89–006

106TH CONGRESS REPT. 106–1019 " ! HOUSE OF REPRESENTATIVES 2d Session Part 1

BENEFICIARY IMPROVEMENT AND PROTECTION ACT OF

2000

OCTOBER 30, 2000.—Ordered to be printed

Mr. BLILEY, from the Committee on Commerce,

submitted the following

R E P O R T

[To accompany H.R. 5291]

[Including cost estimate of the Congressional Budget Office]

The Committee on Commerce, to whom was referred the bill

(H.R. 5291) to amend titles XVIII, XIX, and XXI of the Social Security Act to make additional corrections and refinements in the

Medicare, Medicaid, and State children’s health insurance programs, as revised by the Balanced Budget Act of 1997, having considered the same, report favorably thereon with an amendment and

recommend that the bill as amended do pass.

CONTENTS

Page

Amendment .............................................................................................................. 2

Purpose and Summary ............................................................................................ 29

Background and Need for Legislation .................................................................... 29

Hearings ................................................................................................................... 30

Committee Consideration ........................................................................................ 30

Committee Votes ...................................................................................................... 30

Committee Oversight Findings ............................................................................... 31

Committee on Government Reform Oversight Findings ...................................... 31

New Budget Authority, Entitlement Authority, and Tax Expenditures ............. 31

Committee Cost Estimate ....................................................................................... 32

Congressional Budget Office Estimate ................................................................... 32

Federal Mandates Statement ................................................................................. 34

Advisory Committee Statement .............................................................................. 34

Constitutional Authority Statement ...................................................................... 34

Applicability to Legislative Branch ........................................................................ 34

Section-by-Section Analysis of the Legislation ...................................................... 34

Changes in Existing Law Made by the Bill, as Reported ..................................... 67

AMENDMENT

The amendment is as follows:

2

Strike all after the enacting clause and insert the following:

SECTION 1. SHORT TITLE; AMENDMENTS TO SOCIAL SECURITY ACT; REFERENCES TO OTHER

ACTS; TABLE OF CONTENTS.

(a) SHORT TITLE.—This Act may be cited as the ‘‘Beneficiary Improvement and

Protection Act of 2000’’.

(b) AMENDMENTS TO SOCIAL SECURITY ACT.—Except as otherwise specifically provided, whenever in this Act an amendment is expressed in terms of an amendment

to or repeal of a section or other provision, the reference shall be considered to be

made to that section or other provision of the Social Security Act.

(c) REFERENCES TO OTHER ACTS.—In this Act:

(1) BALANCED BUDGET ACT OF 1997.—The term ‘‘BBA’’ means the Balanced

Budget Act of 1997 (Public Law 105–33).

(2) MEDICARE, MEDICAID, AND SCHIP BALANCED BUDGET REFINEMENT ACT OF

1999.—The term ‘‘BBRA’’ means the Medicare, Medicaid, and SCHIP Balanced

Budget Refinement Act of 1999, as enacted into law by section 1000(a)(6) of

Public Law 106–113 (Appendix F).

(d) TABLE OF CONTENTS.—The table of contents of this Act is as follows:

Sec. 1. Short title; amendments to Social Security Act; references to other Acts; table of contents.

TITLE I—BENEFICIARY IMPROVEMENTS

Sec. 101. Improving availability of QMB/SLMB application forms.

Sec. 102. Study on limitation on State payment for medicare cost-sharing affecting access to services for qualified medicare beneficiaries.

Sec. 103. Election of periodic colonoscopy.

Sec. 104. Waiver of 24-month waiting period for medicare coverage of individuals disabled with amyotrophic

lateral sclerosis (ALS).

Sec. 105. Elimination of time limitation on medicare benefits for immunosuppressive drugs.

Sec. 106. Preservation of coverage of drugs and biologicals under part B of the medicare program.

Sec. 107. Demonstration of medicare coverage of medical nutrition therapy services.

TITLE II—OTHER MEDICARE PART B PROVISIONS

Subtitle A—Access to Technology

Sec. 201. Annual reports on national coverage determinations.

Sec. 202. National limitation amount equal to 100 percent of national median for new clinical laboratory test

technologies; fee schedule for new clinical laboratory tests.

Sec. 203. Clarifying process and standards for determining eligibility of devices for pass-through payments

under hospital outpatient PPS.

Sec. 204. Access to new technologies applied to screening mammography to enhance breast cancer detection.

Subtitle B—Provisions Relating to Physicians Services

Sec. 211. GAO study of gastrointestinal endoscopic services furnished in physicians offices and hospital outpatient department services.

Sec. 212. Treatment of certain physician pathology services.

Sec. 213. Physician group practice demonstration.

Sec. 214. Designation of separate category for interventional pain management physicians.

Sec. 215. Evaluation of enrollment procedures for medical groups that retain independent contractor physicians.

Subtitle C—Other Services

Sec. 221. 3-year moratorium on SNF part B consolidated billing requirements.

Sec. 222. Ambulatory surgical centers.

Sec. 223. 1-year extension of moratorium on therapy caps.

Sec. 224. Revision of medicare reimbursement for telehealth services.

Sec. 225. Payment for ambulance services.

Sec. 226. Contrast enhanced diagnostic procedures under hospital prospective payment system.

Sec. 227. 10-Year phased-in increase from 55 percent to 80 percent in the proportion of hospital bad debt recognized.

Sec. 228. State accreditation of diabetes self-management training programs.

Sec. 229. Update in renal dialysis composite rate.

TITLE III—MEDICARE PART A AND B PROVISIONS

Sec. 301. Home health services.

Sec. 302. Advisory opinions.

Sec. 303. Hospital geographic reclassification for labor costs for other PPS systems.

Sec. 304. Reclassification of a metropolitan statistical area for purposes of reimbursement under the medicare

program.

Sec. 305. Making the medicare dependent, small rural hospital program permanent.

Sec. 306. Option to base eligibility on discharges during any of the 3 most recent audited cost reporting periods.

Sec. 307. Identification and reduction of medical errors by peer review organizations.

Sec. 308. GAO report on impact of the emergency medical treatment and active labor act (EMTALA) on hospital

emergency departments.

TITLE IV—MEDICARE+CHOICE PROGRAM STABILIZATION AND IMPROVEMENTS

Subtitle A—Payment Reforms

Sec. 401. Increasing minimum payment amount.

Sec. 402. 3 percent minimum percentage update in 2001.

Sec. 403. 10-year phase in of risk adjustment based on data from substantially all settings.

Sec. 404. Transition to revised Medicare+Choice payment rates.

Subtitle B—Administrative Reforms

Sec. 411. Effectiveness of elections and changes of elections.

3

Sec. 412. Medicare+Choice program compatibility with employer or union group health plans.

Sec. 413. Uniform premium and benefits.

TITLE V—MEDICAID

Sec. 501. DSH payments.

Sec. 502. New prospective payment system for Federally-qualified health centers and rural health clinics.

Sec. 503. Optional coverage of legal immigrants under the medicaid program.

Sec. 504. Additional entities qualified to determine medicaid presumptive eligibility for low-income children.

Sec. 505. Improving welfare-to-work transition.

Sec. 506. Medicaid county-organized health systems.

Sec. 507. Medicaid recognition for services of physician assistants.

TITLE VI—STATE CHILDREN’S HEALTH INSURANCE PROGRAM

Sec. 601. Special rule for availability and redistribution of unused fiscal year 1998 and 1999 SCHIP allotments.

Sec. 602. Optional coverage of certain legal immigrants under SCHIP.

TITLE VII—EXTENSION OF SPECIAL DIABETES GRANT PROGRAMS

Sec. 701. Extension of juvenile and Indian diabetes grant programs.

TITLE I—BENEFICIARY IMPROVEMENTS

SEC. 101. IMPROVING AVAILABILITY OF QMB/SLMB APPLICATION FORMS.

(a) THROUGH LOCAL SOCIAL SECURITY OFFICES.—

(1) IN GENERAL.—Section 1804 (42 U.S.C. 1395b–2) is amended by adding at

the end the following new subsection:

‘‘(d) AVAILABILITY OF APPLICATION FORMS FOR MEDICAL ASSISTANCE FOR MEDICARE COST-SHARING.—The Secretary shall make available to the Commissioner of

Social Security appropriate forms for applying for medical assistance for medicare

cost-sharing under a State plan under title XIX. Such Commissioner, through local

offices of the Social Security Administration shall—

‘‘(1) notify applicants and beneficiaries who present at a local office orally of

the availability of such forms and make such forms available to such individuals

upon request; and

‘‘(2) provide assistance to such individuals in completing such forms and, upon

request, in submitting such forms to the appropriate State agency.’’.

(2) CONFORMING AMENDMENT.—Section 1902(a)(8) (42 U.S.C. 1396a(a)(8)) is

amended by inserting before the semicolon at the end the following: ‘‘and provide application forms for medical assistance for medicare cost-sharing under

the plan to the Secretary in order to make them available through Federal offices under section 1804(d) within the State’’.

(b) STREAMLINING APPLICATION PROCESS.—

(1) REQUIREMENT.—Section 1902(a)(8) (42 U.S.C. 1396a(a)(8)) is amended by

striking ‘‘, and that’’ and inserting ‘‘permit individuals to apply for and obtain

medical assistance for medicare cost-sharing using the simplified uniform application form developed under section 1905(p)(5), make available such forms to

such individuals, permit such individuals to apply for such assistance by mail

(and, at the State option, by telephone or other electronic means) and not require them to apply in person, and provide that’’.

(2) SIMPLIFIED APPLICATION FORM.—Section 1905(p) (42 U.S.C. 1396d(p)) is

amended by adding at the end the following new paragraph:

‘‘(5)(A) The Secretary shall develop a simplified application form for use by individuals (including both qualified medicare beneficiaries and specified low-income

medicare beneficiaries) in applying for medical assistance for medicare cost-sharing

under this title. Such form shall be easily readable by applicants and uniform nationally.

‘‘(B) In developing such form, the Secretary shall consult with beneficiary groups

and the States.

‘‘(C) The Secretary shall make such application forms available—

‘‘(i) to the Commissioner of Social Security for distribution through local social

security offices;

‘‘(ii) at such other sites at the Secretary determines appropriate; and

‘‘(iii) to persons upon request.’’.

(c) EFFECTIVE DATES.—

(1) The amendments made by subsection (a) take effect on January 1, 2004.

(2) EFFECTIVE DATE.—The amendments made by subsection (b) take effect 1

year after the date of the enactment of this Act, regardless of whether regulations have been promulgated to carry out such amendments by such date. Secretary of Health and Human Services shall develop the uniform application

form under the amendment made by subsection (b)(2) by not later than 9

months after the date of the enactment of this Act.

4

SEC. 102. STUDY ON LIMITATION ON STATE PAYMENT FOR MEDICARE COST-SHARING AFFECTING ACCESS TO SERVICES FOR QUALIFIED MEDICARE BENEFICIARIES.

(a) IN GENERAL.—The Secretary of Health and Human Services shall conduct a

study to determine if access to certain services (including mental health services)

for qualified medicare beneficiaries has been affected by limitations on a State’s payment for medicare cost-sharing for such beneficiaries under section 1902(n) of the

Social Security Act (42 U.S.C. 1396a(n)). As part of such study, the Secretary shall

analyze the effect of such payment limitation on providers who serve a disproportionate share of such beneficiaries.

(b) REPORT.—Not later than 1 year after the date of the enactment of this Act

the Secretary shall submit to Congress a report on the study under subsection (a).

The report shall include recommendations regarding any changes that should be

made to the State payment limits under section 1902(n) for qualified medicare beneficiaries to ensure appropriate access to services.

SEC. 103. ELECTION OF PERIODIC COLONOSCOPY.

(a) COVERAGE.—Section 1861(pp)(1)(C) (42 U.S.C. 1395x(pp)(1)(C)) is amended by

inserting ‘‘and in the case of an individual making the election described in section

1834(d)(4)’’ after ‘‘high risk for colorectal cancer’’.

