79–006 

115TH CONGRESS REPT. 115–478 " ! HOUSE OF REPRESENTATIVES 1st Session Part 1 

SPECIAL NEEDS PLANS REAUTHORIZATION ACT OF 2017 

DECEMBER 21, 2017.—Committed to the Committee of the Whole House on the State 

of the Union and ordered to be printed 

Mr. BRADY of Texas, from the Committee on Ways and Means, 

submitted the following 

R E P O R T 

[To accompany H.R. 3168] 

[Including cost estimate of the Congressional Budget Office] 

The Committee on Ways and Means, to whom was referred the 

bill (H.R. 3168) to amend title XVIII of the Social Security Act to 

provide continued access to specialized Medicare Advantage plans 

for special needs individuals, and for other purposes, having considered the same, report favorably thereon with an amendment and 

recommend that the bill as amended do pass. 

CONTENTS 

Page 

I. SUMMARY AND BACKGROUND ............................................................... 7 

A. Purpose and Summary ..................................................................... 7 

B. Background and Need for Legislation ............................................. 7 

C. Legislative History ............................................................................ 8 

II. EXPLANATION OF THE BILL ................................................................... 9 

A. Special Needs Plans Reauthorization Act of 2017 ......................... 9 

III. VOTES OF THE COMMITTEE .................................................................... 11 

IV. BUDGET EFFECTS OF THE BILL ............................................................ 11 

A. Committee Estimate of Budgetary Effects ...................................... 11 

B. Statement Regarding New Budget Authority and Tax Expenditures Budget Authority .................................................................. 12 

C. Cost Estimate Prepared by the Congressional Budget Office ....... 12 

V. OTHER MATTERS TO BE DISCUSSED UNDER THE RULES OF 

THE HOUSE .............................................................................................. 14 

A. Committee Oversight Findings and Recommendations ................. 14 

B. Statement of General Performance Goals and Objectives ............. 14 

C. Information Relating to Unfunded Mandates ................................ 15 

D. Congressional Earmarks, Limited Tax Benefits, and Limited 

Tariff Benefits ................................................................................. 15 

E. Duplication of Federal Programs ..................................................... 15 

F. Disclosure of Directed Rule Makings .............................................. 15 

VI. CHANGES IN EXISTING LAW MADE BY THE BILL, AS REPORTED 15 

2 

VII. EXCHANGES OF LETTERS WITH ADDITIONAL COMMITTEES OF 

REFERRAL ................................................................................................. 79 

The amendment is as follows: 

Strike all after the enacting clause and insert the following: 

SECTION 1. SHORT TITLE. 

This Act may be cited as the ‘‘Special Needs Plans Reauthorization Act of 2017’’ 

or the ‘‘SNP Reauthorization Act of 2017’’. 

SEC. 2. SPECIALIZED MEDICARE ADVANTAGE PLANS FOR SPECIAL NEEDS INDIVIDUALS. 

(a) EXTENSION.—Section 1859(f)(1) of the Social Security Act (42 U.S.C. 1395w– 

28(f)(1)) is amended— 

(1) by striking ‘‘and for periods before January 1, 2019’’; and 

(2) by adding at the end the following new sentence: ‘‘In the case of a specialized MA plan for special needs individuals described in clause (ii) or (iii) of subsection (b)(6)(B), the previous sentence shall apply for periods before January 

1, 2024.’’. 

(b) INCREASED INTEGRATION OF DUAL SNPS.— (1) IN GENERAL.—Section 1859(f) of the Social Security Act (42 U.S.C. 1395w– 

28(f)) is amended— 

(A) in paragraph (3), by adding at the end the following new subparagraph: 

‘‘(F) The plan meets the requirements applicable under paragraph (8).’’; 

and 

(B) by adding at the end the following new paragraph: 

‘‘(8) INCREASED INTEGRATION OF DUAL SNPS.— 

‘‘(A) DESIGNATED CONTACT.—The Secretary, acting through the Federal 

Coordinated Health Care Office established under section 2602 of Public 

Law 111–148, shall serve as a dedicated point of contact for States to address misalignments that arise with the integration of specialized MA plans 

for special needs individuals described in subsection (b)(6)(B)(ii) under this 

paragraph and, consistent with such role, shall— 

‘‘(i) establish a uniform process for disseminating to State Medicaid 

agencies information under this title impacting contracts between such 

agencies and such plans under this subsection; and 

‘‘(ii) establish basic resources for States interested in exploring such 

plans as a platform for integration, such as a model contract or other 

tools to achieve those goals. 

‘‘(B) UNIFIED GRIEVANCES AND APPEALS PROCESS.— 

‘‘(i) IN GENERAL.—Not later than April 1, 2020, the Secretary shall 

establish procedures, to the extent feasible as determined by the Secretary, unifying grievances and appeals procedures under sections 

1852(f), 1852(g), 1902(a)(3), 1902(a)(5), and 1932(b)(4) for items and 

services provided by specialized MA plans for special needs individuals 

described in subsection (b)(6)(B)(ii) under this title and title XIX. The 

Secretary shall solicit comment in developing such procedures from 

States, plans, beneficiaries and their representatives, and other relevant stakeholders. With respect to items and services described in the 

previous sentence, appeals procedures established under this clause 

shall apply in place of otherwise applicable appeals procedures. 

‘‘(ii) PROCEDURES.—The procedures established under clause (i) shall 

be included in the plan contract under paragraph (3)(D) and shall— 

‘‘(I) adopt the provisions for the enrollee that are most protective 

for the enrollee and, to the extent feasible as determined by the 

Secretary, are compatible with unified timeframes and consolidated 

access to external review under an integrated process; 

‘‘(II) take into account differences in State plans under title XIX 

to the extent necessary; 

‘‘(III) be easily navigable by an enrollee; and 

‘‘(IV) include the elements described in clause (iii), as applicable. 

‘‘(iii) ELEMENTS DESCRIBED.—Both unified appeals and unified grievance procedures shall include, as applicable, the following elements described in this clause: 

‘‘(I) Single written notification of all applicable grievances and 

appeal rights under this title and title XIX. For purposes of this 

subparagraph, the Secretary may waive the requirements under 

section 1852(g)(1)(B) when the specialized MA plan covers items or 

services under this part or under title XIX. 

3 

‘‘(II) Single pathways for resolution of any grievance or appeal 

related to a particular item or service provided by specialized MA 

plans for special needs individuals described in subsection 

(b)(6)(B)(ii) under this title and title XIX. 

‘‘(III) Notices written in plain language and available in a language and format that is accessible to the enrollee, including in 

non-English languages that are prevalent in the service area of the 

specialized MA plan. 

‘‘(IV) Unified timeframes for grievances and appeals processes, 

such as an individual’s filing of a grievance or appeal, a plan’s acknowledgment and resolution of a grievance or appeal, and notification of decisions with respect to a grievance or appeal. 

‘‘(V) Requirements for how the plan must process, track, and resolve grievances and appeals, to ensure beneficiaries are notified 

on a timely basis of decisions that are made throughout the grievance or appeals process and are able to easily determine the status 

of a grievance or appeal. 

‘‘(iv) CONTINUATION OF BENEFITS PENDING APPEAL.—The unified procedures under clause (i) shall, with respect to all benefits under parts 

A and B and title XIX subject to appeal under such procedures, incorporate provisions under current law and implementing regulations that 

provide continuation of benefits pending appeal under this title and 

title XIX. 

‘‘(C) REQUIREMENT FOR UNIFIED GRIEVANCES AND APPEALS.—For 2022 and 

subsequent years, the contract of a specialized MA plan for special needs 

individuals described in subsection (b)(6)(B)(ii) with a State Medicaid agency under paragraph (3)(D) shall require the use of unified grievances and 

appeals procedures as described in subparagraph (B). 

‘‘(D) REQUIREMENTS FOR FULL INTEGRATION FOR CERTAIN DUAL SNPS.— 

‘‘(i) REQUIREMENT.—For 2021 and subsequent years, a specialized MA 

plan for special needs individuals described in subsection (b)(6)(B)(ii) 

shall meet one or more of the following requirements for integration of 

benefits under this title and title XIX: 

‘‘(I) Meet the requirements of a fully integrated plan described in 

section 1853(a)(1)(B)(iv)(II) (other than the requirement that the 

plan have similar average levels of frailty, as determined by the 

Secretary, as the PACE program). 

‘‘(II) Enter into a capitated contract with the State Medicaid 

agency to provide long-term services and supports or behavioral 

health services, or both. 

‘‘(III) To the extent the State does not allow for or require such 

a specialized MA plan to enter into a capitated contract described 

in subclause (II), enter into another type of integration arrangement, as determined appropriate by the Secretary after consultation with stakeholders, such as by— 

‘‘(aa) entering into a contract with the State that requires 

notifying the State in a timely manner of hospitalizations, 

emergency room visits, and hospital or nursing home discharges of enrollees or otherwise requires sharing data that 

would benefit the coordination of items and services under this 

title and the State plan under title XIX; or 

‘‘(bb) offering, by a parent organization, a Medicaid managed 

care plan that provides long term services and supports or behavioral health services to the same enrollees as under such 

specialized MA plan. 

‘‘(ii) SANCTIONS.—For 2021 and subsequent years, if the Secretary determines that a specialized MA plan fails to comply with clause (i), the 

Secretary may provide for the application against the Medicare Advantage organization offering the plan any of the remedies described in 

section 1857(g)(2).’’. 

(2) CONFORMING AMENDMENT TO RESPONSIBILITIES OF FEDERAL COORDINATED

HEALTH CARE OFFICE.—Section 2602(d) of Public Law 111–148 (42 U.S.C. 

1315b(d)) is amended by adding at the end the following new paragraphs: 

‘‘(6) To act as a designated contact for States under subsection (f)(8)(A) of section 1859 of the Social Security Act (42 U.S.C. 1395w–28) with respect to the 

integration of specialized MA plans for special needs individuals described in 

subsection (b)(6)(B)(ii) of such section. 

‘‘(7) To be responsible for developing regulations and guidance related to the 

implementation of a unified grievance and appeals process as described in subVerDate Sep 11 2014 01:27 Dec 23, 2017 Jkt 079006 PO 00000 Frm 00003 Fmt 6659 Sfmt 6621 E:\HR\OC\HR478P1.XXX HR478P1
4 

paragraphs (B) and (C) of section 1859(f)(8) of the Social Security Act (42 U.S.C. 

1395w–28(f)(8)). 

‘‘(8) To be responsible for developing regulations and guidance related to the 

integration or alignment of policy and oversight under the Medicare program 

under title XVIII of such Act and Medicaid program under title XIX of such Act 

regarding specialized MA plans for special needs individuals described in subsection (b)(6)(B)(ii) of such section 1859.’’. 

(c) IMPROVEMENTS TO SEVERE OR DISABLING CHRONIC CONDITION SNPS.— (1) CARE MANAGEMENT REQUIREMENTS.—Section 1859(f)(5) of the Social Security Act (42 U.S.C. 1395w–28(f)(5)) is amended— 

(A) by redesignating subparagraphs (A) and (B) as clauses (i) and (ii), respectively, and indenting appropriately; 

(B) in clause (ii), as redesignated by subparagraph (A), by redesignating 

clauses (i) through (iii) as subclauses (I) through (III), respectively, and indenting appropriately; 

(C) by striking ‘‘ALL SNPS.—The requirements’’ and inserting ‘‘ALL SNPS.— ‘‘(A) IN GENERAL.—Subject to subparagraph (B), the requirements’’; and 

(D) by adding at the end the following new subparagraph: 

‘‘(B) IMPROVEMENTS TO CARE MANAGEMENT REQUIREMENTS FOR SEVERE OR

DISABLING CHRONIC CONDITION SNPS.—For 2020 and subsequent years, in 

the case of a specialized MA plan for special needs individuals described in 

subsection (b)(6)(B)(iii), the requirements described in this paragraph include the following: 

‘‘(i) The interdisciplinary team under subparagraph (A)(ii)(III) includes a team of providers with demonstrated expertise, including 

training in an applicable specialty, in treating individuals similar to 

the targeted population of the plan. 

‘‘(ii) Requirements developed by the Secretary to provide face-to-face 

encounters with individuals enrolled in the plan not less frequently 

than on an annual basis. 

‘‘(iii) As part of the model of care under clause (i) of subparagraph 

(A), the results of the initial assessment and annual reassessment 

under clause (ii)(I) of such subparagraph of each individual enrolled in 

the plan are addressed in the individual’s individualized care plan 

under clause (ii)(II) of such subparagraph. 

‘‘(iv) As part of the annual evaluation and approval of such model of 

care, the Secretary shall take into account whether the plan fulfilled 

the previous year’s goals (as required under the model of care). 

‘‘(v) The Secretary shall establish a minimum benchmark for each 

element of the model of care of a plan. The Secretary shall only approve 

a plan’s model of care under this paragraph if each element of the 

model of care meets the minimum benchmark applicable under the preceding sentence.’’. 

(2) REVISIONS TO THE DEFINITION OF A SEVERE OR DISABLING CHRONIC CONDITIONS SPECIALIZED NEEDS INDIVIDUAL.— 

(A) IN GENERAL.—Section 1859(b)(6)(B)(iii) of the Social Security Act (42 

U.S.C. 1395w–28(b)(6)(B)(iii)) is amended— 

(i) by striking ‘‘who have’’ and inserting ‘‘who— 

‘‘(I) before January 1, 2022, have’’; 

(ii) in subclause (I), as added by clause (i), by striking the period at 

the end and inserting ‘‘; and’’; and 

(iii) by adding at the end the following new subclause: 

‘‘(II) on or after January 1, 2022, have one or more comorbid and 

medically complex chronic conditions that is life threatening or significantly limits overall health or function, have a high risk of hospitalization or other adverse health outcomes, and require intensive care coordination and that is listed under subsection (f)(9)(A).’’. 

(B) PANEL OF CLINICAL ADVISORS.—Section 1859(f) of the Social Security 

Act (42 U.S.C. 1395w–28(f)), as amended by subsection (b), is amended by 

adding at the end the following new paragraph: 

‘‘(9) LIST OF CONDITIONS FOR CLARIFICATION OF THE DEFINITION OF A SEVERE

OR DISABLING CHRONIC CONDITIONS SPECIALIZED NEEDS INDIVIDUAL.— 

‘‘(A) IN GENERAL.—Not later than December 31, 2020, and every 5 years 

thereafter, the Secretary shall convene a panel of clinical advisors to establish and update a list of conditions that meet each of the following criteria: 

‘‘(i) Conditions that meet the definition of a severe or disabling chronic condition under subsection (b)(6)(B)(iii) on or after January 1, 2022. 

‘‘(ii) Conditions that require prescription drugs, providers, and models 

of care that are unique to the specific population of enrollees in a speVerDate Sep 11 2014 01:27 Dec 23, 2017 Jkt 079006 PO 00000 Frm 00004 Fmt 6659 Sfmt 6621 E:\HR\OC\HR478P1.XXX HR478P1
5 

cialized MA plan for special needs individuals described in such subsection on or after such date and— 

‘‘(I) as a result of such special needs individuals with such a condition having access to and being enrolled in such a plan, as compared to access to and enrollment in other Medicare Advantage 

plans under this part, it is projected that such individuals would 

improve health outcomes with respect to such condition, that such 

individuals would have reduced overall costs under this title, and 

that there would not be any increase in expenditures under this 

title for such individuals; or 

‘‘(II) have a low prevalence in the general population of beneficiaries under this title or a disproportionally high per-beneficiary 

cost under this title. 

‘‘(B) GAO STUDY ON HEALTH OUTCOMES OF INDIVIDUALS ENROLLED IN SPE- CIALIZED MA PLANS.—Not later than the date that is 3 years after the date 

of the enactment of this paragraph, the Comptroller General of the United 

States shall conduct a study and submit to Congress a report on the extent 

to which health outcomes can be compared across specialized MA plans for 

special needs individuals (as defined in section 1859(b)(6)) and other Medicare Advantage plans under this part across similar populations, using existing measures and that identifies any potential limitations where new 

measures may need to be developed for such population.’’. 

(d) QUALITY MEASUREMENT AT THE PLAN LEVEL FOR SNPS AND DETERMINATION

OF FEASABILITY OF QUALITY MEASUREMENT AT THE PLAN LEVEL FOR ALL MA 

PLANS.—Section 1853(o) of the Social Security Act (42 U.S.C. 1395w–23(o)) is 

amended by adding at the end the following new paragraphs: 

‘‘(6) QUALITY MEASUREMENT AT THE PLAN LEVEL FOR SNPS.— 

‘‘(A) IN GENERAL.—Subject to subparagraph (B), the Secretary may require reporting of data under section 1852(e) for, and apply under this subsection, quality measures at the plan level for specialized MA plans for special needs individuals instead of at the contract level. 

‘‘(B) CONSIDERATIONS.—Prior to applying quality measurement at the 

plan level under this paragraph, the Secretary shall— 

‘‘(i) take into consideration the minimum number of enrollees in a 

specialized MA plan for special needs individuals in order to determine 

if a statistically significant or valid measurement of quality at the plan 

level is possible under this paragraph; 

‘‘(ii) if quality measures are reported at the plan level, ensure that 

MA plans are not required to provide duplicative information; and 

‘‘(iii) ensure that such reporting does not interfere with the collection 

of encounter data submitted by MA organizations or the administration 

of any changes to the program under this part as a result of the collection of such data. 

‘‘(C) APPLICATION.—If the Secretary applies quality measurement at the 

plan level under this paragraph— 

‘‘(i) such quality measurement may include Medicare Health Outcomes Survey (HOS), Healthcare Effectiveness Data and Information 

Set (HEDIS), Consumer Assessment of Healthcare Providers and Systems (CAHPS) measures and quality measures under part D; and 

‘‘(ii) the Secretary shall consider applying administrative actions, 

such as remedies described in section 1857(g)(2), to the plan level. 

‘‘(7) DETERMINATION OF FEASIBILITY OF QUALITY MEASUREMENT AT THE PLAN

LEVEL FOR ALL MA PLANS.— 

‘‘(A) DETERMINATION OF FEASIBILITY.—The Secretary shall determine the 

feasibility of requiring reporting of data under section 1852(e) for, and applying under this subsection, quality measures at the plan level for all MA 

plans under this part. 

‘‘(B) CONSIDERATION OF CHANGE.—After making a determination under 

subparagraph (A), the Secretary shall consider requiring such reporting and 

applying such quality measures at the plan level as described in such subparagraph.’’. 

(e) GAO STUDY AND REPORT ON STATE-LEVEL INTEGRATION BETWEEN DUAL SNPS

AND MEDICAID.— 

(1) STUDY.—The Comptroller General of the United States (in this paragraph 

referred to as the ‘‘Comptroller General’’) shall conduct a study on State-level 

integration between specialized MA plans for special needs individuals described in subsection (b)(6)(B)(ii) of section 1859 of the Social Security Act (42 

U.S.C. 1395w–28) and the Medicaid program under title XIX of such Act (42 

U.S.C. 1396 et seq.). Such study shall include an analysis of the following: 

6 

(A) The characteristics of States in which the State agency responsible for 

administering the State plan under such title XIX has a contract with such 

a specialized MA plan and that delivers long term services and supports 

under the State plan under such title XIX through a managed care program, including the requirements under such State plan with respect to 

long term services and supports. 

(B) The types of such specialized MA plans, which may include the following: 

(i) A plan described in section 1853(a)(1)(B)(iv)(II) of such Act (42 

U.S.C. 1395w–23(a)(1)(B)(iv)(II)). 

(ii) A plan that meets the requirements described in subsection 

(f)(3)(D) of such section 1859. 

(iii) A plan described in clause (ii) that also meets additional requirements established by the State. 

(C) The characteristics of individuals enrolled in such specialized MA 

plans. 

(D) As practicable, the following with respect to State programs for the 

delivery of long term services and supports under such title XIX through 

a managed care program: 

(i) Which populations of individuals are eligible to receive such services and supports. 

(ii) Whether all such services and supports are provided on a 

capitated basis or if any of such services and supports are carved out 

and provided through fee-for-service. 

(E) As, practicable, how the availability and variation of integration arrangements of such specialized MA plans offered in States affects spending, 

service delivery options, access to community-based care, and utilization of 

care. (F) Barriers and opportunities for making further progress on dual integration, as well as recommend legislation to expedite or refine pathways toward fully integrated care. 

(2) REPORT.—Not later than 2 years after the date of the enactment of this 

Act, the Comptroller General shall submit to Congress a report containing the 

results of the study conducted under paragraph (1), together with recommendations for such legislation and administrative action as the Comptroller General 

determines appropriate. 

SEC. 3. EXPANDING SUPPLEMENTAL BENEFITS TO MEET THE NEEDS OF CHRONICALLY ILL 

MEDICARE ADVANTAGE ENROLLEES. 

(a) IN GENERAL.—Section 1852(a)(3) of the Social Security Act (42 U.S.C. 1395w– 

22(a)(3)) is amended— 

(1) in subparagraph (A), by striking ‘‘Each’’ and inserting ‘‘Subject to subparagraph (D), each’’; and 

(2) by adding at the end the following new subparagraph: 

‘‘(D) EXPANDING SUPPLEMENTAL BENEFITS TO MEET THE NEEDS OF CHRON- ICALLY ILL ENROLLEES.— ‘‘(i) IN GENERAL.—For plan year 2020 and subsequent plan years, in 

addition to any supplemental health care benefits otherwise provided 

under this paragraph, an MA plan, including a specialized MA plan for 

special needs individuals described in subsection (b)(6) of section 1859, 

may provide supplemental benefits described in clause (ii) to a chronically ill enrollee (as defined in clause (iii)). 

‘‘(ii) SUPPLEMENTAL BENEFITS DESCRIBED.— ‘‘(I) IN GENERAL.—Supplemental benefits described in this clause 

are supplemental benefits that, with respect to a chronically ill enrollee, have a reasonable expectation of improving or maintaining 

the health or overall function of the chronically ill enrollee and 

may not be limited to being primarily health related benefits. 

‘‘(II) AUTHORITY TO WAIVE UNIFORMITY REQUIREMENTS.—The Secretary may, with respect to supplemental benefits provided to a 

chronically ill enrollee under this subparagraph, waive the uniformity requirement, as determined appropriate by the Secretary. 

‘‘(iii) CHRONICALLY ILL ENROLLEE DEFINED.—In this subparagraph, 

the term ‘chronically ill enrollee’ means an enrollee in an MA plan that 

the Secretary determines— 

‘‘(I) has one or more comorbid and medically complex chronic conditions that is life threatening or significantly limits the overall 

health or function of the enrollee; 

‘‘(II) has a high risk of hospitalization or other adverse health 

outcomes; or 

7 

‘‘(III) requires intensive care coordination.’’. 

(b) GAO STUDY AND REPORT.— 

(1) STUDY.—The Comptroller General of the United States (in this subsection 

referred to as the ‘‘Comptroller General’’) shall conduct a study on supplemental 

benefits provided to enrollees in Medicare Advantage plans under part C of title 

XVIII of the Social Security Act, including specialized MA plans for special 

needs individuals described in section 1859(b)(6) of such Act (42 U.S.C. 1395w– 

28(b)(6)). Such study shall be conducted in consultation with the Centers for 

Medicare & Medicaid Services and Medicare Advantage plans as necessary and, 

to the extent data is available, shall include an analysis of the following: 

(A) The type of supplemental benefits provided to such enrollees, the total 

number of enrollees receiving each supplemental benefit, and whether the 

supplemental benefit is covered by the standard benchmark cost of the benefit or with an additional premium. 

(B) The frequency in which supplemental benefits are utilized by such enrollees. 

(C) The impact supplemental benefits have on— 

(i) indicators of the quality of care received by such enrollees, including overall health and function of the enrollees; 

(ii) the utilization of items and services for which benefits are available under the original Medicare fee-for-service program option under 

parts A and B of such title XVIII by such enrollees; and 

(iii) the amount of the bids submitted by Medicare Advantage Organizations for Medicare Advantage plans under such part C. 

(2) REPORT.—Not later than 5 years after the date of the enactment of this 

Act, the Comptroller General shall submit to Congress a report containing the 

results of the study conducted under paragraph (1), together with recommendations for such legislation and administrative action as the Comptroller General 

determines appropriate. 

I. SUMMARY AND BACKGROUND 

A. PURPOSE AND SUMMARY

The bill, H.R. 3168, the ‘‘Special Needs Plans Reauthorization 

Act of 2017,’’ as ordered reported by the Committee on Ways and 

Means on July 13, 2017, would provide continued access to Medicare Advantage (‘‘MA’’) Special Needs Plans (‘‘SNPs’’) for Medicare 

beneficiaries with specific circumstances benefiting from specialized 

plan designs. 

The bill reauthorizes Chronic Condition SNPs (‘‘C–SNPs’’) and 

Dual-Eligible SNPs (‘‘D–SNPs’’) for 5 years, and permanently authorizes Institutional SNPs (‘‘I–SNPs’’) with policy enhancements 

consistent with recommendations by the Medicare Payment Advisory Commission (‘‘MedPAC’’). 

The bill makes improvements to D–SNPs and C–SNPs by increasing the integration of benefits for dual eligible beneficiaries 

and requiring improvements to the care coordination model of C– 

SNPs. Additionally, the bill directs the Secretary of Health and 

Human Services (‘‘the Secretary’’) to establish and consult a panel 

of clinical advisors to develop and update the list of conditions that 

qualify for C–SNPs. 

Lastly, this legislation strengthens access to meaningful supplemental benefits by allowing MA plans to tailor and expand the type 

of supplemental benefits offered to meet the individual needs of patients with chronic illnesses. 

B. BACKGROUND AND NEED FOR LEGISLATION

On July 6, 2017, Representative Tiberi (R–OH) and Representative Levin (D–MI) introduced H.R. 3168, legislation that reauthorVerDate Sep 11 2014 01:27 Dec 23, 2017 Jkt 079006 PO 00000 Frm 00007 Fmt 6659 Sfmt 6602 E:\HR\OC\HR478P1.XXX HR478P1
8 

izes Medicare SNPs and includes provisions to improve the quality 

of care for enrollees. 

