--
                    ``(A) In general.--The Secretary shall establish, 
                using a negotiated rulemaking process under subchapter 
                III of chapter 5 of title 5, United States Code, and on 
                an expedited basis, health-status related risk 
                adjustors described in paragraph (3).
                    ``(B) Appointment of committee.--In appointing 
                negotiated rulemaking committee under section 565(a) of 
                such title, the Secretary shall include representatives 
                of Medicare+Choice organizations, providers, the 
                Medicare Payment Advisory Commission, the Academy of 
                Actuaries, the Department of Health and Human Services, 
                and representatives of organizations with expertise in 
                data privacy issues.
                    ``(C) Factors to consider.--The health status risk 
                adjustment methodology shall be based on the health 
                status of Medicare+Choice enrollees. In evaluating 
                alternative approaches, the committee and the Secretary 
                shall weigh the costs of implementing risk adjustment 
                methods against their benefits in terms of predictive 
                power.
                    ``(D) Deadlines.--
                            ``(i) Committee appointment.--The Secretary 
                        shall provide for the appointment of the 
                        negotiated rulemaking committee under 
                        subparagraph (B) by not later than 6 months 
                        after the date of the enactment of this 
                        paragraph.
                            ``(ii) Reporting deadline.--The committee 
                        shall submit its recommendations to the 
                        Secretary by not later than December 31, 2001.
                    ``(E) Superseding other provisions.--Regulations 
                promulgated by the Secretary pursuant to 
                recommendations of the committee shall supersede the 
                regulations implemented under paragraph (3).''.
    (b) Limiting Phase-in of Current Health-Status Risk Adjustment 
Methodology.--Section 1853(a)(3)(C)(ii)(II) of such Act (42 U.S.C. 
1395w-23(a)(3)(C)(ii)(II)), as amended by section 511(a) of the 
Medicare, Medicaid, and SCHIP Balanced Budget Refinement Act of 1999 
(113 Stat. 1501A-380), as enacted into law by section 1000(a)(6) of 
Public Law 106-113, is amended by striking ``not more than 20 percent 
of such capitation rate in 2002'' and inserting ``not more than 10 
percentage points more than the percent of \1/12\ of the annual 
Medicare+Choice capitation rate that it applied to in the previous 
year, except as may be provided for under paragraph (4)''.
    (c) Elimination of Requirement To Report Encounter Data.--The 
Secretary of Health and Human Services shall immediately discontinue 
all activity related to requiring Medicare+Choice organizations, under 
part C of title XVIII of the Social Security Act, to submit encounter 
data for sites other than hospital inpatient departments, before final 
regulations are promulgated implementing the health-status risk 
adjustment methodology developed under the amendment made by subsection 
(a).

SEC. 4. 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. 5. PAYMENT OF ADDITIONAL DRUG INFLATION DIFFERENTIAL FOR 
              MEDICARE+CHOICE PLANS OFFERING QUALIFIED PRESCRIPTION 
              DRUG COVERAGE.

    (a) In General.--Section 1853 of the Social Security Act (42 U.S.C. 
1395w-23) is amended--
            (1) in subsection (a)(1)(A), by striking ``and (i)'' and 
        inserting ``(i), and (j)''; and
            (2) by adding at the end the following new subsection:
    ``(j) Payment of Additional Drug Inflation Differential for 
Medicare+Choice Plans Offering Qualified Prescription Drug Coverage.--
            ``(1) In general.--In the case of a Medicare+Choice plan 
        that offers qualified prescription drug coverage (as defined in 
        paragraph (2))) in a year and that meets the conditions 
        described in paragraph (3), the annual Medicare+Choice 
        capitation rate otherwise applied under this section shall be 
        increased by the percentage specified in paragraph (4).
            ``(2) Qualified prescription drug coverage defined.--In 
        this subsection, the term `qualified prescription drug 
        coverage' means coverage for outpatient prescription drugs 
        under which--
                    ``(A) there is no deductible applicable; and
                    ``(B) there is either no limitation to the amount 
                of benefits available in a year or any such limitation 
                is not less than $1,500.
        Nothing in this paragraph shall be construed as preventing a 
        Medicare+Choice plan offering qualified prescription drug 
        coverage from imposing a copayment or other cost-sharing, other 
        than a deductible.
            ``(3) Conditions.--The conditions described in this 
        paragraph with respect to a Medicare+Choice plan for months in 
        a year are as follows:
                    ``(A) No separate premium.--There is no separate 
                premium established for qualified prescription drug 
                coverage under the plan.
                    ``(B) Limit on premiums.--The adjusted community 
                rate proposal shall include a certification that the 
                percentage increase in the cost of drug benefits does 
                not exceed 150 percent of the Secretary's estimate of 
                the percentage specified in paragraph (4), adjusted to 
                fairly reflect changes in the benefits provided.
            ``(4) Differential percentage.--The percentage specified in 
        this paragraph for a Medicare+Choice plan for months in a year 
        is equal to the product of the following:
                    ``(A) Drug inflation differential.--The number of 
                percentage points by which--
                            ``(i) the annual rate of inflation for 
                        prescription drug coverage under 
                        Medicare+Choice plans (as estimated by the 
                        Secretary for the year), exceeds
                            ``(ii) the percentage increase in the 
                        annual Medicare+Choice capitation rate 
                        applicable to the plan under subsection (a) 
                        (not taking into account this subsection) for 
                        the year involved.
                    ``(B) Proportion of total value represented by drug 
                coverage.--The ratio of--
                            ``(i) the average per capita actuarial 
                        value of the qualified prescription drug 
                        coverage under the plan for the year; to
                            ``(ii) the actuarial value of all benefits 
                        under the plan for the year.
        In no case shall the percentage under this paragraph be less 
        than 0.
            ``(5) Treatment.--The percentage increase in payment 
        effected under this subsection shall be taken into account in 
        applying section 1854(f) (relating to additional benefits) and 
        such payment increase is subject to adjustment for risk factors 
        under subsection (a) in the same manner as the payment 
        described in such subsection.
            ``(6) Construction.--Nothing in this subsection shall be 
        construed as requiring a Medicare+Choice plan to provide 
        qualified or other prescription drug coverage.''.
    (b) Effective Date.--The amendments made by subsection (a) apply to 
payment for months beginning with January 2002.
Directs the Secretary of Health and Human Services to discontinue immediately all activity related to requiring Medicare+Choice organizations to submit encounter data for sites other than hospital inpatient departments, before final regulations are promulgated implementing the health-status risk adjustment methodology established under this Act.
Seniors Health Choice Preservation Act of 2000