(b) ELECTION.—Section 1834(d) (42 U.S.C. 1395m(d)) is amended—

(1) in paragraph (2)(E)—

(A) by striking ‘‘or’’ at the end of clause (i);

(B) by striking the period at the end of clause (ii) and inserting ‘‘; or’’;

and

(C) by adding at the end the following new clause:

‘‘(iii) if the procedure is performed within 119 months after a screening colonoscopy under paragraph (4).’’;

(2) in paragraph (3)(A), by inserting ‘‘and for individuals making the election

described in paragraph (4)’’ after ‘‘1861(pp)(2))’’;

(3) in paragraph (3)(E), by adding at the end the following: ‘‘No payment may

be made under this part for a colorectal cancer screening test consisting of a

screening colonoscopy for individuals making the election described in paragraph (4) if the procedure is performed within the 119 months after a previous

screening colonoscopy or within 47 months after a screening flexible

sigmoidoscopy.’’; and

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

‘‘(4) ELECTION OF SCREENING COLONOSCOPY FOR INDIVIDUALS NOT AT HIGH

RISK OF COLORECTAL CANCER INSTEAD OF SCREENING SIGMOIDOSCOPY.—An individual who is not at high risk of colorectal cancer may elect to receive a screening colonoscopy instead of a screening sigmoidoscopy.’’.

(c) EFFECTIVE DATE.—The amendments made by this section take effect on January 1, 2001.

SEC. 104. WAIVER OF 24-MONTH WAITING PERIOD FOR MEDICARE COVERAGE OF INDIVIDUALS DISABLED WITH AMYOTROPHIC LATERAL SCLEROSIS (ALS).

(a) IN GENERAL.—Section 226 (42 U.S.C. 426) is amended—

(1) by redesignating subsection (h) as subsection (j) and by moving such subsection to the end of the section, and

(2) by inserting after subsection (g) the following new subsection:

‘‘(h) For purposes of applying this section in the case of an individual medically

determined to have amyotrophic lateral sclerosis (ALS), the following special rules

apply:

‘‘(1) Subsection (b) shall be applied as if there were no requirement for any

entitlement to benefits, or status, for a period longer than 1 month.

‘‘(2) The entitlement under such subsection shall begin with the first month

(rather than twenty-fifth month) of entitlement or status.

‘‘(3) Subsection (f) shall not be applied.’’.

(b) CONFORMING AMENDMENT.—Section 1837 (42 U.S.C. 1395p) is amended by

adding at the end the following new subsection:

‘‘(j) In applying this section in the case of an individual who is entitled to benefits

under part A pursuant to the operation of section 226(h), the following special rules

apply:

‘‘(1) The initial enrollment period under subsection (d) shall begin on the first

day of the first month in which the individual satisfies the requirement of section 1836(1).

‘‘(2) In applying subsection (g)(1), the initial enrollment period shall begin on

the first day of the first month of entitlement to disability insurance benefits

referred to in such subsection.’’.

(c) EFFECTIVE DATE.—The amendments made by this section apply to benefits for

months beginning after the date of the enactment of this Act.

5

SEC. 105. ELIMINATION OF TIME LIMITATION ON MEDICARE BENEFITS FOR IMMUNOSUPPRESSIVE DRUGS.

(a) IN GENERAL.—Section 1861(s)(2)(J) (42 U.S.C. 1395x(s)(2)(J)) is amended by

striking ‘‘, but only’’ and all that follows up to the semicolon at the end.

(b) EFFECTIVE DATE.—The amendment made by subsection (a) shall apply to

drugs furnished on or after the date of the enactment of this Act.

SEC. 106. PRESERVATION OF COVERAGE OF DRUGS AND BIOLOGICALS UNDER PART B OF

THE MEDICARE PROGRAM.

(a) IN GENERAL.—Section 1861(s)(2) (42 U.S.C. 1395x(s)(2)) is amended, in each

of subparagraphs (A) and (B), by striking ‘‘(including drugs and biologicals which

cannot, as determined in accordance with regulations, be self-administered)’’ and inserting ‘‘(including drugs and biologicals which are not usually self-administered by

the patient)’’.

(b) EFFECTIVE DATE.—The amendment made by subsection (a) applies to drugs

and biologicals administered on or after October 1, 2000.

SEC. 107. DEMONSTRATION OF MEDICARE COVERAGE OF MEDICAL NUTRITION THERAPY

SERVICES.

(a) IN GENERAL.—The Secretary of Health and Human Services shall conduct a

demonstration project (in this section referred to as the ‘‘project’’) to examine the

cost-effectiveness of providing medical nutrition therapy services under the medicare

program and the financial impact of providing such services under the program.

(b) SCOPE OF SERVICES.—

(1) TIME PERIOD AND LOCATIONS.—The project shall be conducted—

(A) during a period of 5 fiscal years; and

(B) in the 5 States which have the highest proportion of the population

who are 65 years of age or older.

(2) FUNDING.—The total amount of the payments that may be made under

this section shall not exceed $60,000,000 for each of the 5 fiscal years of the

project. Funding for the project shall be made from the Federal Supplementary

Medical Insurance Trust Fund established under section 1841 of the Social Security Act (42 U.S.C. 1395t).

(c) COVERAGE AS MEDICARE PART B SERVICES.—

(1) IN GENERAL.—Subject to the succeeding provisions of this subsection, medical nutrition therapy services furnished under the project shall be considered

to be services covered under part B of title XVIII of the Social Security Act.

(2) PAYMENT.—Payment for such services shall be made at a rate of 80 percent of the lesser of the actual charge for the services or 85 percent of the

amount determined under the fee schedule established under section 1848(b) of

the Social Security Act (42 U.S.C. 1395w–4(b)) for the same services if furnished

by a physician.

(3) APPLICATION OF LIMITS ON BILLING.—The provisions of section 1842(b)(18)

of the Social Security Act (42 U.S.C. 1395u(b)(18)) shall apply to a registered

dietitian or nutrition professional furnishing services under the project in the

same manner as they to a practitioner described in subparagraph (C) of such

section furnishing services under title XVIII of such Act.

(d) REPORTS.—The Secretary shall submit to the Committee on Ways and Means

and the Committee on Commerce of the House of Representatives and the Committee on Finance of the Senate interim reports on the project and a final report

on the project within 6 months after the conclusion of the project. The final report

shall include an evaluation of the impact of the use of medical nutrition therapy

services on medicare beneficiaries and on the medicare program, including any impact on reducing costs under the program and improving the health of beneficiaries.

(e) DEFINITIONS.—For purposes of this section:

(1) MEDICAL NUTRITION THERAPY SERVICES.—The term ‘‘medical nutrition

therapy services’’ means nutritional diagnostic, therapy, and counseling services

for the purpose of disease management which are furnished by a registered dietitian or nutrition professional (as defined in paragraph (2)) pursuant to a referral by a physician (as defined in section 1861(r)(1) of the Social Security Act,

42 U.S.C. 1395x(r)(1)).

(2) REGISTERED DIETITIAN OR NUTRITION PROFESSIONAL.—

(A) IN GENERAL.—Subject to subparagraph (B), the term ‘‘registered dietitian or nutrition professional’’ means an individual who—

(i) holds a baccalaureate or higher degree granted by a regionally accredited college or university in the United States (or an equivalent foreign degree) with completion of the academic requirements of a program in nutrition or dietetics, as accredited by an appropriate national

accreditation organization recognized by the Secretary for this purpose;

6

(ii) has completed at least 900 hours of supervised dietetics practice

under the supervision of a registered dietitian or nutrition professional;

and

(iii)(I) is licensed or certified as a dietitian or nutrition professional

by the State in which the services are performed, or

(II) in the case of an individual in a State which does not provide for

such licensure or certification, meets such other criteria as the Secretary establishes.

(B) EXCEPTION.—Clauses (i) and (ii) of subparagraph (A) shall not apply

in the case of an individual who as of the date of the enactment of this Act

is licensed or certified as a dietitian or nutrition professional by the State

in which medical nutrition therapy services are performed.

(3) SECRETARY.—The term ‘‘Secretary’’ means Secretary of Health and Human

Services.

TITLE II—OTHER MEDICARE PART B

PROVISIONS

Subtitle A—Access to Technology

SEC. 201. ANNUAL REPORTS ON NATIONAL COVERAGE DETERMINATIONS.

(a) ANNUAL REPORTS.—Not later than December 1 of each year, beginning in

2001, the Secretary of Health and Human Services shall submit to Congress a report that sets forth a detailed compilation of the actual time periods that were necessary to complete and fully implement any national coverage determinations that

were made in the previous fiscal year for items, services, or medical devices not previously covered as a benefit under title XVIII of the Social Security Act (42 U.S.C.

1395 et seq.), including, with respect to each new item, service, or medical device,

a statement of the time taken by the Secretary to make the necessary coverage, coding, and payment determinations, including the time taken to complete each significant step in the process of making such determinations.

(b) PUBLICATION OF REPORTS ON THE INTERNET.—The Secretary of Health and

Human Services shall publish each report submitted under subsection (a) on the

medicare Internet site of the Department of Health and Human Services.

SEC. 202. NATIONAL LIMITATION AMOUNT EQUAL TO 100 PERCENT OF NATIONAL MEDIAN

FOR NEW CLINICAL LABORATORY TEST TECHNOLOGIES; FEE SCHEDULE FOR NEW

CLINICAL LABORATORY TESTS.

(a) IN GENERAL.—Section 1833(h)(4)(B)(viii) (42 U.S.C. 1395l(h)(4)(B)(viii)) is

amended by inserting before the period the following: ‘‘(or 100 percent of such median in the case of a clinical diagnostic laboratory test performed on or after January 1, 2001, that the Secretary determines is a new test for which no limitation

amount has previously been established under this subparagraph)’’.

(b) FEE SCHEDULE FOR NEW CLINICAL LAB TESTS.—

(1) ESTABLISHMENT OF FEE SCHEDULE FOR NEW TESTS.—Section 1833(h)(1) (42

U.S.C. 1395l(h)(1)) is amended—

(A) in subparagraph (B), by striking ‘‘In’’ and inserting ‘‘Except for tests

described in subparagraph (E), in’’; and

(B) by inserting at the end the following new subparagraph:

‘‘(E) In the case of a clinical diagnostic laboratory test which is described by a new

code in the Health Care Financing Administration Common Procedure Coding System (commonly referred to as ‘HCPCS’), for which the Secretary is not able to crosswalk with a similar test with an established schedule amount, the Secretary shall

establish for purposes of subparagraph (A) a single fee schedule amount for all areas

in the following manner:

‘‘(i) By not later than December 1 of each year, beginning with 2001, the Secretary shall cause to have published in the Federal Register (which may include

publication on an interim final rule basis with a comment period) an interim

fee schedule amount for each such new test which shall apply for such new tests

furnished during the following year.

‘‘(ii) The interim fee schedule amount for each such new test shall be subject

to a comment period of 60 days. The Secretary shall review comments and data

received and make appropriate adjustments to the fee schedule for each test applicable beginning with the following calendar year.

‘‘(iii) For years beginning with 2002, the Secretary shall also cause to have

published in the Federal Register by not later than December 1 of the year

prior to its application, the adjustments to the interim fee schedule amount deVerDate 11-MAY-2000 15:23 Oct 31, 2000 Jkt 089006 PO 00000 Frm 00006 Fmt 6659 Sfmt 6621 E:\HR\OC\HR1019P1.XXX pfrm04 PsN: HR1019P1
7

scribed in clause (ii) for each such new test for which an interim fee schedule

amount was established for a year, including adjustments to such fee schedule

amounts in response to comments.’’.

(2) CONFORMING AMENDMENT TO UPDATE PROVISION.—Section 1833(h)(2)(A)

(42 U.S.C. 1395l(h)(2)(A)) is amended by striking ‘‘July 1, 1984,’’ and inserting

the following: ‘‘July 1, 1984. The fee schedules established under the previous

sentence and paragraph (1)(E)(3) shall be’’.