The Medicare Prescription Drug, Improvement, and Modernization Act of 2003 (‘‘MMA’’) established new MA coordinated care 

plans to provide services for individuals with special needs. SNPs 

are permitted to target enrollment to one or more types of special 

needs individuals, including those who are: (1) institutionalized, (2) 

dually eligible for both Medicare and Medicaid, or (3) living with 

severe or disabling chronic conditions. This program was temporarily reauthorized several times, including most recently as part 

of the Medicare Access and CHIP Reauthorization Act of 2015 

(‘‘MACRA’’). 

MACRA extended SNP authority through December 31, 2018. 

Congress must act before the end of 2017 in order to give the Secretary time to develop and issue contract requirements and plans 

time to submit bids and complete the contracting cycle for plan 

year 2019. In the absence of congressional action, SNPs will not be 

terminated, but they will have to operate as other MA plans, which 

cannot differentiate benefits and in which all beneficiaries are eligible to enroll, not just beneficiaries with special needs. 

SNP enrollment continues to grow. In 2016, nearly 2.3 million 

Medicare beneficiaries enrolled in a SNP, representing 4 percent of 

total Medicare beneficiaries. The majority of these beneficiaries are 

enrolled in a D–SNP. If Congress allows for these plans to have 

special rules, including limited enrollment and specialized benefits, 

it is important that the plans actually perform better than traditional MA plans. 

In March 2013, MedPAC released its Report to Congress with 

analysis of and recommendations for MA SNPs. The report found 

that I–SNPs perform better on a number of quality measures, particularly hospital readmission rates, than traditional MA plans. 

MedPAC found that C–SNPs tend to perform no better, and often 

worse, than other SNPs and MA plans on most quality measures 

except for a narrow set of conditions. D–SNPs were found to generally have average to below-average performance on quality measures compared with other SNPs and regular MA plans, with some 

exceptions. Those exceptions included instances in which D–SNPs 

covered some or all Medicaid long-term care services and supports 

(‘‘LTSS’’), behavioral health services, or both through its contract 

with the state and when a managed care organization administers 

the D–SNP and the Medicaid plan that furnishes some or all of the 

LTSS or behavioral health services. 

C. LEGISLATIVE HISTORY

Background 

H.R. 3168 was introduced on July 6, 2017, and was referred to 

the Committee on Ways and Means and additionally the Committee on Energy and Commerce. 

Committee hearings 

On June 7, 2017, the Subcommittee on Health held a hearing on 

Promoting Integrated and Coordinated Care for Medicare Beneficiaries to review the current status of SNPs and explore existing 

barriers to integration of benefits for D–SNPs. 

9 

July 24, 2014, the Subcommittee on Health held a hearing on 

The Future of Medicare Advantage Plans. 

Committee action 

The Committee on Ways and Means marked up H.R. 3168, the 

Special Needs Plans Reauthorization Act of 2017, on July 13, 2017, 

and ordered the bill, as amended, favorably reported (with a 

quorum being present). 

II. EXPLANATION OF THE BILL 

A. SPECIAL NEEDS PLANS REAUTHORIZATION ACT OF 2017 

PRESENT LAW

The Medicare Access and CHIP Reauthorization Act of 2015 

(MACRA) extended SNP authority through December 31, 2018. 

REASONS FOR CHANGE

In the absence of congressional action, SNPs will have to operate 

as other MA plans in which all beneficiaries are eligible to enroll, 

not just beneficiaries with special needs. Congress must act before 

the end of 2017 in order to give plans time to submit bids for plan 

year 2019. 

EXPLANATION OF PROVISIONS

Section 1: Specialized MA plans for special needs individuals 

Extension of Authority: This legislation permanently reauthorizes 

Institutional Special Needs Plans (‘‘I–SNPs’’) and reauthorizes 

Chronic Condition Special Needs Plans (‘‘C–SNPs’’) and Dual Eligible Special Needs Plans (‘‘D–SNPs’’) for five years. 

Increased Integration of Dual SNPs: Designates the Federal Coordinated Health Care Office (often called the Duals Office) as the 

dedicated point of contact for States to address misalignments that 

arise with the integration of care for D–SNPs. Further, the Federal 

Coordinated Health Care Office is made responsible for establishing a uniform process for disseminating information to State 

Medicaid agencies and for establishing basic resources for States 

interested in exploring D–SNPs as a platform for integration of 

Medicare and Medicaid benefits. 

Unified Grievances and Appeals Process: The Secretary is required to establish, with stakeholder input, procedures to unify 

grievances and appeals procedures for items and services covered 

by D–SNPs. Separate appeals and grievances processes for Medicare and Medicaid services are a barrier to integration. The current 

process is confusing and time-consuming for the beneficiary. In 

working to align grievances and appeals, the Committee recognized 

the challenges the Secretary may encounter after the first level of 

appeals and therefore included language to ensure the Secretary 

has the flexibility to implement, to the extent feasible, a unified 

grievances and appeals process. The Federal Coordinated Health 

Care Office will be responsible for developing regulations and guidance related to the implementation of a unified grievance and appeals process. 

10 

Requirements for Full Integration for Certain Dual SNPs: D– 

SNPs are required to integrate their Medicare and Medicaid benefits by 2022 in one of three ways: (1) meet the requirements to be 

considered a Fully Integrated Dual Eligible (‘‘FIDE’’) SNP; (2) enter 

into a capitated contract with the State Medicaid agency to provide 

long-term services and supports or behavioral health services, or 

both; and (3) enter into another type of integration arrangement as 

determined appropriate by the Secretary. The Secretary, with the 

Federal Coordinated Health Care Office in a lead role, will be responsible for developing regulations and guidance related to the integration or alignment of policy and oversight regarding D–SNPs. 

The Committee recognizes that some states are further along in 

their integration efforts than others. It is the intent that the Secretary has and should act with sufficient flexibility to permit states 

to enter into alternative approaches to promote integrated care 

that meets the needs of their populations, with specific attention to 

integration arrangements that are considered stepping stones to 

further integration of Medicare and Medicaid benefits. 

Improvements to Severe or Disabling Chronic Condition SNPs: 

The legislation requires improvements to the care coordination 

model in C–SNPs and revises the definition of chronic conditions. 

The legislation also directs the Secretary to establish and consult 

a panel of clinical advisors to develop and update the list of conditions that qualify for C–SNPs. It is the intent of the Committee to 

ensure the Secretary has the flexibility necessary to include conditions that have been proven to have better health outcomes and reduced expenditures as a result of enrollment in a C–SNP for that 

specific disease. In addition, it is the intent of the Committee for 

the Secretary to include diseases that have a low prevalence in the 

general population or a disproportionally high per-beneficiary cost, 

such as end-stage renal disease, HIV/AIDS, and chronic and disabling mental health conditions. 

GAO Study on Health Outcomes of Individuals Enrolled in Specialized Medicare Advantage Plans: The Comptroller General of the 

United States (Comptroller General) is required to conduct a study 

and submit to Congress a report on the extent to which health outcomes can be compared across SNPs and traditional MA plans. 

Quality Measurement at the Plan Level for SNPs and Determination of Feasibility of Quality Measurement at the Plan Level for all 

Medicare Advantage Plans: After determining feasibility, the Secretary may require reporting of quality data and apply star rating 

measures at the plan level, rather than the contract level. The Secretary shall consider the use of quality measures that are currently 

being used to calculate star ratings and shall consider applying administrative actions, such as enrollment and payment suspensions 

or civil monetary penalties, at the plan level rather than the contract level. 

GAO Study and Report on State-Level Integration Between Dual 

SNPs and Medicaid: The Comptroller General shall conduct a 

study on State-level integration between SNPs and the Medicaid 

program and produce recommendations for legislative or administrative actions to remove barriers and increase benefit integration. 

11 

Section 2: Expanding supplemental benefits to meet the needs of 

chronically ill Medicare Advantage enrollees 

Expanding Supplemental Benefits to Meet the Needs of Chronically Ill Enrollees: The bill waives existing uniformity requirements to allow MA plans and SNPs to provide individualized supplemental benefits to chronically ill enrollees. The definition of supplemental benefits is expanded to include other types of services 

that have a reasonable expectation of improving or maintaining the 

health or overall function of the chronically ill enrollee. These benefits may not be limited to primarily health-related benefits. 

GAO Study on Supplemental Benefits: The Comptroller General 

shall submit to Congress a report on types and utilization of supplemental benefits provided to MA and SNP enrollees. 

EFFECTIVE DATE

Extension of Authority: Effective January 1, 2019. 

Unified Grievances and Appeals Process: Procedures shall be established no later than April 2020, with a requirement of enactment for contract year 2022. 

Requirements for Full Integration for Certain Dual SNPs: Plans 

are required to be integrated through one of the three pathways by 

2022. 

Improvements to Severe or Disabling Chronic Condition SNPs: 

Certain requirements for C–SNPs go into effect in 2020, whereas 

others go into effect on January 1, 2022. The Secretary is required 

to convene a panel of clinical advisors no later than December 31, 

2020. 

GAO Study on Health Outcomes of Individuals Enrolled in Specialized Medicare Advantage Plans: Three years after the date of 

enactment. 

GAO Study and Report on State-Level Integration Between Dual 

SNPs and Medicaid: No later than two years after the date of enactment. 

Expanding Supplemental Benefits to Meet the Needs of Chronically Ill Enrollees: Effective starting in plan year 2020. 

GAO Study on Supplemental Benefits: No later than five years 

after the date of enactment. 

III. VOTES OF THE COMMITTEE 

In compliance with clause 3(b) of rule XIII of the Rules of the 

House of Representatives, the following statement is made concerning the vote of the Committee on Ways and Means in its consideration of H.R. 3168, the Special Needs Plans Reauthorization 

Act of 2017, on July 13, 2017. 

The Chairman’s amendment in the nature of a substitute was 

adopted by a voice vote (with a quorum being present). 

The bill, H.R. 3168, was ordered favorably reported as amended 

by voice vote (with a quorum being present). 

IV. BUDGET EFFECTS OF THE BILL 

A. COMMITTEE ESTIMATE OF BUDGETARY EFFECTS

In compliance with clause 3(d) of rule XIII of the Rules of the 

House of Representatives, the following statement is made conVerDate Sep 11 2014 01:27 Dec 23, 2017 Jkt 079006 PO 00000 Frm 00011 Fmt 6659 Sfmt 6602 E:\HR\OC\HR478P1.XXX HR478P1
12 

cerning the effects on the budget of the bill, H.R. 3168, as reported. 

The Committee agrees with the estimate prepared by the Congressional Budget Office (CBO), which is included below. 

B. STATEMENT REGARDING NEW BUDGET AUTHORITY AND TAX

EXPENDITURES BUDGET AUTHORITY

In compliance with clause 3(c)(2) of rule XIII of the Rules of the 

House of Representatives, the Committee states that the bill involves no new or increased budget authority. The Committee states 

further that the bill involves no new or increased tax expenditures. 

C. COST ESTIMATE PREPARED BY THE CONGRESSIONAL BUDGET

OFFICE

In compliance with clause 3(c)(3) of rule XIII of the Rules of the 

House of Representatives, requiring a cost estimate prepared by 

the CBO, the following statement by CBO is provided. 

U.S. CONGRESS, 

CONGRESSIONAL BUDGET OFFICE, 

Washington, DC, August 28, 2017. 

Hon. KEVIN BRADY, 

Chairman, Committee on Ways and Means, 

House of Representatives, Washington, DC. 

DEAR MR. CHAIRMAN: The Congressional Budget Office has prepared the enclosed cost estimate for H.R. 3168, the Special Needs 

Plans Reauthorization Act of 2017. 

If you wish further details on this estimate, we will be pleased 

to provide them. The CBO staff contact is Andrea Noda. 

Sincerely, 

KEITH HALL, Director. 

Enclosure. 

H.R. 3168—Special Needs Plans Reauthorization Act of 2017 

Summary: H.R. 3168 would permanently authorize insurers to 

offer special needs plans (SNPs) for institutionalized beneficiaries 

through the Medicare Advantage program and would extend the 

authorization for SNPs that enroll certain other beneficiaries until 

January 1, 2024. The bill also would require the Government Accountability Office (GAO) to issue several reports on SNPs and 

their enrollees. 

CBO estimates that enacting H.R. 3168 would increase direct 

spending by $119 million over the 2017–2027 period. Pay-as-yougo procedures apply because enacting the legislation would affect 

direct spending. H.R. 3168 would not affect revenues. 

CBO estimates that enacting the legislation would not increase 

net direct spending or on-budget deficits by more than $5 billion 

in any of the four consecutive 10-year periods beginning in 2028. 

H.R. 3168 contains no intergovernmental or private-sector mandates as defined in the Unfunded Mandates Reform Act (UMRA). 

Estimated cost to the Federal Government: The estimated budgetary effect of H.R. 3168 is shown in the following table. The costs 

of this legislation fall primarily within 550 (health). 

13 

By fiscal year, in millions of dollars— 

2017 2018 2019 2020 2021 2022 2023 2024 2025 2026 2027 2017– 

2022 

2017– 

2027 

CHANGES IN DIRECT SPENDING a

Estimated Budget Authority ............ 0 0 6 13 13 14 14 14 15 15 15 46 119 

Estimated Outlays ........................... 0 0 6 13 13 14 14 14 15 15 15 46 119 

a H.R. 3168 also would require the Government Accountability Office to issue several studies about SNPs and their enrollees, which would 

cost about $2 million 2018–2022 period, assuming availability of appropriated funds. 

Basis of estimate: Special needs plans (SNPs) are private health 

insurance plans in the Medicare Advantage (MA) program that 

limit enrollment to beneficiaries who require an institutional level 

of care, have certain chronic conditions, or are enrolled in both 

Medicare and Medicaid (dual eligibles). Under current law, the authority for an MA plan to operate as a SNP will expire at the end 

of calendar year 2018. 

H.R. 3168 would permanently authorize SNPs for institutionalized beneficiaries and would extend until January 1, 2024, the authorization for SNPs that enroll beneficiaries with certain chronic 

conditions or that enroll dual eligibles, if certain requirements are 

met. In particular, SNPs that limit enrollment to dual eligibles (D– 

SNPs) would be required to establish formal agreements with state 

Medicaid programs by January 1, 2021, to coordinate the provision 

of Medicaid-covered long-term services and supports (LTSS) or behavioral health services. Feedback from stakeholders indicates that 

state Medicaid programs find that D–SNPs offer an attractive option for identifying and contracting with private insurers to provide 

LTSS. Therefore, CBO expects that authorizing D–SNPs beyond 

2018 would increase the number and the scope of managed LTSS 

programs covered by state Medicaid programs. 

Based on analysis of information from stakeholders, CBO concludes that managed LTSS plans enroll a small number of individuals who otherwise would receive informal, nonfederally financed 

care in the community. Once those individuals are enrolled in a 

managed LTSS plan, they would receive Medicaid-financed LTSS 

for the first time. Compared to current law, CBO estimates that 

the number of people who would receive Medicaid-financed LTSS 

under H.R. 3168 would grow over time. That increase would rise 

to about 1,200 by 2027. CBO estimates that expansion of participation in Medicaid-financed LTSS would increase federal Medicaid 

outlays by $119 million over the 2017–2027 period. Reauthorizing 

SNPs would not have a significant effect on Medicare spending, 

CBO estimates, because Medicare payments to SNPs, on average, 

are comparable to Medicare’s payments to other MA plans or to 

providers in the fee-for-service sector. 

H.R. 3168 also would require GAO to prepare three reports on 

the MA program, with particular focus on SNP benefits and enrollees. Based on the scope of the reports and the cost of similar activities, CBO estimates that implementing those provisions would cost 

about $2 million over the 2018–2022 period. Such spending would 

be subject to the availability of appropriated funds. 

Pay-As-You-Go considerations: The Statutory Pay-As-You-Go Act 

of 2010 establishes budget-reporting and enforcement procedures 

for legislation affecting direct spending or revenues. The net 

changes in outlays that are subject to those pay-as-you-go procedures are shown in the following table. 

14 

CBO ESTIMATE OF PAY-AS-YOU-GO EFFECTS FOR H.R. 3168 AS ORDERED REPORTED BY THE 

HOUSE COMMITTEE ON WAYS AND MEANS ON JULY 13, 2017 

By fiscal year, in millions of dollars— 

2017 2018 2019 2020 2021 2022 2023 2024 2025 2026 2027 2017– 

2022 

2017– 

2027 

NET INCREASE IN THE DEFICIT 

Statutory Pay-As-You-Go Impact .... 0 0 6 13 13 14 14 14 15 15 15 46 119 

Increase in long-term direct spending and deficits: CBO estimates that enacting the legislation would not increase net direct 

spending or on-budget deficits by more than $5 billion in any of the 

four consecutive 10-year periods beginning in 2028. 

Intergovernmental and private-sector impact: H.R. 3168 contains 

no intergovernmental or private-sector mandates as defined in 

UMRA. CBO estimates that the state share of increased Medicaid 

spending for extended enrollment in certain SNPs would total $90 

million over the 2017–2027 period. Because states have significant 

flexibility in Medicaid to adjust their financial and programmatic 

responsibilities, such additional expenditures would not result from 

an intergovernmental mandate as defined in UMRA. 

Previous estimate: On August 1, 2017, CBO provided a cost estimate for S. 870 as ordered reported by the Senate Committee on 

Finance on May 18, 2017. Section 201 of S. 870 is similar to H.R. 

3168, except that it would permanently authorize D–SNPs and 

SNPs that enroll beneficiaries with certain chronic conditions. CBO 

estimates that permanently authorizing D–SNPs would increase 

the number of people who would receive Medicaid-financed LTSS 

relative to the temporary extension of the authority included in 

H.R. 3168. As a result, section 201 of S. 870 would increase federal 

Medicaid outlays by $4 million more over the 2017–2027 period 

than H.R. 3168. 

Estimate prepared by: Federal Costs: Alice Burns and Andrea 

Noda; Impact on state, local, and tribal governments: Zach Byrum; 

Impact on the private sector: Amy Petz. 

Estimate approved by: Holly Harvey, Deputy Assistant Director 

for Budget Analysis. 

V. OTHER MATTERS TO BE DISCUSSED UNDER THE 

RULES OF THE HOUSE 

A. COMMITTEE OVERSIGHT FINDINGS AND RECOMMENDATIONS

With respect to clause 3(c)(1) of rule XIII of the Rules of the 

House of Representatives, the Committee made findings and recommendations that are reflected in this report. 

B. STATEMENT OF GENERAL PERFORMANCE GOALS AND OBJECTIVES

With respect to clause 3(c)(4) of rule XIII of the Rules of the 

House of Representatives, the Committee advises that the bill does 

not authorize funding, so no statement of general performance 

goals and objectives is required. 

15 

C. INFORMATION RELATING TO UNFUNDED MANDATES

This information is provided in accordance with section 423 of 

the Unfunded Mandates Reform Act of 1995 (Pub. L. No. 104–4). 

The Committee has determined that the bill does not contain 

Federal mandates on the private sector. The Committee has determined that the bill does not impose a Federal intergovernmental 

mandate on State, local, or tribal governments. 

D. CONGRESSIONAL EARMARKS, LIMITED TAX BENEFITS, AND

LIMITED TARIFF BENEFITS

With respect to clause 9 of rule XXI of the Rules of the House 

of Representatives, the Committee has carefully reviewed the provisions of the bill and states that the provisions of the bill do not 

contain any congressional earmarks, limited tax benefits, or limited 

tariff benefits within the meaning of the rule. 

E. DUPLICATION OF FEDERAL PROGRAMS

In compliance with clause 3(c)(5) of rule XIII of the Rules of the 

House of Representatives, the Committee states that no provision 

of the bill establishes or reauthorizes: (1) a program of the Federal 

Government known to be duplicative of another Federal program; 

(2) a program included in any report from the Government Accountability Office to Congress pursuant to section 21 of Public 

Law 111–139; or (3) a program related to a program identified in 

the most recent Catalog of Federal Domestic Assistance, published 

pursuant to the Federal Program Information Act (Pub. L. No. 95– 

220, as amended by Pub. L. No. 98–169). 

F. DISCLOSURE OF DIRECTED RULE MAKINGS

In compliance with Sec. 3(i) of H. Res. 5 (115th Congress), the 

following statement is made concerning directed rule makings: The 

Committee estimates that the bill requires the following directed 

rule makings within the meaning of such section: Section 1 regarding unified grievances and appeals for D–SNPs, integration or 

alignment of policy and oversight regarding D–SNPs, and development of list of conditions that qualify for C–SNPs. 

VI. CHANGES IN EXISTING LAW MADE BY THE BILL, 

AS REPORTED 

In compliance with clause 3(e) of rule XIII of the Rules of the 

House of Representatives, changes in existing law made by the bill, 

as reported, are shown as follows (existing law proposed to be omitted is enclosed in black brackets, new matter is printed in italic, 

and existing law in which no change is proposed is shown in 

roman): 

CHANGES IN EXISTING LAW MADE BY THE BILL, AS REPORTED

In compliance with clause 3(e) of rule XIII of the Rules of the 

House of Representatives, changes in existing law made by the bill, 

as reported, are shown as follows (existing law proposed to be omitted is enclosed in black brackets, new matter is printed in italic, 

16 

and existing law in which no change is proposed is shown in 

roman): 

SOCIAL SECURITY ACT 

* * * * * * * 

TITLE XVIII—HEALTH INSURANCE FOR THE AGED AND 

DISABLED 

* * * * * * * 

PART C—MEDICARE+CHOICE PROGRAM

* * * * * * * 

BENEFITS AND BENEFICIARY PROTECTIONS

SEC. 1852. (a) BASIC BENEFITS.— (1) REQUIREMENT.— (A) IN GENERAL.—Except as provided in section 

1859(b)(3) for MSA plans and except as provided in paragraph (6) for MA regional plans, each Medicare+Choice 

plan shall provide to members enrolled under this part, 

through providers and other persons that meet the applicable requirements of this title and part A of title XI, benefits under the original medicare fee-for-service program option (and, for plan years before 2006, additional benefits 

required under section 1854(f)(1)(A)). 

(B) BENEFITS UNDER THE ORIGINAL MEDICARE FEE-FOR- SERVICE PROGRAM OPTION DEFINED.— (i) IN GENERAL.—For purposes of this part, the term 

‘‘benefits under the original medicare fee-for-service 

program option’’ means those items and services (other 

than hospice care or coverage for organ acquisitions 

for kidney transplants, including as covered under section 1881(d)) for which benefits are available under 

parts A and B to individuals entitled to benefits under 

part A and enrolled under part B, with cost-sharing 

for those services as required under parts A and B or, 

subject to clause (iii), an actuarially equivalent level of 

cost-sharing as determined in this part. 

(ii) SPECIAL RULE FOR REGIONAL PLANS.—In the case 

of an MA regional plan in determining an actuarially 

equivalent level of cost-sharing with respect to benefits under the original medicare fee-for-service program option, there shall only be taken into account, 

with respect to the application of section 1858(b)(2), 

such expenses only with respect to subparagraph (A) 

of such section. 

(iii) LIMITATION ON VARIATION OF COST SHARING FOR

CERTAIN BENEFITS.—Subject to clause (v), cost-sharing 

for services described in clause (iv) shall not exceed 

the cost-sharing required for those services under 

parts A and B. 

(iv) SERVICES DESCRIBED.—The following services 

are described in this clause: 

17 

(I) Chemotherapy administration services. 

(II) Renal dialysis services (as defined in section 

1881(b)(14)(B)). 

(III) Skilled nursing care. 

(IV) Such other services that the Secretary determines appropriate (including services that the 

Secretary determines require a high level of predictability and transparency for beneficiaries). 

(v) EXCEPTION.—In the case of services described in 

clause (iv) for which there is no cost-sharing required 

under parts A and B, cost-sharing may be required for 

those services in accordance with clause (i). 

(2) SATISFACTION OF REQUIREMENT.— 

(A) IN GENERAL.—A Medicare+Choice plan (other than 

an MSA plan) offered by a Medicare+Choice organization 

satisfies paragraph (1)(A), with respect to benefits for 

items and services furnished other than through a provider or other person that has a contract with the organization offering the plan, if the plan provides payment in 

an amount so that— 

(i) the sum of such payment amount and any cost 

sharing provided for under the plan, is equal to at 

least 

(ii) the total dollar amount of payment for such 

items and services as would otherwise be authorized 

under parts A and B (including any balance billing 

permitted under such parts). 

(B) REFERENCE TO RELATED PROVISIONS.—For provision 

relating to— 

(i) limitations on balance billing against 

Medicare+Choice organizations for non-contract providers, see sections 1852(k) and 1866(a)(1)(O), and 

(ii) limiting actuarial value of enrollee liability for 

covered benefits, see section 1854(e). 

(C) ELECTION OF UNIFORM COVERAGE DETERMINATION.— In the case of a Medicare+Choice organization that offers 

a Medicare+Choice plan in an area in which more than 

one local coverage determination is applied with respect to 

different parts of the area, the organization may elect to 

have the local coverage determination for the part of the 

area that is most beneficial to Medicare+Choice enrollees 

(as identified by the Secretary) apply with respect to all 

Medicare+Choice enrollees enrolled in the plan. 

(3) SUPPLEMENTAL BENEFITS.— 

(A) BENEFITS INCLUDED SUBJECT TO SECRETARY’S APPROVAL.—øEach¿ Subject to subparagraph (D), each 

Medicare+Choice organization may provide to individuals 

enrolled under this part, other than under an MSA plan 

(without affording those individuals an option to decline 

the coverage), supplemental health care benefits that the 

Secretary may approve. The Secretary shall approve any 

such supplemental benefits unless the Secretary determines that including such supplemental benefits would 

substantially discourage enrollment by Medicare+Choice 

eligible individuals with the organization. 

18 

(B) AT ENROLLEES’ OPTION.— (i) IN GENERAL.—Subject to clause (ii), a 

Medicare+Choice organization may provide to individuals enrolled under this part supplemental health care 

benefits that the individuals may elect, at their option, 

to have covered. 

