I 

108TH CONGRESS 

1ST SESSION H. R. 2033

To amend title XVIII of the Social Security Act to increase the minimum 

percentage increase under the Medicare+Choice program, and for other 

purposes. 

IN THE HOUSE OF REPRESENTATIVES 

MAY 8, 2003

Ms. DUNN (for herself, Mr. MCDERMOTT, and Mr. RUSH) 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 increase 

the minimum percentage increase under the 

Medicare+Choice program, and for other purposes.

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 Equity and 

5 Access Act’’. 
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1 SEC. 2. 2-YEAR INCREASE IN MINIMUM PERCENTAGE IN2 CREASE. 

3 Section 1853(c)(1)(C) of the Social Security Act (42 

4 U.S.C. 1395w–23(c)(1)(C)) is amended—

5 (1) in clause (iv), by striking ‘‘and each suc6 ceeding year’’ and inserting ‘‘and 2003’’; and 

7 (2) by inserting at the end the following new 

8 clauses: 

9 ‘‘(v) For 2004 and 2005, 106.5 per10 cent of the annual Medicare+Choice capi11 tation rate under this paragraph for the 

12 area for the previous year. 

13 ‘‘(vi) For 2006 and each succeeding 

14 year, 102 percent of the annual 

15 Medicare+Choice capitation rate under 

16 this paragraph for the area for the pre17 vious year.’’. 

18 SEC. 3. INCLUSION OF COSTS OF DOD AND VA MILITARY 

19 FACILITY SERVICES TO MEDICARE-ELIGIBLE 

20 BENEFICIARIES IN CALCULATION OF 

21 MEDICARE+CHOICE PAYMENT RATES. 

22 Section 1853(c)(3) of the Social Security Act (42 

23 U.S.C. 1395w–23(c)(3)) is amended—

24 (1) in subparagraph (A), by striking ‘‘subpara25 graph (B)’’ and inserting ‘‘subparagraphs (B) and 

26 (E)’’, and 
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1 (2) by adding at the end the following new sub2 paragraph: 

3 ‘‘(E) INCLUSION OF COSTS OF DOD AND

4 VA MILITARY FACILITY SERVICES TO MEDICARE5 ELIGIBLE BENEFICIARIES.—In determining the 

6 area-specific Medicare+Choice capitation rate 

7 under subparagraph (A) for a year (beginning 

8 with 2004), the annual per capita rate of pay9 ment for 1997 determined under section 

10 1876(a)(1)(C) shall be adjusted to include in 

11 the rate the Secretary’s estimate, on a per cap12 ita basis, of the amount of additional payments 

13 that would have been made in the area involved 

14 under this title if individuals entitled to benefits 

15 under this title had not received services from 

16 facilities of the Department of Defense or the 

17 Department of Veterans Affairs.’’. 

18 SEC. 4. AVOIDING DUPLICATIVE STATE REGULATION. 

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

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

21 read as follows: 

22 ‘‘(3) RELATION TO STATE LAWS.—The stand23 ards established under this subsection shall super24 sede any State law or regulation (other than State 

25 licensing laws or State laws relating to plan sol-
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1 vency) with respect to Medicare+Choice plans which 

2 are offered by Medicare+Choice organizations under 

3 this part.’’. 

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

5 subsection (a) shall take effect on the date of the enact6 ment of this Act. 

7 SEC. 5. MEDICARE+CHOICE QUALITY PERFORMANCE PAY8 MENT INCENTIVE PROGRAM. 

9 (a) ESTABLISHMENT OF PROGRAM.—

10 (1) IN GENERAL.—The Secretary of Health and 

11 Human Services shall establish a program to provide 

12 financial incentive awards to Medicare+Choice orga13 nizations offering Medicare+Choice plans under 

14 part C of title XVIII of the Social Security Act that 

15 demonstrate the provision of superior quality health 

16 care to enrollees under the plan. 

17 (2) PERIOD OF PROGRAM.—Awards under the 

18 program shall be made during 2005 and 2006, and 

19 shall be based upon the most recent available quality 

20 data. 