SEC. 203. CLARIFYING PROCESS AND STANDARDS FOR DETERMINING ELIGIBILITY OF DEVICES FOR PASS-THROUGH PAYMENTS UNDER HOSPITAL OUTPATIENT PPS.

(a) IN GENERAL.—Section 1833(t)(6) (42 U.S.C. 1395l(t)(6)) is amended—

(1) by redesignating subparagraphs (C) and (D) as subparagraphs (D) and (E),

respectively; and

(2) by striking subparagraph (B) and inserting the following:

‘‘(B) USE OF CATEGORIES IN DETERMINING ELIGIBILITY OF A DEVICE FOR

PASS-THROUGH PAYMENTS.—The Secretary shall determine whether a medical device meets the requirements of subparagraph (A)(iv) as follows:

‘‘(i) ESTABLISHMENT OF CATEGORIES.—The Secretary shall establish

categories of medical devices based on type of medical device as follows:

‘‘(I) IN GENERAL.—The Secretary shall establish criteria that will

be used for creation of categories through rulemaking (which may

include use of an interim final rule with comment period). Such

categories shall be established in a manner such that no medical

device is described by more than one category. Such criteria shall

include a test of whether the average cost of devices that would be

included in a category, as estimated by the Secretary, is not insignificant as described in paragraph (A)(iv)(II).

‘‘(II) INITIAL CATEGORIES.—The categories to be applied as of the

category-based pass-through implementation date specified pursuant to subclause (V) shall be established in a manner such that

each medical device that meets the requirements of clause (ii) or

(iv) of subparagraph (A) as of such date is included in a such a category. For purposes of the preceding sentence, whether a medical

device meets the requirements of clause (ii) or (iv) of subparagraph

(A) as of such date shall be determined without regard to clause

(ii) of this subparagraph and on the basis of the program memoranda issued before such date identifying medical devices that

meet such requirements.

‘‘(III) ADDING CATEGORIES.—The Secretary shall promptly establish a new category of medical device under this clause for any

medical device that meets the requirements of subparagraph (A)(iv)

and for which none of the categories in effect or that were previously in effect (as described in subparagraph (C)(iii)) is appropriate. The Secretary shall only establish a new category for a

medical device that is described by a category that was previously

in effect if the Secretary determines, in accord with criteria established under subclause (I) of this clause, that the device represents

a significant advance in medical technology that is expected to significantly improve the treatment of Medicare beneficiaries.

‘‘(IV) DELETING CATEGORIES.—The Secretary shall delete a category at the close of the period for which the category is in effect

(as described in subparagraph (C)(iii)).

‘‘(V) CATEGORY-BASED PASS-THROUGH IMPLEMENTATION DATE.— For purposes of this subparagraph and subparagraph (C), the ‘category-based pass-through implementation date’ is a date specified

by the Secretary as of which the categories established under this

clause are first used for purposes of clause (ii)(I). Such date may

not be later than July 1, 2000.

‘‘(ii) REQUIREMENTS TREATED AS MET.—A medical device shall be

treated as meeting the requirements of subparagraph (A)(iv) if—

‘‘(I) the device is described by a category established under clause

(i), and

‘‘(II) an application under section 515 of the Federal Food, Drug,

and Cosmetic Act has been approved with respect to the device, or

the device has been cleared for market under section 510(k) of such

Act, or the device is exempt from the requirements of section

510(k) of such Act pursuant to subsection (l) or (m) of section 510

of such Act or section 520(g) of such Act, without an additional requirement for application or prior approval.

‘‘(C) LIMITED PERIOD OF PAYMENT.—

8

‘‘(i) DRUGS AND BIOLOGICALS.—The payment under this paragraph

with respect to a drug or biological shall only apply during a period of

at least 2 years, but not more than 3 years, that begins—

‘‘(I) on the first date this subsection is implemented in the case

of a drug or biological described in clause (i), (ii), or (iii) of subparagraph (A) and in the case of a drug or biological described in subparagraph (A)(iv) and for which payment under this part is made

as an outpatient hospital service before such first date; or

‘‘(II) in the case of a drug or biological described in subparagraph

(A)(iv) not described in subclause (I), on the first date on which

payment is made under this part for the drug or biological as an

outpatient hospital service.

‘‘(ii) MEDICAL DEVICES.—Except as provided in clause (iv), payment

shall be made under this paragraph with respect to a medical device

only if such device—

‘‘(I) is described by a category of medical devices established

under subparagraph (B)(i); and

‘‘(II) is provided as part of a service (or group of services) paid

for under this subsection and provided during the period for which

such category is in effect (as described in clause (iii)).

‘‘(iii) PERIOD FOR WHICH CATEGORY IS IN EFFECT.—For purposes of

this subparagraph and subparagraph (B), a category of medical devices

established under subparagraph (B)(i) shall be in effect for a period of

at least 2 years, but not more than 3 years, that begins—

‘‘(I) in the case of a category established under subparagraph

(B)(i)(II), on the first date on which payment was made under this

paragraph for any device described by such category (including

payments made during the period before the category-based passthrough implementation date); and

‘‘(II) in the case of a category established under subparagraph

(B)(i)(III), on the first date on which payment is made under this

paragraph for any medical device that is described by such category.

‘‘(iv) PAYMENTS MADE BEFORE CATEGORY-BASED PASS-THROUGH IMPLEMENTATION DATE.—

‘‘(I) in the case of a medical device provided as part of a service

(or group of services) paid for under this subsection and provided

during the period beginning on the first date on which the system

under this subsection is implemented and ending on (and including) the day before the category-based pass-through implementation date specified pursuant to subparagraph (B)(i)(V), payment

shall be made in accordance with the provisions of this paragraph

as in effect on the day before the date of the enactment of this subparagraph; and

‘‘(II) notwithstanding subclause (I), the Secretary shall make

payments under this paragraph during the period beginning one

month after the date of enactment of the Beneficiary Improvement

and Protection Act of 2000 and ending on the same ending date in

subclause (I) with respect to any medical device that is not included in a program memorandum referred to in subparagraph

(B)(i)(II) but that is substantially similar (other than with respect

to the restriction in subparagraph (A)(iv)(I)) to devices that are so

included and that the Secretary determines is likely to be described

by a initial category established under such subparagraph.’’.

(b) CONFORMING AMENDMENTS.—Section 1833(t) is further amended—

(1) in paragraph (6)(D) (as redesignated by subsection (a)(1)), by striking ‘‘subparagraph (D)(iii)’’ in the matter preceding clause (i) and inserting ‘‘subparagraph (E)(iii)’’;

(2) in paragraph (12)(E), by striking ‘‘additional payments (consistent with

paragraph (6)(B))’’ and inserting ‘‘additional payments, the determination and

deletion of initial and new categories (consistent with subparagraphs (B) and

(C) of paragraph (6))’’; and

(3) in paragraph (6)(A), by striking ‘‘the cost of the device, drug, or biological’’

and inserting ‘‘the cost of the drug or biological or the average cost of the category of devices’’.

(c) EFFECTIVE DATE.—The amendments made by this section shall become effective on the date of the enactment of this Act.

9

SEC. 204. ACCESS TO NEW TECHNOLOGIES APPLIED TO SCREENING MAMMOGRAPHY TO ENHANCE BREAST CANCER DETECTION.

(a) $15 INITIAL INCREASE IN PAYMENT LIMIT.—Section 1834(c)(3) (42 U.S.C.

1395m(c)(3)) is amended—

(1) in subparagraph (A)—

(A) by striking ‘‘subparagraph (B)’’ and inserting ‘‘subparagraphs (B) and

(D)’’; and

(B) in clause (ii), by inserting ‘‘(taking into account, if applicable, subparagraph (D))’’ after ‘‘for the preceding year’’; and

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

‘‘(D) INCREASE IN PAYMENT LIMIT FOR NEW TECHNOLOGIES.—In the case of

new technologies applied to screening mammography performed beginning

in 2001 and determined by the Secretary to enhance the detection of breast

cancer, the limit applied under this paragraph for 2001 shall be increased

by $15.’’.

(b) CHANGE IN REVISION OF LIMIT.—Subparagraph (B) of such section is

amended—

(1) by striking ‘‘REDUCTION OF’’ and inserting ‘‘REVISIONS TO’’,

(2) by inserting ‘‘or new technologies described in paragraph (1)(D)’’ after

‘‘1992’’, and

(3) by inserting ‘‘increase or’’ before ‘‘reduce’’.

(c) INCLUSION OF NEW TECHNOLOGY.—Section 1861(jj) (42 U.S.C. 1395x(jj)) is

amended by inserting before the period at the end the following: ‘‘, as well as new

technology applied to such a procedure that the Secretary determines enhances the

detection of breast cancer’’.

(d) EFFECTIVE DATE.—The amendments made by this section apply to mammography performed on or after January 1, 2001.

Subtitle B—Provisions Relating to Physicians

Services

SEC. 211. GAO STUDY OF GASTROINTESTINAL ENDOSCOPIC SERVICES FURNISHED IN PHYSICIANS OFFICES AND HOSPITAL OUTPATIENT DEPARTMENT SERVICES.

(a) STUDY.—The Comptroller General of the United States shall conduct a study

on the appropriateness of furnishing gastrointestinal endoscopic physicians services

in physicians offices. In conducting this study, the Comptroller General shall—

(1) review available scientific and clinical evidence about the safety of performing procedures in physicians offices and hospital outpatient departments;

(2) assess whether resource-based practice expense relative values established

by the Secretary of Health and Human Services under the Medicare physician

fee schedule under section 1848 of the Social Security Act (42 U.S.C. 1395w–

4) for gastrointestinal endoscopic services furnished in physicians offices and

hospital outpatient departments create an incentive to furnish such services in

physicians offices instead of hospital outpatient departments; and

(3) assess the implications for access to care for Medicare beneficiaries if

Medicare were not to cover gastrointestinal endoscopic services in physicians offices.

(b) REPORT.—The Comptroller General shall submit a report to Congress on such

study no later than July 1, 2002 and include such recommendations as the Comptroller General determines to be appropriate.

SEC. 212. TREATMENT OF CERTAIN PHYSICIAN PATHOLOGY SERVICES.

(a) IN GENERAL.—When an independent laboratory furnishes the technical component of a physician pathology service to a fee-for-service medicare beneficiary who

is a patient of a grandfathered hospital, the Secretary of Health and Human Services shall treat such component as a service for which payment shall be made to

the laboratory under section 1848 of the Social Security Act (42 U.S.C. 1395w–4)

and not as an inpatient hospital service for which payment is made to the hospital

under section 1886(d) of such Act (42 U.S.C. 1395ww(d)) or as an outpatient hospital

service for which payment is made to the hospital under section 1834(t) of such Act

(42 U.S.C. 1395l(t))..

(b) DEFINITIONS.—For purposes of this section:

(1) GRANDFATHERED HOSPITAL.—The term ‘‘grandfathered hospital’’ means a

hospital that had an arrangement with an independent laboratory that was in

effect as of July 22, 1999, under which a laboratory furnished the technical component of physician pathology services to fee-for-service medicare beneficiaries

who were hospital patients and submitted claims for payment for such component to a medicare carrier (and not to the hospital).

10

(2) FEE-FOR-SERVICE MEDICARE BENEFICIARY.—The term ‘‘fee-for-service medicare beneficiary’’ means an individual who—

(A) is entitled to benefits under part A, or enrolled under part B, of title

XVIII of the Social Security Act (42 U.S.C. 1395c et seq.); and

(B) is not enrolled in (i) a Medicare+Choice plan under part C of such

title (42 U.S.C. 1395w–21 et seq.), (ii) a plan offered by an eligible organization under section 1876 of such Act (42 U.S.C. 1395mm), (iii) a program of

all-inclusive care for the elderly (PACE) under section 1898 of such Act, or

(iv) a social health maintenance organization (SHMO) demonstration

project established under section 4018(b) of the Omnibus Budget Reconciliation Act of 1987 (Public Law 100–203).

(3) MEDICARE CARRIER.—The term ‘‘medicare carrier’’ means an organization

with a contract under section 1842 of such Act (42 U.S.C. 1395u).