(ii) SPECIAL RULE FOR MSA PLANS.—A 

Medicare+Choice organization may not provide, under 

an MSA plan, supplemental health care benefits that 

cover the deductible described in section 1859(b)(2)(B). 

In applying the previous sentence, health benefits described in section 1882(u)(2)(B) shall not be treated as 

covering such deductible. 

(C) APPLICATION TO MEDICARE+CHOICE PRIVATE FEEFOR-SERVICE PLANS.—Nothing in this paragraph shall be 

construed as preventing a Medicare+Choice private fee-forservice plan from offering supplemental benefits that include payment for some or all of the balance billing 

amounts permitted consistent with section 1852(k) and 

coverage of additional services that the plan finds to be 

medically necessary. Such benefits may include reductions 

in cost-sharing below the actuarial value specified in section 1854(e)(4)(B). 

(D) EXPANDING SUPPLEMENTAL BENEFITS TO MEET THE

NEEDS OF CHRONICALLY ILL ENROLLEES.— (i) IN GENERAL.—For plan year 2020 and subsequent 

plan years, in addition to any supplemental health 

care benefits otherwise provided under this paragraph, 

an MA plan, including a specialized MA plan for special needs individuals described in subsection (b)(6) of 

section 1859, may provide supplemental benefits described in clause (ii) to a chronically ill enrollee (as defined in clause (iii)). 

(ii) SUPPLEMENTAL BENEFITS DESCRIBED.— 

(I) IN GENERAL.—Supplemental benefits described in this clause are supplemental benefits 

that, with respect to a chronically ill enrollee, have 

a reasonable expectation of improving or maintaining the health or overall function of the chronically 

ill enrollee and may not be limited to being primarily health related benefits. 

(II) AUTHORITY TO WAIVE UNIFORMITY REQUIREMENTS.—The Secretary may, with respect to supplemental benefits provided to a chronically ill enrollee under this subparagraph, waive the uniformity requirement, as determined appropriate by 

the Secretary. 

(iii) CHRONICALLY ILL ENROLLEE DEFINED.—In this 

subparagraph, the term ‘‘chronically ill enrollee’’ means 

an enrollee in an MA plan that the Secretary determines— 

(I) has one or more comorbid and medically 

complex chronic conditions that is life threatening 

or significantly limits the overall health or function of the enrollee; 

19 

(II) has a high risk of hospitalization or other 

adverse health outcomes; or 

(III) requires intensive care coordination. 

(4) ORGANIZATION AS SECONDARY PAYER.—Notwithstanding 

any other provision of law, a Medicare+Choice organization 

may (in the case of the provision of items and services to an 

individual under a Medicare+Choice plan under circumstances 

in which payment under this title is made secondary pursuant 

to section 1862(b)(2)) charge or authorize the provider of such 

services to charge, in accordance with the charges allowed 

under a law, plan, or policy described in such section— 

(A) the insurance carrier, employer, or other entity 

which under such law, plan, or policy is to pay for the provision of such services, or 

(B) such individual to the extent that the individual has 

been paid under such law, plan, or policy for such services. 

(5) NATIONAL COVERAGE DETERMINATIONS AND LEGISLATIVE

CHANGES IN BENEFITS.—If there is a national coverage determination or legislative change in benefits required to be provided under this part made in the period beginning on the date 

of an announcement under section 1853(b) and ending on the 

date of the next announcement under such section and the Secretary projects that the determination will result in a significant change in the costs to a Medicare+Choice organization of 

providing the benefits that are the subject of such national coverage determination and that such change in costs was not incorporated in the determination of the annual 

Medicare+Choice capitation rate under section 1853 included 

in the announcement made at the beginning of such period, 

then, unless otherwise required by law— 

(A) such determination or legislative change in benefits 

shall not apply to contracts under this part until the first 

contract year that begins after the end of such period, and 

(B) if such coverage determination or legislative change 

provides for coverage of additional benefits or coverage 

under additional circumstances, section 1851(i)(1) shall not 

apply to payment for such additional benefits or benefits 

provided under such additional circumstances until the 

first contract year that begins after the end of such period. 

The projection under the previous sentence shall be based on 

an analysis by the Chief Actuary of the Centers for Medicare 

& Medicaid Services of the actuarial costs associated with the 

coverage determination or legislative change in benefits. 

(6) SPECIAL BENEFIT RULES FOR REGIONAL PLANS.—In the 

case of an MA plan that is an MA regional plan, benefits under 

the plan shall include the benefits described in paragraphs (1) 

and (2) of section 1858(b). 

(7) LIMITATION ON COST-SHARING FOR DUAL ELIGIBLES AND

QUALIFIED MEDICARE BENEFICIARIES.—In the case of an individual who is a full-benefit dual eligible individual (as defined 

in section 1935(c)(6)) or a qualified medicare beneficiary (as defined in section 1905(p)(1)) and who is enrolled in a specialized 

Medicare Advantage plan for special needs individuals described in section 1859(b)(6)(B)(ii), the plan may not impose 

cost-sharing that exceeds the amount of cost-sharing that 

20 

would be permitted with respect to the individual under title 

XIX if the individual were not enrolled in such plan. 

(b) ANTIDISCRIMINATION.— 

(1) BENEFICIARIES.—A Medicare Advantage organization may 

not deny, limit, or condition the coverage or provision of benefits under this part, for individuals permitted to be enrolled 

with the organization under this part, based on any health status-related factor described in section 2702(a)(1) of the Public 

Health Service Act. The Secretary shall not approve a plan of 

an organization if the Secretary determines that the design of 

the plan and its benefits are likely to substantially discourage 

enrollment by certain MA eligible individuals with the organization. 

(2) PROVIDERS.—A Medicare+Choice organization shall not 

discriminate with respect to participation, reimbursement, or 

indemnification as to any provider who is acting within the 

scope of the provider’s license or certification under applicable 

State law, solely on the basis of such license or certification. 

This paragraph shall not be construed to prohibit a plan from 

including providers only to the extent necessary to meet the 

needs of the plan’s enrollees or from establishing any measure 

designed to maintain quality and control costs consistent with 

the responsibilities of the plan. 

(c) DISCLOSURE REQUIREMENTS.— 

(1) DETAILED DESCRIPTION OF PLAN PROVISIONS.—A 

Medicare+Choice organization shall disclose, in clear, accurate, 

and standardized form to each enrollee with a 

Medicare+Choice plan offered by the organization under this 

part at the time of enrollment and at least annually thereafter, 

the following information regarding such plan: 

(A) SERVICE AREA.—The plan’s service area. 

(B) BENEFITS.—Benefits offered under the plan, including information described in section 1851(d)(3)(A) and exclusions from coverage and, if it is an MSA plan, a comparison of benefits under such a plan with benefits under 

other Medicare+Choice plans. 

(C) ACCESS.—The number, mix, and distribution of plan 

providers, out-of-network coverage (if any) provided by the 

plan, and any point-of-service option (including the supplemental premium for such option). 

(D) OUT-OF-AREA COVERAGE.—Out-of-area coverage provided by the plan. 

(E) EMERGENCY COVERAGE.—Coverage of emergency 

services, including— 

(i) the appropriate use of emergency services, including use of the 911 telephone system or its local equivalent in emergency situations and an explanation of 

what constitutes an emergency situation; 

(ii) the process and procedures of the plan for obtaining emergency services; and 

(iii) the locations of (I) emergency departments, and 

(II) other settings, in which plan physicians and hospitals provide emergency services and post-stabilization care. 

21 

(F) SUPPLEMENTAL BENEFITS.—Supplemental benefits 

available from the organization offering the plan, including— 

(i) whether the supplemental benefits are optional, 

(ii) the supplemental benefits covered, and 

(iii) the Medicare+Choice monthly supplemental 

beneficiary premium for the supplemental benefits. 

(G) PRIOR AUTHORIZATION RULES.—Rules regarding prior 

authorization or other review requirements that could result in nonpayment. 

(H) PLAN GRIEVANCE AND APPEALS PROCEDURES.—All 

plan appeal or grievance rights and procedures. 

(I) QUALITY IMPROVEMENT PROGRAM.—A description of 

the organization’s quality improvement program under 

subsection (e). 

(2) DISCLOSURE UPON REQUEST.—Upon request of a 

Medicare+Choice eligible individual, a Medicare+Choice organization must provide the following information to such individual: 

(A) The general coverage information and general comparative plan information made available under clauses (i) 

and (ii) of section 1851(d)(2)(A). 

(B) Information on procedures used by the organization 

to control utilization of services and expenditures. 

(C) Information on the number of grievances, redeterminations, and appeals and on the disposition in the aggregate of such matters. 

(D) An overall summary description as to the method of 

compensation of participating physicians. 

(d) ACCESS TO SERVICES.— 

(1) IN GENERAL.—A Medicare+Choice organization offering a 

Medicare+Choice plan may select the providers from whom the 

benefits under the plan are provided so long as— 

(A) the organization makes such benefits available and 

accessible to each individual electing the plan within the 

plan service area with reasonable promptness and in a 

manner which assures continuity in the provision of benefits; 

(B) when medically necessary the organization makes 

such benefits available and accessible 24 hours a day and 

7 days a week; 

(C) the plan provides for reimbursement with respect to 

services which are covered under subparagraphs (A) and 

(B) and which are provided to such an individual other 

than through the organization, if— 

(i) the services were not emergency services (as defined in paragraph (3)), but (I) the services were medically necessary and immediately required because of 

an unforeseen illness, injury, or condition, and (II) it 

was not reasonable given the circumstances to obtain 

the services through the organization, 

(ii) the services were renal dialysis services and 

were provided other than through the organization because the individual was temporarily out of the plan’s 

service area, or 

22 

(iii) the services are maintenance care or post-stabilization care covered under the guidelines established under paragraph (2); 

(D) the organization provides access to appropriate providers, including credentialed specialists, for medically 

necessary treatment and services; and 

(E) coverage is provided for emergency services (as defined in paragraph (3)) without regard to prior authorization or the emergency care provider’s contractual relationship with the organization. 

(2) GUIDELINES RESPECTING COORDINATION OF POST-STABILIZATION CARE.—A Medicare+Choice plan shall comply with 

such guidelines as the Secretary may prescribe relating to promoting efficient and timely coordination of appropriate maintenance and post-stabilization care of an enrollee after the enrollee has been determined to be stable under section 1867. 

(3) DEFINITION OF EMERGENCY SERVICES.—In this subsection— 

(A) IN GENERAL.—The term ‘‘emergency services’’ means, 

with respect to an individual enrolled with an organization, covered inpatient and outpatient services that— 

(i) are furnished by a provider that is qualified to 

furnish such services under this title, and 

(ii) are needed to evaluate or stabilize an emergency 

medical condition (as defined in subparagraph (B)). 

(B) EMERGENCY MEDICAL CONDITION BASED ON PRUDENT

LAYPERSON.—The term ‘‘emergency medical condition’’ 

means a medical condition manifesting itself by acute 

symptoms of sufficient severity (including severe pain) 

such that a prudent layperson, who possesses an average 

knowledge of health and medicine, could reasonably expect 

the absence of immediate medical attention to result in— 

(i) placing the health of the individual (or, with respect to a pregnant woman, the health of the woman 

or her unborn child) in serious jeopardy, 

(ii) serious impairment to bodily functions, or 

(iii) serious dysfunction of any bodily organ or part. 

(4) ASSURING ACCESS TO SERVICES IN MEDICARE+CHOICE

PRIVATE FEE-FOR-SERVICE PLANS.—In addition to any other 

requirements under this part, in the case of a 

Medicare+Choice private fee-for-service plan, the organization offering the plan must demonstrate to the Secretary 

that the organization has sufficient number and range of 

health care professionals and providers willing to provide 

services under the terms of the plan. Subject to paragraphs (5) and (6), the Secretary shall find that an organization has met such requirement with respect to any category of health care professional or provider if, with respect to that category of provider— 

(A) the plan has established payment rates for covered services furnished by that category of provider 

that are not less than the payment rates provided for 

under part A, part B, or both, for such services, or 

(B) the plan has contracts or agreements (other than 

deemed contracts or agreements under subsection 

23 

(j)(6)) with a sufficient number and range of providers 

within such category to meet the access standards in 

subparagraphs (A) through (E) of paragraph (1), 

or a combination of both. The previous sentence shall not 

be construed as restricting the persons from whom enrollees under such a plan may obtain covered benefits, except 

that, if a plan entirely meets such requirement with respect to a category of health care professional or provider 

on the basis of subparagraph (B), it may provide for a 

higher beneficiary copayment in the case of health care 

professionals and providers of that category who do not 

have contracts or agreements (other than deemed contracts or agreements under subsection (j)(6)) to provide 

covered services under the terms of the plan. 

(5) REQUIREMENT OF CERTAIN NONEMPLOYER MEDICARE ADVANTAGE PRIVATE FEE-FOR-SERVICE PLANS TO USE CONTRACTS

WITH PROVIDERS.— 

(A) IN GENERAL.—For plan year 2011 and subsequent 

plan years, in the case of a Medicare Advantage private 

fee-for-service plan not described in paragraph (1) or (2) of 

section 1857(i) operating in a network area (as defined in 

subparagraph (B)), the plan shall meet the access standards under paragraph (4) in that area only through entering into written contracts as provided for under subparagraph (B) of such paragraph and not, in whole or in part, 

through the establishment of payment rates meeting the 

requirements under subparagraph (A) of such paragraph. 

(B) NETWORK AREA DEFINED.—For purposes of subparagraph (A), the term ‘‘network area’’ means, for a plan year, 

an area which the Secretary identifies (in the Secretary’s 

announcement of the proposed payment rates for the previous plan year under section 1853(b)(1)(B)) as having at 

least 2 network-based plans (as defined in subparagraph 

(C)) with enrollment under this part as of the first day of 

the year in which such announcement is made. 

(C) NETWORK-BASED PLAN DEFINED.— (i) IN GENERAL.—For purposes of subparagraph (B), 

the term ‘‘network-based plan’’ means— 

(I) except as provided in clause (ii), a Medicare 

Advantage plan that is a coordinated care plan described in section 1851(a)(2)(A)(i); 

(II) a network-based MSA plan; and 

(III) a reasonable cost reimbursement plan 

under section 1876. 

(ii) EXCLUSION OF NON-NETWORK REGIONAL PPOS.— 

The term ‘‘network-based plan’’ shall not include an 

MA regional plan that, with respect to the area, meets 

access adequacy standards under this part substantially through the authority of section 422.112(a)(1)(ii) 

of title 42, Code of Federal Regulations, rather than 

through written contracts. 

(6) REQUIREMENT OF ALL EMPLOYER MEDICARE ADVANTAGE

PRIVATE FEE-FOR-SERVICE PLANS TO USE CONTRACTS WITH PROVIDERS.—For plan year 2011 and subsequent plan years, in the 

case of a Medicare Advantage private fee-for-service plan that 

24 

is described in paragraph (1) or (2) of section 1857(i), the plan 

shall meet the access standards under paragraph (4) only 

through entering into written contracts as provided for under 

subparagraph (B) of such paragraph and not, in whole or in 

part, through the establishment of payment rates meeting the 

requirements under subparagraph (A) of such paragraph. 

(e) QUALITY IMPROVEMENT PROGRAM.— (1) IN GENERAL.—Each MA organization shall have an ongoing quality improvement program for the purpose of improving 

the quality of care provided to enrollees in each MA plan offered by such organization. 

(2) CHRONIC CARE IMPROVEMENT PROGRAMS.—As part of the 

quality improvement program under paragraph (1), each MA 

organization shall have a chronic care improvement program. 

Each chronic care improvement program shall have a method 

for monitoring and identifying enrollees with multiple or sufficiently severe chronic conditions that meet criteria established 

by the organization for participation under the program. 

(3) DATA.— 

(A) COLLECTION, ANALYSIS, AND REPORTING.— 

(i) IN GENERAL.—Except as provided in clauses (ii) 

and (iii) with respect to plans described in such 

clauses and subject to subparagraph (B), as part of the 

quality improvement program under paragraph (1), 

each MA organization shall provide for the collection, 

analysis, and reporting of data that permits the measurement of health outcomes and other indices of quality. With respect to MA private fee-for-service plans 

and MSA plans, the requirements under the preceding 

sentence may not exceed the requirements under this 

subparagraph with respect to MA local plans that are 

preferred provider organization plans, except that, for 

plan year 2010, the limitation under clause (iii) shall 

not apply and such requirements shall apply only with 

respect to administrative claims data. 

(ii) SPECIAL REQUIREMENTS FOR SPECIALIZED MA

PLANS FOR SPECIAL NEEDS INDIVIDUALS.—In addition 

to the data required to be collected, analyzed, and reported under clause (i) and notwithstanding the limitations under subparagraph (B), as part of the quality 

improvement program under paragraph (1), each MA 

organization offering a specialized Medicare Advantage plan for special needs individuals shall provide 

for the collection, analysis, and reporting of data that 

permits the measurement of health outcomes and 

other indices of quality with respect to the requirements described in paragraphs (2) through (5) of subsection (f). Such data may be based on claims data and 

shall be at the plan level. 

(iii) APPLICATION TO LOCAL PREFERRED PROVIDER OR- GANIZATIONS AND MA REGIONAL PLANS.—Clause (i) 

shall apply to MA organizations with respect to MA 

local plans that are preferred provider organization 

plans and to MA regional plans only insofar as services are furnished by providers or services, physicians, 

25 

and other health care practitioners and suppliers that 

have contracts with such organization to furnish services under such plans. 

(iv) DEFINITION OF PREFERRED PROVIDER ORGANIZATION PLAN.—In this subparagraph, the term ‘‘preferred 

provider organization plan’’ means an MA plan that— 

(I) has a network of providers that have agreed 

to a contractually specified reimbursement for covered benefits with the organization offering the 

plan; 

(II) provides for reimbursement for all covered 

benefits regardless of whether such benefits are 

provided within such network of providers; and 

(III) is offered by an organization that is not licensed or organized under State law as a health 

maintenance organization. 

(B) LIMITATIONS.— 

(i) TYPES OF DATA.—The Secretary shall not collect 

under subparagraph (A) data on quality, outcomes, 

and beneficiary satisfaction to facilitate consumer 

choice and program administration other than the 

types of data that were collected by the Secretary as 

of November 1, 2003. 

(ii) CHANGES IN TYPES OF DATA.—Subject to subclause (iii), the Secretary may only change the types 

of data that are required to be submitted under subparagraph (A) after submitting to Congress a report 

on the reasons for such changes that was prepared in 

consultation with MA organizations and private accrediting bodies. 

(iii) CONSTRUCTION.—Nothing in the subsection 

shall be construed as restricting the ability of the Secretary to carry out the duties under section 

1851(d)(4)(D). 

(4) TREATMENT OF ACCREDITATION.— 

(A) IN GENERAL.—The Secretary shall provide that a 

Medicare+Choice organization is deemed to meet all the 

requirements described in any specific clause of subparagraph (B) if the organization is accredited (and periodically 

reaccredited) by a private accrediting organization under a 

process that the Secretary has determined assures that the 

accrediting organization applies and enforces standards 

that meet or exceed the standards established under section 1856 to carry out the requirements in such clause. 

(B) REQUIREMENTS DESCRIBED.—The provisions described in this subparagraph are the following: 

(i) Paragraphs (1) through (3) of this subsection (relating to quality improvement programs). 

(ii) Subsection (b) (relating to antidiscrimination). 

(iii) Subsection (d) (relating to access to services). 

(iv) Subsection (h) (relating to confidentiality and accuracy of enrollee records). 

(v) Subsection (i) (relating to information on advance 

directives). 

26 

(vi) Subsection (j) (relating to provider participation 

rules). 

(vii) The requirements described in section 1860D– 

4(j), to the extent such requirements apply under section 1860D–21(c). 

(C) TIMELY ACTION ON APPLICATIONS.—The Secretary 

shall determine, within 210 days after the date the Secretary receives an application by a private accrediting organization and using the criteria specified in section 

1865(a)(2), whether the process of the private accrediting 

organization meets the requirements with respect to any 

specific clause in subparagraph (B) with respect to which 

the application is made. The Secretary may not deny such 

an application on the basis that it seeks to meet the requirements with respect to only one, or more than one, 

such specific clause. 

(D) CONSTRUCTION.—Nothing in this paragraph shall be 

construed as limiting the authority of the Secretary under 

section 1857, including the authority to terminate contracts with Medicare+Choice organizations under subsection (c)(2) of such section. 

(f) GRIEVANCE MECHANISM.—Each Medicare+Choice organization 

must provide meaningful procedures for hearing and resolving 

grievances between the organization (including any entity or individual through which the organization provides health care services) and enrollees with Medicare+Choice plans of the organization 

under this part. 

(g) COVERAGE DETERMINATIONS, RECONSIDERATIONS, AND APPEALS.— 

(1) DETERMINATIONS BY ORGANIZATION.— 

(A) IN GENERAL.—A Medicare+Choice organization shall 

have a procedure for making determinations regarding 

whether an individual enrolled with the plan of the organization under this part is entitled to receive a health service under this section and the amount (if any) that the individual is required to pay with respect to such service. 

Subject to paragraph (3), such procedures shall provide for 

such determination to be made on a timely basis. 

(B) EXPLANATION OF DETERMINATION.—Such a determination that denies coverage, in whole or in part, shall 

be in writing and shall include a statement in understandable language of the reasons for the denial and a description of the reconsideration and appeals processes. 

(2) RECONSIDERATIONS.— 

(A) IN GENERAL.—The organization shall provide for reconsideration of a determination described in paragraph 

(1)(B) upon request by the enrollee involved. The reconsideration shall be within a time period specified by the Secretary, but shall be made, subject to paragraph (3), not 

later than 60 days after the date of the receipt of the request for reconsideration. 

(B) PHYSICIAN DECISION ON CERTAIN RECONSIDER- ATIONS.—A reconsideration relating to a determination to 

deny coverage based on a lack of medical necessity shall 

be made only by a physician with appropriate expertise in 

27 

the field of medicine which necessitates treatment who is 

other than a physician involved in the initial determination. 

(3) EXPEDITED DETERMINATIONS AND RECONSIDERATIONS.— (A) RECEIPT OF REQUESTS.— (i) ENROLLEE REQUESTS.—An enrollee in a 

Medicare+Choice plan may request, either in writing 

or orally, an expedited determination under paragraph 

(1) or an expedited reconsideration under paragraph 

(2) by the Medicare+Choice organization. 

(ii) PHYSICIAN REQUESTS.—A physician, regardless 

whether the physician is affiliated with the organization or not, may request, either in writing or orally, 

such an expedited determination or reconsideration. 

(B) ORGANIZATION PROCEDURES.— 

(i) IN GENERAL.—The Medicare+Choice organization 

shall maintain procedures for expediting organization 

determinations and reconsiderations when, upon request of an enrollee, the organization determines that 

the application of the normal time frame for making 

a determination (or a reconsideration involving a determination) could seriously jeopardize the life or 

health of the enrollee or the enrollee’s ability to regain 

maximum function. 

(ii) EXPEDITION REQUIRED FOR PHYSICIAN RE- QUESTS.—In the case of a request for an expedited determination or reconsideration made under subparagraph (A)(ii), the organization shall expedite the determination or reconsideration if the request indicates 

that the application of the normal time frame for making a determination (or a reconsideration involving a 

determination) could seriously jeopardize the life or 

health of the enrollee or the enrollee’s ability to regain 

maximum function. 

(iii) TIMELY RESPONSE.—In cases described in 

clauses (i) and (ii), the organization shall notify the 

enrollee (and the physician involved, as appropriate) of 

the determination or reconsideration under time limitations established by the Secretary, but not later 

than 72 hours of the time of receipt of the request for 

the determination or reconsideration (or receipt of the 

information necessary to make the determination or 

reconsideration), or such longer period as the Secretary may permit in specified cases. 

(4) INDEPENDENT REVIEW OF CERTAIN COVERAGE DENIALS.— 

The Secretary shall contract with an independent, outside entity to review and resolve in a timely manner reconsiderations 

that affirm denial of coverage, in whole or in part. The provisions of section 1869(c)(5) shall apply to independent outside 

entities under contract with the Secretary under this paragraph. 

(5) APPEALS.—An enrollee with a Medicare+Choice plan of a 

Medicare+Choice organization under this part who is dissatisfied by reason of the enrollee’s failure to receive any health 

service to which the enrollee believes the enrollee is entitled 

28 

and at no greater charge than the enrollee believes the enrollee 

is required to pay is entitled, if the amount in controversy is 

$100 or more, to a hearing before the Secretary to the same 

extent as is provided in section 205(b), and in any such hearing 

the Secretary shall make the organization a party. If the 

amount in controversy is $1,000 or more, the individual or organization shall, upon notifying the other party, be entitled to 

judicial review of the Secretary’s final decision as provided in 

section 205(g), and both the individual and the organization 

shall be entitled to be parties to that judicial review. In applying subsections (b) and (g) of section 205 as provided in this 

paragraph, and in applying section 205(l) thereto, any reference therein to the Commissioner of Social Security or the 

Social Security Administration shall be considered a reference 

to the Secretary or the Department of Health and Human 

Services, respectively. The provisions of section 

1869(b)(1)(E)(iii) shall apply with respect to dollar amounts 

specified in the first 2 sentences of this paragraph in the same 

manner as they apply to the dollar amounts specified in section 

1869(b)(1)(E)(i). 

(h) CONFIDENTIALITY AND ACCURACY OF ENROLLEE RECORDS.— 

Insofar as a Medicare+Choice organization maintains medical 

records or other health information regarding enrollees under this 

part, the Medicare+Choice organization shall establish procedures— 

(1) to safeguard the privacy of any individually identifiable 

enrollee information; 

(2) to maintain such records and information in a manner 

that is accurate and timely; and 

(3) to assure timely access of enrollees to such records and 

information. 

(i) INFORMATION ON ADVANCE DIRECTIVES.—Each 

Medicare+Choice organization shall meet the requirement of section 1866(f) (relating to maintaining written policies and procedures respecting advance directives). 