21 (b) AWARDS.—

22 (1) IN GENERAL.—Of the amounts provided for 

23 the program under subsection (f) in each year, the 

24 Secretary shall allocate—
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1 (A) 75 percent of such amounts for Na2 tional Performance Quality Awards (described 

3 in subsection (c)), and 

4 (B) 25 percent of such amounts for State 

5 Performance Quality Awards (described in sub6 section (d)). 

7 (2) LIMITATIONS ON AWARDS.—A 

8 Medicare+Choice organization offering a 

9 Medicare+Choice plan may not receive both a Na10 tional and State Performance Quality Award in a 

11 year. No Medicare+Choice organization offering a 

12 Medicare+Choice plan is eligible for an award under 

13 this section unless it offers benefits throughout the 

14 year in which the award is paid. 

15 (3) AMOUNT OF AWARD.—The amount of an 

16 award to a Medicare+Choice organization offering a 

17 Medicare+Choice plan eligible for the award shall be 

18 determined by multiplying the number of bene19 ficiaries enrolled under the plan on the first day of 

20 the year for which the award is paid times a uniform 

21 dollar amount established by the Secretary. In no 

22 case may the uniform dollar amount for a State Per23 formance Quality Award exceed the dollar amount 

24 for a National Performance Quality Award for the 

25 year involved. 
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1 (4) USE OF AWARDS.—Financial incentives re2 ceived under an award under this section may only 

3 be used for the following purposes: 

4 (A) To reduce any beneficiary cost-sharing 

5 applicable under the plan. 

6 (B) To reduce any beneficiary premiums 

7 applicable under the plan. 

8 (C) To initiate, continue, or enhance a 

9 comprehensive disease management program or 

10 health care quality programs for beneficiaries. 

11 (D) To enhance beneficiary benefits under 

12 the plan. 

13 (E) To utilize the stabilization fund de14 scribed in section 1854(f )(2) of the Social Se15 curity Act (42 U.S.C. 1395w–24(f )(2)). 

16 (5) COMPREHENSIVE DISEASE MANAGEMENT

17 PROGRAM DESCRIBED.—A comprehensive disease 

18 management program referred to in paragraph 

19 (4)(C) is a comprehensive program to manage 

20 chronic disease that includes the following: 

21 (A) A population identification process. 

22 (B) Evidence based practice guidelines. 

23 (C) Collaborative practice models that in24 clude physician and providers of support serv25 ices. 
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1 (D) Patient self-management education 

2 which may include primary prevention, behavior 

3 modification programs, and compliance and sur4 veillance. 

5 (E) Process and outcome measurement, 

6 evaluation, and management. 

7 (F) Routine reporting among health care 

8 providers concerned and procedures for feed9 back. 

10 (G) Such other components that the Sec11 retary determines reasonably improve health 

12 care outcomes. 

13 (c) NATIONAL PERFORMANCE QUALITY AWARDS.—

14 (1) IN GENERAL.—The Secretary shall only 

15 award a National Performance Quality Award to 

16 Medicare+Choice organizations with respect to the 

17 Medicare+Choice plans offered by the organizations 

18 that demonstrate superior quality in the health care 

19 furnished to its enrollees. 

20 (2) MANDATORY AWARDS.—National Perform21 ance Quality Awards shall be given to the 

22 Medicare+Choice organizations with respect to the 

23 Medicare+Choice plans that receive ratings in the 

24 top 25th percentile of all plans rated by the Sec25 retary pursuant to subsection (e). 
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1 (d) STATE PERFORMANCE QUALITY AWARDS.—

2 (1) IN GENERAL.—The Secretary shall only 

3 award a State Performance Quality Award to 

4 Medicare+Choice organizations with respect to the 

5 Medicare+Choice plans offered by the organizations 

6 in that State that demonstrate the highest quality in 

7 the health care furnished to its enrollees. 

8 (2) REQUIREMENT FOR 2 PLANS.—A State Per9 formance Quality Award may not be awarded in a 

10 State that has less than two Medicare+Choice orga11 nizations offering Medicare+Choice plans. 

12 (3) MINIMUM RATING REQUIRED.—A State 

13 Performance Quality Award shall be awarded to 

14 Medicare+Choice organizations offering 

15 Medicare+Choice plans in a State that receive a rat16 ing by the Secretary pursuant to subsection (e) in 

17 the 60th percentile, or higher, of the national rank18 ing of all eligible plans. 