(c) EFFECTIVE DATE.—Subsection (a) applies to services furnished during the 2-

year period beginning on January 1, 2001.

(d) GAO REPORT.—

(1) STUDY.—The Comptroller General of the United States shall—

(A) analyze the types of hospitals that are grandfathered under subsection (a); and

(B) study the effects of subsection (a) on hospitals, laboratories, and medicare beneficiaries access to physician pathology services.

(2) REPORT.—The Comptroller General shall submit a report to Congress on

such analysis and study no later than July 1, 2002. The report shall include

recommendations about whether the provisions of subsection (a) should apply

after the 2-year period under subsection (c) for grandfathered hospitals for either (or both) inpatient and outpatient hospital services and whether such subsection should be extended to apply to other hospitals that have similar characteristics to grandfathered hospitals.

SEC. 213. PHYSICIAN GROUP PRACTICE DEMONSTRATION.

Title XVIII is amended by inserting after section 1866 the following new sections:

‘‘DEMONSTRATION OF APPLICATION OF PHYSICIAN VOLUME INCREASES TO GROUP

PRACTICES

‘‘SEC. 1866A. (a) DEMONSTRATION PROGRAM AUTHORIZED.—

‘‘(1) IN GENERAL.—The Secretary shall conduct demonstration projects to test

and, if proven effective, expand the use of incentives to health care groups participating in the program under this title that—

‘‘(A) encourage coordination of the care furnished to individuals under the

programs under parts A and B by institutional and other providers, practitioners, and suppliers of health care items and services;

‘‘(B) encourage investment in administrative structures and processes to

ensure efficient service delivery; and

‘‘(C) reward physicians for improving health outcomes.

‘‘(2) ADMINISTRATION BY CONTRACT.—Except as otherwise specifically provided, the Secretary may administer the program under this section in accordance with section 1866B.

‘‘(3) DEFINITIONS.—For purposes of this section, terms have the following

meanings:

‘‘(A) PHYSICIAN.—Except as the Secretary may otherwise provide, the

term ‘physician’ means any individual who furnishes services which may be

paid for as physicians’ services under this title.

‘‘(B) HEALTH CARE GROUP.—The term ‘health care group’ means a group

of physicians (as defined in subparagraph (A)) organized at least in part for

the purpose of providing physicians’ services under this title. As the Secretary finds appropriate, a health care group may include a hospital and

any other individual or entity furnishing items or services for which payment may be made under this title that is affiliated with the health care

group under an arrangement structured so that such individual or entity

participates in a demonstration under this section and will share in any

bonus earned under subsection (d).

‘‘(b) ELIGIBILITY CRITERIA.—

‘‘(1) IN GENERAL.—The Secretary is authorized to establish criteria for health

care groups eligible to participate in a demonstration under this section, including criteria relating to numbers of health care professionals in, and of patients

served by, the group, scope of services provided, and quality of care.

‘‘(2) PAYMENT METHOD.—A health care group participating in the demonstration under this section shall agree with respect to services furnished to beneVerDate 11-MAY-2000 15:23 Oct 31, 2000 Jkt 089006 PO 00000 Frm 00010 Fmt 6659 Sfmt 6621 E:\HR\OC\HR1019P1.XXX pfrm04 PsN: HR1019P1
11

ficiaries within the scope of the demonstration (as determined under subsection

(c))—

‘‘(A) to be paid on a fee-for-service basis; and

‘‘(B) that payment with respect to all such services furnished by members

of the health care group to such beneficiaries shall (where determined appropriate by the Secretary) be made to a single entity.

‘‘(3) DATA REPORTING.—A health care group participating in a demonstration

under this section shall report to the Secretary such data, at such times and

in such format as the Secretary require, for purposes of monitoring and evaluation of the demonstration under this section.

‘‘(c) PATIENTS WITHIN SCOPE OF DEMONSTRATION.—

‘‘(1) IN GENERAL.—The Secretary shall specify, in accordance with this subsection, the criteria for identifying those patients of a health care group who

shall be considered within the scope of the demonstration under this section for

purposes of application of subsection (d) and for assessment of the effectiveness

of the group in achieving the objectives of this section.

‘‘(2) OTHER CRITERIA.—The Secretary may establish additional criteria for inclusion of beneficiaries within a demonstration under this section, which may

include frequency of contact with physicians in the group or other factors or criteria that the Secretary finds to be appropriate.

‘‘(3) NOTICE REQUIREMENTS.—In the case of each beneficiary determined to be

within the scope of a demonstration under this section with respect to a specific

health care group, the Secretary shall ensure that such beneficiary is notified

of the incentives, and of any waivers of coverage or payment rules, applicable

to such group under such demonstration.

‘‘(d) INCENTIVES.—

‘‘(1) PERFORMANCE TARGET.—The Secretary shall establish for each health

care group participating in a demonstration under this section—

‘‘(A) a base expenditure amount, equal to the average total payments

under parts A and B for patients served by the health care group on a feefor-service basis in a base period determined by the Secretary; and

‘‘(B) an annual per capita expenditure target for patients determined to

be within the scope of the demonstration, reflecting the base expenditure

amount adjusted for risk and expected growth rates.

‘‘(2) INCENTIVE BONUS.—The Secretary shall pay to each participating health

care group (subject to paragraph (4)) a bonus for each year under the demonstration equal to a portion of the Medicare savings realized for such year relative to the performance target.

‘‘(3) ADDITIONAL BONUS FOR PROCESS AND OUTCOME IMPROVEMENTS.—At such

time as the Secretary has established appropriate criteria based on evidence the

Secretary determines to be sufficient, the Secretary shall also pay to a participating health care group (subject to paragraph (4)) an additional bonus for a

year, equal to such portion as the Secretary may designate of the saving to the

program under this title resulting from process improvements made by and patient outcome improvements attributable to activities of the group.

‘‘(4) LIMITATION.—The Secretary shall limit bonus payments under this section as necessary to ensure that the aggregate expenditures under this title (inclusive of bonus payments) with respect to patients within the scope of the demonstration do not exceed the amount which the Secretary estimates would be

expended if the demonstration projects under this section were not implemented.

‘‘PROVISIONS FOR ADMINISTRATION OF DEMONSTRATION PROGRAM

‘‘SEC. 1866B. (a) GENERAL ADMINISTRATIVE AUTHORITY.—

‘‘(1) BENEFICIARY ELIGIBILITY.—Except as otherwise provided by the Secretary, an individual shall only be eligible to receive benefits under the program

under section 1866A (in this section referred to as the ‘demonstration program’)

if such individual—

‘‘(A) is enrolled in under the program under part B and entitled to benefits under part A; and

‘‘(B) is not enrolled in a Medicare+Choice plan under part C, an eligible

organization under a contract under section 1876 (or a similar organization

operating under a demonstration project authority), an organization with

an agreement under section 1833(a)(1)(A), or a PACE program under section 1894.

‘‘(2) SECRETARY’S DISCRETION AS TO SCOPE OF PROGRAM.—The Secretary may

limit the implementation of the demonstration program to—

12

‘‘(A) a geographic area (or areas) that the Secretary designates for purposes of the program, based upon such criteria as the Secretary finds appropriate;

‘‘(B) a subgroup (or subgroups) of beneficiaries or individuals and entities

furnishing items or services (otherwise eligible to participate in the program), selected on the basis of the number of such participants that the

Secretary finds consistent with the effective and efficient implementation of

the program;

‘‘(C) an element (or elements) of the program that the Secretary determines to be suitable for implementation; or

‘‘(D) any combination of any of the limits described in subparagraphs (A)

through (C).

‘‘(3) VOLUNTARY RECEIPT OF ITEMS AND SERVICES.—Items and services shall be

furnished to an individual under the demonstration program only at the individual’s election.

‘‘(4) AGREEMENTS.—The Secretary is authorized to enter into agreements with

individuals and entities to furnish health care items and services to beneficiaries under the demonstration program.

‘‘(5) PROGRAM STANDARDS AND CRITERIA.—The Secretary shall establish performance standards for the demonstration program including, as applicable,

standards for quality of health care items and services, cost-effectiveness, beneficiary satisfaction, and such other factors as the Secretary finds appropriate.

The eligibility of individuals or entities for the initial award, continuation, and

renewal of agreements to provide health care items and services under the program shall be conditioned, at a minimum, on performance that meets or exceeds

such standards.

‘‘(6) ADMINISTRATIVE REVIEW OF DECISIONS AFFECTING INDIVIDUALS AND ENTITIES FURNISHING SERVICES.—An individual or entity furnishing services under

the demonstration program shall be entitled to a review by the program administrator (or, if the Secretary has not contracted with a program administrator,

by the Secretary) of a decision not to enter into, or to terminate, or not to

renew, an agreement with the entity to provide health care items or services

under the program.

‘‘(7) SECRETARY’S REVIEW OF MARKETING MATERIALS.—An agreement with an

individual or entity furnishing services under the demonstration program shall

require the individual or entity to guarantee that it will not distribute materials

marketing items or services under the program without the Secretary’s prior review and approval;

‘‘(8) PAYMENT IN FULL.—

‘‘(A) IN GENERAL.—Except as provided in subparagraph (B), an individual

or entity receiving payment from the Secretary under a contract or agreement under the demonstration program shall agree to accept such payment

as payment in full, and such payment shall be in lieu of any payments to

which the individual or entity would otherwise be entitled under this title.

‘‘(B) COLLECTION OF DEDUCTIBLES AND COINSURANCE.—Such individual or

entity may collect any applicable deductible or coinsurance amount from a

beneficiary.

‘‘(b) CONTRACTS FOR PROGRAM ADMINISTRATION.—

‘‘(1) IN GENERAL.—The Secretary may administer the demonstration program

through a contract with a program administrator in accordance with the provisions of this subsection.

‘‘(2) SCOPE OF PROGRAM ADMINISTRATOR CONTRACTS.—The Secretary may

enter into such contracts for a limited geographic area, or on a regional or national basis.

‘‘(3) ELIGIBLE CONTRACTORS.—The Secretary may contract for the administration of the program with—

‘‘(A) an entity that, under a contract under section 1816 or 1842, determines the amount of and makes payments for health care items and services furnished under this title; or

‘‘(B) any other entity with substantial experience in managing the type

of program concerned.

‘‘(4) CONTRACT AWARD, DURATION, AND RENEWAL.—

‘‘(A) IN GENERAL.—A contract under this subsection shall be for an initial

term of up to three years, renewable for additional terms of up to three

years.

‘‘(B) NONCOMPETITIVE AWARD AND RENEWAL FOR ENTITIES ADMINISTERING

PART A OR PART B PAYMENTS.—The Secretary may enter or renew a contract

under this subsection with an entity described in paragraph (3)(A) without

regard to the requirements of section 5 of title 41, United States Code.

13

‘‘(5) APPLICABILITY OF FEDERAL ACQUISITION REGULATION.—The Federal Acquisition Regulation shall apply to program administration contracts under this

subsection.

‘‘(6) PERFORMANCE STANDARDS.—The Secretary shall establish performance

standards for the program administrator including, as applicable, standards for

the quality and cost-effectiveness of the program administered, and such other

factors as the Secretary finds appropriate. The eligibility of entities for the initial award, continuation, and renewal of program administration contracts shall

be conditioned, at a minimum, on performance that meets or exceeds such

standards.

‘‘(7) FUNCTIONS OF PROGRAM ADMINISTRATOR.—A program administrator shall

perform any or all of the following functions, as specified by the Secretary:

‘‘(A) AGREEMENTS WITH ENTITIES FURNISHING HEALTH CARE ITEMS AND

SERVICES.—Determine the qualifications of entities seeking to enter or

renew agreements to provide services under the program, and as appropriate enter or renew (or refuse to enter or renew) such agreements on behalf of the Secretary.

‘‘(B) ESTABLISHMENT OF PAYMENT RATES.—Negotiate or otherwise establish, subject to the Secretary’s approval, payment rates for covered health

care items and services.

‘‘(C) PAYMENT OF CLAIMS OR FEES.—Administer payments for health care

items or services furnished under the program.