(j) RULES REGARDING PROVIDER PARTICIPATION.— 

(1) PROCEDURES.—Insofar as a Medicare+Choice organization 

offers benefits under a Medicare+Choice plan through agreements with physicians, the organization shall establish reasonable procedures relating to the participation (under an agreement between a physician and the organization) of physicians 

under such a plan. Such procedures shall include— 

(A) providing notice of the rules regarding participation, 

(B) providing written notice of participation decisions 

that are adverse to physicians, and 

(C) providing a process within the organization for appealing such adverse decisions, including the presentation 

of information and views of the physician regarding such 

decision. 

(2) CONSULTATION IN MEDICAL POLICIES.—A Medicare+Choice 

organization shall consult with physicians who have entered 

into participation agreements with the organization regarding 

the organization’s medical policy, quality, and medical management procedures. 

29 

(3) PROHIBITING INTERFERENCE WITH PROVIDER ADVICE TO

ENROLLEES.— (A) IN GENERAL.—Subject to subparagraphs (B) and (C), 

a Medicare+Choice organization (in relation to an individual enrolled under a Medicare+Choice plan offered by 

the organization under this part) shall not prohibit or otherwise restrict a covered health care professional (as defined in subparagraph (D)) from advising such an individual who is a patient of the professional about the health 

status of the individual or medical care or treatment for 

the individual’s condition or disease, regardless of whether 

benefits for such care or treatment are provided under the 

plan, if the professional is acting within the lawful scope 

of practice. 

(B) CONSCIENCE PROTECTION.—Subparagraph (A) shall 

not be construed as requiring a Medicare+Choice plan to 

provide, reimburse for, or provide coverage of a counseling 

or referral service if the Medicare+Choice organization offering the plan— 

(i) objects to the provision of such service on moral 

or religious grounds; and 

(ii) in the manner and through the written instrumentalities such Medicare+Choice organization deems 

appropriate, makes available information on its policies regarding such service to prospective enrollees before or during enrollment and to enrollees within 90 

days after the date that the organization or plan 

adopts a change in policy regarding such a counseling 

or referral service. 

(C) CONSTRUCTION.—Nothing in subparagraph (B) shall 

be construed to affect disclosure requirements under State 

law or under the Employee Retirement Income Security 

Act of 1974. 

(D) HEALTH CARE PROFESSIONAL DEFINED.—For purposes 

of this paragraph, the term ‘‘health care professional’’ 

means a physician (as defined in section 1861(r)) or other 

health care professional if coverage for the professional’s 

services is provided under the Medicare+Choice plan for 

the services of the professional. Such term includes a podiatrist, optometrist, chiropractor, psychologist, dentist, physician assistant, physical or occupational therapist and 

therapy assistant, speech-language pathologist, audiologist, registered or licensed practical nurse (including 

nurse practitioner, clinical nurse specialist, certified registered nurse anesthetist, and certified nurse-midwife), licensed certified social worker, registered respiratory therapist, and certified respiratory therapy technician. 

(4) LIMITATIONS ON PHYSICIAN INCENTIVE PLANS.— 

(A) IN GENERAL.—No Medicare+Choice organization may 

operate any physician incentive plan (as defined in subparagraph (B)) unless the organization provides assurances satisfactory to the Secretary that the following requirements are met: 

(i) No specific payment is made directly or indirectly 

under the plan to a physician or physician group as an 

30 

inducement to reduce or limit medically necessary 

services provided with respect to a specific individual 

enrolled with the organization. 

(ii) If the plan places a physician or physician group 

at substantial financial risk (as determined by the 

Secretary) for services not provided by the physician 

or physician group, the organization provides stop-loss 

protection for the physician or group that is adequate 

and appropriate, based on standards developed by the 

Secretary that take into account the number of physicians placed at such substantial financial risk in the 

group or under the plan and the number of individuals 

enrolled with the organization who receive services 

from the physician or group. 

(B) PHYSICIAN INCENTIVE PLAN DEFINED.—In this paragraph, the term ‘‘physician incentive plan’’ means any compensation arrangement between a Medicare+Choice organization and a physician or physician group that may directly or indirectly have the effect of reducing or limiting 

services provided with respect to individuals enrolled with 

the organization under this part. 

(5) LIMITATION ON PROVIDER INDEMNIFICATION.—A 

Medicare+Choice organization may not provide (directly or indirectly) for a health care professional, provider of services, or 

other entity providing health care services (or group of such 

professionals, providers, or entities) to indemnify the organization against any liability resulting from a civil action brought 

for any damage caused to an enrollee with a Medicare+Choice 

plan of the organization under this part by the organization’s 

denial of medically necessary care. 

(6) SPECIAL RULES FOR MEDICARE+CHOICE PRIVATE FEE-FORSERVICE PLANS.—For purposes of applying this part (including 

subsection (k)(1)) and section 1866(a)(1)(O), a hospital (or other 

provider of services), a physician or other health care professional, or other entity furnishing health care services is treated 

as having an agreement or contract in effect with a 

Medicare+Choice organization (with respect to an individual 

enrolled in a Medicare+Choice private fee-for-service plan it offers), if— 

(A) the provider, professional, or other entity furnishes 

services that are covered under the plan to such an enrollee; and 

(B) before providing such services, the provider, professional, or other entity — 

(i) has been informed of the individual’s enrollment 

under the plan, and 

(ii) either— 

(I) has been informed of the terms and conditions of payment for such services under the plan, 

or 

(II) is given a reasonable opportunity to obtain 

information concerning such terms and conditions, 

in a manner reasonably designed to effect informed 

agreement by a provider. 

31 

The previous sentence shall only apply in the absence of an explicit agreement between such a provider, professional, or 

other entity and the Medicare+Choice organization. 

(7) PROMOTION OF E-PRESCRIBING BY MA PLANS.— (A) IN GENERAL.—An MA–PD plan may provide for a 

separate payment or otherwise provide for a differential 

payment for a participating physician that prescribes covered part D drugs in accordance with an electronic prescription drug program that meets standards established 

under section 1860D–4(e). 

(B) CONSIDERATIONS.—Such payment may take into consideration the costs of the physician in implementing such 

a program and may also be increased for those participating physicians who significantly increase— 

(i) formulary compliance; 

(ii) lower cost, therapeutically equivalent alternatives; 

(iii) reductions in adverse drug interactions; and 

(iv) efficiencies in filing prescriptions through reduced administrative costs. 

(C) STRUCTURE.—Additional or increased payments 

under this subsection may be structured in the same manner as medication therapy management fees are structured 

under section 1860D–4(c)(2)(E). 

(k) TREATMENT OF SERVICES FURNISHED BY CERTAIN PRO- VIDERS.— 

(1) IN GENERAL.—Except as provided in paragraph (2), a physician or other entity (other than a provider of services) that 

does not have a contract establishing payment amounts for 

services furnished to an individual enrolled under this part 

with a Medicare+Choice organization described in section 

1851(a)(2)(A) or with an organization offering an MSA plan 

shall accept as payment in full for covered services under this 

title that are furnished to such an individual the amounts that 

the physician or other entity could collect if the individual were 

not so enrolled. Any penalty or other provision of law that applies to such a payment with respect to an individual entitled 

to benefits under this title (but not enrolled with a 

Medicare+Choice organization under this part) also applies 

with respect to an individual so enrolled. 

(2) APPLICATION TO MEDICARE+CHOICE PRIVATE FEE-FORSERVICE PLANS.— 

(A) BALANCE BILLING LIMITS UNDER MEDICARE+CHOICE

PRIVATE FEE-FOR-SERVICE PLANS IN CASE OF CONTRACT PROVIDERS.— 

(i) IN GENERAL.—In the case of an individual enrolled in a Medicare+Choice private fee-for-service 

plan under this part, a physician, provider of services, 

or other entity that has a contract (including through 

the operation of subsection (j)(6)) establishing a payment rate for services furnished to the enrollee shall 

accept as payment in full for covered services under 

this title that are furnished to such an individual an 

amount not to exceed (including any deductibles, coinsurance, copayments, or balance billing otherwise perVerDate Sep 11 2014 01:27 Dec 23, 2017 Jkt 079006 PO 00000 Frm 00031 Fmt 6659 Sfmt 6601 E:\HR\OC\HR478P1.XXX HR478P1
32 

mitted under the plan) an amount equal to 115 percent of such payment rate. 

(ii) PROCEDURES TO ENFORCE LIMITS.—The 

Medicare+Choice organization that offers such a plan 

shall establish procedures, similar to the procedures 

described in section 1848(g)(1)(A), in order to carry out 

the previous sentence. 

(iii) ASSURING ENFORCEMENT.—If the 

Medicare+Choice organization fails to establish and 

enforce procedures required under clause (ii), the organization is subject to intermediate sanctions under 

section 1857(g). 

(B) ENROLLEE LIABILITY FOR NONCONTRACT PROVIDERS.— 

For provision— 

(i) establishing minimum payment rate in the case 

of noncontract providers under a Medicare+Choice private fee-for-service plan, see section 1852(a)(2); or 

(ii) limiting enrollee liability in the case of covered 

services furnished by such providers, see paragraph 

(1) and section 1866(a)(1)(O). 

(C) INFORMATION ON BENEFICIARY LIABILITY.— 

(i) IN GENERAL.—Each Medicare+Choice organization that offers a Medicare+Choice private fee-for-service plan shall provide that enrollees under the plan 

who are furnished services for which payment is 

sought under the plan are provided an appropriate explanation of benefits (consistent with that provided 

under parts A and B and, if applicable, under medicare supplemental policies) that includes a clear statement of the amount of the enrollee’s liability (including any liability for balance billing consistent with this 

subsection) with respect to payments for such services. 

(ii) ADVANCE NOTICE BEFORE RECEIPT OF INPATIENT

HOSPITAL SERVICES AND CERTAIN OTHER SERVICES.—In 

addition, such organization shall, in its terms and conditions of payments to hospitals for inpatient hospital 

services and for other services identified by the Secretary for which the amount of the balance billing 

under subparagraph (A) could be substantial, require 

the hospital to provide to the enrollee, before furnishing such services and if the hospital imposes balance billing under subparagraph (A)— 

(I) notice of the fact that balance billing is permitted under such subparagraph for such services, 

and 

(II) a good faith estimate of the likely amount of 

such balance billing (if any), with respect to such 

services, based upon the presenting condition of 

the enrollee. 

(l) RETURN TO HOME SKILLED NURSING FACILITIES FOR COVERED

POST-HOSPITAL EXTENDED CARE SERVICES.— 

(1) ENSURING RETURN TO HOME SNF.— 

(A) IN GENERAL.—In providing coverage of post-hospital 

extended care services, a Medicare+Choice plan shall proVerDate Sep 11 2014 01:27 Dec 23, 2017 Jkt 079006 PO 00000 Frm 00032 Fmt 6659 Sfmt 6601 E:\HR\OC\HR478P1.XXX HR478P1
33 

vide for such coverage through a home skilled nursing facility if the following conditions are met: 

(i) ENROLLEE ELECTION.—The enrollee elects to receive such coverage through such facility. 

(ii) SNF AGREEMENT.—The facility has a contract 

with the Medicare+Choice organization for the provision of such services, or the facility agrees to accept 

substantially similar payment under the same terms 

and conditions that apply to similarly situated skilled 

nursing facilities that are under contract with the 

Medicare+Choice organization for the provision of such 

services and through which the enrollee would otherwise receive such services. 

(B) MANNER OF PAYMENT TO HOME SNF.—The organization shall provide payment to the home skilled nursing facility consistent with the contract or the agreement described in subparagraph (A)(ii), as the case may be. 

(2) NO LESS FAVORABLE COVERAGE.—The coverage provided 

under paragraph (1) (including scope of services, cost-sharing, 

and other criteria of coverage) shall be no less favorable to the 

enrollee than the coverage that would be provided to the enrollee with respect to a skilled nursing facility the post-hospital 

extended care services of which are otherwise covered under 

the Medicare+Choice plan. 

(3) RULE OF CONSTRUCTION.—Nothing in this subsection 

shall be construed to do the following: 

(A) To require coverage through a skilled nursing facility 

that is not otherwise qualified to provide benefits under 

part A for medicare beneficiaries not enrolled in a 

Medicare+Choice plan. 

(B) To prevent a skilled nursing facility from refusing to 

accept, or imposing conditions upon the acceptance of, an 

enrollee for the receipt of post-hospital extended care services. 

(4) DEFINITIONS.—In this subsection: 

(A) HOME SKILLED NURSING FACILITY.—The term ‘‘home 

skilled nursing facility’’ means, with respect to an enrollee 

who is entitled to receive post-hospital extended care services under a Medicare+Choice plan, any of the following 

skilled nursing facilities: 

(i) SNF RESIDENCE AT TIME OF ADMISSION.—The 

skilled nursing facility in which the enrollee resided at 

the time of admission to the hospital preceding the receipt of such post-hospital extended care services. 

(ii) SNF IN CONTINUING CARE RETIREMENT COMMUNITY.—A skilled nursing facility that is providing such 

services through a continuing care retirement community (as defined in subparagraph (B)) which provided 

residence to the enrollee at the time of such admission. 

(iii) SNF RESIDENCE OF SPOUSE AT TIME OF DISCHARGE.—The skilled nursing facility in which the 

spouse of the enrollee is residing at the time of discharge from such hospital. 

34 

(B) CONTINUING CARE RETIREMENT COMMUNITY.—The 

term ‘‘continuing care retirement community’’ means, with 

respect to an enrollee in a Medicare+Choice plan, an arrangement under which housing and health-related services are provided (or arranged) through an organization for 

the enrollee under an agreement that is effective for the 

life of the enrollee or for a specified period. 

PAYMENTS TO MEDICARE+CHOICE ORGANIZATIONS

SEC. 1853. (a) PAYMENTS TO ORGANIZATIONS.— 

(1) MONTHLY PAYMENTS.— 

(A) IN GENERAL.—Under a contract under section 1857 

and subject to subsections (e), (g), (i), and (l) and section 

1859(e)(4), the Secretary shall make monthly payments 

under this section in advance to each Medicare+Choice organization, with respect to coverage of an individual under 

this part in a Medicare+Choice payment area for a month, 

in an amount determined as follows: 

(i) PAYMENT BEFORE 2006.—For years before 2006, 

the payment amount shall be equal to 1⁄12 of the annual MA capitation rate (as calculated under subsection (c)(1)) with respect to that individual for that 

area, adjusted under subparagraph (C) and reduced by 

the amount of any reduction elected under section 

1854(f)(1)(E). 

(ii) PAYMENT FOR ORIGINAL FEE-FOR-SERVICE BENEFITS BEGINNING WITH 2006.—For years beginning with 

2006, the amount specified in subparagraph (B). 

(B) PAYMENT AMOUNT FOR ORIGINAL FEE-FOR-SERVICE

BENEFITS BEGINNING WITH 2006.— 

(i) PAYMENT OF BID FOR PLANS WITH BIDS BELOW

BENCHMARK.—In the case of a plan for which there are 

average per capita monthly savings described in section 1854(b)(3)(C) or 1854(b)(4)(C), as the case may be, 

the amount specified in this subparagraph is equal to 

the unadjusted MA statutory non-drug monthly bid 

amount, adjusted under subparagraph (C) and (if applicable) under subparagraphs (F) and (G), plus the 

amount (if any) of any rebate under subparagraph (E). 

(ii) PAYMENT OF BENCHMARK FOR PLANS WITH BIDS

AT OR ABOVE BENCHMARK.—In the case of a plan for 

which there are no average per capita monthly savings 

described in section 1854(b)(3)(C) or 1854(b)(4)(C), as 

the case may be, the amount specified in this subparagraph is equal to the MA area-specific non-drug 

monthly benchmark amount, adjusted under subparagraph (C) and (if applicable) under subparagraphs (F) 

and (G). 

(iii) PAYMENT OF BENCHMARK FOR MSA PLANS.—Notwithstanding clauses (i) and (ii), in the case of an MSA 

plan, the amount specified in this subparagraph is 

equal to the MA area-specific non-drug monthly 

benchmark amount, adjusted under subparagraph (C). 

35 

(iv) AUTHORITY TO APPLY FRAILTY ADJUSTMENT

UNDER PACE PAYMENT RULES FOR CERTAIN SPECIALIZED

MA PLANS FOR SPECIAL NEEDS INDIVIDUALS.— (I) IN GENERAL.—Notwithstanding the preceding 

provisions of this paragraph, for plan year 2011 

and subsequent plan years, in the case of a plan 

described in subclause (II), the Secretary may 

apply the payment rules under section 1894(d) 

(other than paragraph (3) of such section) rather 

than the payment rules that would otherwise 

apply under this part, but only to the extent necessary to reflect the costs of treating high concentrations of frail individuals. 

(II) PLAN DESCRIBED.—A plan described in this 

subclause is a specialized MA plan for special 

needs individuals described in section 

1859(b)(6)(B)(ii) that is fully integrated with 

capitated contracts with States for Medicaid benefits, including long-term care, and that have similar average levels of frailty (as determined by the 

Secretary) as the PACE program. 

(C) DEMOGRAPHIC ADJUSTMENT, INCLUDING ADJUSTMENT

FOR HEALTH STATUS.— (i) IN GENERAL.—Subject to subparagraph (I), the 

Secretary shall adjust the payment amount under subparagraph (A)(i) and the amount specified under subparagraph (B)(i), (B)(ii), and (B)(iii) for such risk factors as age, disability status, gender, institutional status, and such other factors as the Secretary determines to be appropriate, including adjustment for 

health status under paragraph (3), so as to ensure actuarial equivalence. The Secretary may add to, modify, 

or substitute for such adjustment factors if such 

changes will improve the determination of actuarial 

equivalence. 

(ii) APPLICATION OF CODING ADJUSTMENT.—For 2006 

and each subsequent year: 

(I) In applying the adjustment under clause (i) 

for health status to payment amounts, the Secretary shall ensure that such adjustment reflects 

changes in treatment and coding practices in the 

fee-for-service sector and reflects differences in 

coding patterns between Medicare Advantage 

plans and providers under part A and B to the extent that the Secretary has identified such differences. 

(II) In order to ensure payment accuracy, the 

Secretary shall annually conduct an analysis of 

the differences described in subclause (I). The Secretary shall complete such analysis by a date necessary to ensure that the results of such analysis 

are incorporated on a timely basis into the risk 

scores for 2008 and subsequent years. In conducting such analysis, the Secretary shall use 

data submitted with respect to 2004 and subseVerDate Sep 11 2014 01:27 Dec 23, 2017 Jkt 079006 PO 00000 Frm 00035 Fmt 6659 Sfmt 6601 E:\HR\OC\HR478P1.XXX HR478P1
36 

quent years, as available and updated as appropriate. 

(III) In calculating each year’s adjustment, the 

adjustment factor shall be for 2014, not less than 

the adjustment factor applied for 2010, plus 1.5 

percentage points; for each of years 2015 through 

2018, not less than the adjustment factor applied 

for the previous year, plus 0.25 percentage point; 

and for 2019 and each subsequent year, not less 

than 5.9 percent. 

(IV) Such adjustment shall be applied to risk 

scores until the Secretary implements risk adjustment using Medicare Advantage diagnostic, cost, 

and use data. 

(iii) IMPROVEMENTS TO RISK ADJUSTMENT FOR SPECIAL NEEDS INDIVIDUALS WITH CHRONIC HEALTH CONDITIONS.— 

(I) IN GENERAL.—For 2011 and subsequent 

years, for purposes of the adjustment under clause 

(i) with respect to individuals described in subclause (II), the Secretary shall use a risk score 

that reflects the known underlying risk profile 

and chronic health status of similar individuals. 

Such risk score shall be used instead of the default risk score for new enrollees in Medicare Advantage plans that are not specialized MA plans 

for special needs individuals (as defined in section 

1859(b)(6)). 

(II) INDIVIDUALS DESCRIBED.—An individual described in this subclause is a special needs individual described in subsection (b)(6)(B)(iii) who 

enrolls in a specialized MA plan for special needs 

individuals on or after January 1, 2011. 

(III) EVALUATION.—For 2011 and periodically 

thereafter, the Secretary shall evaluate and revise 

the risk adjustment system under this subparagraph in order to, as accurately as possible, account for higher medical and care coordination 

costs associated with frailty, individuals with multiple, comorbid chronic conditions, and individuals 

with a diagnosis of mental illness, and also to account for costs that may be associated with higher 

concentrations of beneficiaries with those conditions. 

(IV) PUBLICATION OF EVALUATION AND REVISIONS.—The Secretary shall publish, as part of an 

announcement under subsection (b), a description 

of any evaluation conducted under subclause (III) 

during the preceding year and any revisions made 

under such subclause as a result of such evaluation. 

(D) SEPARATE PAYMENT FOR FEDERAL DRUG SUBSIDIES.— 

In the case of an enrollee in an MA–PD plan, the MA organization offering such plan also receives— 

37 

(i) subsidies under section 1860D–15 (other than 

under subsection (g)); and 

(ii) reimbursement for premium and cost-sharing reductions for low-income individuals under section 

1860D–14(c)(1)(C). 

(E) PAYMENT OF REBATE FOR PLANS WITH BIDS BELOW

BENCHMARK.—In the case of a plan for which there are average per capita monthly savings described in section 

1854(b)(3)(C) or 1854(b)(4)(C), as the case may be, the 

amount specified in this subparagraph is the amount of 

the monthly rebate computed under section 1854(b)(1)(C)(i) 

for that plan and year (as reduced by the amount of any 

credit provided under section 1854(b)(1)(C)(iv)). 

(F) ADJUSTMENT FOR INTRA-AREA VARIATIONS.— 

(i) INTRA-REGIONAL VARIATIONS.—In the case of payment with respect to an MA regional plan for an MA 

region, the Secretary shall also adjust the amounts 

specified under subparagraphs (B)(i) and (B)(ii) in a 

manner to take into account variations in MA local 

payment rates under this part among the different MA 

local areas included in such region. 

(ii) INTRA-SERVICE AREA VARIATIONS.—In the case of 

payment with respect to an MA local plan for a service 

area that covers more than one MA local area, the 

Secretary shall also adjust the amounts specified 

under subparagraphs (B)(i) and (B)(ii) in a manner to 

take into account variations in MA local payment 

rates under this part among the different MA local 

areas included in such service area. 

(G) ADJUSTMENT RELATING TO RISK ADJUSTMENT.—The 

Secretary shall adjust payments with respect to MA plans 

as necessary to ensure that— 

(i) the sum of— 

(I) the monthly payment made under subparagraph (A)(ii); and 

(II) the MA monthly basic beneficiary premium 

under section 1854(b)(2)(A); equals 

(ii) the unadjusted MA statutory non-drug monthly 

bid amount, adjusted in the manner described in subparagraph (C) and, for an MA regional plan, subparagraph (F). 

(H) SPECIAL RULE FOR END-STAGE RENAL DISEASE.—The 

Secretary shall establish separate rates of payment to a 

Medicare+Choice organization with respect to classes of individuals determined to have end-stage renal disease and 

enrolled in a Medicare+Choice plan of the organization. 

Such rates of payment shall be actuarially equivalent to 

rates that would have been paid with respect to other enrollees in the MA payment area (or such other area as 

specified by the Secretary) under the provisions of this section as in effect before the date of the enactment of the 

Medicare Prescription Drug, Improvement, and Modernization Act of 2003. In accordance with regulations, the Secretary shall provide for the application of the seventh sentence of section 1881(b)(7) to payments under this section 

38 

covering the provision of renal dialysis treatment in the 

same manner as such sentence applies to composite rate 

payments described in such sentence. In establishing such 

rates, the Secretary shall provide for appropriate adjustments to increase each rate to reflect the demonstration 

rate (including the risk adjustment methodology associated 

with such rate) of the social health maintenance organization end-stage renal disease capitation demonstrations (established by section 2355 of the Deficit Reduction Act of 

1984, as amended by section 13567(b) of the Omnibus 

Budget Reconciliation Act of 1993), and shall compute such 

rates by taking into account such factors as renal treatment modality, age, and the underlying cause of the endstage renal disease. The Secretary may apply the competitive bidding methodology provided for in this section, with 

appropriate adjustments to account for the risk adjustment 

methodology applied to end stage renal disease payments. 

(I) IMPROVEMENTS TO RISK ADJUSTMENT FOR 2019 AND

SUBSEQUENT YEARS.— 

(i) IN GENERAL.—In order to determine the appropriate adjustment for health status under subparagraph (C)(i), the following shall apply: 

(I) TAKING INTO ACCOUNT TOTAL NUMBER OF DISEASES OR CONDITIONS.—The Secretary shall take 

into account the total number of diseases or conditions of an individual enrolled in an MA plan. The 

Secretary shall make an additional adjustment 

under such subparagraph as the number of diseases or conditions of an individual increases. 

(II) USING AT LEAST 2 YEARS OF DIAGNOSTIC

DATA.—The Secretary may use at least 2 years of 

diagnosis data. 

(III) PROVIDING SEPARATE ADJUSTMENTS FOR

DUAL ELIGIBLE INDIVIDUALS.—With respect to individuals who are dually eligible for benefits under 

this title and title XIX, the Secretary shall make 

separate adjustments for each of the following: 

(aa) Full-benefit dual eligible individuals 

(as defined in section 1935(c)(6)). 

(bb) Such individuals not described in item 

(aa). 

(IV) EVALUATION OF MENTAL HEALTH AND SUBSTANCE USE DISORDERS.—The Secretary shall 

evaluate the impact of including additional diagnosis codes related to mental health and substance use disorders in the risk adjustment model. 

(V) EVALUATION OF CHRONIC KIDNEY DISEASE.— 

The Secretary shall evaluate the impact of including the severity of chronic kidney disease in the 

risk adjustment model. 

(VI) EVALUATION OF PAYMENT RATES FOR ENDSTAGE RENAL DISEASE.—The Secretary shall evaluate whether other factors (in addition to those described in subparagraph (H)) should be taken into 

39 

consideration when computing payment rates 

under such subparagraph. 

