To amend title XVIII of the Social Security Act to revitalize and improve the Medicare+Choice program.

SECTION 1. SHORT TITLE.

    This Act may be cited as the ``Medicare+Choice Revitalization Act 
of 2003''.

SEC. 2. MEDICARE+CHOICE IMPROVEMENTS.

    (a) Equalizing Payments Between Fee-for-Service and 
Medicare+Choice.--
            (1) In general.--Section 1853(c)(1) of the Social Security 
        Act (42 U.S.C. 1395w-23(c)(1)) is amended by adding at the end 
        the following:
                    ``(D) Based on 100 percent of fee-for-service 
                costs.--
                            ``(i) In general.--For 2004 and any 
                        subsequent year, the adjusted average per 
                        capita cost for the year involved, determined 
                        under section 1876(a)(4) for the 
                        Medicare+Choice payment area for services 
                        covered under parts A and B for individuals 
                        entitled to benefits under part A and enrolled 
                        under part B who are not enrolled in a 
                        Medicare+Choice plan under this part for the 
                        year.
                            ``(ii) Inclusion of costs of va and dod 
                        military facility services to medicare-Eligible 
                        beneficiaries.--In determining the adjusted 
                        average per capita cost under clause (i) for a 
                        year, such cost shall be adjusted to include 
                        the Secretary's estimate, on a per capita 
                        basis, of the amount of additional payments 
                        that would have been made in the area involved 
                        under this title if individuals entitled to 
                        benefits under this title had not received 
                        services from facilities of the Department of 
                        Veterans Affairs or the Department of 
                        Defense.''.
            (2) Conforming amendment.--Such section is further amended, 
        in the matter before subparagraph (A), by striking ``or (C)'' 
        and inserting ``(C), or (D)''.
    (b) Revision of Blend.--
            (1) Revision of national average used in calculation of 
        blend.--Section 1853(c)(4)(B)(i)(II) of such Act (42 U.S.C. 
        1395w-23(c)(4)(B)(i)(II)) is amended by inserting ``who (with 
        respect to determinations for 2004 and any subsequent year) are 
        enrolled in a Medicare+Choice plan'' after ``the average number 
        of medicare beneficiaries''.
            (2) Change in budget neutrality.--Section 1853(c) of such 
        Act (42 U.S.C. 1395w-23(c)) is amended--
                    (A) in paragraph (1)(A), by inserting ``(for a year 
                before 2003)'' after ``multiplied''; and
                    (B) in paragraph (5), by inserting ``(before 
                2003)'' after ``for each year''.
    (c) Revision in Minimum Percentage Increase.--Section 1853(c)(1)(C) 
of such Act (42 U.S.C. 1395w-23(c)(1)(C)) is amended by striking clause 
(iv) and inserting the following:
                            ``(iv) For 2002 and 2003, 102 percent of 
                        the annual Medicare+Choice capitation rate 
                        under this paragraph for the area for the 
                        previous year.
                            ``(v) For 2004 and each succeeding year, 
                        104 percent of the annual Medicare+Choice 
                        capitation rate under this paragraph for the 
                        area for the previous year.''.
    (d) Inclusion of Costs of DOD and VA Military Facility Services to 
Medicare-Eligible Beneficiaries in Calculation of Medicare+Choice 
Payment Rates.--Section 1853(c)(3) of such Act (42 U.S.C. 1395w-
23(c)(3)) is amended--
            (1) in subparagraph (A), by striking ``subparagraph (B)'' 
        and inserting ``subparagraphs (B) and (E)'', and
            (2) by adding at the end the following new subparagraph:
                    ``(E) Inclusion of costs of dod and va military 
                facility services to medicare-eligible beneficiaries.--
                In determining the area-specific Medicare+Choice 
                capitation rate under subparagraph (A) for a year 
                (beginning with 2004), the annual per capita rate of 
                payment for 1997 determined under section 1876(a)(1)(C) 
                shall be adjusted to include in the rate the 
                Secretary's estimate, on a per capita basis, of the 
                amount of additional payments that would have been made 
                in the area involved under this title if individuals 
                entitled to benefits under this title had not received 
                services from facilities of the Department of Defense 
                or the Department of Veterans Affairs.''.
    (e) Announcement of Revised Medicare+Choice Payment Rates.--Within 
4 weeks after the date of the enactment of this Act, the Secretary 
shall determine, and shall announce (in a manner intended to provide 
notice to interested parties) Medicare+Choice capitation rates under 
section 1853 of the Social Security Act (42 U.S.C. 1395w-23) for 2004, 
revised in accordance with the provisions of this section.
    (f) MedPAC Study of AAPCC.--
            (1) Study.--The Medicare Payment Advisory Commission shall 
        conduct a study that assesses the method used for determining 
        the adjusted average per capita cost (AAPCC) under section 
1876(a)(4) of the Social Security Act (42 U.S.C. 1395mm(a)(4)). Such 
study shall examine--
                    (A) the bases for variation in such costs between 
                different areas, including differences in input prices, 
                utilization, and practice patterns;
                    (B) the appropriate geographic area for payment 
                under the Medicare+Choice program under part C of title 
                XVIII of such Act; and
                    (C) the accuracy of risk adjustment methods in 
                reflecting differences in costs of providing care to 
                different groups of beneficiaries served under such 
                program.
            (2) Report.--Not later than 9 months after the date of the 
        enactment of this Act, the Commission shall submit to Congress 
        a report on the study conducted under paragraph (1). Such 
        report shall include recommendations regarding changes in the 
        methods for computing the adjusted average per capita cost 
        among different areas.
    (g) Report on Impact of Increased Financial Assistance to 
Medicare+Choice Plans.--Not later than July 1, 2004, the Secretary of 
Health and Human Services shall submit to Congress a report that 
describes the impact of additional financing provided under this Act 
and other Acts (including the Medicare, Medicaid, and SCHIP Balanced 
Budget Refinement Act of 1999 and BIPA) on the availability of 
Medicare+Choice plans in different areas and its impact on lowering 
premiums and increasing benefits under such plans.