‘‘(D) PAYMENT OF BONUSES.—Using such guidelines as the Secretary shall

establish, and subject to the approval of the Secretary, make bonus payments as described in subsection (c)(2)(A)(ii) to entities furnishing items or

services for which payment may be made under the program.

‘‘(E) OVERSIGHT.—Monitor the compliance of individuals and entities with

agreements under the program with the conditions of participation.

‘‘(F) ADMINISTRATIVE REVIEW.—Conduct reviews of adverse determinations specified in subsection (a)(6).

‘‘(G) REVIEW OF MARKETING MATERIALS.—Conduct a review of marketing

materials proposed by an entity furnishing services under the program.

‘‘(H) ADDITIONAL FUNCTIONS.—Perform such other functions as the Secretary may specify.

‘‘(8) LIMITATION OF LIABILITY.—The provisions of section 1157(b) shall apply

with respect to activities of contractors and their officers, employees, and agents

under a contract under this subsection.

‘‘(9) INFORMATION SHARING.—Notwithstanding section 1106 and section 552a

of title 5, United States Code, the Secretary is authorized to disclose to an entity with a program administration contract under this subsection such information (including medical information) on individuals receiving health care items

and services under the program as the entity may require to carry out its responsibilities under the contract.

‘‘(c) RULES APPLICABLE TO BOTH PROGRAM AGREEMENTS AND PROGRAM ADMINISTRATION CONTRACTS.—

‘‘(1) RECORDS, REPORTS, AND AUDITS.—The Secretary is authorized to require

entities with agreements to provide health care items or services under the

demonstration program, and entities with program administration contracts

under subsection (b), to maintain adequate records, to afford the Secretary access to such records (including for audit purposes), and to furnish such reports

and other materials (including audited financial statements and performance

data) as the Secretary may require for purposes of implementation, oversight,

and evaluation of the program and of individuals’ and entities’ effectiveness in

performance of such agreements or contracts.

‘‘(2) BONUSES.—Notwithstanding any other provision of law, but subject to

subparagraph (B)(ii), the Secretary may make bonus payments under the program from the Federal Health Insurance Trust Fund and the Federal Supplementary Medical Insurance Trust Fund in amounts that do not exceed the

amounts authorized under the program in accordance with the following:

‘‘(A) PAYMENTS TO PROGRAM ADMINISTRATORS.—The Secretary may make

bonus payments under the program to program administrators.

‘‘(B) PAYMENTS TO ENTITIES FURNISHING SERVICES.—

‘‘(i) IN GENERAL.—Subject to clause (ii), the Secretary may make

bonus payments to individuals or entities furnishing items or services

for which payment may be made under the program, or may authorize

the program administrator to make such bonus payments in accordance

with such guidelines as the Secretary shall establish and subject to the

Secretary’s approval.

14

‘‘(ii) LIMITATIONS.—The Secretary may condition such payments on

the achievement of such standards related to efficiency, improvement

in processes or outcomes of care, or such other factors as the Secretary

determines to be appropriate.

‘‘(3) ANTIDISCRIMINATION LIMITATION.—The Secretary shall not enter into an

agreement with an entity to provide health care items or services under the program, or with an entity to administer the program, unless such entity guarantees that it will not deny, limit, or condition the coverage or provision of benefits under the program, for individuals eligible to be enrolled under such program, based on any health status-related factor described in section 2702(a)(1)

of the Public Health Service Act.

‘‘(d) LIMITATIONS ON JUDICIAL REVIEW.—The following actions and determinations

with respect to the demonstration program shall not be subject to review by a judicial or administrative tribunal:

‘‘(1) Limiting the implementation of the program under subsection (a)(2).

‘‘(2) Establishment of program participation standards under subsection (a)(5)

or the denial or termination of, or refusal to renew, an agreement with an entity

to provide health care items and services under the program.

‘‘(3) Establishment of program administration contract performance standards

under subsection (b)(6), the refusal to renew a program administration contract,

or the noncompetitive award or renewal of a program administration contract

under subsection (b)(4)(B).

‘‘(5) Establishment of payment rates, through negotiation or otherwise, under

a program agreement or a program administration contract.

‘‘(6) A determination with respect to the program (where specifically authorized by the program authority or by subsection (c)(2))—

‘‘(A) as to whether cost savings have been achieved, and the amount of

savings; or

‘‘(B) as to whether, to whom, and in what amounts bonuses will be paid.

‘‘(e) APPLICATION LIMITED TO PARTS A AND B.—None of the provisions of this section or of the demonstration program shall apply to the programs under part C.

‘‘(f) REPORTS TO CONGRESS.—Not later than two years after the date of enactment

of this section, and biennially thereafter for six years, the Secretary shall report to

the Congress on the use of authorities under the demonstration program. Each report shall address the impact of the use of those authorities on expenditures, access,

and quality under the programs under this title.’’.

SEC. 214. DESIGNATION OF SEPARATE CATEGORY FOR INTERVENTIONAL PAIN MANAGEMENT

PHYSICIANS.

With respect to services furnished on or after January 1, 2002, the Secretary of

Health and Human Services shall provide for the designation under section

1848(c)(3)(A) of the Social Security Act (42 U.S.C. 1395w–4(c)(3)(A)) of interventional pain management physicians as a separate category of physician specialists.

SEC. 215. EVALUATION OF ENROLLMENT PROCEDURES FOR MEDICAL GROUPS THAT RETAIN

INDEPENDENT CONTRACTOR PHYSICIANS.

(a) IN GENERAL.—The Secretary of Health and Human Services shall conduct an

evaluation of the current medicare enrollment process for medical groups that retain

independent contractor physicians with particular emphasis on hospital-based physicians, such as emergency department staffing groups. In conducting the evaluation, the Secretary shall—

(1) review the increase of individual medicare provider numbers issued and

the possible medicare program integrity vulnerabilities of the current process;

(2) assess how program integrity could be enhanced by the enrollment of

groups that retain independent contractor hospital-based physicians; and

(3) develop suggested procedures for the enrollment of these groups.

(b) REPORT.—Not later than 1 year after the date of the enactment of this Act,

the Secretary shall submit to Congress a report on the evaluation conducted under

subsection (a).

Subtitle C—Other Services

SEC. 221. 3-YEAR MORATORIUM ON SNF PART B CONSOLIDATED BILLING REQUIREMENTS.

(a) MORATORIUM IN APPLICATION OF CONSOLIDATED BILLING TO SNF RESIDENTS

IN NON-COVERED STAYS.—Section 1842(b)(6)(E) (42 U.S.C. 1395u(b)(6)(E)) is amended by inserting ‘‘(on or after October 1, 2003)’’ after ‘‘furnished to an individual’’.

(b) MORATORIUM IN PROVIDER AGREEMENT PROVISION.—Section 1866(a)(1)(H)(ii)(I)

(42 U.S.C. 1395cc(a)(1)(H)(ii)(I) is amended by inserting ‘‘in the case of a resident

15

who is in a stay covered under part A, and for services furnished on or after October

1, 2003, in the case of a resident who is not in a stay covered under such part’’ before the comma.

(c) MORATORIUM IN REQUIREMENT FOR SNF BILLING OF PART B SERVICES.—Section 1862(a)(18) (42 U.S.C. 1395y(a)(18)) is amended to read as follows:

‘‘(18) which are covered skilled nursing facility services described in section

1888(e)(2)(A)(i) and which are furnished to an individual who is a resident—

‘‘(A) of a skilled nursing facility in the case of a resident who is in a stay

covered under part A; or

‘‘(B) of a skilled nursing facility or of a part of a facility that includes a

skilled nursing facility (as determined under regulations) for services furnished on or after October 1, 2003, in the case of a resident who is not in

a stay covered under such part,

by an entity other than the skilled nursing facility, unless the services are furnished under arrangements (as defined in section 1861(w)(1)) with the entity

made by the skilled nursing facility;’’.

(d) EFFECTIVE DATE.—The amendments made by subsections (a), (b) and (c) are

effective as if included in the enactment of BBA.

(e) REPORT.—Not later than October 1, 2002, the Comptroller General of the

United States shall submit to Congress a report that includes an analysis and recommendations on—

(1) alternatives, if any, to consolidated billing for part B items and services

described in section 1842(b)(6) of the Social Security Act (42 U.S.C. 1395u(b)(6))

to ensure accountability by skilled nursing facilities and accuracy in claims submitted for all services and items provided to skilled nursing facility residents

under part B of the medicare program;

(2) the costs expected to be incurred by skilled nursing facilities under such

alternative approaches, compared with the costs associated with the implementation of consolidated billing; and

(3) the costs incurred by the medicare program in implementing such alternative approaches and their effect on utilization review, compared with the

costs and effect on utilization review expected with consolidated billing.

SEC. 222. AMBULATORY SURGICAL CENTERS.

(a) DELAY IN IMPLEMENTATION OF PROSPECTIVE PAYMENT SYSTEM.—The Secretary

of Health and Human Services may not implement a revised prospective payment

system for services of ambulatory surgical facilities under section 1833(i) of the Social Security Act (42 U.S.C. 1395l(i)) before January 1, 2002.

(b) EXTENDING PHASE-IN TO 4 YEARS.—Section 226 of the BBRA is amended by

striking paragraphs (1) and (2) and inserting the following:

‘‘(1) in the first year of its implementation, only a proportion (specified by the

Secretary and not to exceed 1⁄4) of the payment for such services shall be made

in accordance with such system and the remainder shall be made in accordance

with current regulations; and

‘‘(2) in each of the following 2 years a proportion (specified by the Secretary

and not to exceed 1⁄2, and 3⁄4, respectively) of the payment for such services shall

be made under such system and the remainder shall be made in accordance

with current regulations.’’.

(c) DEADLINE FOR USE OF 1999 OR LATER COST SURVEYS.—Section 226 of BBRA

is amended by adding at the end the following:

‘‘By not later than January 1, 2003, the Secretary shall incorporate data from a

1999 Medicare cost survey or a subsequent cost survey for purposes of implementing

or revising such system.’’.

SEC. 223. 1-YEAR EXTENSION OF MORATORIUM ON THERAPY CAPS.

(a) IN GENERAL.—Section 1833(g)(4) (42 U.S.C. 1395l(g)), as added by section

221(a) of BBRA, is amended by striking ‘‘and 2001’’ and inserting ‘‘, 2001, and

2002’’.

(b) CONFORMING AMENDMENT TO CONTINUE FOCUSED MEDICAL REVIEWS OF

CLAIMS DURING MORATORIUM PERIOD.—Section 221(a)(2) of BBRA is amended by

striking ‘‘(under the amendment made by paragraph (1)(B))’’.

SEC. 224. REVISION OF MEDICARE REIMBURSEMENT FOR TELEHEALTH SERVICES.

The text of section 4206 of the Balanced Budget Act of 1997 (42 U.S.C. 1395l note)

is amended to read as follows:

‘‘(a) TELEHEALTH SERVICES REIMBURSED.—

‘‘(1) IN GENERAL.—Not later than April 1, 2001, the Secretary of Health and

Human Services shall make payments from the Federal Supplementary Medical

Insurance Trust Fund in accordance with the methodology described in subsection (b) for services for which payment may be made under part B of title

16

XVIII of the Social Security Act (42 U.S.C. 1395j et seq.) that are furnished via

a telecommunications system by a physician or practitioner to an eligible telehealth beneficiary.

‘‘(2) USE OF STORE-AND-FORWARD TECHNOLOGIES.—For purposes of paragraph

(1), in the case of any Federal telemedicine demonstration program in Alaska

or Hawaii, the term ‘telecommunications system’ includes store-and-forward

technologies that provide for the asynchronous transmission of health care information in single or multimedia formats.

‘‘(b) METHODOLOGY FOR DETERMINING AMOUNT OF PAYMENTS.— ‘‘(1) IN GENERAL.—The Secretary shall make payment under this section as

follows:

‘‘(A) Subject to subparagraph (B), with respect to a physician or practitioner located at a distant site that furnishes a service to an eligible medicare beneficiary under subsection (a), an amount equal to the amount that

such physician or practitioner would have been paid had the service been

furnished without the use of a telecommunications system.