(ii) PHASED-IN IMPLEMENTATION.—The Secretary 

shall phase-in any changes to risk adjustment payment amounts under subparagraph (C)(i) under this 

subparagraph over a 3-year period, beginning with 

2019, with such changes being fully implemented for 

2022 and subsequent years. 

(iii) OPPORTUNITY FOR REVIEW AND PUBLIC COM- MENT.—The Secretary shall provide an opportunity for 

review of the proposed changes to such risk adjustment payment amounts under this subparagraph and 

a public comment period of not less than 60 days before implementing such changes. 

(2) ADJUSTMENT TO REFLECT NUMBER OF ENROLLEES.— 

(A) IN GENERAL.—The amount of payment under this 

subsection may be retroactively adjusted to take into account any difference between the actual number of individuals enrolled with an organization under this part and the 

number of such individuals estimated to be so enrolled in 

determining the amount of the advance payment. 

(B) SPECIAL RULE FOR CERTAIN ENROLLEES.— (i) IN GENERAL.—Subject to clause (ii), the Secretary 

may make retroactive adjustments under subparagraph (A) to take into account individuals enrolled 

during the period beginning on the date on which the 

individual enrolls with a Medicare+Choice organization under a plan operated, sponsored, or contributed 

to by the individual’s employer or former employer (or 

the employer or former employer of the individual’s 

spouse) and ending on the date on which the individual is enrolled in the organization under this part, 

except that for purposes of making such retroactive 

adjustments under this subparagraph, such period 

may not exceed 90 days. 

(ii) EXCEPTION.—No adjustment may be made under 

clause (i) with respect to any individual who does not 

certify that the organization provided the individual 

with the disclosure statement described in section 

1852(c) at the time the individual enrolled with the organization. 

(3) ESTABLISHMENT OF RISK ADJUSTMENT FACTORS.— 

(A) REPORT.—The Secretary shall develop, and submit to 

Congress by not later than March 1, 1999, a report on the 

method of risk adjustment of payment rates under this 

section, to be implemented under subparagraph (C), that 

accounts for variations in per capita costs based on health 

status. Such report shall include an evaluation of such 

method by an outside, independent actuary of the actuarial soundness of the proposal. 

(B) DATA COLLECTION.—In order to carry out this paragraph, the Secretary shall require Medicare+Choice organizations (and eligible organizations with risk-sharing contracts under section 1876) to submit data regarding inpatient hospital services for periods beginning on or after 

40 

July 1, 1997, and data regarding other services and other 

information as the Secretary deems necessary for periods 

beginning on or after July 1, 1998. The Secretary may not 

require an organization to submit such data before January 1, 1998. 

(C) INITIAL IMPLEMENTATION.— (i) IN GENERAL.—The Secretary shall first provide 

for implementation of a risk adjustment methodology 

that accounts for variations in per capita costs based 

on health status and other demographic factors for 

payments by no later than January 1, 2000. 

(ii) PHASE-IN.—Except as provided in clause (iv), 

such risk adjustment methodology shall be implemented in a phased-in manner so that the methodology insofar as it makes adjustments to capitation 

rates for health status applies to— 

(I) 10 percent of 1⁄12 of the annual 

Medicare+Choice capitation rate in 2000 and each 

succeeding year through 2003; 

(II) 30 percent of such capitation rate in 2004; 

(III) 50 percent of such capitation rate in 2005; 

(IV) 75 percent of such capitation rate in 2006; 

and 

(V) 100 percent of such capitation rate in 2007 

and succeeding years. 

(iii) DATA FOR RISK ADJUSTMENT METHODOLOGY.— Such risk adjustment methodology for 2004 and each 

succeeding year, shall be based on data from inpatient 

hospital and ambulatory settings. 

(iv) FULL IMPLEMENTATION OF RISK ADJUSTMENT FOR

CONGESTIVE HEART FAILURE ENROLLEES FOR 2001.— (I) EXEMPTION FROM PHASE-IN.—Subject to subclause (II), the Secretary shall fully implement the 

risk adjustment methodology described in clause 

(i) with respect to each individual who has had a 

qualifying congestive heart failure inpatient diagnosis (as determined by the Secretary under such 

risk adjustment methodology) during the period 

beginning on July 1, 1999, and ending on June 30, 

2000, and who is enrolled in a coordinated care 

plan that is the only coordinated care plan offered 

on January 1, 2001, in the service area of the individual. 

(II) PERIOD OF APPLICATION.—Subclause (I) shall 

only apply during the 1-year period beginning on 

January 1, 2001. 

(D) UNIFORM APPLICATION TO ALL TYPES OF PLANS.—Subject to section 1859(e)(4), the methodology shall be applied 

uniformly without regard to the type of plan. 

(4) PAYMENT RULE FOR FEDERALLY QUALIFIED HEALTH CENTER

SERVICES.—If an individual who is enrolled with an MA plan under 

this part receives a service from a federally qualified health center 

that has a written agreement with the MA organization that offers 

such plan for providing such a service (including any agreement required under section 1857(e)(3))— 

41 

(A) the Secretary shall pay the amount determined under 

section 1833(a)(3)(B) directly to the federally qualified health 

center not less frequently than quarterly; and 

(B) the Secretary shall not reduce the amount of the monthly 

payments under this subsection as a result of the application 

of subparagraph (A). 

(b) ANNUAL ANNOUNCEMENT OF PAYMENT RATES.— (1) ANNUAL ANNOUNCEMENTS.— (A) FOR 2005.—The Secretary shall determine, and shall 

announce (in a manner intended to provide notice to interested parties), not later than the second Monday in May 

of 2004, with respect to each MA payment area, the following: 

(i) MA CAPITATION RATES.—The annual MA capitation rate for each MA payment area for 2005. 

(ii) ADJUSTMENT FACTORS.—The risk and other factors to be used in adjusting such rates under subsection (a)(1)(C) for payments for months in 2005. 

(B) FOR 2006 AND SUBSEQUENT YEARS.—For a year after 

2005— 

(i) INITIAL ANNOUNCEMENT.—The Secretary shall determine, and shall announce (in a manner intended to 

provide notice to interested parties), not later than the 

first Monday in April before the calendar year concerned, with respect to each MA payment area, the following: 

(I) MA CAPITATION RATES; MA LOCAL AREA

BENCHMARK.—The annual MA capitation rate for 

each MA payment area for the year. 

(II) ADJUSTMENT FACTORS.—The risk and other 

factors to be used in adjusting such rates under 

subsection (a)(1)(C) for payments for months in 

such year. 

(ii) REGIONAL BENCHMARK ANNOUNCEMENT.—The 

Secretary shall determine, and shall announce (in a 

manner intended to provide notice to interested parties), on a timely basis before the calendar year concerned, with respect to each MA region and each MA 

regional plan for which a bid was submitted under section 1854, the MA region-specific non-drug monthly 

benchmark amount for that region for the year involved. 

(iii) BENCHMARK ANNOUNCEMENT FOR CCA LOCAL

AREAS.—The Secretary shall determine, and shall announce (in a manner intended to provide notice to interested parties), on a timely basis before the calendar 

year concerned, with respect to each CCA area (as defined in section 1860C–1(b)(1)(A)), the CCA non-drug 

monthly benchmark amount under section 1860C– 

1(e)(1) for that area for the year involved. 

(2) ADVANCE NOTICE OF METHODOLOGICAL CHANGES.—At 

least 45 days (or, in 2017 and each subsequent year, at least 

60 days) before making the announcement under paragraph (1) 

for a year, the Secretary shall provide for notice to 

Medicare+Choice organizations of proposed changes to be made 

42 

in the methodology from the methodology and assumptions 

used in the previous announcement and shall provide such organizations an opportunity (in 2017 and each subsequent year, 

of no less than 30 days) to comment on such proposed changes. 

(3) EXPLANATION OF ASSUMPTIONS.—In each announcement 

made under paragraph (1), the Secretary shall include an explanation of the assumptions and changes in methodology used 

in such announcement. 

(4) CONTINUED COMPUTATION AND PUBLICATION OF COUNTY- SPECIFIC PER CAPITA FEE-FOR-SERVICE EXPENDITURE INFORMA- TION.—The Secretary, through the Chief Actuary of the Centers for Medicare & Medicaid Services, shall provide for the 

computation and publication, on an annual basis beginning 

with 2001 at the time of publication of the annual 

Medicare+Choice capitation rates under paragraph (1), of the 

following information for the original medicare fee-for-service 

program under parts A and B (exclusive of individuals eligible 

for coverage under section 226A) for each Medicare+Choice 

payment area for the second calendar year ending before the 

date of publication: 

(A) Total expenditures per capita per month, computed 

separately for part A and for part B. 

(B) The expenditures described in subparagraph (A) reduced by the best estimate of the expenditures (such as 

graduate medical education and disproportionate share 

hospital payments) not related to the payment of claims. 

(C) The average risk factor for the covered population 

based on diagnoses reported for medicare inpatient services, using the same methodology as is expected to be applied in making payments under subsection (a). 

(D) Such average risk factor based on diagnoses for inpatient and other sites of service, using the same methodology as is expected to be applied in making payments 

under subsection (a). 

(c) CALCULATION OF ANNUAL MEDICARE+CHOICE CAPITATION

RATES.— 

(1) IN GENERAL.—For purposes of this part, subject to paragraphs (6)(C) and (7), each annual Medicare+Choice capitation 

rate, for a Medicare+Choice payment area that is an MA local 

area for a contract year consisting of a calendar year, is equal 

to the largest of the amounts specified in the following subparagraph (A), (B), (C), or (D): 

(A) BLENDED CAPITATION RATE.—For a year before 2005, 

the sum of— 

(i) the area-specific percentage (as specified under 

paragraph (2) for the year) of the annual area-specific 

Medicare+Choice capitation rate for the 

Medicare+Choice payment area, as determined under 

paragraph (3) for the year, and 

(ii) the national percentage (as specified under paragraph (2) for the year) of the input-price-adjusted annual national Medicare+Choice capitation rate, as determined under paragraph (4) for the year, 

multiplied (for a year other than 2004) by the budget neutrality adjustment factor determined under paragraph (5). 

43 

(B) MINIMUM AMOUNT.—12 multiplied by the following 

amount: 

(i) For 1998, $367 (but not to exceed, in the case of 

an area outside the 50 States and the District of Columbia, 150 percent of the annual per capita rate of 

payment for 1997 determined under section 

1876(a)(1)(C) for the area). 

(ii) For 1999 and 2000, the minimum amount determined under clause (i) or this clause, respectively, for 

the preceding year, increased by the national per capita Medicare+Choice growth percentage described in 

paragraph (6)(A) applicable to 1999 or 2000, respectively. 

(iii)(I) Subject to subclause (II), for 2001, for any 

area in a Metropolitan Statistical Area with a population of more than 250,000, $525, and for any other 

area $475. 

(II) In the case of an area outside the 50 States and 

the District of Columbia, the amount specified in this 

clause shall not exceed 120 percent of the amount determined under clause (ii) for such area for 2000. 

(iv) For 2002, 2003, and 2004, the minimum amount 

specified in this clause (or clause (iii)) for the preceding year increased by the national per capita 

Medicare+Choice growth percentage, described in 

paragraph (6)(A) for that succeeding year. 

(C) MINIMUM PERCENTAGE INCREASE.— (i) For 1998, 102 percent of the annual per capita 

rate of payment for 1997 determined under section 

1876(a)(1)(C) for the Medicare+Choice payment area. 

(ii) For 1999 and 2000, 102 percent of the annual 

Medicare+Choice capitation rate under this paragraph 

for the area for the previous year. 

(iii) For 2001, 103 percent of the annual 

Medicare+Choice capitation rate under this paragraph 

for the area for 2000. 

(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, the greater 

of— 

(I) 102 percent of the annual MA capitation rate 

under this paragraph for the area for the previous 

year; or 

(II) the annual MA capitation rate under this 

paragraph for the area for the previous year increased by the national per capita MA growth percentage, described in paragraph (6) for that succeeding year, but not taking into account any adjustment under paragraph (6)(C) for a year before 

2004. 

(D) 100 PERCENT OF FEE-FOR-SERVICE COSTS.— (i) IN GENERAL.—For each year specified in clause 

(ii), the adjusted average per capita cost for the year 

involved, determined under section 1876(a)(4) and adVerDate Sep 11 2014 01:27 Dec 23, 2017 Jkt 079006 PO 00000 Frm 00043 Fmt 6659 Sfmt 6601 E:\HR\OC\HR478P1.XXX HR478P1
44 

justed as appropriate for the purpose of risk adjustment, for the MA payment area for individuals who 

are not enrolled in an MA plan under this part for the 

year, but adjusted to exclude costs attributable to payments under sections, 1848(o), and 1886(n) and 

1886(h). 

(ii) PERIODIC REBASING.—The provisions of clause (i) 

shall apply for 2004 and for subsequent years as the 

Secretary shall specify (but not less than once every 3 

years). 

(iii) 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 Defense or the Department of Veterans 

Affairs. 

(2) AREA-SPECIFIC AND NATIONAL PERCENTAGES.—For purposes of paragraph (1)(A)— 

(A) for 1998, the ‘‘area-specific percentage’’ is 90 percent 

and the ‘‘national percentage’’ is 10 percent, 

(B) for 1999, the ‘‘area-specific percentage’’ is 82 percent 

and the ‘‘national percentage’’ is 18 percent, 

(C) for 2000, the ‘‘area-specific percentage’’ is 74 percent 

and the ‘‘national percentage’’ is 26 percent, 

(D) for 2001, the ‘‘area-specific percentage’’ is 66 percent 

and the ‘‘national percentage’’ is 34 percent, 

(E) for 2002, the ‘‘area-specific percentage’’ is 58 percent 

and the ‘‘national percentage’’ is 42 percent, and 

(F) for a year after 2002, the ‘‘area-specific percentage’’ 

is 50 percent and the ‘‘national percentage’’ is 50 percent. 

(3) ANNUAL AREA-SPECIFIC MEDICARE+CHOICE CAPITATION

RATE.— 

(A) IN GENERAL.—For purposes of paragraph (1)(A), subject to subparagraphs (B) and (E), the annual area-specific 

Medicare+Choice capitation rate for a Medicare+Choice 

payment area— 

(i) for 1998 is, subject to subparagraph (D), the annual per capita rate of payment for 1997 determined 

under section 1876(a)(1)(C) for the area, increased by 

the national per capita Medicare+Choice growth percentage for 1998 (described in paragraph (6)(A)); or 

(ii) for a subsequent year is the annual area-specific 

Medicare+Choice capitation rate for the previous year 

determined under this paragraph for the area, increased by the national per capita Medicare+Choice 

growth percentage for such subsequent year. 

(B) REMOVAL OF MEDICAL EDUCATION FROM CALCULATION

OF ADJUSTED AVERAGE PER CAPITA COST.— 

(i) IN GENERAL.—In determining the area-specific 

Medicare+Choice capitation rate under subparagraph 

45 

(A) for a year (beginning with 1998), the annual per 

capita rate of payment for 1997 determined under section 1876(a)(1)(C) shall be adjusted to exclude from 

the rate the applicable percent (specified in clause (ii)) 

of the payment adjustments described in subparagraph (C). 

(ii) APPLICABLE PERCENT.—For purposes of clause (i), 

the applicable percent for— 

(I) 1998 is 20 percent, 

(II) 1999 is 40 percent, 

(III) 2000 is 60 percent, 

(IV) 2001 is 80 percent, and 

(V) a succeeding year is 100 percent. 

(C) PAYMENT ADJUSTMENT.— 

(i) IN GENERAL.—Subject to clause (ii), the payment 

adjustments described in this subparagraph are payment adjustments which the Secretary estimates were 

payable during 1997— 

(I) for the indirect costs of medical education 

under section 1886(d)(5)(B), and 

(II) for direct graduate medical education costs 

under section 1886(h). 

(ii) TREATMENT OF PAYMENTS COVERED UNDER STATE

HOSPITAL REIMBURSEMENT SYSTEM.—To the extent 

that the Secretary estimates that an annual per capita 

rate of payment for 1997 described in clause (i) reflects 

payments to hospitals reimbursed under section 

1814(b)(3), the Secretary shall estimate a payment adjustment that is comparable to the payment adjustment that would have been made under clause (i) if 

the hospitals had not been reimbursed under such section. 

(D) TREATMENT OF AREAS WITH HIGHLY VARIABLE PAYMENT RATES.—In the case of a Medicare+Choice payment 

area for which the annual per capita rate of payment determined under section 1876(a)(1)(C) for 1997 varies by 

more than 20 percent from such rate for 1996, for purposes 

of this subsection the Secretary may substitute for such 

rate for 1997 a rate that is more representative of the 

costs of the enrollees in the area. 

(E) INCLUSION OF COSTS OF DOD AND VA MILITARY FACILITY SERVICES TO MEDICARE-ELIGIBLE BENEFICIARIES.—In 

determining the area-specific MA 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. 

(4) INPUT-PRICE-ADJUSTED ANNUAL NATIONAL

MEDICARE+CHOICE CAPITATION RATE.— 

46 

(A) IN GENERAL.—For purposes of paragraph (1)(A), the 

input-price-adjusted annual national Medicare+Choice 

capitation rate for a Medicare+Choice payment area for a 

year is equal to the sum, for all the types of medicare services (as classified by the Secretary), of the product (for 

each such type of service) of— 

(i) the national standardized annual 

Medicare+Choice capitation rate (determined under 

subparagraph (B)) for the year, 

(ii) the proportion of such rate for the year which is 

attributable to such type of services, and 

(iii) an index that reflects (for that year and that 

type of services) the relative input price of such services in the area compared to the national average 

input price of such services. 

In applying clause (iii), the Secretary may, subject to subparagraph (C), apply those indices under this title that are 

used in applying (or updating) national payment rates for 

specific areas and localities. 

(B) NATIONAL STANDARDIZED ANNUAL MEDICARE+CHOICE

CAPITATION RATE.—In subparagraph (A)(i), the ‘‘national 

standardized annual Medicare+Choice capitation rate’’ for 

a year is equal to— 

(i) the sum (for all Medicare+Choice payment areas) 

of the product of— 

(I) the annual area-specific Medicare+Choice 

capitation rate for that year for the area under 

paragraph (3), and 

(II) the average number of medicare beneficiaries residing in that area in the year, multiplied by the average of the risk factor weights 

used to adjust payments under subsection 

(a)(1)(A) for such beneficiaries in such area; divided by 

(ii) the sum of the products described in clause (i)(II) 

for all areas for that year. 

(C) SPECIAL RULES FOR 1998.—In applying this paragraph 

for 1998— 

(i) medicare services shall be divided into 2 types of 

services: part A services and part B services; 

(ii) the proportions described in subparagraph 

(A)(ii)— 

(I) for part A services shall be the ratio (expressed as a percentage) of the national average 

annual per capita rate of payment for part A for 

1997 to the total national average annual per capita rate of payment for parts A and B for 1997, 

and 

(II) for part B services shall be 100 percent 

minus the ratio described in subclause (I); 

(iii) for part A services, 70 percent of payments attributable to such services shall be adjusted by the 

index used under section 1886(d)(3)(E) to adjust payment rates for relative hospital wage levels for hospitals located in the payment area involved; 

47 

(iv) for part B services— 

(I) 66 percent of payments attributable to such 

services shall be adjusted by the index of the geographic area factors under section 1848(e) used to 

adjust payment rates for physicians’ services furnished in the payment area, and 

(II) of the remaining 34 percent of the amount 

of such payments, 40 percent shall be adjusted by 

the index described in clause (iii); and 

(v) the index values shall be computed based only on 

the beneficiary population who are 65 years of age or 

older and who are not determined to have end stage 

renal disease. 

The Secretary may continue to apply the rules described in 

this subparagraph (or similar rules) for 1999. 

(5) PAYMENT ADJUSTMENT BUDGET NEUTRALITY FACTOR.—For 

purposes of paragraph (1)(A), for each year (other than 2004), 

the Secretary shall determine a budget neutrality adjustment 

factor so that the aggregate of the payments under this part 

(other than those attributable to subsections (a)(3)(C)(iv), 

(a)(4), and (i) shall equal the aggregate payments that would 

have been made under this part if payment were based entirely on area-specific capitation rates. 

(6) NATIONAL PER CAPITA MEDICARE+CHOICE GROWTH PER- CENTAGE DEFINED.— (A) IN GENERAL.—In this part, the ‘‘national per capita 

Medicare+Choice growth percentage’’ for a year is the percentage determined by the Secretary, by March 1st before 

the beginning of the year involved, to reflect the Secretary’s estimate of the projected per capita rate of growth 

in expenditures under this title for an individual entitled 

to benefits under part A and enrolled under part B, excluding expenditures attributable to subsections (a)(7) and (o) 

of section 1848 and subsections (b)(3)(B)(ix) and (n) of section 1886, reduced by the number of percentage points 

specified in subparagraph (B) for the year. Separate determinations may be made for aged enrollees, disabled enrollees, and enrollees with end-stage renal disease. 

(B) ADJUSTMENT.—The number of percentage points 

specified in this subparagraph is— 

(i) for 1998, 0.8 percentage points, 

(ii) for 1999, 0.5 percentage points, 

(iii) for 2000, 0.5 percentage points, 

(iv) for 2001, 0.5 percentage points, 

(v) for 2002, 0.3 percentage points, and 

(vi) for a year after 2002, 0 percentage points. 

(C) ADJUSTMENT FOR OVER OR UNDER PROJECTION OF NA- TIONAL PER CAPITA MEDICARE+CHOICE GROWTH PERCENTAGE.—Beginning with rates calculated for 1999, before 

computing rates for a year as described in paragraph (1), 

the Secretary shall adjust all area-specific and national 

Medicare+Choice capitation rates (and beginning in 2000, 

the minimum amount) for the previous year for the differences between the projections of the national per capita 

Medicare+Choice growth percentage for that year and preVerDate Sep 11 2014 01:27 Dec 23, 2017 Jkt 079006 PO 00000 Frm 00047 Fmt 6659 Sfmt 6601 E:\HR\OC\HR478P1.XXX HR478P1
48 

vious years and the current estimate of such percentage 

for such years, except that for purposes of paragraph 

(1)(C)(v)(II), no such adjustment shall be made for a year 

before 2004. 

(7) ADJUSTMENT FOR NATIONAL COVERAGE DETERMINATIONS

AND LEGISLATIVE CHANGES IN BENEFITS.—If the Secretary 

makes a determination with respect to coverage under this 

title or there is a change in benefits required to be provided 

under this part that the Secretary projects will result in a significant increase in the costs to Medicare+Choice of providing 

benefits under contracts under this part (for periods after any 

period described in section 1852(a)(5)), the Secretary shall adjust appropriately the payments to such organizations under 

this part. Such projection and adjustment shall be based on an 

analysis by the Chief Actuary of the Centers for Medicare & 

Medicaid Services of the actuarial costs associated with the 

new benefits. 

(d) MA PAYMENT AREA; MA LOCAL AREA; MA REGION DEFINED.— 

(1) MA PAYMENT AREA.—In this part, except as provided in 

this subsection, the term ‘‘MA payment area’’ means— 

(A) with respect to an MA local plan, an MA local area 

(as defined in paragraph (2)); and 

(B) with respect to an MA regional plan, an MA region 

(as established under section 1858(a)(2)). 

(2) MA LOCAL AREA.—The term ‘‘MA local area’’ means a 

county or equivalent area specified by the Secretary. 

(3) RULE FOR ESRD BENEFICIARIES.—In the case of individuals who are determined to have end stage renal disease, the 

Medicare+Choice payment area shall be a State or such other 

payment area as the Secretary specifies. 

(4) GEOGRAPHIC ADJUSTMENT.— 

(A) IN GENERAL.—Upon written request of the chief executive officer of a State for a contract year (beginning after 

1998) made by not later than February 1 of the previous 

year, the Secretary shall make a geographic adjustment to 

a Medicare+Choice payment area in the State otherwise 

determined under paragraph (1) for MA local plans— 

(i) to a single statewide Medicare+Choice payment 

area, 

(ii) to the metropolitan based system described in 

subparagraph (C), or 

(iii) to consolidating into a single Medicare+Choice 

payment area noncontiguous counties (or equivalent 

areas described inparagraph (1)(A)) within a State. 

Such adjustment shall be effective for payments for 

months beginning with January of the year following the 

year in which the request is received. 

(B) BUDGET NEUTRALITY ADJUSTMENT.—In the case of a 

State requesting an adjustment under this paragraph, the 

Secretary shall initially (and annually thereafter) adjust 

the payment rates otherwise established under this section 

with respect to MA local plans for Medicare+Choice payment areas in the State in a manner so that the aggregate 

of the payments under this section for such plans in the 

49 

State shall not exceed the aggregate payments that would 

have been made under this section for such plans for 

Medicare+Choice payment areas in the State in the absence of the adjustment under this paragraph. 

(C) METROPOLITAN BASED SYSTEM.—The metropolitan 

based system described in this subparagraph is one in 

which— 

(i) all the portions of each metropolitan statistical 

area in the State or in the case of a consolidated metropolitan statistical area, all of the portions of each 

primary metropolitan statistical area within the consolidated area within the State, are treated as a single 

Medicare+Choice payment area, and 

(ii) all areas in the State that do not fall within a 

metropolitan statistical area are treated as a single 

Medicare+Choice payment area. 

(D) AREAS.—In subparagraph (C), the terms ‘‘metropolitan statistical area’’, ‘‘consolidated metropolitan statistical 

area’’, and ‘‘primary metropolitan statistical area’’ mean 

any area designated as such by the Secretary of Commerce. 

(e) SPECIAL RULES FOR INDIVIDUALS ELECTING MSA PLANS.— (1) IN GENERAL.—If the amount of the Medicare+Choice 

monthly MSA premium (as defined in section 1854(b)(2)(C)) for 

an MSA plan for a year is less than 1⁄12 of the annual 

Medicare+Choice capitation rate applied under this section for 

the area and year involved, the Secretary shall deposit an 

amount equal to 100 percent of such difference in a 

Medicare+Choice MSA established (and, if applicable, designated) by the individual under paragraph (2). 

