To amend part C of title XVIII to require Medicare+Choice organizations to offer Medicare+Choice plans for a minimum period of three years, and to permit Medicare beneficiaries to enroll and disenroll from such plans at any time.

SECTION 1. SHORT TITLE.

    This Act may be cited as the ``Medicare+Choice Accountability Act 
of 2001''.

SEC. 2. EXTENSION OF INITIAL MEDICARE+CHOICE CONTRACT PERIOD TO 3 
              YEARS.

    (a) Requirement for 3-Year Contracts.--Section 1857(c)(1) of the 
Social Security Act (42 U.S.C. 1395w-27(c)(1)) is amended--
            (1) by redesignating the matter following the heading as 
        subparagraph (A) and inserting ``In general.--'' after ``(A)'';
            (2) in subparagraph (A), as so redesignated--
                    (A) by striking ``a term of at least 1 year'' and 
                inserting ``an initial term of at least 3 years''; and
                    (B) by striking ``from term to term'' and inserting 
                ``for additional 3-year periods thereafter''; and
            (3) by adding at the end the following new subparagraphs:
                    ``(B) Limitation on modification of benefits and 
                premiums during the contract period.--A Medicare+Choice 
                organization under a contract with the Secretary under 
                this section may not modify premiums and benefits under 
                the Medicare+Choice plan offered by the organization 
                for the duration of that contract unless the Secretary 
                determines that such modifications would increase the 
                value of the coverage under the plan.
                    ``(C) Prohibition on withdrawing from parts of a 
                service area.--A Medicare+Choice organization under a 
                contract with the Secretary under this section may not 
                withdraw from any part of the service area in which it 
                offers a Medicare+Choice plan.''.
    (b) Payment Amount.--Section 1853(c) of such Act (42 U.S.C. 1395w-
23(c)) is amended to read as follows:
    ``(c) Calculation of Annual Medicare+Choice Capitation Rates.--
            ``(1) Adjusted average per capita amount.--For purposes of 
        this part, subject to paragraph (2), each annual 
        Medicare+Choice capitation rate, for a Medicare+Choice payment 
        area for a contract year consisting of a calendar year, is 
        equal to the Secretary's estimate of the adjusted average per 
        capita cost (as determined under section 1876(a)(4)) for the 
        payment area and contract year.
            ``(2) Exclusion of medical education costs.--In determining 
        the amounts under paragraph (1), the Secretary shall not take 
        into account payments attributable to--
                    ``(A) graduate medical education payments under 
                section 1886(h);
                    ``(B) disproportionate share hospital payments 
                described in section 1886(d)(5)(F); or
                    ``(C) indirect costs of medical education described 
                in section 1886(d)(5)(B).''.
    (c) Service Areas Requirements.--Section 1852 of such Act (42 
U.S.C. 1395w-22) is amended by adding at the end the following new 
subsection:
    ``(m) Service Areas.--
            ``(1) Designation by Secretary.--Taking into account 
        factors such as commercial rating patterns, the Secretary shall 
        designate geographic areas as service areas for purposes of 
        this part. Such areas may be portions of a State or an entire 
        State.
            ``(2) Prohibition on counties being in multiple service 
        areas.--In no case may a county or equivalent area, or portion 
        thereof, be included in more than one service area designated 
        by the Secretary under paragraph (1).''.
    (d) Benefits.--
            (1) Requirement for uniform benefits for all enrollees 
        residing in the service area.--
                    (A) In general.--Section 1852(a) of such Act (42 
                U.S.C. 1395w-22(a)) is amended--
                    (i)(I) in paragraph (2)(C), by striking ``may elect 
                to'' and inserting ``shall''; and
                    (II) in the heading of such paragraph by striking 
                ``Election of'' and inserting ``Requirement for''; and
                    (ii) by adding at the end the following new 
                paragraph:
            ``(6) Requirement for uniform benefits in a service area.--
                    ``(A) In general.--Subject to subparagraph (B), a 
                Medicare+Choice plan shall provide the same benefits to 
                all enrollees in a service area (designated by the 
                Secretary under subsection (m)).
                    ``(B) Adaption by health maintenance 
                organizations.--In applying subparagraph (A) in the 
                case of a plan that is a health maintenance 
                organization, if limitations in provider contracts 
                prevent the plan from maintaining the provider 
                contracts in certain parts of a service area, the plan 
                may establish a preferred provider network or fee-for-
                service plan in those parts of the service area, but 
                only if the cost-sharing applicable to such a network 
                or plan is not established in a manner that discourages 
                enrollment of residents in those parts of the service 
                area.''.
                    (B) Conforming repeal of authority to use of 
                segments of service areas.--Section 1854 of such Act 
                (42 U.S.C. 1395w-24) is amended by striking subsection 
                (h).
            (2) No requirement for supplemental benefits.--
                    (A) In general.--Section 1854(f)) of such Act (42 
                U.S.C. 1395w-24(f))) is amended by adding at the end 
                the following new paragraph:
            ``(5) Application of provision.--The provisions of this 
        subsection shall not apply for any year with respect to which a 
        Medicare+Choice organization has entered into a 3-year contract 
        with the Secretary under section 1857(c)(1).''.
                    (B) Conforming amendment.--Section 1852(a)(1)(B) of 
                such Act (42 U.S.C. 1395w-22(a)(1)(B)) is amended by 
                inserting before the period the following: ``for any 
                year with respect to which a Medicare+Choice 
                organization has entered into a 3-year contract with 
                the Secretary under section 1857(c)(1)''.
    (e) Effective Date.--The amendments made by this section shall 
apply to contracts entered into on or after January 1, 2002.

SEC. 3. 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) Permitting reenrollment in medigap when m+c plans 
        reduce benefits.--
                    (A) In general.--Clause (ii) of section 
                1882(s)(3)(B) of such Act (42 U.S.C. 1395ss(s)(3)(B)) 
                is amended--
                            (i) by striking ``under the first sentence 
                        of'' each place it appears and inserting 
                        ``during a special election period provided for 
                        under''; and
                            (ii) by inserting ``(including a reduction 
                        in benefits offered under a Medicare+Choice 
                        plan from year to year)'' after ``section 
                        1851(e)(4)''.
                    (B) Conforming amendment.--Clause (iii) of such 
                section is amended--
                            (i) by striking ``under the first sentence 
                        of'' and inserting ``during a special election 
                        period provided for under''; and
                            (ii) by inserting ``(including a reduction 
                        in benefits offered under a Medicare+Choice 
                        plan from year to year)'' after ``section 
                        1851(e)(4)''.
    (c) Effective Date.--The amendments made by this section shall 
apply with respect to plan years beginning on or after January 1, 2002.

Summary: Medicare Choice Accountability Act of 2001 - Amends the Social Security Act to: (1) extend the Medicare Choice contract period to three years, and (2) permit continuous open enrollment or disenrollment.