‘‘(B) With respect to an originating site, a facility fee equal to— ‘‘(i) for 2001 (beginning with April 1, 2001) and 2002, $20; and

‘‘(ii) for a subsequent year, the facility fee under this subsection for

the previous year increased by the percentage increase in the MEI (as

defined in section 1842(i)(3)) for such subsequent year.

‘‘(2) APPLICATION OF PART B COINSURANCE AND DEDUCTIBLE.—Any payment

made under this section shall be subject to the coinsurance and deductible requirements under subsections (a)(1) and (b) of section 1833 of the Social Security Act (42 U.S.C. 1395l).

‘‘(3) APPLICATION OF NONPARTICIPATING PHYSICIAN PAYMENT DIFFERENTIAL

AND BALANCE BILLING LIMITS.—The payment differential of section 1848(a)(3) of

such Act (42 U.S.C. 1395w–4(a)(3)) shall apply to services furnished by non-participating physicians. The provisions of section 1848(g) of such Act (42 U.S.C.

1395w–4(g)) and section 1842(b)(18) of such Act (42 U.S.C. 1395u(b)(18)) shall

apply. Payment for such service shall be increased annually by the update factor for physicians’ services determined under section 1848(d) of such Act (42

U.S.C. 1395w–4(d)).

‘‘(c) TELEPRESENTER NOT REQUIRED.—Nothing in this section shall be construed

as requiring an eligible telehealth beneficiary to be presented by a physician or

practitioner at the originating site for the furnishing of a service via a telecommunications system, unless it is medically necessary as determined by the physician or

practitioner at the distant site.

‘‘(d) COVERAGE OF ADDITIONAL SERVICES.—

‘‘(1) STUDY AND REPORT ON ADDITIONAL SERVICES.—

‘‘(A) STUDY.—The Secretary of Health and Human Services shall conduct

a study to identify services in addition to those described in subsection

(a)(1) that are appropriate for payment under this section.

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

Act, the Secretary shall submit to Congress a report on the study conducted

under subparagraph (A) together with such recommendations for legislation

that the Secretary determines are appropriate.

‘‘(2) IN GENERAL.—The Secretary shall provide for payment under this section

for services identified in paragraph (1).

‘‘(e) CONSTRUCTION RELATING TO HOME HEALTH SERVICES.—

‘‘(1) IN GENERAL.—Nothing in this section or in section 1895 of the Social Security Act (42 U.S.C. 1395fff) shall be construed as preventing a home health

agency furnishing a home health unit of service for which payment is made

under the prospective payment system established in such section from furnishing the service via a telecommunications system.

‘‘(2) LIMITATION.—The Secretary shall not consider a home health service provided in the manner described in paragraph (1) to be a home health visit for

purposes of—

‘‘(A) determining the amount of payment to be made under such prospective payment system; or

‘‘(B) any requirement relating to the certification of a physician required

under section 1814(a)(2)(C) or section 1835(a)(2)(A) of such Act (42 U.S.C.

1395f(a)(2)(C), 1395n(a)(2)(A)).

‘‘(3) CONSTRUCTION.—Nothing in this section shall be construed as waiving

the requirement for a physician certification under section 1814(a)(2)(C) or section 1835(a)(2)(A) of such Act (42 U.S.C. 1395f(a)(2)(C), 1395n(a)(2)(A)) for the

payment for home health services, whether or not furnished via a telecommunications system.

‘‘(f) COVERAGE OF ITEMS AND SERVICES.—

17

‘‘(1) IN GENERAL.—Subject to paragraph (2), payment for items and services

provided pursuant to subsection (a) shall include payment for professional consultations, office visits, office psychiatry services, including any service identified as of July 1, 2000, by HCPCS codes 99241–99275, 99201–99215, 90804–

90809, and 90862, and any additional item or service specified by the Secretary.

‘‘(2) YEARLY UPDATE.—The Secretary shall provide a process that provides, on

at least an annual basis, for the review and revision of services (and HCPCS

codes) to those specified in paragraph (1) for authorized payment under subsection (a).

‘‘(g) DEFINITIONS.—In this section:

‘‘(1) ELIGIBLE TELEHEALTH BENEFICIARY.—The term ‘eligible telehealth beneficiary’ means an individual enrolled under part B of title XVIII of the Social

Security Act (42 U.S.C. 1395j et seq.) that receives a service originating—

‘‘(A) in an area that is designated as a health professional shortage area

under section 332(a)(1)(A) of the Public Health Service Act (42 U.S.C.

254e(a)(1)(A));

‘‘(B) in a county that is not included in a Metropolitan Statistical Area;

‘‘(C) effective January 1, 2002, in an inner-city area that is medically underserved (as defined in section 330(b)(3) of the Public Health Service Act

(42 U.S.C. 254b(b)(3))); or

‘‘(D) in a service which originated in a facility which participates in a

Federal telemedicine demonstration project.

‘‘(2) PHYSICIAN.—The term ‘physician’ has the meaning given that term in section 1861(r) of the Social Security Act (42 U.S.C. 1395x(r))

‘‘(3) PRACTITIONER.—The term ‘practitioner’ means a practitioner described in

section 1842(b)(18)(C) of the Social Security Act (42 U.S.C. 1395u(b)(18)(C)).

‘‘(4) DISTANT SITE.—The term ‘distant site’ means the site at which the physician or practitioner is located at the time the service is provided via a telecommunications system.

‘‘(5) ORIGINATING SITE.—

‘‘(A) IN GENERAL.—The term ‘originating site’ means any site described in

subparagraph (B) at which the eligible telehealth beneficiary is located at

the time the service is furnished via a telecommunications system.

‘‘(B) SITES DESCRIBED.—The sites described in this subparagraph are as

follows:

‘‘(i) On or after April 1, 2001—

‘‘(I) the office of a physician or a practitioner,

‘‘(II) a critical access hospital (as defined in section 1861(mm)(1)

of the Social Security Act (42 U.S.C. 1395x(mm)(1))),

‘‘(III) a rural health clinic (as defined in section 1861(aa)(2) of

such Act (42 U.S.C. 1395x(aa)(2))), and

‘‘(IV) a Federally qualified health center (as defined in section

1861(aa)(4) of such Act (42 U.S.C. 1395x(aa)(4))).

‘‘(ii) On or after January 1, 2002—

‘‘(I) a hospital (as defined in section 1861(e) of such Act (42

U.S.C. 1395x(e))),

‘‘(II) a skilled nursing facility (as defined in section 1861(j) of

such Act (42 U.S.C. 1395x(j))),

‘‘(III) a comprehensive outpatient rehabilitation facility (as defined in section 1861(cc)(2) of such Act (42 U.S.C. 1395x(cc)(2))),

‘‘(IV) a renal dialysis facility (described in section 1881(b)(1) of

such Act (42 U.S.C. 1395rr(b)(1))),

‘‘(V) an ambulatory surgical center (described in section

1833(i)(1)(A) of such Act (42 U.S.C. 1395l(i)(1)(A))),

‘‘(VI) a hospital or skilled nursing facility of the Indian Health

Service (under section 1880 of such Act (42 U.S.C. 1395qq)), and

‘‘(VII) a community mental health center (as defined in section

1861(ff)(3)(B) of such Act (42 U.S.C. 1395x(ff)(3)(B))).

‘‘(6) FEDERAL SUPPLEMENTARY MEDICAL INSURANCE TRUST FUND.—The term

‘Federal Supplementary Medical Insurance Trust Fund’ means the trust fund

established under section 1841 of the Social Security Act (42 U.S.C. 1395t).’’.

SEC. 225. PAYMENT FOR AMBULANCE SERVICES.

(a) ELIMINATING BBA REDUCTION.—Section 1834(l)(3) (42 U.S.C. 1395m(l)(3)) is

amended, in subparagraphs (A) and (B), by striking ‘‘reduced in the case of 2001

and 2002 by 1.0 percentage points’’ both places it appears.

(b) MILEAGE PAYMENTS.—Section 1834(l)(2)(E) (42 U.S.C. 1395m(l)(2)(E)) is

amended by inserting before the period at the end the following: ‘‘, except that such

phase-in shall provide for full payment of any national mileage rate beginning with

18

the effective date of the fee schedule for ambulance services provided by suppliers

in any State where payment for such services did not include a separate amount

for all mileage prior to the implementation of the fee schedule’’.

(c) GAO STUDY ON COSTS OF AMBULANCE SERVICES.—

(1) STUDY.—The Comptroller General of the United States shall conduct a

study of the costs of providing ambulance services covered under the medicare

program under title XVIII of the Social Security Act across the range of service

levels for which such services are provided.

(2) REPORT.—Not later than 18 months after the date of the enactment of this

Act, the Comptroller General shall submit a report to the Secretary of Health

and Human Services and Congress on the study conducted under paragraph (1).

Such report shall include recommendations for any changes in methodology or

payment levels necessary to fairly compensate suppliers of ambulance services

and to ensure the access of medicare beneficiaries to such services under the

medicare program.

SEC. 226. CONTRAST ENHANCED DIAGNOSTIC PROCEDURES UNDER HOSPITAL PROSPECTIVE

PAYMENT SYSTEM.

(a) SEPARATE CLASSIFICATION.—Section 1833(t)(2) (42 U.S.C. 1395l(t)(2)) is

amended—

(1) by striking ‘‘and’’ at the end of subparagraph (E);

(2) by striking the period at the end of subparagraph (F) and inserting ‘‘;

and’’; and

(3) by inserting after subparagraph (F) the following new subparagraph:

‘‘(G) the Secretary shall create additional groups of covered OPD services

that classify separately those procedures that utilize contrast media from

those that do not.’’.

(b) CONFORMING AMENDMENT.—Section 1861(t)(1) (42 U.S.C. 1395x(t)(1)) is

amended by inserting ‘‘(including contrast agents)’’ after ‘‘only such drugs’’.

(c) EFFECTIVE DATE.—The amendments made by this section shall be effective as

if included in the enactment of BBA.

SEC. 227. 10-YEAR PHASED IN INCREASE FROM 55 PERCENT TO 80 PERCENT IN THE PROPORTION OF HOSPITAL BAD DEBT RECOGNIZED.

Section 1861(v)(1)(T) (42 U.S.C. 1395x(v)(1)(T)) is amended—

(1) by striking ‘‘and’’ at the end of clause (ii);

(2) in clause (iii) by striking ‘‘a subsequent fiscal year’’ and inserting ‘‘fiscal

year 2000’’ and by striking the period at the end and inserting a semicolon; and

(3) by adding at the end the following new clauses:

‘‘(iv) for cost reporting periods beginning during fiscal year 2001 and each

subsequent fiscal year (before fiscal year 2011), by the percent specified in

clause (iii) or this clause for the preceding fiscal year reduced by 2.5 percentage

points, of such amount otherwise allowable; and

‘‘(v) for cost reporting periods beginning during fiscal year 2011 or a subsequent fiscal year, by 20 percent of such amount otherwise allowable.’’.

SEC. 228. STATE ACCREDITATION OF DIABETES SELF-MANAGEMENT TRAINING PROGRAMS.

Section 1861(qq)(2) (42 U.S.C. 1395x(qq)(2)) is amended—

(1) in the matter preceding subparagraph (A) by striking ‘‘paragraph (1)—’’

and inserting ‘‘paragraph (1):’’;

(2) in subparagraph (A)—

(A) by striking ‘‘a ‘certified provider’ ’’ and inserting ‘‘A ‘certified provider’ ’’; and

(B) by striking ‘‘; and’’ and inserting a period; and

(3) in subparagraph (B)—

(A) by striking ‘‘a physician, or such other individual’’ and inserting ‘‘(i)

A physician, or such other individual’’;

(B) by inserting ‘‘(I)’’ before ‘‘meets applicable standards’’;

(C) by inserting ‘‘(II)’’ before ‘‘is recognized’’;

(D) by inserting ‘‘, or by a program described in clause (ii),’’ after ‘‘recognized by an organization that represents individuals (including individuals

under this title) with diabetes’’; and

(E) by adding at the end the following:

‘‘(ii) Notwithstanding any reference to ‘a national accreditation body’ in section 1865(b), for purposes of clause (i), a program described in this clause is a

program operated by a State for the purposes of accrediting diabetes self-management training programs, if the Secretary determines that such State program has established quality standards that meet or exceed the standards established by the Secretary under clause (i) or the standards originally estabVerDate 11-MAY-2000 15:23 Oct 31, 2000 Jkt 089006 PO 00000 Frm 00018 Fmt 6659 Sfmt 6621 E:\HR\OC\HR1019P1.XXX pfrm04 PsN: HR1019P1
19

lished by the National Diabetes Advisory Board and subsequently revised as described in clause (i).’’.