(2) ESTABLISHMENT AND DESIGNATION OF MEDICARE+CHOICE

MEDICAL SAVINGS ACCOUNT AS REQUIREMENT FOR PAYMENT OF

CONTRIBUTION.—In the case of an individual who has elected 

coverage under an MSA plan, no payment shall be made under 

paragraph (1) on behalf of an individual for a month unless the 

individual— 

(A) has established before the beginning of the month (or 

by such other deadline as the Secretary may specify) a 

Medicare+Choice MSA (as defined in section 138(b)(2) of 

the Internal Revenue Code of 1986), and 

(B) if the individual has established more than one such 

Medicare+Choice MSA, has designated one of such accounts as the individual’s Medicare+Choice MSA for purposes of this part. 

Under rules under this section, such an individual may change 

the designation of such account under subparagraph (B) for 

purposes of this part. 

(3) LUMP-SUM DEPOSIT OF MEDICAL SAVINGS ACCOUNT CONTRIBUTION.—In the case of an individual electing an MSA plan 

effective beginning with a month in a year, the amount of the 

contribution to the Medicare+Choice MSA on behalf of the individual for that month and all successive months in the year 

shall be deposited during that first month. In the case of a termination of such an election as of a month before the end of 

a year, the Secretary shall provide for a procedure for the reVerDate Sep 11 2014 01:27 Dec 23, 2017 Jkt 079006 PO 00000 Frm 00049 Fmt 6659 Sfmt 6601 E:\HR\OC\HR478P1.XXX HR478P1
50 

covery of deposits attributable to the remaining months in the 

year. 

(f) PAYMENTS FROM TRUST FUNDS.—The payment to a 

Medicare+Choice organization under this section for individuals enrolled under this part with the organization and for payments 

under subsection (l) and subsection (m) and payments to a 

Medicare+Choice MSA under subsection (e)(1) shall be made from 

the Federal Hospital Insurance Trust Fund and the Federal Supplementary Medical Insurance Trust Fund in such proportion as 

the Secretary determines reflects the relative weight that benefits 

under part A and under part B represents of the actuarial value 

of the total benefits under this title. Payments to MA organizations 

for statutory drug benefits provided under this title are made from 

the Medicare Prescription Drug Account in the Federal Supplementary Medical Insurance Trust Fund. Monthly payments otherwise payable under this section for October 2000 shall be paid on 

the first business day of such month. Monthly payments otherwise 

payable under this section for October 2001 shall be paid on the 

last business day of September 2001. Monthly payments otherwise 

payable under this section for October 2006 shall be paid on the 

first business day of October 2006. 

(g) SPECIAL RULE FOR CERTAIN INPATIENT HOSPITAL STAYS.—In 

the case of an individual who is receiving inpatient hospital services from a subsection (d) hospital (as defined in section 

1886(d)(1)(B)), a rehabilitation hospital described in section 

1886(d)(1)(B)(ii) or a distinct part rehabilitation unit described in 

the matter following clause (v) of section 1886(d)(1)(B), or a longterm care hospital (described in section 1886(d)(1)(B)(iv)) as of the 

effective date of the individual’s— 

(1) election under this part of a Medicare+Choice plan offered by a Medicare+Choice organization— 

(A) payment for such services until the date of the individual’s discharge shall be made under this title through 

the Medicare+Choice plan or the original medicare fee-forservice program option described in section 1851(a)(1)(A) 

(as the case may be) elected before the election with such 

organization, 

(B) the elected organization shall not be financially responsible for payment for such services until the date after 

the date of the individual’s discharge, and 

(C) the organization shall nonetheless be paid the full 

amount otherwise payable to the organization under this 

part; or 

(2) termination of election with respect to a Medicare+Choice 

organization under this part— 

(A) the organization shall be financially responsible for 

payment for such services after such date and until the 

date of the individual’s discharge, 

(B) payment for such services during the stay shall not 

be made under section 1886(d) or other payment provision 

under this title for inpatient services for the type of facility, hospital, or unit involved, described in the matter preceding paragraph (1), as the case may be, or by any succeeding Medicare+Choice organization, and 

51 

(C) the terminated organization shall not receive any 

payment with respect to the individual under this part 

during the period the individual is not enrolled. 

(h) SPECIAL RULE FOR HOSPICE CARE.— (1) INFORMATION.—A contract under this part shall require 

the Medicare+Choice organization to inform each individual 

enrolled under this part with a Medicare+Choice plan offered 

by the organization about the availability of hospice care if— 

(A) a hospice program participating under this title is located within the organization’s service area; or 

(B) it is common practice to refer patients to hospice programs outside such service area. 

(2) PAYMENT.—If an individual who is enrolled with a 

Medicare+Choice organization under this part makes an election under section 1812(d)(1) to receive hospice care from a 

particular hospice program— 

(A) payment for the hospice care furnished to the individual shall be made to the hospice program elected by the 

individual by the Secretary; 

(B) payment for other services for which the individual 

is eligible notwithstanding the individual’s election of hospice care under section 1812(d)(1), including services not 

related to the individual’s terminal illness, shall be made 

by the Secretary to the Medicare+Choice organization or 

the provider or supplier of the service instead of payments 

calculated under subsection (a); and 

(C) the Secretary shall continue to make monthly payments to the Medicare+Choice organization in an amount 

equal to the value of the additional benefits required under 

section 1854(f)(1)(A). 

(i) NEW ENTRY BONUS.— (1) IN GENERAL.—Subject to paragraphs (2) and (3), in the 

case of Medicare+Choice payment area in which a 

Medicare+Choice plan has not been offered since 1997 (or in 

which all organizations that offered a plan since such date 

have filed notice with the Secretary, as of October 13, 1999, 

that they will not be offering such a plan as of January 1, 

2000, or filed notice with the Secretary as of October 3, 2000, 

that they will not be offering such a plan as of January 1, 

2001), the amount of the monthly payment otherwise made 

under this section shall be increased— 

(A) only for the first 12 months in which any 

Medicare+Choice plan is offered in the area, by 5 percent 

of the total monthly payment otherwise computed for such 

payment area; and 

(B) only for the subsequent 12 months, by 3 percent of 

the total monthly payment otherwise computed for such 

payment area. 

(2) PERIOD OF APPLICATION.—Paragraph (1) shall only apply 

to payment for Medicare+Choice plans which are first offered 

in a Medicare+Choice payment area during the 2-year period 

beginning on January 1, 2000. 

(3) LIMITATION TO ORGANIZATION OFFERING FIRST PLAN IN AN

AREA.—Paragraph (1) shall only apply to payment to the first 

Medicare+Choice organization that offers a Medicare+Choice 

52 

plan in each Medicare+Choice payment area, except that if 

more than one such organization first offers such a plan in an 

area on the same date, paragraph (1) shall apply to payment 

for such organizations. 

(4) CONSTRUCTION.—Nothing in paragraph (1) shall be construed as affecting the calculation of the annual 

Medicare+Choice capitation rate under subsection (c) for any 

payment area or as applying to payment for any period not described in such paragraph and paragraph (2). 

(5) OFFERED DEFINED.—In this subsection, the term ‘‘offered’’ 

means, with respect to a Medicare+Choice plan as of a date, 

that a Medicare+Choice eligible individual may enroll with the 

plan on that date, regardless of when the enrollment takes effect or when the individual obtains benefits under the plan. 

(j) COMPUTATION OF BENCHMARK AMOUNTS.—For purposes of this 

part, subject to subsection (o), the term ‘‘MA area-specific non-drug 

monthly benchmark amount’’ means for a month in a year— 

(1) with respect to— 

(A) a service area that is entirely within an MA local 

area, subject to section 1860C–1(d)(2)(A), an amount equal 

to 1⁄12 of the annual MA capitation rate under section 

1853(c)(1) for the area for the year (or, for 2007, 2008, 

2009, and 2010, 1⁄12 of the applicable amount determined 

under subsection (k)(1) for the area for the year; for 2011, 

1⁄12 of the applicable amount determined under subsection 

(k)(1) for the area for 2010; and, beginning with 2012, 1⁄12

of the blended benchmark amount determined under subsection (n)(1) for the area for the year), adjusted as appropriate (for years before 2007) for the purpose of risk adjustment; or 

(B) a service area that includes more than one MA local 

area, an amount equal to the average of the amounts described in subparagraph (A) for each such local MA area, 

weighted by the projected number of enrollees in the plan 

residing in the respective local MA areas (as used by the 

plan for purposes of the bid and disclosed to the Secretary 

under section 1854(a)(6)(A)(iii)), adjusted as appropriate 

(for years before 2007) for the purpose of risk adjustment; 

or 

(2) with respect to an MA region for a month in a year, the 

MA region-specific non-drug monthly benchmark amount, as 

defined in section 1858(f) for the region for the year. 

(k) DETERMINATION OF APPLICABLE AMOUNT FOR PURPOSES OF

CALCULATING THE BENCHMARK AMOUNTS.— 

(1) APPLICABLE AMOUNT DEFINED.—For purposes of subsection (j), subject to paragraphs (2), (4), and (5), the term ‘‘applicable amount’’ means for an area— 

(A) for 2007— 

(i) if such year is not specified under subsection 

(c)(1)(D)(ii), an amount equal to the amount specified 

in subsection (c)(1)(C) for the area for 2006— 

(I) first adjusted by the rescaling factor for 2006 

for the area (as made available by the Secretary 

in the announcement of the rates on April 4, 2005, 

under subsection (b)(1), but excluding any naVerDate Sep 11 2014 01:27 Dec 23, 2017 Jkt 079006 PO 00000 Frm 00052 Fmt 6659 Sfmt 6601 E:\HR\OC\HR478P1.XXX HR478P1
53 

tional adjustment factors for coding intensity and 

risk adjustment budget neutrality that were included in such factor); and 

(II) then increased by the national per capita 

MA growth percentage, described in subsection 

(c)(6) for 2007, but not taking into account any adjustment under subparagraph (C) of such subsection for a year before 2004; 

(ii) if such year is specified under subsection 

(c)(1)(D)(ii), an amount equal to the greater of— 

(I) the amount determined under clause (i) for 

the area for the year; or 

(II) the amount specified in subsection (c)(1)(D) 

for the area for the year; and 

(B) for a subsequent year— 

(i) if such year is not specified under subsection 

(c)(1)(D)(ii), an amount equal to the amount determined under this paragraph for the area for the previous year (determined without regard to paragraphs 

(2), (4), and (5)), increased by the national per capita 

MA growth percentage, described in subsection (c)(6) 

for that succeeding year, but not taking into account 

any adjustment under subparagraph (C) of such subsection for a year before 2004; and 

(ii) if such year is specified under subsection 

(c)(1)(D)(ii), an amount equal to the greater of— 

(I) the amount determined under clause (i) for 

the area for the year; or 

(II) the amount specified in subsection (c)(1)(D) 

for the area for the year. 

(2) PHASE-OUT OF BUDGET NEUTRALITY FACTOR.— (A) IN GENERAL.—Except as provided in subparagraph 

(D), in the case of 2007 through 2010, the applicable 

amount determined under paragraph (1) shall be multiplied by a factor equal to 1 plus the product of— 

(i) the percent determined under subparagraph (B) 

for the year; and 

(ii) the applicable phase-out factor for the year 

under subparagraph (C). 

(B) PERCENT DETERMINED.— 

(i) IN GENERAL.—For purposes of subparagraph 

(A)(i), subject to clause (iv), the percent determined 

under this subparagraph for a year is a percent equal 

to a fraction the numerator of which is described in 

clause (ii) and the denominator of which is described 

in clause (iii). 

(ii) NUMERATOR BASED ON DIFFERENCE BETWEEN DE- MOGRAPHIC RATE AND RISK RATE.— 

(I) IN GENERAL.—The numerator described in 

this clause is an amount equal to the amount by 

which the demographic rate described in subclause (II) exceeds the risk rate described in subclause (III). 

(II) DEMOGRAPHIC RATE.—The demographic rate 

described in this subclause is the Secretary’s estiVerDate Sep 11 2014 01:27 Dec 23, 2017 Jkt 079006 PO 00000 Frm 00053 Fmt 6659 Sfmt 6601 E:\HR\OC\HR478P1.XXX HR478P1
54 

mate of the total payments that would have been 

made under this part in the year if all the monthly payment amounts for all MA plans were equal 

to 1⁄12 of the annual MA capitation rate under 

subsection (c)(1) for the area and year, adjusted 

pursuant to subsection (a)(1)(C). 

(III) RISK RATE.—The risk rate described in this 

subclause is the Secretary’s estimate of the total 

payments that would have been made under this 

part in the year if all the monthly payment 

amounts for all MA plans were equal to the 

amount described in subsection (j)(1)(A) (determined as if this paragraph had not applied) under 

subsection (j) for the area and year, adjusted pursuant to subsection (a)(1)(C). 

(iii) DENOMINATOR BASED ON RISK RATE.—The denominator described in this clause is equal to the total 

amount estimated for the year under clause (ii)(III). 

(iv) REQUIREMENTS.—In estimating the amounts 

under the previous clauses, the Secretary shall— 

(I) use a complete set of the most recent and 

representative Medicare Advantage risk scores 

under subsection (a)(3) that are available from the 

risk adjustment model announced for the year; 

(II) adjust the risk scores to reflect changes in 

treatment and coding practices in the fee-for-service sector; 

(III) adjust the risk scores for differences in coding patterns between Medicare Advantage plans 

and providers under the original Medicare fee-forservice program under parts A and B to the extent 

that the Secretary has identified such differences, 

as required in subsection (a)(1)(C); 

(IV) as necessary, adjust the risk scores for late 

data submitted by Medicare Advantage organizations; 

(V) as necessary, adjust the risk scores for 

lagged cohorts; and 

(VI) as necessary, adjust the risk scores for 

changes in enrollment in Medicare Advantage 

plans during the year. 

(v) AUTHORITY.—In computing such amounts the 

Secretary may take into account the estimated health 

risk of enrollees in preferred provider organization 

plans (including MA regional plans) for the year. 

(C) APPLICABLE PHASE-OUT FACTOR.—For purposes of 

subparagraph (A)(ii), the term ‘‘applicable phase-out factor’’ means— 

(i) for 2007, 0.55; 

(ii) for 2008, 0.40; 

(iii) for 2009, 0.25; and 

(iv) for 2010, 0.05. 

(D) TERMINATION OF APPLICATION.—Subparagraph (A) 

shall not apply in a year if the amount estimated under 

subparagraph (B)(ii)(III) for the year is equal to or greater 

55 

than the amount estimated under subparagraph (B)(ii)(II) 

for the year. 

(3) NO REVISION IN PERCENT.— (A) IN GENERAL.—The Secretary may not make any adjustment to the percent determined under paragraph 

(2)(B) for any year. 

(B) RULE OF CONSTRUCTION.—Nothing in this subsection 

shall be construed to limit the authority of the Secretary 

to make adjustments to the applicable amounts determined under paragraph (1) as appropriate for purposes of 

updating data or for purposes of adopting an improved risk 

adjustment methodology. 

(4) PHASE-OUT OF THE INDIRECT COSTS OF MEDICAL EDUCATION FROM CAPITATION RATES.— 

(A) IN GENERAL.—After determining the applicable 

amount for an area for a year under paragraph (1) (beginning with 2010), the Secretary shall adjust such applicable 

amount to exclude from such applicable amount the phasein percentage (as defined in subparagraph (B)(i)) for the 

year of the Secretary’s estimate of the standardized costs 

for payments under section 1886(d)(5)(B) in the area for 

the year. Any adjustment under the preceding sentence 

shall be made prior to the application of paragraph (2). 

(B) PERCENTAGES DEFINED.—For purposes of this paragraph: 

(i) PHASE-IN PERCENTAGE.—The term ‘‘phase-in percentage’’ means, for an area for a year, the ratio (expressed as a percentage, but in no case greater than 

100 percent) of— 

(I) the maximum cumulative adjustment percentage for the year (as defined in clause (ii)); to 

(II) the standardized IME cost percentage (as 

defined in clause (iii)) for the area and year. 

(ii) MAXIMUM CUMULATIVE ADJUSTMENT PERCENTAGE.—The term ‘‘maximum cumulative adjustment 

percentage’’ means, for— 

(I) 2010, 0.60 percent; and 

(II) a subsequent year, the maximum cumulative adjustment percentage for the previous year 

increased by 0.60 percentage points. 

(iii) STANDARDIZED IME COST PERCENTAGE.—The 

term ‘‘standardized IME cost percentage’’ means, for 

an area for a year, the per capita costs for payments 

under section 1886(d)(5)(B) (expressed as a percentage 

of the fee-for-service amount specified in subparagraph 

(C)) for the area and the year. 

(C) FEE-FOR-SERVICE AMOUNT.—The fee-for-service 

amount specified in this subparagraph for an area for a 

year is the amount specified under subsection (c)(1)(D) for 

the area and the year. 

(5) EXCLUSION OF COSTS FOR KIDNEY ACQUISITIONS FROM

CAPITATION RATES.—After determining the applicable amount 

for an area for a year under paragraph (1) (beginning with 

2021), the Secretary shall adjust such applicable amount to exclude from such applicable amount the Secretary’s estimate of 

56 

the standardized costs for payments for organ acquisitions for 

kidney transplants covered under this title (including expenses 

covered under section 1881(d)) in the area for the year. 

(l) APPLICATION OF ELIGIBLE PROFESSIONAL INCENTIVES FOR CER- TAIN MA ORGANIZATIONS FOR ADOPTION AND MEANINGFUL USE OF

CERTIFIED EHR TECHNOLOGY.— (1) IN GENERAL.—Subject to paragraphs (3) and (4), in the 

case of a qualifying MA organization, the provisions of sections 

1848(o) and 1848(a)(7) shall apply with respect to eligible professionals described in paragraph (2) of the organization who 

the organization attests under paragraph (6) to be meaningful 

EHR users in a similar manner as they apply to eligible professionals under such sections. Incentive payments under paragraph (3) shall be made to and payment adjustments under 

paragraph (4) shall apply to such qualifying organizations. 

(2) ELIGIBLE PROFESSIONAL DESCRIBED.—With respect to a 

qualifying MA organization, an eligible professional described 

in this paragraph is an eligible professional (as defined for purposes of section 1848(o)) who— 

(A)(i) is employed by the organization; or 

(ii)(I) is employed by, or is a partner of, an entity that 

through contract with the organization furnishes at least 

80 percent of the entity’s Medicare patient care services to 

enrollees of such organization; and 

(II) furnishes at least 80 percent of the professional services of the eligible professional covered under this title to 

enrollees of the organization; and 

(B) furnishes, on average, at least 20 hours per week of 

patient care services. 

(3) ELIGIBLE PROFESSIONAL INCENTIVE PAYMENTS.— 

(A) IN GENERAL.—In applying section 1848(o) under 

paragraph (1), instead of the additional payment amount 

under section 1848(o)(1)(A) and subject to subparagraph 

(B), the Secretary may substitute an amount determined 

by the Secretary to the extent feasible and practical to be 

similar to the estimated amount in the aggregate that 

would be payable if payment for services furnished by such 

professionals was payable under part B instead of this 

part. 

(B) AVOIDING DUPLICATION OF PAYMENTS.— 

(i) IN GENERAL.—In the case of an eligible professional described in paragraph (2)— 

(I) that is eligible for the maximum incentive 

payment under section 1848(o)(1)(A) for the same 

payment period, the payment incentive shall be 

made only under such section and not under this 

subsection; and 

(II) that is eligible for less than such maximum 

incentive payment for the same payment period, 

the payment incentive shall be made only under 

this subsection and not under section 

1848(o)(1)(A). 

(ii) METHODS.—In the case of an eligible professional 

described in paragraph (2) who is eligible for an incentive payment under section 1848(o)(1)(A) but is not deVerDate Sep 11 2014 01:27 Dec 23, 2017 Jkt 079006 PO 00000 Frm 00056 Fmt 6659 Sfmt 6601 E:\HR\OC\HR478P1.XXX HR478P1
57 

scribed in clause (i) for the same payment period, the 

Secretary shall develop a process— 

(I) to ensure that duplicate payments are not 

made with respect to an eligible professional both 

under this subsection and under section 

1848(o)(1)(A); and 

(II) to collect data from Medicare Advantage organizations to ensure against such duplicate payments. 

(C) FIXED SCHEDULE FOR APPLICATION OF LIMITATION ON

INCENTIVE PAYMENTS FOR ALL ELIGIBLE PROFESSIONALS.— In applying section 1848(o)(1)(B)(ii) under subparagraph 

(A), in accordance with rules specified by the Secretary, a 

qualifying MA organization shall specify a year (not earlier 

than 2011) that shall be treated as the first payment year 

for all eligible professionals with respect to such organization. 

(4) PAYMENT ADJUSTMENT.— (A) IN GENERAL.—In applying section 1848(a)(7) under 

paragraph (1), instead of the payment adjustment being an 

applicable percent of the fee schedule amount for a year 

under such section, subject to subparagraph (D), the payment adjustment under paragraph (1) shall be equal to the 

percent specified in subparagraph (B) for such year of the 

payment amount otherwise provided under this section for 

such year. 

(B) SPECIFIED PERCENT.—The percent specified under 

this subparagraph for a year is 100 percent minus a number of percentage points equal to the product of— 

(i) the number of percentage points by which the applicable percent (under section 1848(a)(7)(A)(ii)) for the 

year is less than 100 percent; and 

(ii) the Medicare physician expenditure proportion 

specified in subparagraph (C) for the year. 

(C) MEDICARE PHYSICIAN EXPENDITURE PROPORTION.— The Medicare physician expenditure proportion under this 

subparagraph for a year is the Secretary’s estimate of the 

proportion, of the expenditures under parts A and B that 

are not attributable to this part, that are attributable to 

expenditures for physicians’ services. 

(D) APPLICATION OF PAYMENT ADJUSTMENT.—In the case 

that a qualifying MA organization attests that not all eligible professionals of the organization are meaningful EHR 

users with respect to a year, the Secretary shall apply the 

payment adjustment under this paragraph based on the 

proportion of all such eligible professionals of the organization that are not meaningful EHR users for such year. 

(5) QUALIFYING MA ORGANIZATION DEFINED.—In this subsection and subsection (m), the term ‘‘qualifying MA organization’’ means a Medicare Advantage organization that is organized as a health maintenance organization (as defined in section 2791(b)(3) of the Public Health Service Act). 

(6) MEANINGFUL EHR USER ATTESTATION.—For purposes of 

this subsection and subsection (m), a qualifying MA organization shall submit an attestation, in a form and manner speciVerDate Sep 11 2014 01:27 Dec 23, 2017 Jkt 079006 PO 00000 Frm 00057 Fmt 6659 Sfmt 6601 E:\HR\OC\HR478P1.XXX HR478P1
58 

fied by the Secretary which may include the submission of 

such attestation as part of submission of the initial bid under 

section 1854(a)(1)(A)(iv), identifying— 

(A) whether each eligible professional described in paragraph (2), with respect to such organization is a meaningful EHR user (as defined in section 1848(o)(2)) for a year 

specified by the Secretary; and 

(B) whether each eligible hospital described in subsection (m)(1), with respect to such organization, is a 

meaningful EHR user (as defined in section 1886(n)(3)) for 

an applicable period specified by the Secretary. 

(7) POSTING ON WEBSITE.—The Secretary shall post on the 

Internet website of the Centers for Medicare & Medicaid Services, in an easily understandable format, a list of the names, 

business addresses, and business phone numbers of— 

(A) each qualifying MA organization receiving an incentive payment under this subsection for eligible professionals of the organization; and 

(B) the eligible professionals of such organization for 

which such incentive payment is based. 

(8) LIMITATION ON REVIEW.—There shall be no administrative or judicial review under section 1869, section 1878, or otherwise, of— 

(A) the methodology and standards for determining payment amounts and payment adjustments under this subsection, including avoiding duplication of payments under 

paragraph (3)(B) and the specification of rules for the fixed 

schedule for application of limitation on incentive payments for all eligible professionals under paragraph (3)(C); 

(B) the methodology and standards for determining eligible professionals under paragraph (2); and 

(C) the methodology and standards for determining a 

meaningful EHR user under section 1848(o)(2), including 

specification of the means of demonstrating meaningful 

EHR use under section 1848(o)(3)(C) and selection of measures under section 1848(o)(3)(B). 

(m) APPLICATION OF ELIGIBLE HOSPITAL INCENTIVES FOR CERTAIN

MA ORGANIZATIONS FOR ADOPTION AND MEANINGFUL USE OF CER- TIFIED EHR TECHNOLOGY.— (1) APPLICATION.—Subject to paragraphs (3) and (4), in the 

case of a qualifying MA organization, the provisions of sections 

1886(n) and 1886(b)(3)(B)(ix) shall apply with respect to eligible hospitals described in paragraph (2) of the organization 

which the organization attests under subsection (l)(6) to be 

meaningful EHR users in a similar manner as they apply to 

eligible hospitals under such sections. Incentive payments 

under paragraph (3) shall be made to and payment adjustments under paragraph (4) shall apply to such qualifying organizations. 

(2) ELIGIBLE HOSPITAL DESCRIBED.—With respect to a qualifying MA organization, an eligible hospital described in this 

paragraph is an eligible hospital (as defined in section 

1886(n)(6)(B)) that is under common corporate governance with 

such organization and serves individuals enrolled under an MA 

plan offered by such organization. 

59 

(3) ELIGIBLE HOSPITAL INCENTIVE PAYMENTS.— (A) IN GENERAL.—In applying section 1886(n)(2) under 

paragraph (1), instead of the additional payment amount 

under section 1886(n)(2), there shall be substituted an 

amount determined by the Secretary to be similar to the 

estimated amount in the aggregate that would be payable 

if payment for services furnished by such hospitals was 

payable under part A instead of this part. In implementing 

the previous sentence, the Secretary— 

(i) shall, insofar as data to determine the discharge 

related amount under section 1886(n)(2)(C) for an eligible hospital are not available to the Secretary, use 

such alternative data and methodology to estimate 

such discharge related amount as the Secretary determines appropriate; and 

(ii) shall, insofar as data to determine the medicare 

share described in section 1886(n)(2)(D) for an eligible 

hospital are not available to the Secretary, use such 

alternative data and methodology to estimate such 

share, which data and methodology may include use of 

the inpatient-bed-days (or discharges) with respect to 

an eligible hospital during the appropriate period 

which are attributable to both individuals for whom 

payment may be made under part A or individuals enrolled in an MA plan under a Medicare Advantage organization under this part as a proportion of the estimated total number of patient-bed-days (or discharges) 

with respect to such hospital during such period. 

