I 

108TH CONGRESS 

1ST SESSION H. R. 2070

To amend title XVIII of the Social Security Act to revitalize and improve 

the Medicare+Choice program. 

IN THE HOUSE OF REPRESENTATIVES 

MAY 13, 2003

Mr. GREENWOOD (for himself, Mr. ISRAEL, and Mr. FOSSELLA) introduced 

the following bill; which was referred to the Committee on Ways and 

Means, and in addition to the Committee on Energy and Commerce, for 

a period to be subsequently determined by the Speaker, in each case for 

consideration of such provisions as fall within the jurisdiction of the committee concerned 

A BILL

To amend title XVIII of the Social Security Act to revitalize 

and improve the Medicare+Choice program.

1 Be it enacted by the Senate and House of Representa2 tives of the United States of America in Congress assembled,

3 SECTION 1. SHORT TITLE. 

4 This Act may be cited as the ‘‘Medicare+Choice Re5 vitalization Act of 2003’’. 

6 SEC. 2. MEDICARE+CHOICE IMPROVEMENTS. 

7 (a) EQUALIZING PAYMENTS BETWEEN FEE-FOR8 SERVICE AND MEDICARE+CHOICE.—
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1 (1) IN GENERAL.—Section 1853(c)(1) of the 

2 Social Security Act (42 U.S.C. 1395w–23(c)(1)) is 

3 amended by adding at the end the following: 

4 ‘‘(D) BASED ON 100 PERCENT OF FEE5 FOR-SERVICE COSTS.—

6 ‘‘(i) IN GENERAL.—For 2004 and any 

7 subsequent year, the adjusted average per 

8 capita cost for the year involved, deter9 mined under section 1876(a)(4) for the 

10 Medicare+Choice payment area for serv11 ices covered under parts A and B for indi12 viduals entitled to benefits under part A 

13 and enrolled under part B who are not en14 rolled in a Medicare+Choice plan under 

15 this part for the year. 

16 ‘‘(ii) INCLUSION OF COSTS OF VA AND

17 DOD MILITARY FACILITY SERVICES TO

18 MEDICARE-ELIGIBLE BENEFICIARIES.—In 

19 determining the adjusted average per cap20 ita cost under clause (i) for a year, such 

21 cost shall be adjusted to include the Sec22 retary’s estimate, on a per capita basis, of 

23 the amount of additional payments that 

24 would have been made in the area involved 

25 under this title if individuals entitled to 
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1 benefits under this title had not received 

2 services from facilities of the Department 

3 of Veterans Affairs or the Department of 

4 Defense.’’. 

5 (2) CONFORMING AMENDMENT.—Such section 

6 is further amended, in the matter before subpara7 graph (A), by striking ‘‘or (C)’’ and inserting ‘‘(C), 

8 or (D)’’. 

9 (b) REVISION OF BLEND.—

10 (1) REVISION OF NATIONAL AVERAGE USED IN

11 CALCULATION OF BLEND.—Section 

12 1853(c)(4)(B)(i)(II) of such Act (42 U.S.C. 1395w–

13 23(c)(4)(B)(i)(II)) is amended by inserting ‘‘who 

14 (with respect to determinations for 2004 and any 

15 subsequent year) are enrolled in a Medicare+Choice 

16 plan’’ after ‘‘the average number of medicare bene17 ficiaries’’. 

18 (2) CHANGE IN BUDGET NEUTRALITY.—Section 

19 1853(c) of such Act (42 U.S.C. 1395w–23(c)) is 

20 amended—

21 (A) in paragraph (1)(A), by inserting ‘‘(for 

22 a year before 2003)’’ after ‘‘multiplied’’; and 

23 (B) in paragraph (5), by inserting ‘‘(before 

24 2003)’’ after ‘‘for each year’’. 
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1 (c) REVISION IN MINIMUM PERCENTAGE IN2 CREASE.—Section 1853(c)(1)(C) of such Act (42 U.S.C. 

3 1395w–23(c)(1)(C)) is amended by striking clause (iv) 

4 and inserting the following: 

5 ‘‘(iv) For 2002 and 2003, 102 percent 

6 of the annual Medicare+Choice capitation 

7 rate under this paragraph for the area for 

8 the previous year. 

9 ‘‘(v) For 2004 and each succeeding 

10 year, 104 percent of the annual 

11 Medicare+Choice capitation rate under 

12 this paragraph for the area for the pre13 vious year.’’. 