SEC. 229. UPDATE IN RENAL DIALYSIS COMPOSITE RATE.

(a) IN GENERAL.—The last sentence of section 1881(b)(7) (42 U.S.C. 1395rr(b)(7))

is amended by striking ‘‘2001, by 1.2 percent’’ and inserting ‘‘2001, by 2.4 percent’’.

(b) REPORT ON LITERATURE REVIEW.—The Secretary of Health and Human Services shall conduct a literature review of studies on the impact of oral self-administered prescription non-calcium phosphate binding drugs in reducing the incidence

of hospitalization under the medicare program for medicare beneficiaries with end

stage renal disease. Not later than 6 months after the date of the enactment of this

Act, the Secretary shall transmit to the Committees on Commerce and Ways and

Means of the House of Representatives and the Committee on Finance of the Senate

a summary of the literature review conducted under this subsection.

TITLE III—MEDICARE PART A AND B

PROVISIONS

SEC. 301. HOME HEALTH SERVICES.

(a) 1-YEAR DELAY IN 15 PERCENT REDUCTION IN PAYMENT RATES UNDER THE

MEDICARE PROSPECTIVE PAYMENT SYSTEM FOR HOME HEALTH SERVICES.—Section

1895(b)(3)(A)(i) (42 U.S.C. 1395fff(b)(3)(A)(i)) is amended—

(1) by redesignating subparagraph (II) as subparagraph (III);

(2) in subparagraph (III), as redesignated, by striking ‘‘described in subclause

(I)’’ and inserting ‘‘described in subclause (II)’’; and

(3) by inserting after subclause (I) the following new subclause:

‘‘(II) For the 12-month period beginning after the period described in subclause (I), such amount (or amounts) shall be equal

to the amount (or amounts) determined under subclause (I), updated under subparagraph (B).’’.

(b) TREATMENT OF BRANCH OFFICES.—

(1) IN GENERAL.—Notwithstanding any other provision of law, in determining

for purposes of title XVIII of the Social Security Act whether an office of a home

health agency constitutes a branch office or a separate home health agency, neither the time nor distance between a parent office of the home health agency

and a branch office shall be the sole determinant of a home health agency’s

branch office status.

(2) CONSIDERATION OF FORMS OF TECHNOLOGY IN DEFINITION OF SUPERVISION.—The Secretary of Health and Human Services shall include forms of

technology in determining what constitutes ‘‘supervision’’ for purposes of determining a home heath agency’s branch office status under paragraph (1).

(c) CLARIFICATION OF THE DEFINITION OF HOMEBOUND.—

(1) IN GENERAL.—The last sentence of sections 1814(a) and 1835(a) (42 U.S.C.

1395f(a); 1395n(a)) are each amended by striking the period and inserting ‘‘, including participating in an adult day care program licensed or certified by a

State, or accredited, to furnish adult day care services in the State for the purposes of therapeutic treatment for Alzheimer’s disease or a related dementia.’’.

(2) EFFECTIVE DATE.—The amendments made by paragraph (1) apply to items

and services provided on or after October 1, 2001.

(d) 1-YEAR DELAY IN REPORT.—Section 302(c) of the BBRA is amended by striking

‘‘six months’’ and inserting ‘‘18 months’’.

SEC. 302. ADVISORY OPINIONS.

(a) MAKING PERMANENT EXISTING ADVISORY OPINION AUTHORITY.—Section

1128D(b)(6) (42 U.S.C. 1320a–7d(b)(6)) is amended by striking ‘‘and before the date

which is 4 years after such date of enactment’’.

(b) NONDISCLOSURE OF REQUESTS AND SUPPORTING MATERIALS.—

(1) IN GENERAL.—Section 1128D(b) (42 U.S.C. 1320a–7d(b)) is amended by

adding at the end the following new paragraph:

‘‘(7) NONDISCLOSURE OF REQUESTS AND SUPPORTING MATERIALS.—A request for

an advisory opinion under this subsection and any supporting written materials

submitted by the party requesting the opinion shall not be subject to disclosure

under section 552 of title 5, United States Code.’’.

(2) EFFECTIVE DATE.—The amendment made by paragraph (1) applies to requests made before, on, or after the date of the enactment of this Act.

20

SEC. 303. HOSPITAL GEOGRAPHIC RECLASSIFICATION FOR LABOR –––COSTS FOR OTHER PPS

SYSTEMS.

(a) HOSPITAL GEOGRAPHIC RECLASSIFICATION FOR LABOR COSTS APPLICABLE TO

OTHER PPS SYSTEMS.—

(1) IN GENERAL.—Notwithstanding the geographic adjustment factor otherwise established under title XVIII of the Social Security Act for items and services paid under a prospective payment system described in paragraph (2), in the

case of a hospital with an application that has been approved by the Medicare

Geographic Classification Review Board under section 1886(d)(10)(C) of such

Act (42 U.S.C. 1395ww(d)(10)(C)) to change the hospital’s geographic classification for a fiscal year for purposes of the factor used to adjust the prospective

payment rate for area differences in hospital wage levels that applies to such

hospital under section 1886(d)(3)(E) of such Act, the Secretary shall substitute

such change in the hospital’s geographic adjustment that would otherwise be

applied to an entity or department of the hospital that is provider based to account for variations in costs which are attributable to wages and wage-related

costs for items and services paid under the prospective payment systems described in paragraph (2).

(2) PROSPECTIVE PAYMENT SYSTEMS COVERED.—For –purposes of this section,

items and services furnished under the following prospective payment systems

are covered:

(A) SNF PROSPECTIVE PAYMENT SYSTEM.—The prospective payment system for covered skilled nursing facility services under section 1888(e) of the

Social Security Act (42 U.S.C. 1395yy(e)).

(B) HOME HEALTH SERVICES PROSPECTIVE PAYMENT SYSTEM.—The prospective payment system for home health services under section 1895(b) of such

Act (42 U.S.C. 1395fff(b)).

(C) INPATIENT REHABILITATION HOSPITAL SERVICES.—The prospective payment system for inpatient rehabilitation services under section 1888(j) of

such Act (42 U.S.C. 1395ww(j)).

(D) INPATIENT LONG-TERM CARE HOSPITAL SERVICES.—The prospective

payment system for inpatient hospital services of long-term care hospitals

under section 123 of the BBRA.

(E) INPATIENT PSYCHIATRIC HOSPITAL SERVICES.—The prospective payment system for inpatient hospital services of psychiatric hospitals and

units under section 124 of the BBRA.

(b) EFFECTIVE DATE.—Subsection (a) applies to fiscal years beginning with fiscal

year 2002.

SEC. 304. RECLASSIFICATION OF A METROPOLITAN STATISTICAL AREA FOR PURPOSES OF

REIMBURSEMENT UNDER THE MEDICARE PROGRAM.

Notwithstanding any other provision of law, effective for discharges occurring and

services furnished during fiscal year 2001 and subsequent fiscal years, for purposes

of making payments under title XVIII of the Social Security Act (42 U.S.C. 1395

et seq.) to hospitals in the Mansfield, Ohio Metropolitan Statistical Area, such Metropolitan Statistical Area is deemed to be located in the Cleveland-Loraine-Elyria,

Ohio Metropolitan Statistical Area. The reclassification made under the previous

sentence shall be treated as a decision of the Medicare Geographic Classification Review Board under section 1886(d)(10) of such Act (42 U.S.C. 1395ww(d)(10)).

SEC. 305. MAKING THE MEDICARE DEPENDENT, SMALL RURAL HOSPITAL PROGRAM PERMANENT.

(a) PAYMENT METHODOLOGY.—Section 1886(d)(5)(G) Act (42 U.S.C.

1395ww(d)(5)(G)) is amended—

(1) in clause (i), by striking ‘‘and before October 1, 2006,’’; and

(2) in clause (ii)(II), by striking ‘‘and before October 1, 2006,’’.

(b) CONFORMING AMENDMENTS.—

(1) TARGET AMOUNT.—Section 1886(b)(3)(D) (42U.S.C. 1395ww(b)(3)(D)) is

amended—

(A) in the matter preceding clause (i), by striking ‘‘and before October 1,

2006,’’; and

(B) in clause (iv), by striking ‘‘through fiscal year 2005,’’ and inserting ‘‘or

any subsequent fiscal year,’’.

(2) PERMITTING HOSPITALS TO DECLINE RECLASSIFICATION.—Section

13501(e)(2) of the Omnibus Budget Reconciliation Act of 1993 (42 U.S.C.

1395ww note) is amended by striking ‘‘or fiscal year 2000 through fiscal year

2005’’ and inserting ‘‘fiscal year 2000, or any subsequent fiscal year’’.

21

SEC. 306. OPTION TO BASE ELIGIBILITY ON DISCHARGES DURING ANY OF THE 3 MOST RECENT AUDITED COST REPORTING PERIODS.

(a) OPTION TO BASE ELIGIBILITY ON DISCHARGES DURING ANY OF THE 3 MOST RECENT AUDITED COST REPORTING PERIODS.—Section 1886(d)(5)(G)(iv)(IV) (42 U.S.C.

1395ww(d)(5)(G)(iv)(IV)) is amended by inserting ‘‘, or any of the 3 most recent audited cost reporting periods,’’ after ‘‘1987’’.

(b) EFFECTIVE DATE.—The amendments made by this section shall apply with respect to cost reporting periods beginning on or after the date of enactment of this

Act.

SEC. 307. IDENTIFICATION AND REDUCTION OF MEDICAL ERRORS BY PEER REVIEW ORGANIZATIONS.

(a) IN GENERAL.—Section 1154(a) (42 U.S.C. 1320c–3(a)) is amended by inserting

after paragraph (11) the following new paragraph:

‘‘(12) The organization shall assist providers, practitioners, and

Medicare+Choice organizations in identifying and developing strategies to reduce the incidence of actual and potential medical errors and problems related

to patient safety affecting individuals entitled to benefits under title XVIII. For

the purposes of this part and title XVIII, the functions described in this paragraph shall be treated as a review function.’’.

(b) EFFECTIVE DATE.—The amendments made by this section take effect on January 1, 2001.

SEC. 308. GAO REPORT ON IMPACT OF THE EMERGENCY MEDICAL TREATMENT AND ACTIVE

LABOR ACT (EMTALA) ON HOSPITAL EMERGENCY DEPARTMENTS.

(a) CONGRESSIONAL FINDINGS.—The Congress makes the following findings:

(1) The Emergency Medical Treatment and Active Labor Act (EMTALA) requires that hospitals and the emergency physicians as well as doctors on call

at hospital emergency departments screen and stabilize patients who go to

emergency departments for treatment.

(2) Physicians who refuse to treat emergency department patients or fail to

respond to hospital emergency department requests when on call face significant fines and are exposed to liability under EMTALA.

(3) The Balanced Budget Act of 1997 made many changes in hospital and

physician reimbursement that appear to have had unintended consequences

that have hampered the ability of hospitals, emergency physicians, and physicians covering emergency department call to comply with the requirements of

EMTALA.

(4) Estimates indicate that EMTALA costs emergency department physicians

$426,000,000 per year and leads to at least $10,000,000,000 more in uncompensated inpatient services.

(5) Emergency departments, emergency physicians, and physicians covering

emergency department call have become the de facto providers of indigent

health care in America.