(B) AVOIDING DUPLICATION OF PAYMENTS.— 

(i) IN GENERAL.—In the case of a hospital that for a 

payment year is an eligible hospital described in paragraph (2) and for which at least one-third of their discharges (or bed-days) of Medicare patients for the year 

are covered under part A, payment for the payment 

year shall be made only under section 1886(n) and not 

under this subsection. 

(ii) METHODS.—In the case of a hospital that is an 

eligible hospital described in paragraph (2) and also is 

eligible for an incentive payment under section 

1886(n) but is not described in clause (i) for the same 

payment period, the Secretary shall develop a process— 

(I) to ensure that duplicate payments are not 

made with respect to an eligible hospital both 

under this subsection and under section 1886(n); 

and 

(II) to collect data from Medicare Advantage organizations to ensure against such duplicate payments. 

(4) PAYMENT ADJUSTMENT.— (A) Subject to paragraph (3), in the case of a qualifying 

MA organization (as defined in section 1853(l)(5)), if, according to the attestation of the organization submitted 

under subsection (l)(6) for an applicable period, one or 

more eligible hospitals (as defined in section 1886(n)(6)(B)) 

60 

that are under common corporate governance with such organization and that serve individuals enrolled under a 

plan offered by such organization are not meaningful EHR 

users (as defined in section 1886(n)(3)) with respect to a 

period, the payment amount payable under this section for 

such organization for such period shall be the percent 

specified in subparagraph (B) for such period of the payment amount otherwise provided under this section for 

such period. 

(B) SPECIFIED PERCENT.—The percent specified under 

this subparagraph for a year is 100 percent minus a number of percentage points equal to the product of— 

(i) the number of the percentage point reduction effected under section 1886(b)(3)(B)(ix)(I) for the period; 

and 

(ii) the Medicare hospital expenditure proportion 

specified in subparagraph (C) for the year. 

(C) MEDICARE HOSPITAL EXPENDITURE PROPORTION.—The 

Medicare hospital expenditure proportion under this subparagraph for a year is the Secretary’s estimate of the proportion, of the expenditures under parts A and B that are 

not attributable to this part, that are attributable to expenditures for inpatient hospital services. 

(D) APPLICATION OF PAYMENT ADJUSTMENT.—In the case 

that a qualifying MA organization attests that not all eligible hospitals are meaningful EHR users with respect to an 

applicable period, the Secretary shall apply the payment 

adjustment under this paragraph based on a methodology 

specified by the Secretary, taking into account the proportion of such eligible hospitals, or discharges from such hospitals, that are not meaningful EHR users for such period. 

(5) POSTING ON WEBSITE.—The Secretary shall post on the 

Internet website of the Centers for Medicare & Medicaid Services, in an easily understandable format— 

(A) a list of the names, business addresses, and business 

phone numbers of each qualifying MA organization receiving an incentive payment under this subsection for eligible 

hospitals described in paragraph (2); and 

(B) a list of the names of the eligible hospitals for which 

such incentive payment is based. 

(6) LIMITATIONS ON REVIEW.—There shall be no administrative or judicial review under section 1869, section 1878, or otherwise, of— 

(A) the methodology and standards for determining payment amounts and payment adjustments under this subsection, including avoiding duplication of payments under 

paragraph (3)(B); 

(B) the methodology and standards for determining eligible hospitals under paragraph (2); and 

(C) the methodology and standards for determining a 

meaningful EHR user under section 1886(n)(3), including 

specification of the means of demonstrating meaningful 

EHR use under subparagraph (C) of such section and selection of measures under subparagraph (B) of such section. 

61 

(n) DETERMINATION OF BLENDED BENCHMARK AMOUNT.— (1) IN GENERAL.—For purposes of subsection (j), subject to 

paragraphs (3), (4), and (5), the term ‘‘blended benchmark 

amount’’ means for an area— 

(A) for 2012 the sum of— 

(i) 1⁄2 of the applicable amount for the area and year; 

and 

(ii) 1⁄2 of the amount specified in paragraph (2)(A) 

for the area and year; and 

(B) for a subsequent year the amount specified in paragraph (2)(A) for the area and year. 

(2) SPECIFIED AMOUNT.— 

(A) IN GENERAL.—The amount specified in this subparagraph for an area and year is the product of— 

(i) the base payment amount specified in subparagraph (E) for the area and year adjusted to take into 

account the phase-out in the indirect costs of medical 

education from capitation rates described in subsection 

(k)(4) and, for 2021 and subsequent years, the exclusion of payments for organ acquisitions for kidney 

transplants from the capitation rate as described in 

subsection (k)(5); and 

(ii) the applicable percentage for the area for the 

year specified under subparagraph (B). 

(B) APPLICABLE PERCENTAGE.—Subject to subparagraph 

(D), the applicable percentage specified in this subparagraph for an area for a year in the case of an area that 

is ranked— 

(i) in the highest quartile under subparagraph (C) 

for the previous year is 95 percent; 

(ii) in the second highest quartile under such subparagraph for the previous year is 100 percent; 

(iii) in the third highest quartile under such subparagraph for the previous year is 107.5 percent; or 

(iv) in the lowest quartile under such subparagraph 

for the previous year is 115 percent. 

(C) PERIODIC RANKING.—For purposes of this paragraph 

in the case of an area located— 

(i) in 1 of the 50 States or the District of Columbia, 

the Secretary shall rank such area in each year specified under subsection (c)(1)(D)(ii) based upon the level 

of the amount specified in subparagraph (A)(i) for such 

areas; or 

(ii) in a territory, the Secretary shall rank such 

areas in each such year based upon the level of the 

amount specified in subparagraph (A)(i) for such area 

relative to quartile rankings computed under clause 

(i). 

(D) 1-YEAR TRANSITION FOR CHANGES IN APPLICABLE PER- CENTAGE.—If, for a year after 2012, there is a change in 

the quartile in which an area is ranked compared to the 

previous year, the applicable percentage for the area in the 

year shall be the average of— 

(i) the applicable percentage for the area for the previous year; and 

62 

(ii) the applicable percentage that would otherwise 

apply for the area for the year. 

(E) BASE PAYMENT AMOUNT.—Subject to subparagraphs 

(F) and (G), the base payment amount specified in this 

subparagraph— 

(i) for 2012 is the amount specified in subsection 

(c)(1)(D) for the area for the year; or 

(ii) for a subsequent year that— 

(I) is not specified under subsection (c)(1)(D)(ii), 

is the base amount specified in this subparagraph 

for the area for the previous year, increased by 

the national per capita MA growth percentage, described in subsection (c)(6) for that succeeding 

year, but not taking into account any adjustment 

under subparagraph (C) of such subsection for a 

year before 2004; and 

(II) is specified under subsection (c)(1)(D)(ii), is 

the amount specified in subsection (c)(1)(D) for the 

area for the year. 

(F) APPLICATION OF INDIRECT MEDICAL EDUCATION

PHASE-OUT.—The base payment amount specified in subparagraph (E) for a year shall be adjusted in the same 

manner under paragraph (4) of subsection (k) as the applicable amount is adjusted under such subsection. 

(G) APPLICATION OF KIDNEY ACQUISITIONS ADJUSTMENT.—The base payment amount specified in subparagraph (E) for a year (beginning with 2021) shall be adjusted in the same manner under paragraph (5) of subsection (k) as the applicable amount is adjusted under 

such subsection. 

(3) ALTERNATIVE PHASE-INS.— 

(A) 4-YEAR PHASE-IN FOR CERTAIN AREAS.—If the difference between the applicable amount (as defined in subsection (k)) for an area for 2010 and the projected 2010 

benchmark amount (as defined in subparagraph (C)) for 

the area is at least $30 but less than $50, the blended 

benchmark amount for the area is— 

(i) for 2012 the sum of— 

(I) 3⁄4 of the applicable amount for the area and 

year; and 

(II) 1⁄4 of the amount specified in paragraph 

(2)(A) for the area and year; 

(ii) for 2013 the sum of— 

(I) 1⁄2 of the applicable amount for the area and 

year; and 

(II) 1⁄2 of the amount specified in paragraph 

(2)(A) for the area and year; 

(iii) for 2014 the sum of— 

(I) 1⁄4 of the applicable amount for the area and 

year; and 

(II) 3⁄4 of the amount specified in paragraph 

(2)(A) for the area and year; and 

(iv) for a subsequent year the amount specified in 

paragraph (2)(A) for the area and year. 

63 

(B) 6-YEAR PHASE-IN FOR CERTAIN AREAS.—If the difference between the applicable amount (as defined in subsection (k)) for an area for 2010 and the projected 2010 

benchmark amount (as defined in subparagraph (C)) for 

the area is at least $50, the blended benchmark amount 

for the area is— 

(i) for 2012 the sum of— 

(I) 5⁄6 of the applicable amount for the area and 

year; and 

(II) 1⁄6 of the amount specified in paragraph 

(2)(A) for the area and year; 

(ii) for 2013 the sum of— 

(I) 2⁄3 of the applicable amount for the area and 

year; and 

(II) 1⁄3 of the amount specified in paragraph 

(2)(A) for the area and year; 

(iii) for 2014 the sum of— 

(I) 1⁄2 of the applicable amount for the area and 

year; and 

(II) 1⁄2 of the amount specified in paragraph 

(2)(A) for the area and year; 

(iv) for 2015 the sum of— 

(I) 1⁄3 of the applicable amount for the area and 

year; and 

(II) 2⁄3 of the amount specified in paragraph 

(2)(A) for the area and year; and 

(v) for 2016 the sum of— 

(I) 1⁄6 of the applicable amount for the area and 

year; and 

(II) 5⁄6 of the amount specified in paragraph 

(2)(A) for the area and year; and 

(vi) for a subsequent year the amount specified in 

paragraph (2)(A) for the area and year. 

(C) PROJECTED 2010 BENCHMARK AMOUNT.—The projected 

2010 benchmark amount described in this subparagraph 

for an area is equal to the sum of— 

(i) 1⁄2 of the applicable amount (as defined in subsection (k)) for the area for 2010; and 

(ii) 1⁄2 of the amount specified in paragraph (2)(A) 

for the area for 2010 but determined as if there were 

substituted for the applicable percentage specified in 

clause (ii) of such paragraph the sum of— 

(I) the applicable percent that would be specified under subparagraph (B) of paragraph (2) (determined without regard to subparagraph (D) of 

such paragraph) for the area for 2010 if any reference in such paragraph to ‘‘the previous year’’ 

were deemed a reference to 2010; and 

(II) the applicable percentage increase that 

would apply to a qualifying plan in the area under 

subsection (o) as if any reference in such subsection to 2012 were deemed a reference to 2010 

and as if the determination of a qualifying county 

under paragraph (3)(B) of such subsection were 

made for 2010. 

64 

(4) CAP ON BENCHMARK AMOUNT.—In no case shall the blended benchmark amount for an area for a year (determined taking into account subsection (o)) be greater than the applicable 

amount that would (but for the application of this subsection) 

be determined under subsection (k)(1) for the area for the year. 

(5) NON-APPLICATION TO PACE PLANS.—This subsection shall 

not apply to payments to a PACE program under section 1894. 

(o) APPLICABLE PERCENTAGE QUALITY INCREASES.— 

(1) IN GENERAL.—Subject to the succeeding paragraphs, in 

the case of a qualifying plan with respect to a year beginning 

with 2012, the applicable percentage under subsection (n)(2)(B) 

shall be increased on a plan or contract level, as determined 

by the Secretary— 

(A) for 2012, by 1.5 percentage points; 

(B) for 2013, by 3.0 percentage points; and 

(C) for 2014 or a subsequent year, by 5.0 percentage 

points. 

(2) INCREASE FOR QUALIFYING PLANS IN QUALIFYING COUNTIES.—The increase applied under paragraph (1) for a qualifying plan located in a qualifying county for a year shall be 

doubled. 

(3) QUALIFYING PLANS AND QUALIFYING COUNTY DEFINED; APPLICATION OF INCREASES TO LOW ENROLLMENT AND NEW

PLANS.—For purposes of this subsection: 

(A) QUALIFYING PLAN.— 

(i) IN GENERAL.—The term ‘‘qualifying plan’’ means, 

for a year and subject to paragraph (4), a plan that 

had a quality rating under paragraph (4) of 4 stars or 

higher based on the most recent data available for 

such year. 

(ii) APPLICATION OF INCREASES TO LOW ENROLLMENT

PLANS.— 

(I) 2012.—For 2012, the term ‘‘qualifying plan’’ 

includes an MA plan that the Secretary determines is not able to have a quality rating under 

paragraph (4) because of low enrollment. 

(II) 2013 AND SUBSEQUENT YEARS.—For 2013 

and subsequent years, for purposes of determining 

whether an MA plan with low enrollment (as defined by the Secretary) is included as a qualifying 

plan, the Secretary shall establish a method to 

apply to MA plans with low enrollment (as defined 

by the Secretary) the computation of quality rating and the rating system under paragraph (4). 

(iii) APPLICATION OF INCREASES TO NEW PLANS.— 

(I) IN GENERAL.—A new MA plan that meets criteria specified by the Secretary shall be treated as 

a qualifying plan, except that in applying paragraph (1), the applicable percentage under subsection (n)(2)(B) shall be increased— 

(aa) for 2012, by 1.5 percentage points; 

(bb) for 2013, by 2.5 percentage points; and 

(cc) for 2014 or a subsequent year, by 3.5 

percentage points. 

65 

(II) NEW MA PLAN DEFINED.—The term ‘‘new MA 

plan’’ means, with respect to a year, a plan offered 

by an organization or sponsor that has not had a 

contract as a Medicare Advantage organization in 

the preceding 3-year period. 

(B) QUALIFYING COUNTY.—The term ‘‘qualifying county’’ 

means, for a year, a county— 

(i) that has an MA capitation rate that, in 2004, was 

based on the amount specified in subsection (c)(1)(B) 

for a Metropolitan Statistical Area with a population 

of more than 250,000; 

(ii) for which, as of December 2009, of the Medicare 

Advantage eligible individuals residing in the county 

at least 25 percent of such individuals were enrolled 

in Medicare Advantage plans; and 

(iii) that has per capita fee-for-service spending that 

is lower than the national monthly per capita cost for 

expenditures for individuals enrolled under the original medicare fee-for-service program for the year. 

(4) QUALITY DETERMINATIONS FOR APPLICATION OF IN- CREASE.— 

(A) QUALITY DETERMINATION.—The quality rating for a 

plan shall be determined according to a 5-star rating system (based on the data collected under section 1852(e)). 

(B) PLANS THAT FAILED TO REPORT.—An MA plan which 

does not report data that enables the Secretary to rate the 

plan for purposes of this paragraph shall be counted as 

having a rating of fewer than 3.5 stars. 

(C) SPECIAL RULE FOR FIRST 3 PLAN YEARS FOR PLANS

THAT WERE CONVERTED FROM A REASONABLE COST REIM- BURSEMENT CONTRACT.—For purposes of applying paragraph (1) and section 1854(b)(1)(C) for the first 3 plan 

years under this part in the case of an MA plan to which 

deemed enrollment applies under section 1851(c)(4)— 

(i) such plan shall not be treated as a new MA plan 

(as defined in paragraph (3)(A)(iii)(II)); and 

(ii) in determining the star rating of the plan under 

subparagraph (A), to the extent that Medicare Advantage data for such plan is not available for a measure 

used to determine such star rating, the Secretary shall 

use data from the period in which such plan was a 

reasonable cost reimbursement contract. 

(5) EXCEPTION FOR PACE PLANS.—This subsection shall not 

apply to payments to a PACE program under section 1894. 

(6) QUALITY MEASUREMENT AT THE PLAN LEVEL FOR SNPS.— 

(A) IN GENERAL.—Subject to subparagraph (B), the Secretary may require reporting of data under section 1852(e) 

for, and apply under this subsection, quality measures at 

the plan level for specialized MA plans for special needs individuals instead of at the contract level. 

(B) CONSIDERATIONS.—Prior to applying quality measurement at the plan level under this paragraph, the Secretary shall— 

(i) take into consideration the minimum number of 

enrollees in a specialized MA plan for special needs inVerDate Sep 11 2014 01:27 Dec 23, 2017 Jkt 079006 PO 00000 Frm 00065 Fmt 6659 Sfmt 6603 E:\HR\OC\HR478P1.XXX HR478P1
66 

dividuals in order to determine if a statistically significant or valid measurement of quality at the plan level 

is possible under this paragraph; 

(ii) if quality measures are reported at the plan level, 

ensure that MA plans are not required to provide duplicative information; and 

(iii) ensure that such reporting does not interfere 

with the collection of encounter data submitted by MA 

organizations or the administration of any changes to 

the program under this part as a result of the collection of such data. 

(C) APPLICATION.—If the Secretary applies quality measurement at the plan level under this paragraph— 

(i) such quality measurement may include Medicare 

Health Outcomes Survey (HOS), Healthcare Effectiveness Data and Information Set (HEDIS), Consumer 

Assessment of Healthcare Providers and Systems 

(CAHPS) measures and quality measures under part 

D; and 

(ii) the Secretary shall consider applying administrative actions, such as remedies described in section 

1857(g)(2), to the plan level. 

(7) DETERMINATION OF FEASIBILITY OF QUALITY MEASUREMENT AT THE PLAN LEVEL FOR ALL MA PLANS.— 

(A) DETERMINATION OF FEASIBILITY.—The Secretary shall 

determine the feasibility of requiring reporting of data 

under section 1852(e) for, and applying under this subsection, quality measures at the plan level for all MA plans 

under this part. 

(B) CONSIDERATION OF CHANGE.—After making a determination under subparagraph (A), the Secretary shall consider requiring such reporting and applying such quality 

measures at the plan level as described in such subparagraph. 

* * * * * * * 

DEFINITIONS; MISCELLANEOUS PROVISIONS

SEC. 1859. (a) DEFINITIONS RELATING TO MEDICARE+CHOICE ORGANIZATIONS.—In this part— 

(1) MEDICARE+CHOICE ORGANIZATION.—The term 

‘‘Medicare+Choice organization’’ means a public or private entity that is certified under section 1856 as meeting the requirements and standards of this part for such an organization. 

(2) PROVIDER-SPONSORED ORGANIZATION.—The term ‘‘provider-sponsored organization’’ is defined in section 1855(d)(1). 

(b) DEFINITIONS RELATING TO MEDICARE+CHOICE PLANS.— 

(1) MEDICARE+CHOICE PLAN.—The term ‘‘Medicare+Choice 

plan’’ means health benefits coverage offered under a policy, 

contract, or plan by a Medicare+Choice organization pursuant 

to and in accordance with a contract under section 1857. 

(2) MEDICARE+CHOICE PRIVATE FEE-FOR-SERVICE PLAN.—The 

term ‘‘Medicare+Choice private fee-for-service plan’’ means a 

Medicare+Choice plan that— 

67 

(A) reimburses hospitals, physicians, and other providers 

at a rate determined by the plan on a fee-for-service basis 

without placing the provider at financial risk; 

(B) does not vary such rates for such a provider based 

on utilization relating to such provider; and 

(C) does not restrict the selection of providers among 

those who are lawfully authorized to provide the covered 

services and agree to accept the terms and conditions of 

payment established by the plan. 

Nothing in subparagraph (B) shall be construed to preclude a 

plan from varying rates for such a provider based on the specialty of the provider, the location of the provider, or other factors related to such provider that are not related to utilization, 

or to preclude a plan from increasing rates for such a provider 

based on increased utilization of specified preventive or screening services. 

(3) MSA PLAN.— 

(A) IN GENERAL.—The term ‘‘MSA plan’’ means a 

Medicare+Choice plan that— 

(i) provides reimbursement for at least the items 

and services described in section 1852(a)(1) in a year 

but only after the enrollee incurs countable expenses 

(as specified under the plan) equal to the amount of an 

annual deductible (described in subparagraph (B)); 

(ii) counts as such expenses (for purposes of such deductible) at least all amounts that would have been 

payable under parts A and B, and that would have 

been payable by the enrollee as deductibles, coinsurance, or copayments, if the enrollee had elected to receive benefits through the provisions of such parts; 

and 

(iii) provides, after such deductible is met for a year 

and for all subsequent expenses for items and services 

referred to in clause (i) in the year, for a level of reimbursement that is not less than— 

(I) 100 percent of such expenses, or 

(II) 100 percent of the amounts that would have 

been paid (without regard to any deductibles or 

coinsurance) under parts A and B with respect to 

such expenses, 

whichever is less. 

(B) DEDUCTIBLE.—The amount of annual deductible 

under an MSA plan— 

(i) for contract year 1999 shall be not more than 

$6,000; and 

(ii) for a subsequent contract year shall be not more 

than the maximum amount of such deductible for the 

previous contract year under this subparagraph increased by the national per capita Medicare+Choice 

growth percentage under section 1853(c)(6) for the 

year. 

If the amount of the deductible under clause (ii) is not a 

multiple of $50, the amount shall be rounded to the nearest multiple of $50. 

68 

(4) MA REGIONAL PLAN.—The term ‘‘MA regional plan’’ 

means an MA plan described in section 1851(a)(2)(A)(i)— 

(A) that has a network of providers that have agreed to 

a contractually specified reimbursement for covered benefits with the organization offering the plan; 

(B) that provides for reimbursement for all covered benefits regardless of whether such benefits are provided within such network of providers; and 

(C) the service area of which is one or more entire MA 

regions. 

(5) MA LOCAL PLAN.—The term ‘‘MA local plan’’ means an 

MA plan that is not an MA regional plan. 

(6) SPECIALIZED MA PLANS FOR SPECIAL NEEDS INDIVIDUALS.— 

(A) IN GENERAL.—The term ‘‘specialized MA plan for special needs individuals’’ means an MA plan that exclusively 

serves special needs individuals (as defined in subparagraph (B)) and that, as of January 1, 2010, meets the applicable requirements of paragraph (2), (3), or (4) of subsection (f), as the case may be. 

(B) SPECIAL NEEDS INDIVIDUAL.—The term ‘‘special needs 

individual’’ means an MA eligible individual who— 

(i) is institutionalized (as defined by the Secretary); 

(ii) is entitled to medical assistance under a State 

plan under title XIX; or 

(iii) meets such requirements as the Secretary may 

determine would benefit from enrollment in such a 

specialized MA plan described in subparagraph (A) for 

individuals with severe or disabling chronic conditions 

øwho have¿ who— 

(I) before January 1, 2022, have one or more comorbid and medically complex chronic conditions 

that are substantially disabling or life threatening, have a high risk of hospitalization or other 

significant adverse health outcomes, and require 

specialized delivery systems across domains of 

careø.¿; and 

(II) on or after January 1, 2022, have one or 

more comorbid and medically complex chronic conditions that is life threatening or significantly limits overall health or function, have a high risk of 

hospitalization or other adverse health outcomes, 

and require intensive care coordination and that is 

listed under subsection (f)(9)(A). 

The Secretary may apply rules similar to the rules of section 1894(c)(4) for continued eligibility of special needs individuals. 

(c) OTHER REFERENCES TO OTHER TERMS.— 

(1) MEDICARE+CHOICE ELIGIBLE INDIVIDUAL.—The term 

‘‘Medicare+Choice eligible individual’’ is defined in section 

1851(a)(3). 

(2) MEDICARE+CHOICE PAYMENT AREA.—The term 

‘‘Medicare+Choice payment area’’ is defined in section 1853(d). 

(3) NATIONAL PER CAPITA MEDICARE+CHOICE GROWTH PERCENTAGE.—The ‘‘national per capita Medicare+Choice growth 

percentage’’ is defined in section 1853(c)(6). 

69 

(4) MEDICARE+CHOICE MONTHLY BASIC BENEFICIARY PRE- MIUM; MEDICARE+CHOICE MONTHLY SUPPLEMENTAL BENEFICIARY

PREMIUM.—The terms ‘‘Medicare+Choice monthly basic beneficiary premium’’ and ‘‘Medicare+Choice monthly supplemental 

beneficiary premium’’ are defined in section 1854(a)(2). 

(5) MA LOCAL AREA.—The term ‘‘MA local area’’ is defined in 

section 1853(d)(2). 

(d) COORDINATED ACUTE AND LONG-TERM CARE BENEFITS UNDER

A MEDICARE+CHOICE PLAN.—Nothing in this part shall be construed as preventing a State from coordinating benefits under a 

medicaid plan under title XIX with those provided under a 

Medicare+Choice plan in a manner that assures continuity of a 

full-range of acute care and long-term care services to poor elderly 

or disabled individuals eligible for benefits under this title and 

under such plan. 

(e) RESTRICTION ON ENROLLMENT FOR CERTAIN

MEDICARE+CHOICE PLANS.— 

(1) IN GENERAL.—In the case of a Medicare+Choice religious 

fraternal benefit society plan described in paragraph (2), notwithstanding any other provision of this part to the contrary 

and in accordance with regulations of the Secretary, the society 

offering the plan may restrict the enrollment of individuals 

under this part to individuals who are members of the church, 

convention, or group described in paragraph (3)(B) with which 

the society is affiliated. 

(2) MEDICARE+CHOICE RELIGIOUS FRATERNAL BENEFIT SOCI- ETY PLAN DESCRIBED.—For purposes of this subsection, a 

Medicare+Choice religious fraternal benefit society plan described in this paragraph is a Medicare+Choice plan described 

in section 1851(a)(2) that— 

(A) is offered by a religious fraternal benefit society described in paragraph (3) only to members of the church, 

convention, or group described in paragraph (3)(B); and 

(B) permits all such members to enroll under the plan 

without regard to health status-related factors. 