19 (4) SPECIAL CONSIDERATION.—The Secretary 

20 may provide special consideration to 

21 Medicare+Choice organizations offering 

22 Medicare+Choice plans that serve predominantly 

23 rural areas or that demonstrate significant quality 

24 care improvements.
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1 (e) RATING METHODOLOGY.—In determining which 

2 Medicare+Choice organization offering Medicare+Choice 

3 plans qualify for an award under this section, the Sec4 retary shall develop a scoring and ranking system using—

5 (1) the 2003 MCO standards and guideline 

6 methodology of the National Committee for Quality 

7 Assurance for awarding total HEDIS points (based 

8 on HEDIS and CAHPS measures) with an adjust9 ment to incorporate the following three HEDIS out10 come measures—

11 (A) cholesterol control after acute cardio12 vascular events, 

13 (B) HbA1c control for comprehensive dia14 betes care, and 

15 (C) cholesterol control for comprehensive 

16 diabetes care), and 

17 (2) audited HEDIS outcomes and process 

18 measures and CAHPS data as reported to the De19 partment of Health and Human Services. 

20 (f) PAYMENT FROM MEDICARE TRUST FUNDS.—The 

21 Secretary shall provide for the transfer from the Federal 

22 Hospital Insurance Trust Fund and the Federal Supple23 mentary Insurance Trust Fund under title XVIII of the 

24 Social Security Act (42 U.S.C. 1395i, 1395t), in such pro25 portions as the Secretary determines to be appropriate, 
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1 of $500,000,000 for each of 2005 and 2006 for the costs 

2 of carrying out the project under this section. 

3 SEC. 6. INSTITUTE OF MEDICINE REPORT ON PAYMENT IN4 CENTIVES AND PERFORMANCE UNDER THE 

5 MEDICARE+CHOICE PROGRAM. 

6 (a) STUDY.—The Secretary of Health and Human 

7 Services shall enter into an arrangement with the Institute 

8 of Medicine of the National Academy of Sciences under 

9 which the Institute shall conduct a study on clinical out10 comes, performance, and quality of care under the 

11 Medicare+Choice program under part C of title XVIII of 

12 the Social Security Act. 

13 (b) MATTERS STUDIED.—

14 (1) IN GENERAL.—In conducting the study 

15 under subsection (a), the Institute shall review and 

16 evaluate the public and private sector experience re17 lated to the establishment of performance measures 

18 and payment incentives. The review shall include an 

19 evaluation of the success, efficiency, and utility of 

20 structural process and performance measurements, 

21 and different methodologies that link performance to 

22 payment incentives. The review shall include the use 

23 of incentives—

24 (A) aimed at plans and their enrollees; 

25 (B) aimed at providers and their patients; 
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1 (C) to encourage consumers to purchase 

2 based on quality and value; and 

3 (D) to encourage multiple purchasers, pro4 viders, beneficiaries, and plans within a commu5 nity to work together to improve performance. 

6 (2) IDENTIFICATION OF OPTIONS.—As part of 

7 the study, the Institute shall identify options for 

8 providing incentives and rewarding performance, im9 prove quality, outcomes, and efficiency in the deliv10 ery of programs and services under the 

11 Medicare+Choice program, including—

12 (A) periodic updates of performance meas13 urements to continue rewarding outstanding 

14 performance and encourage improvements; 

15 (B) payments that vary by type of plan, 

16 such as preferred provider organization plans 

17 and MSA plans; 

18 (C) extension of incentives in the 

19 Medicare+Choice program to the fee for service 

20 program under title XVIII of the Social Secu21 rity Act; and 

22 (D) performance measures needed to im23 plement alternative methodologies to align pay24 ments with performance. 
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1 (c) REPORT.—Not later than 18 months after the 

2 date of the enactment of this Act, the Institute shall sub3 mit to Congress and the Secretary a report on the study 

4 conducted under subsection (a).

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