SEC. 3. MAKING PERMANENT CHANGE IN MEDICARE+CHOICE REPORTING DEADLINES 
              AND ANNUAL, COORDINATED ELECTION PERIOD.

    (a) Change in Reporting Deadline.--Section 1854(a)(1) of the Social 
Security Act (42 U.S.C. 1395w-24(a)(1)) is amended by striking ``2002, 
2003, and 2004 (or July 1 of each other year)'' and inserting ``2002 
and each subsequent year (or July 1 of each year before 2002)''.
    (b) Delay in Annual, Coordinated Election Period.--Section 
1851(e)(3)(B) of such Act (42 U.S.C. 1395w-21(e)(3)(B)) is amended by 
striking ``and after 2005, the month of November before such year and 
with respect to 2003, 2004, and 2005'' and inserting ``, the month of 
November before such year and with respect to 2003 and any subsequent 
year''.
    (c) Annual Announcement of Payment Rates.--Section 1853(b)(1) of 
such Act (42 U.S.C. 1395w-23(b)(1)) is amended by striking ``and after 
2005 not later than March 1 before the calendar year concerned and for 
2004 and 2005'' and inserting ``not later than March 1 before the 
calendar year concerned and for 2004 and each subsequent year''.
    (d) Requiring Provision of Available Information Comparing Plan 
Options.--The first sentence of section 1851(d)(2)(A)(ii) of such Act 
(42 U.S.C. 1395w-21(d)(2)(A)(ii)) is amended by inserting before the 
period the following: ``to the extent such information is available at 
the time of preparation of materials for the mailing''.

SEC. 4. AVOIDING DUPLICATIVE STATE REGULATION.

    (a) In General.--Section 1856(b)(3) of the Social Security Act (42 
U.S.C. 1395w-26(b)(3)) is amended to read as follows:
            ``(3) Relation to state laws.--The standards established 
        under this subsection shall supersede any State law or 
        regulation (other than State licensing laws or State laws 
        relating to plan solvency) with respect to Medicare+Choice 
        plans which are offered by Medicare+Choice organizations under 
        this part.''.
    (b) Effective Date.--The amendment made by subsection (a) shall 
take effect on the date of the enactment of this Act.

SEC. 5. SPECIALIZED MEDICARE+CHOICE PLANS FOR SPECIAL NEEDS 
              BENEFICIARIES.