Nothing in this subsection shall be construed as waiving any 

plan requirements relating to financial solvency. 

(3) RELIGIOUS FRATERNAL BENEFIT SOCIETY DEFINED.—For 

purposes of paragraph (2)(A), a ‘‘religious fraternal benefit society’’ described in this section is an organization that— 

(A) is described in section 501(c)(8) of the Internal Revenue Code of 1986 and is exempt from taxation under section 501(a) of such Act; 

(B) is affiliated with, carries out the tenets of, and 

shares a religious bond with, a church or convention or association of churches or an affiliated group of churches; 

(C) offers, in addition to a Medicare+Choice religious fraternal benefit society plan, health coverage to individuals 

not entitled to benefits under this title who are members 

of such church, convention, or group; and 

(D) does not impose any limitation on membership in the 

society based on any health status-related factor. 

(4) PAYMENT ADJUSTMENT.—Under regulations of the Secretary, in the case of individuals enrolled under this part 

under a Medicare+Choice religious fraternal benefit society 

70 

plan described in paragraph (2), the Secretary shall provide for 

such adjustment to the payment amounts otherwise established under section 1854 as may be appropriate to assure an 

appropriate payment level, taking into account the actuarial 

characteristics and experience of such individuals. 

(f) REQUIREMENTS REGARDING ENROLLMENT IN SPECIALIZED MA 

PLANS FOR SPECIAL NEEDS INDIVIDUALS.— (1) REQUIREMENTS FOR ENROLLMENT.—In the case of a specialized MA plan for special needs individuals (as defined in 

subsection (b)(6)), notwithstanding any other provision of this 

part and in accordance with regulations of the Secretary øand 

for periods before January 1, 2019¿, the plan may restrict the 

enrollment of individuals under the plan to individuals who 

are within one or more classes of special needs individuals. In 

the case of a specialized MA plan for special needs individuals 

described in clause (ii) or (iii) of subsection (b)(6)(B), the previous sentence shall apply for periods before January 1, 2024. 

(2) ADDITIONAL REQUIREMENTS FOR INSTITUTIONAL SNPS.—In 

the case of a specialized MA plan for special needs individuals 

described in subsection (b)(6)(B)(i), the applicable requirements 

described in this paragraph are as follows: 

(A) Each individual that enrolls in the plan on or after 

January 1, 2010, is a special needs individuals described 

in subsection (b)(6)(B)(i). In the case of an individual who 

is living in the community but requires an institutional 

level of care, such individual shall not be considered a special needs individual described in subsection (b)(6)(B)(i) 

unless the determination that the individual requires an 

institutional level of care was made— 

(i) using a State assessment tool of the State in 

which the individual resides; and 

(ii) by an entity other than the organization offering 

the plan. 

(B) The plan meets the requirements described in paragraph (5). 

(C) If applicable, the plan meets the requirement described in paragraph (7). 

(3) ADDITIONAL REQUIREMENTS FOR DUAL SNPS.—In the case 

of a specialized MA plan for special needs individuals described 

in subsection (b)(6)(B)(ii), the applicable requirements described in this paragraph are as follows: 

(A) Each individual that enrolls in the plan on or after 

January 1, 2010, is a special needs individuals described 

in subsection (b)(6)(B)(ii). 

(B) The plan meets the requirements described in paragraph (5). 

(C) The plan provides each prospective enrollee, prior to 

enrollment, with a comprehensive written statement 

(using standardized content and format established by the 

Secretary) that describes— 

(i) the benefits and cost-sharing protections that the 

individual is entitled to under the State Medicaid program under title XIX; and 

(ii) which of such benefits and cost-sharing protections are covered under the plan. 

71 

Such statement shall be included with any description of 

benefits offered by the plan. 

(D) The plan has a contract with the State Medicaid 

agency to provide benefits, or arrange for benefits to be 

provided, for which such individual is entitled to receive as 

medical assistance under title XIX. Such benefits may include long-term care services consistent with State policy. 

(E) If applicable, the plan meets the requirement described in paragraph (7). 

(F) The plan meets the requirements applicable under 

paragraph (8). 

(4) ADDITIONAL REQUIREMENTS FOR SEVERE OR DISABLING

CHRONIC CONDITION SNPS.—In the case of a specialized MA 

plan for special needs individuals described in subsection 

(b)(6)(B)(iii), the applicable requirements described in this 

paragraph are as follows: 

(A) Each individual that enrolls in the plan on or after 

January 1, 2010, is a special needs individual described in 

subsection (b)(6)(B)(iii). 

(B) The plan meets the requirements described in paragraph (5). 

(C) If applicable, the plan meets the requirement described in paragraph (7). 

(5) CARE MANAGEMENT REQUIREMENTS FOR øALL SNPS.—¿ 

øThe requirements¿ ALL SNPS.— (A) IN GENERAL.—Subject to subparagraph (B), the requirements described in this paragraph are that the organization offering a specialized MA plan for special needs 

individuals— 

ø(A)¿ (i) have in place an evidenced-based model 

of care with appropriate networks of providers 

and specialists; and 

ø(B)¿ (ii) with respect to each individual enrolled in the plan— 

ø(i)¿ (I) conduct an initial assessment and 

an annual reassessment of the individual’s 

physical, psychosocial, and functional needs; 

ø(ii)¿ (II) develop a plan, in consultation 

with the individual as feasible, that identifies 

goals and objectives, including measurable 

outcomes as well as specific services and benefits to be provided; and 

ø(iii)¿ (III) use an interdisciplinary team in 

the management of care. 

(B) IMPROVEMENTS TO CARE MANAGEMENT REQUIREMENTS FOR SEVERE OR DISABLING CHRONIC CONDITION

SNPS.—For 2020 and subsequent years, in the case of a specialized MA plan for special needs individuals described in 

subsection (b)(6)(B)(iii), the requirements described in this 

paragraph include the following: 

(i) The interdisciplinary team under subparagraph 

(A)(ii)(III) includes a team of providers with demonstrated expertise, including training in an applicable 

specialty, in treating individuals similar to the targeted population of the plan. 

72 

(ii) Requirements developed by the Secretary to provide face-to-face encounters with individuals enrolled 

in the plan not less frequently than on an annual 

basis. 

(iii) As part of the model of care under clause (i) of 

subparagraph (A), the results of the initial assessment 

and annual reassessment under clause (ii)(I) of such 

subparagraph of each individual enrolled in the plan 

are addressed in the individual’s individualized care 

plan under clause (ii)(II) of such subparagraph. 

(iv) As part of the annual evaluation and approval 

of such model of care, the Secretary shall take into account whether the plan fulfilled the previous year’s 

goals (as required under the model of care). 

(v) The Secretary shall establish a minimum benchmark for each element of the model of care of a plan. 

The Secretary shall only approve a plan’s model of care 

under this paragraph if each element of the model of 

care meets the minimum benchmark applicable under 

the preceding sentence. 

(6) TRANSITION AND EXCEPTION REGARDING RESTRICTION ON

ENROLLMENT.— (A) IN GENERAL.—Subject to subparagraph (C), the Secretary shall establish procedures for the transition of applicable individuals to— 

(i) a Medicare Advantage plan that is not a specialized MA plan for special needs individuals (as defined 

in subsection (b)(6)); or 

(ii) the original medicare fee-for-service program 

under parts A and B. 

(B) APPLICABLE INDIVIDUALS.—For purposes of clause (i), 

the term ‘‘applicable individual’’ means an individual 

who— 

(i) is enrolled under a specialized MA plan for special needs individuals (as defined in subsection (b)(6)); 

and 

(ii) is not within the 1 or more of the classes of special needs individuals to which enrollment under the 

plan is restricted to. 

(C) EXCEPTION.—The Secretary shall provide for an exception to the transition described in subparagraph (A) for 

a limited period of time for individuals enrolled under a 

specialized MA plan for special needs individuals described 

in subsection (b)(6)(B)(ii) who are no longer eligible for 

medical assistance under title XIX. 

(D) TIMELINE FOR INITIAL TRANSITION.—The Secretary 

shall ensure that applicable individuals enrolled in a specialized MA plan for special needs individuals (as defined 

in subsection (b)(6)) prior to January 1, 2010, are 

transitioned to a plan or the program described in subparagraph (A) by not later than January 1, 2013. 

(7) AUTHORITY TO REQUIRE SPECIAL NEEDS PLANS BE NCQA

APPROVED.—For 2012 and subsequent years, the Secretary 

shall require that a Medicare Advantage organization offering 

a specialized MA plan for special needs individuals be apVerDate Sep 11 2014 01:27 Dec 23, 2017 Jkt 079006 PO 00000 Frm 00072 Fmt 6659 Sfmt 6601 E:\HR\OC\HR478P1.XXX HR478P1
73 

proved by the National Committee for Quality Assurance 

(based on standards established by the Secretary). 

(8) INCREASED INTEGRATION OF DUAL SNPS.— (A) DESIGNATED CONTACT.—The Secretary, acting 

through the Federal Coordinated Health Care Office established under section 2602 of Public Law 111–148, shall 

serve as a dedicated point of contact for States to address 

misalignments that arise with the integration of specialized 

MA plans for special needs individuals described in subsection (b)(6)(B)(ii) under this paragraph and, consistent 

with such role, shall— 

(i) establish a uniform process for disseminating to 

State Medicaid agencies information under this title 

impacting contracts between such agencies and such 

plans under this subsection; and 

(ii) establish basic resources for States interested in 

exploring such plans as a platform for integration, 

such as a model contract or other tools to achieve those 

goals. 

(B) UNIFIED GRIEVANCES AND APPEALS PROCESS.— 

(i) IN GENERAL.—Not later than April 1, 2020, the 

Secretary shall establish procedures, to the extent feasible as determined by the Secretary, unifying grievances and appeals procedures under sections 1852(f), 

1852(g), 1902(a)(3), 1902(a)(5), and 1932(b)(4) for 

items and services provided by specialized MA plans 

for special needs individuals described in subsection 

(b)(6)(B)(ii) under this title and title XIX. The Secretary shall solicit comment in developing such procedures from States, plans, beneficiaries and their representatives, and other relevant stakeholders. With respect to items and services described in the previous 

sentence, appeals procedures established under this 

clause shall apply in place of otherwise applicable appeals procedures. 

(ii) PROCEDURES.—The procedures established under 

clause (i) shall be included in the plan contract under 

paragraph (3)(D) and shall— 

(I) adopt the provisions for the enrollee that are 

most protective for the enrollee and, to the extent 

feasible as determined by the Secretary, are compatible with unified timeframes and consolidated 

access to external review under an integrated process; 

(II) take into account differences in State plans 

under title XIX to the extent necessary; 

(III) be easily navigable by an enrollee; and 

(IV) include the elements described in clause 

(iii), as applicable. 

(iii) ELEMENTS DESCRIBED.—Both unified appeals 

and unified grievance procedures shall include, as applicable, the following elements described in this 

clause: 

(I) Single written notification of all applicable 

grievances and appeal rights under this title and 

74 

title XIX. For purposes of this subparagraph, the 

Secretary may waive the requirements under section 1852(g)(1)(B) when the specialized MA plan 

covers items or services under this part or under 

title XIX. 

(II) Single pathways for resolution of any grievance or appeal related to a particular item or service provided by specialized MA plans for special 

needs individuals described in subsection 

(b)(6)(B)(ii) under this title and title XIX. 

(III) Notices written in plain language and 

available in a language and format that is accessible to the enrollee, including in non-English languages that are prevalent in the service area of the 

specialized MA plan. 

(IV) Unified timeframes for grievances and appeals processes, such as an individual’s filing of a 

grievance or appeal, a plan’s acknowledgment and 

resolution of a grievance or appeal, and notification of decisions with respect to a grievance or appeal. 

(V) Requirements for how the plan must process, 

track, and resolve grievances and appeals, to ensure beneficiaries are notified on a timely basis of 

decisions that are made throughout the grievance 

or appeals process and are able to easily determine 

the status of a grievance or appeal. 

(iv) CONTINUATION OF BENEFITS PENDING APPEAL.— The unified procedures under clause (i) shall, with respect to all benefits under parts A and B and title XIX 

subject to appeal under such procedures, incorporate 

provisions under current law and implementing regulations that provide continuation of benefits pending 

appeal under this title and title XIX. 

(C) REQUIREMENT FOR UNIFIED GRIEVANCES AND AP- PEALS.—For 2022 and subsequent years, the contract of a 

specialized MA plan for special needs individuals described 

in subsection (b)(6)(B)(ii) with a State Medicaid agency 

under paragraph (3)(D) shall require the use of unified 

grievances and appeals procedures as described in subparagraph (B). 

(D) REQUIREMENTS FOR FULL INTEGRATION FOR CERTAIN

DUAL SNPS.— 

(i) REQUIREMENT.—For 2021 and subsequent years, 

a specialized MA plan for special needs individuals described in subsection (b)(6)(B)(ii) shall meet one or 

more of the following requirements for integration of 

benefits under this title and title XIX: 

(I) Meet the requirements of a fully integrated 

plan described in section 1853(a)(1)(B)(iv)(II) 

(other than the requirement that the plan have 

similar average levels of frailty, as determined by 

the Secretary, as the PACE program). 

(II) Enter into a capitated contract with the 

State Medicaid agency to provide long-term servVerDate Sep 11 2014 01:27 Dec 23, 2017 Jkt 079006 PO 00000 Frm 00074 Fmt 6659 Sfmt 6603 E:\HR\OC\HR478P1.XXX HR478P1
75 

ices and supports or behavioral health services, or 

both. 

(III) To the extent the State does not allow for or 

require such a specialized MA plan to enter into a 

capitated contract described in subclause (II), enter 

into another type of integration arrangement, as 

determined appropriate by the Secretary after consultation with stakeholders, such as by— 

(aa) entering into a contract with the State 

that requires notifying the State in a timely 

manner of hospitalizations, emergency room 

visits, and hospital or nursing home discharges of enrollees or otherwise requires sharing data that would benefit the coordination of 

items and services under this title and the 

State plan under title XIX; or 

(bb) offering, by a parent organization, a 

Medicaid managed care plan that provides 

long term services and supports or behavioral 

health services to the same enrollees as under 

such specialized MA plan. 

(ii) SANCTIONS.—For 2021 and subsequent years, if 

the Secretary determines that a specialized MA plan 

fails to comply with clause (i), the Secretary may provide for the application against the Medicare Advantage organization offering the plan any of the remedies 

described in section 1857(g)(2). 

(9) LIST OF CONDITIONS FOR CLARIFICATION OF THE DEFINITION OF A SEVERE OR DISABLING CHRONIC CONDITIONS SPECIALIZED NEEDS INDIVIDUAL.— 

(A) IN GENERAL.—Not later than December 31, 2020, and 

every 5 years thereafter, the Secretary shall convene a panel 

of clinical advisors to establish and update a list of conditions that meet each of the following criteria: 

(i) Conditions that meet the definition of a severe or 

disabling chronic condition under subsection 

(b)(6)(B)(iii) on or after January 1, 2022. 

(ii) Conditions that require prescription drugs, providers, and models of care that are unique to the specific population of enrollees in a specialized MA plan 

for special needs individuals described in such subsection on or after such date and— 

(I) as a result of such special needs individuals 

with such a condition having access to and being 

enrolled in such a plan, as compared to access to 

and enrollment in other Medicare Advantage plans 

under this part, it is projected that such individuals would improve health outcomes with respect 

to such condition, that such individuals would 

have reduced overall costs under this title, and 

that there would not be any increase in expenditures under this title for such individuals; or 

(II) have a low prevalence in the general population of beneficiaries under this title or a 

76 

disproportionally high per-beneficiary cost under 

this title. 

(B) GAO STUDY ON HEALTH OUTCOMES OF INDIVIDUALS

ENROLLED IN SPECIALIZED MA PLANS.—Not later than the 

date that is 3 years after the date of the enactment of this 

paragraph, the Comptroller General of the United States 

shall conduct a study and submit to Congress a report on 

the extent to which health outcomes can be compared across 

specialized MA plans for special needs individuals (as defined in section 1859(b)(6)) and other Medicare Advantage 

plans under this part across similar populations, using existing measures and that identifies any potential limitations where new measures may need to be developed for 

such population. 

(g) SPECIAL RULES FOR SENIOR HOUSING FACILITY PLANS.— 

(1) IN GENERAL.—In the case of a Medicare Advantage senior 

housing facility plan described in paragraph (2), notwithstanding any other provision of this part to the contrary and 

in accordance with regulations of the Secretary, the service 

area of such plan may be limited to a senior housing facility 

in a geographic area. 

(2) MEDICARE ADVANTAGE SENIOR HOUSING FACILITY PLAN DESCRIBED.—For purposes of this subsection, a Medicare Advantage senior housing facility plan is a Medicare Advantage plan 

that— 

(A) restricts enrollment of individuals under this part to 

individuals who reside in a continuing care retirement 

community (as defined in section 1852(l)(4)(B)); 

(B) provides primary care services onsite and has a ratio 

of accessible physicians to beneficiaries that the Secretary 

determines is adequate; 

(C) provides transportation services for beneficiaries to 

specialty providers outside of the facility; and 

(D) has participated (as of December 31, 2009) in a demonstration project established by the Secretary under 

which such a plan was offered for not less than 1 year. 

* * * * * * * 

PUBLIC LAW 111-148 

* * * * * * * 

TITLE II—ROLE OF PUBLIC PROGRAMS 

* * * * * * * 

Subtitle H—Improved Coordination for 

Dual Eligible Beneficiaries 

* * * * * * * 

77 

SEC. 2602. PROVIDING FEDERAL COVERAGE AND PAYMENT COORDINATION FOR DUAL ELIGIBLE BENEFICIARIES. 

(a) ESTABLISHMENT OF FEDERAL COORDINATED HEALTH CARE OFFICE.— 

(1) IN GENERAL.—Not later than March 1, 2010, the Secretary of Health and Human Services (in this section referred 

to as the ‘‘Secretary’’) shall establish a Federal Coordinated 

Health Care Office. 

(2) ESTABLISHMENT AND REPORTING TO CMS ADMINISTRATOR.—The Federal Coordinated Health Care Office— 

(A) shall be established within the Centers for Medicare 

& Medicaid Services; and 

(B) have as the Office a Director who shall be appointed 

by, and be in direct line of authority to, the Administrator 

of the Centers for Medicare & Medicaid Services. 

(b) PURPOSE.—The purpose of the Federal Coordinated Health 

Care Office is to bring together officers and employees of the Medicare and Medicaid programs at the Centers for Medicare & Medicaid Services in order to— 

(1) more effectively integrate benefits under the Medicare 

program under title XVIII of the Social Security Act and the 

Medicaid program under title XIX of such Act; and 

(2) improve the coordination between the Federal Government and States for individuals eligible for benefits under both 

such programs in order to ensure that such individuals get full 

access to the items and services to which they are entitled 

under titles XVIII and XIX of the Social Security Act. 

(c) GOALS.—The goals of the Federal Coordinated Health Care 

Office are as follows: 

(1) Providing dual eligible individuals full access to the benefits to which such individuals are entitled under the Medicare 

and Medicaid programs. 

(2) Simplifying the processes for dual eligible individuals to 

access the items and services they are entitled to under the 

Medicare and Medicaid programs. 

(3) Improving the quality of health care and long-term services for dual eligible individuals. 

(4) Increasing dual eligible individuals’ understanding of and 

satisfaction with coverage under the Medicare and Medicaid 

programs. 

(5) Eliminating regulatory conflicts between rules under the 

Medicare and Medicaid programs. 

(6) Improving care continuity and ensuring safe and effective 

care transitions for dual eligible individuals. 

(7) Eliminating cost-shifting between the Medicare and Medicaid program and among related health care providers. 

(8) Improving the quality of performance of providers of services and suppliers under the Medicare and Medicaid programs. 

(d) SPECIFIC RESPONSIBILITIES.—The specific responsibilities of 

the Federal Coordinated Health Care Office are as follows: 

(1) Providing States, specialized MA plans for special needs 

individuals (as defined in section 1859(b)(6) of the Social Security Act (42 U.S.C. 1395w–28(b)(6))), physicians and other relevant entities or individuals with the education and tools necVerDate Sep 11 2014 01:27 Dec 23, 2017 Jkt 079006 PO 00000 Frm 00077 Fmt 6659 Sfmt 6601 E:\HR\OC\HR478P1.XXX HR478P1
78 

essary for developing programs that align benefits under the 

Medicare and Medicaid programs for dual eligible individuals. 

(2) Supporting State efforts to coordinate and align acute 

care and long-term care services for dual eligible individuals 

with other items and services furnished under the Medicare 

program. 

(3) Providing support for coordination of contracting and 

oversight by States and the Centers for Medicare & Medicaid 

Services with respect to the integration of the Medicare and 

Medicaid programs in a manner that is supportive of the goals 

described in paragraph (3). 

(4) To consult and coordinate with the Medicare Payment 

Advisory Commission established under section 1805 of the Social Security Act (42 U.S.C. 1395b–6) and the Medicaid and 

CHIP Payment and Access Commission established under section 1900 of such Act (42 U.S.C. 1396) with respect to policies 

relating to the enrollment in, and provision of, benefits to dual 

eligible individuals under the Medicare program under title 

XVIII of the Social Security Act and the Medicaid program 

under title XIX of such Act. 

(5) To study the provision of drug coverage for new full-benefit dual eligible individuals (as defined in section 1935(c)(6) of 

the Social Security Act (42 U.S.C. 1396u–5(c)(6)), as well as to 

monitor and report annual total expenditures, health outcomes, and access to benefits for all dual eligible individuals. 

(6) To act as a designated contact for States under subsection 

(f)(8)(A) of section 1859 of the Social Security Act (42 U.S.C. 

1395w–28) with respect to the integration of specialized MA 

plans for special needs individuals described in subsection 

(b)(6)(B)(ii) of such section. 

(7) To be responsible for developing regulations and guidance 

related to the implementation of a unified grievance and appeals process as described in subparagraphs (B) and (C) of section 1859(f)(8) of the Social Security Act (42 U.S.C. 1395w– 

28(f)(8)). 

(8) To be responsible for developing regulations and guidance 

related to the integration or alignment of policy and oversight 

under the Medicare program under title XVIII of such Act and 

Medicaid program under title XIX of such Act regarding specialized MA plans for special needs individuals described in 

subsection (b)(6)(B)(ii) of such section 1859. 

(e) REPORT.—The Secretary shall, as part of the budget transmitted under section 1105(a) of title 31, United States Code, submit to Congress an annual report containing recommendations for 

legislation that would improve care coordination and benefits for 

dual eligible individuals. 

(f) DUAL ELIGIBLE DEFINED.—In this section, the term ‘‘dual eligible individual’’ means an individual who is entitled to, or enrolled 

for, benefits under part A of title XVIII of the Social Security Act, 

or enrolled for benefits under part B of title XVIII of such Act, and 

is eligible for medical assistance under a State plan under title XIX 

of such Act or under a waiver of such plan. 

* * * * * * * 

79 


Insert folio 92 here HR478P1.001

VII. EXCHANGES OF LETTERS WITH ADDITIONAL COMMITTEES 

OF REFERRAL 

KEVIN BRADY. TEXAS 

CHAIRMAN ltongrcss of the ilnitcd ~tatcs 

'll.,S. 3Jiousc of 1R.cprcscnrotiocs COMMITIEE ON WAYS AND MEANS 

1102 LONGWORTH HOUSE OFFICE BUILDING 

{202) 225~3625 

0AVIOST£WAAT. 

STAHOIRECTOR 

The Honorable Greg Walden 

Chairman 

Committee on Energy and Commerce 

2125 Rayburn House Office Building 

Washington, DC 20515 

Dear Chairman Walden, 

Washington. Btl: 20ili-oHs 

http:/Jwaysandrneans.house.gov 

December 5. 2017 

BRA!IIOON ~A5£Y. 

MINORlrYCHIEFOfSTA~F 

Thank you for your letter concerning H.R. 3168, on which the Energy and Commerce Committee was 

granted an additional referral. 

I am most appreciative of your decision to waive formal consideration of H.R. 3168. I acknowledge 

that although you waived formal consideration of the bill, the Energy and Commerce Committee is in 

no way waiving its jurisdiction over the subject matter contained in those provisions of the bill that fall 

within your Rule X jurisdiction. I would support your effort to seek appointment of an appropriate 

number of conferees on any House-Senate conference involving this legislation. 

I will include a copy of our letters in our committee report and the Congressional Record should this 

legislation be considered on the House floor. 

Thomas J. Wickham, Jr., Parliamentarian 
80 


Insert folio 93 here HR478P1.002

GREG WALDEN, OREGON 

CHAIRMAN 

ONE HUNDRED FIFTEENTH CONGRESS 

FRANK PALLONE, JR., NEW JERSEY 

RANKING MEMBER 

ctr:ongttS'S' of tbt mnittb ~tattS' 

J!)ou~c of ~cprc~cntati\le£1 

COMMITTEE ON ENERGY AND COMMERCE 

2125 RAYBURN HousE OFFICE BuiLDING 

WASHINGTON, DC 20515--6115 

'D1e Honorable Kevin Brady 

Chairman 

Committee on Ways and Means 

1102 Longworth House Of!ice Building 

Washington, D.C. 20515 

Dear Chairman Brady: 

(202)225-2927 

(202)225-3641 

July 26, 2017 

I write concerning H.R. 3168, a bill to amend title XVlll of the Social Security Act to 

provide continued access to specialized Medicare Advantage plans for special needs individuals, 

and for other purposes. 

I wanted to notify you that the Committee will forgo action on H.R. 3168 so that it may 

proceed expeditiously to the House floor for consideration. This is done with the understanding 

that the Committee'sjurisdictional interests over this and similar legislation are in no way 

diminished or altered. In addition, the Committee reserves the right to seck conferees on H.R. 

3168 and requests your support when such a request is made. 

I would appreciate your response confirming this understanding with respect to H.R. 

3168 and ask that a copy of our exchange of letters on this matter be included in the 

Congressional Record during consideration of the bill on the House floor. 

Sin erely, 

~ den 

0