14 (d) INCLUSION OF COSTS OF DOD AND VA MILI15 TARY FACILITY SERVICES TO MEDICARE-ELIGIBLE

16 BENEFICIARIES IN CALCULATION OF MEDICARE+CHOICE

17 PAYMENT RATES.—Section 1853(c)(3) of such Act (42 

18 U.S.C. 1395w–23(c)(3)) is amended—

19 (1) in subparagraph (A), by striking ‘‘subpara20 graph (B)’’ and inserting ‘‘subparagraphs (B) and 

21 (E)’’, and 

22 (2) by adding at the end the following new sub23 paragraph: 

24 ‘‘(E) INCLUSION OF COSTS OF DOD AND

25 VA MILITARY FACILITY SERVICES TO MEDICARE-
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1 ELIGIBLE BENEFICIARIES.—In determining the 

2 area-specific Medicare+Choice capitation rate 

3 under subparagraph (A) for a year (beginning 

4 with 2004), the annual per capita rate of pay5 ment for 1997 determined under section 

6 1876(a)(1)(C) shall be adjusted to include in 

7 the rate the Secretary’s estimate, on a per cap8 ita basis, of the amount of additional payments 

9 that would have been made in the area involved 

10 under this title if individuals entitled to benefits 

11 under this title had not received services from 

12 facilities of the Department of Defense or the 

13 Department of Veterans Affairs.’’. 

14 (e) ANNOUNCEMENT OF REVISED

15 MEDICARE+CHOICE PAYMENT RATES.—Within 4 weeks 

16 after the date of the enactment of this Act, the Secretary 

17 shall determine, and shall announce (in a manner intended 

18 to provide notice to interested parties) Medicare+Choice 

19 capitation rates under section 1853 of the Social Security 

20 Act (42 U.S.C. 1395w–23) for 2004, revised in accordance 

21 with the provisions of this section. 

22 (f) MEDPAC STUDY OF AAPCC.—

23 (1) STUDY.—The Medicare Payment Advisory 

24 Commission shall conduct a study that assesses the 

25 method used for determining the adjusted average
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1 per capita cost (AAPCC) under section 1876(a)(4) 

2 of the Social Security Act (42 U.S.C. 

3 1395mm(a)(4)). Such study shall examine—

4 (A) the bases for variation in such costs 

5 between different areas, including differences in 

6 input prices, utilization, and practice patterns; 

7 (B) the appropriate geographic area for 

8 payment under the Medicare+Choice program 

9 under part C of title XVIII of such Act; and 

10 (C) the accuracy of risk adjustment meth11 ods in reflecting differences in costs of pro12 viding care to different groups of beneficiaries 

13 served under such program. 

14 (2) REPORT.—Not later than 9 months after 

15 the date of the enactment of this Act, the Commis16 sion shall submit to Congress a report on the study 

17 conducted under paragraph (1). Such report shall 

18 include recommendations regarding changes in the 

19 methods for computing the adjusted average per 

20 capita cost among different areas. 

21 (g) REPORT ON IMPACT OF INCREASED FINANCIAL

22 ASSISTANCE TO MEDICARE+CHOICE PLANS.—Not later 

23 than July 1, 2004, the Secretary of Health and Human 

24 Services shall submit to Congress a report that describes 

25 the impact of additional financing provided under this Act 
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1 and other Acts (including the Medicare, Medicaid, and 

2 SCHIP Balanced Budget Refinement Act of 1999 and 

3 BIPA) on the availability of Medicare+Choice plans in 

4 different areas and its impact on lowering premiums and 

5 increasing benefits under such plans.

6 SEC. 3. MAKING PERMANENT CHANGE IN 

7 MEDICARE+CHOICE REPORTING DEADLINES 

8 AND ANNUAL, COORDINATED ELECTION PE9 RIOD. 

10 (a) CHANGE IN REPORTING DEADLINE.—Section 

11 1854(a)(1) of the Social Security Act (42 U.S.C. 1395w–

12 24(a)(1)) is amended by striking ‘‘2002, 2003, and 2004 

13 (or July 1 of each other year)’’ and inserting ‘‘2002 and 

14 each subsequent year (or July 1 of each year before 

15 2002)’’. 

16 (b) DELAY IN ANNUAL, COORDINATED ELECTION

17 PERIOD.—Section 1851(e)(3)(B) of such Act (42 U.S.C. 

18 1395w–21(e)(3)(B)) is amended by striking ‘‘and after 

19 2005, the month of November before such year and with 

20 respect to 2003, 2004, and 2005’’ and inserting ‘‘, the 

21 month of November before such year and with respect to 

22 2003 and any subsequent year’’. 

23 (c) ANNUAL ANNOUNCEMENT OF PAYMENT

24 RATES.—Section 1853(b)(1) of such Act (42 U.S.C. 

25 1395w–23(b)(1)) is amended by striking ‘‘and after 2005 
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1 not later than March 1 before the calendar year concerned 

2 and for 2004 and 2005’’ and inserting ‘‘not later than 

3 March 1 before the calendar year concerned and for 2004 

4 and each subsequent year’’. 

5 (d) REQUIRING PROVISION OF AVAILABLE INFORMA6 TION COMPARING PLAN OPTIONS.—The first sentence of 

7 section 1851(d)(2)(A)(ii) of such Act (42 U.S.C. 1395w–

8 21(d)(2)(A)(ii)) is amended by inserting before the period 

9 the following: ‘‘to the extent such information is available 

10 at the time of preparation of materials for the mailing’’. 