    (a) Treatment as Coordinated Care Plan.--Section 1851(a)(2)(A) of 
the Social Security Act (42 U.S.C. 1395w-21(a)(2)(A)) is amended by 
adding at the end the following new sentence: ``Specialized 
Medicare+Choice plans for special needs beneficiaries (as defined in 
section 1859(b)(4)) may be any type of coordinated care plan.''.
    (b) Specialized Medicare+Choice Plan for Special Needs 
Beneficiaries Defined.--Section 1859(b) of such Act (42 U.S.C. 1395w-
29(b)) is amended by adding at the end the following new paragraph:
            ``(4) Specialized medicare+choice plans for special needs 
        beneficiaries.--
                    ``(A) In general.--The term `specialized 
                Medicare+Choice plan for special needs beneficiaries' 
                means a Medicare+Choice plan that exclusively serves 
                special needs beneficiaries (as defined in subparagraph 
                (B)).
                    ``(B) Special needs beneficiary.--The term `special 
                needs beneficiary' means a Medicare+Choice eligible 
                individual who--
                            ``(i) is institutionalized (as defined by 
                        the Secretary);
                            ``(ii) is entitled to medical assistance 
                        under a State plan under title XIX;
                            ``(iii) is residing in a Continuing Care 
                        Retirement Community (as defined in section 
                        1852(l)(4)(B); or
                            ``(iv) meets such requirements as the 
                        Secretary may determine would benefit from 
                        enrollment in such a specialized 
                        Medicare+Choice plan described in subparagraph 
                        (A) for individuals with severe or disabling 
                        chronic conditions.''.
    (c) Restriction on Enrollment Permitted.--Section 1859 of such Act 
(42 U.S.C. 1395w-29) is amended by adding at the end the following new 
subsection:
    ``(f) Restriction on Enrollment for Specialized Medicare+Choice 
Plans for Special Needs Beneficiaries.--In the case of a specialized 
Medicare+Choice plan (as defined in subsection (b)(4)), notwithstanding 
any other provision of this part and in accordance with regulations of 
the Secretary and for periods before January 1, 2007, the plan may 
restrict the enrollment of individuals under the plan to individuals 
who are within one or more classes of special needs beneficiaries.''.
    (d) Report to Congress.--Not later than December 31, 2006, the 
Medicare Benefits Administrator shall submit to Congress a report that 
assesses the impact of specialized Medicare+Choice plans for special 
needs beneficiaries on the cost and quality of services provided to 
enrollees. Such report shall include an assessment of the costs and 
savings to the medicare program as a result of amendments made by 
subsections (a), (b), and (c).
    (e) Effective Dates.--
            (1) In general.--The amendments made by subsections (a), 
        (b), and (c) shall take effect upon the date of the enactment 
        of this Act.
            (2) Deadline for issuance of requirements for special needs 
        beneficiaries; transition.--No later than 6 months after the 
        date of the enactment of this Act, the Secretary of Health and 
        Human Services shall issue final regulations to establish 
        requirements for special needs beneficiaries under section 
        1859(b)(4)(B)(iii) of the Social Security Act, as added by 
        subsection (b).

Summary: MedicareChoice Revitalization Act of 2003 - Amends part C (MedicareChoice) of title XVIII (Medicare) of the Social Security Act (SSA) to make each annual MedicareChoice capitation rate for a MedicareChoice payment area for a contract year equal to the largest of the amounts specified under current law or, for 2004 and any subsequent year, 100 percent of the fee-for-service costs for the MedicareChoice payment area for services covered under Medicare parts A or B for individuals entitled to benefits under part A and enrolled under part B who are not enrolled in a MedicareChoice plan for the year. Provides that, in determining the adjusted average per capita cost of MedicareChoice for a year, such cost shall be adjusted to include the Secretary of Health and Human Services's estimate, on a per capita basis, of the amount of additional payments that would have been made in the area involved under Medicare if individuals entitled to Medicare benefits had not received services from facilities of the Department of Veterans Affairs (VA) or the Department of Defense (DOD). Revises the calculation of the national standardized annual MedicareChoice capitation rate used in determining the input-price-adjusted annual national MedicareChoice capitation rate for a MedicareChoice payment area. Terminates use of a payment adjustment budget neutrality factor after 2003. Raises the minimum percentage increase for calculation of annual MedicareChoice capitation rates, beginning 2004, to 104 percent of the annual rate for the area for the previous year. Provides for the inclusion of costs of DOD and VA military facility services to Medicare-eligible beneficiaries in calculation of MedicareChoice payment rates. Makes permanent the current MedicareChoice reporting deadlines, and makes the month of November the permanent annual coordinated election period. Declares that Federal standards supercede certain State law or regulations with respect to MedicareChoice plans. Prescribes requirements for specialized MedicareChoice plans for special needs beneficiaries, allowing them to be any type of coordinated care plan.