11 SEC. 4. AVOIDING DUPLICATIVE STATE REGULATION. 

12 (a) IN GENERAL.—Section 1856(b)(3) of the Social 

13 Security Act (42 U.S.C. 1395w–26(b)(3)) is amended to 

14 read as follows: 

15 ‘‘(3) RELATION TO STATE LAWS.—The stand16 ards established under this subsection shall super17 sede any State law or regulation (other than State 

18 licensing laws or State laws relating to plan sol19 vency) with respect to Medicare+Choice plans which 

20 are offered by Medicare+Choice organizations under 

21 this part.’’. 

22 (b) EFFECTIVE DATE.—The amendment made by 

23 subsection (a) shall take effect on the date of the enact24 ment of this Act. 
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1 SEC. 5. SPECIALIZED MEDICARE+CHOICE PLANS FOR SPE2 CIAL NEEDS BENEFICIARIES. 

3 (a) TREATMENT AS COORDINATED CARE PLAN.—

4 Section 1851(a)(2)(A) of the Social Security Act (42 

5 U.S.C. 1395w–21(a)(2)(A)) is amended by adding at the 

6 end the following new sentence: ‘‘Specialized 

7 Medicare+Choice plans for special needs beneficiaries (as 

8 defined in section 1859(b)(4)) may be any type of coordi9 nated care plan.’’. 

10 (b) SPECIALIZED MEDICARE+CHOICE PLAN FOR

11 SPECIAL NEEDS BENEFICIARIES DEFINED.—Section 

12 1859(b) of such Act (42 U.S.C. 1395w–29(b)) is amended 

13 by adding at the end the following new paragraph: 

14 ‘‘(4) SPECIALIZED MEDICARE+CHOICE PLANS

15 FOR SPECIAL NEEDS BENEFICIARIES.—

16 ‘‘(A) IN GENERAL.—The term ‘specialized 

17 Medicare+Choice plan for special needs bene18 ficiaries’ means a Medicare+Choice plan that 

19 exclusively serves special needs beneficiaries (as 

20 defined in subparagraph (B)). 

21 ‘‘(B) SPECIAL NEEDS BENEFICIARY.—The 

22 term ‘special needs beneficiary’ means a 

23 Medicare+Choice eligible individual who—

24 ‘‘(i) is institutionalized (as defined by 

25 the Secretary); 
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1 ‘‘(ii) is entitled to medical assistance 

2 under a State plan under title XIX; 

3 ‘‘(iii) is residing in a Continuing Care 

4 Retirement Community (as defined in sec5 tion 1852(l)(4)(B); or 

6 ‘‘(iv) meets such requirements as the 

7 Secretary may determine would benefit 

8 from enrollment in such a specialized 

9 Medicare+Choice plan described in sub10 paragraph (A) for individuals with severe 

11 or disabling chronic conditions.’’. 

12 (c) RESTRICTION ON ENROLLMENT PERMITTED.—

13 Section 1859 of such Act (42 U.S.C. 1395w–29) is 

14 amended by adding at the end the following new sub15 section: 

16 ‘‘(f) RESTRICTION ON ENROLLMENT FOR SPECIAL17 IZED MEDICARE+CHOICE PLANS FOR SPECIAL NEEDS

18 BENEFICIARIES.—In the case of a specialized 

19 Medicare+Choice plan (as defined in subsection (b)(4)), 

20 notwithstanding any other provision of this part and in 

21 accordance with regulations of the Secretary and for peri22 ods before January 1, 2007, the plan may restrict the en23 rollment of individuals under the plan to individuals who 

24 are within one or more classes of special needs bene25 ficiaries.’’. 
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1 (d) REPORT TO CONGRESS.—Not later than Decem2 ber 31, 2006, the Medicare Benefits Administrator shall 

3 submit to Congress a report that assesses the impact of 

4 specialized Medicare+Choice plans for special needs bene5 ficiaries on the cost and quality of services provided to 

6 enrollees. Such report shall include an assessment of the 

7 costs and savings to the medicare program as a result of 

8 amendments made by subsections (a), (b), and (c). 

9 (e) EFFECTIVE DATES.—

10 (1) IN GENERAL.—The amendments made by 

11 subsections (a), (b), and (c) shall take effect upon 

12 the date of the enactment of this Act. 

13 (2) DEADLINE FOR ISSUANCE OF REQUIRE14 MENTS FOR SPECIAL NEEDS BENEFICIARIES; TRAN15 SITION.—No later than 6 months after the date of 

16 the enactment of this Act, the Secretary of Health 

17 and Human Services shall issue final regulations to 

18 establish requirements for special needs beneficiaries 

19 under section 1859(b)(4)(B)(iii) of the Social Secu20 rity Act, as added by subsection (b).

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