(6) 27 percent of the over 4,300,000 people living in Arizona are uninsured.

(7) Many physicians covering emergency department call in Phoenix, Arizona,

are resigning from the medical staff at hospitals due to burdensome on-call requirements and uncompensated care.

(8) Significant concern exists as to whether downtown Phoenix hospitals can

keep their emergency departments open.

(9) The cumulative effect of potential hospital closings and staff resignations

threatens the quality of health care in Phoenix, Arizona.

(b) REPORT.—The Comptroller General of the United States shall submit a report

to the Subcommittee on Health and Environment of the Committee on Commerce

of the House of Representatives by May 1, 2001, on the effect of the Emergency

Medical Treatment and Active Labor Act on hospitals, emergency physicians, and

physicians covering emergency department call throughout the United States, focusing on those in Arizona (including Phoenix) and California (including Los Angeles).

(c) REPORT REQUIREMENTS.—The report should evaluate—

(1) the extent to which hospitals, emergency physicians, and physicians covering emergency department call provide uncompensated services in relation to

the requirements of EMTALA;

(2) the extent to which the regulatory requirements and enforcement of

EMTALA have expanded beyond the legislation’s original intent;

(3) estimates for the total dollar amount of EMTALA-related care uncompensated costs to emergency physicians, physicians covering emergency department

call, hospital emergency departments;

(4) the extent to which different portions of the United States may be experiencing different levels of uncompensated EMTALA-related care;

22

(5) the extent to which EMTALA would be classified as an unfunded mandate

if it were enacted today;

(6) the extent to which States have programs to provide financial support for

such uncompensated care;

(7) possible sources of funds, including medicare hospital bad debt accounts,

that are available to hospitals to assist with the cost of such uncompensated

care; and

(8) the financial strain that illegal immigration populations, the uninsured,

and the underinsured place on hospital emergency departments, emergency

physicians, and physicians covering emergency department call.

(d) DEFINITION.—In this section, the terms ‘‘Emergency Medical Treatment and

Active Labor Act’’ and ‘‘EMTALA’’ mean section 1867 of the Social Security Act (42

U.S.C. 1395dd).

TITLE IV—MEDICARE+CHOICE PROGRAM

STABILIZATION AND IMPROVEMENTS

Subtitle A—Payment Reforms

SEC. 401. INCREASING MINIMUM PAYMENT AMOUNT.

Section 1853(c)(1)(B)(ii) (42 U.S.C. 1395w–23(c)(1)(B)(ii)) is amended—

(1) by striking ‘‘(ii) For a succeeding year’’ and inserting ‘‘(ii)(I) Subject to subclause (II), for a succeeding year’’; and

(2) by adding at the end the following new 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).’’.

SEC. 402. 3 PERCENT MINIMUM PERCENTAGE UPDATE FOR 2001.

Section 1853(c)(1)(C)(ii) (42 U.S.C. 1395w–23(c)(1)(C)(ii)) is amended by inserting

‘‘(or 103 percent in the case of 2001)’’ after ‘‘102 percent’’.

SEC. 403. 10-YEAR PHASE IN OF RISK ADJUSTMENT BASED ON DATA FROM ALL SETTINGS.

Section 1853(a)(3)(C)(ii) (42 U.S.C. 1395w–23(c)(1)(C)(ii)) is amended—

(1) by striking ‘‘and’’ at the end of subclause (I);

(2) by striking the period at the end of subclause (II) and inserting a semicolon; and

(3) by adding after and below subclause (II) the following:

‘‘and, beginning in 2004, insofar as such risk adjustment is based on

data from substantially all settings, the methodology shall be phased

in equal increments over a 10-year period, beginning with 2004 or (if

later) the first year in which such data are used.’’.

SEC. 404. TRANSITION TO REVISED MEDICARE+CHOICE PAYMENT RATES.

(a) ANNOUNCEMENT OF REVISED MEDICARE+CHOICE PAYMENT RATES.—Within 2

weeks after the date of the enactment of this Act, the Secretary of Health and

Human Services shall determine, and shall announce (in a manner intended to provide notice to interested parties) Medicare+Choice capitation rates under section

1853 of the Social Security Act (42 U.S.C. 1395w–23) for 2001, revised in accordance

with the provisions of this Act.

(b) REENTRY INTO PROGRAM PERMITTED FOR MEDICARE+CHOICE PROGRAMS IN

2000.—A Medicare+Choice organization that provided notice to the Secretary of

Health and Human Services as of July 3, 2000, that it was terminating its contract

under part C of title XVIII of the Social Security Act or was reducing the service

area of a Medicare+Choice plan offered under such part shall be permitted to continue participation under such part, or to maintain the service area of such plan,

for 2001 if it provides the Secretary with the information described in section

1854(a)(1) of the Social Security Act (42 U.S.C. 1395w–24(a)(1)) within four weeks

after the date of the enactment of this Act.

(c) REVISED SUBMISSION OF PROPOSED PREMIUMS AND RELATED INFORMATION.—

If—

(1) a Medicare+Choice organization provided notice to the Secretary of Health

and Human Services as of July 3, 2000, that it was renewing its contract under

part C of title XVIII of the Social Security Act for all or part of the service area

or areas served under its current contract, and

(2) any part of the service area or areas addressed in such notice includes a

county for which the Medicare+Choice capitation rate under section 1853(c) of

23

such Act (42 U.S.C. 1395w–23(c)) for 2001, as determined under subsection (a),

is higher than the rate previously determined for such year,

such organization shall revise its submission of the information described in section

1854(a)(1) of the Social Security Act (42 U.S.C. 1395w–24(a)(1)), and shall submit

such revised information to the Secretary, within four weeks after the date of the

enactment of this Act.

Subtitle B—Administrative Reforms

SEC. 411. EFFECTIVENESS OF ELECTIONS AND CHANGES OF ELECTIONS.

(a) IN GENERAL.—Section 1851(f)(2) (42 U.S.C. 1395w–21(f)(2)) is amended by

striking ‘‘made,’’ and all that follows and inserting ‘‘made.’’.

(b) EFFECTIVE DATE.—The amendment made by subsection (a) applies with respect to years beginning on or after on January 1, 2001.

SEC. 412. MEDICARE+CHOICE PROGRAM COMPATIBILITY WITH EMPLOYER OR UNION GROUP

HEALTH PLANS.

(a) IN GENERAL.—Section 1857 (42 U.S.C. 1395w–27) is amended by adding at the

end the following new subsection:

‘‘(i) M+C PROGRAM COMPATIBILITY WITH EMPLOYER OR UNION GROUP HEALTH

PLANS.—To facilitate the offering of Medicare+Choice plans under contracts between

Medicare+Choice organizations and employers, labor organizations, or the trustees

of a fund established by 1 or more employers or labor organizations (or combination

thereof) to furnish benefits to the entity’s employees, former employees (or combination thereof) or members or former members (or combination thereof) of the labor

organizations, the Secretary may waive or modify requirements that hinder the design of, the offering of, or the enrollment in such Medicare+Choice plans.’’.

(b) EFFECTIVE DATE.—The amendment made by subsection (a) applies with respect to years beginning with 2001.

SEC. 413. UNIFORM PREMIUM AND BENEFITS.

(a) IN GENERAL.—Subsections (c) and (f)(1)(D) of section 1854 (42 U.S.C. 1395w–

24) are each amended by inserting before the period at the end the following: ‘‘, except across counties as approved by the Secretary’’.

(b) EFFECTIVE DATE.—The amendments made by subsection (a) apply with respect

to years beginning on or after January 1, 2001.

TITLE V—MEDICAID

SEC. 501. DSH PAYMENTS.

(a) CONTINUATION OF MEDICAID DSH ALLOTMENTS AT FISCAL YEAR 2000 LEVELS

FOR FISCAL YEAR 2001.—Section 1923(f) (42 U.S.C. 1396r–4(f)), as amended by section 601 of the Medicare, Medicaid, and SCHIP Balanced Budget Refinement Act

of 1999 (as enacted into law by section 1000(a)(6) of Public Law 106–113), is

amended—

(1) in paragraph (2)—

(A) by striking ‘‘2002’’ in the heading and inserting ‘‘2000’’;

(B) in the matter preceding the table, by striking ‘‘2002’’ and inserting

‘‘2000’’; and

(C) in the table in such paragraph, by striking the columns labeled ‘‘FY

01’’ and ‘‘FY 02’’ relating to fiscal years 2001 and 2002; and

(2) in paragraph (3)—

(A) by striking ‘‘2003’’ in the heading and inserting ‘‘2001’’; and

(B) by striking ‘‘2003’’ and inserting ‘‘2001’’.

(b) SPECIAL RULE FOR MEDICAID DSH ALLOTMENT FOR EXTREMELY LOW DSH

STATES.—Section 1923(f)(3) (42 U.S.C. 1396r–4(f)(3)) is amended—

(1) in subparagraph (A), by striking ‘‘subparagraph (B)’’ and inserting ‘‘subparagraphs (B) and (C)’’; and

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

‘‘(C) SPECIAL RULE FOR EXTREMELY LOW DSH STATES.—In the case of a

State in which the total expenditures under the State plan (including Federal and State shares) for disproportionate share hospital adjustments

under this section for fiscal year 1999, as reported to the Administrator of

the Health Care Financing Administration as of August 31, 2000, is greater

than 0 but less than 1 percent of the State’s total amount of expenditures

under the State plan for medical assistance during the fiscal year, the DSH

allotment for fiscal year 2001 shall be increased to 1 percent of the State’s

24

total amount of expenditures under such plan for such assistance during

such fiscal year. In subsequent fiscal years, such increased allotment is subject to an increase for inflation as provided in subparagraph (A).’’.

(c) DISTRICT OF COLUMBIA.—Effective beginning with fiscal year 2001, the item in

the table in section 1923(f) (42 U.S.C. 1396r–4(f)) relating to District of Columbia

for FY 2000, is amended by striking ‘‘32’’ and inserting ‘‘49’’.

(d) CONTINGENT ALLOTMENT FOR TENNESSEE.—Section 1923(f) (42 U.S.C. 1396r–

4(f)) is amended—

(1) in paragraph (3)(A), by striking ‘‘or this paragraph’’ and inserting ‘‘, this

paragraph, or paragraph (4)’’; and

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

‘‘(4) CONTINGENT ALLOTMENT ADJUSTMENT FOR TENNESSEE.—If the State-wide

waiver approved under section 1115 for the State of Tennessee with respect to

requirements under this title as in effect on the date of the enactment of this

subsection is revoked or terminated, the DSH allotment for Tennessee for fiscal

year 2001 is deemed to be equal to $286,442,437.’’.

(e) ASSURING IDENTIFICATION OF MEDICAID MANAGED CARE PATIENTS.— (1) IN GENERAL.—Section 1932 (42 U.S.C. 1396u–2) is amended by adding at

the end the following:

‘‘(g) IDENTIFICATION OF PATIENTS FOR PURPOSES OF MAKING DSH PAYMENTS.— Each contract with a managed care entity under section 1903(m) or under section

1905(t)(3) shall require the entity either—

‘‘(1) to report to the State information necessary to determine the hospital

services provided under the contract (and the identity of hospitals providing

such services) for purposes of applying sections 1886(d)(5)(F) and 1923; or

‘‘(2) to include a sponsorship code in the identification card issued to individuals covered under this title in order that a hospital may identify a patient as

being entitled to benefits under this title.’’.

(2) CLARIFICATION OF COUNTING MANAGED CARE MEDICAID PATIENTS.—Section

1923 (42 U.S.C. 1396r–4) is amended—

(A) in subsection (a)(2)(D), by inserting after ‘‘the proportion of low-income and medicaid patients’’ the following: ‘‘(including such patients who

receive benefits through a managed care entity)’’;

(B) in subsection (b)(2), by inserting after ‘‘a State plan approved under

this title in a period’’ the following: ‘‘(regardless of whether they receive

benefits on a fee-for-service basis or through a managed care entity)’’; and

(C) in subsection (b)(3)(A)(i), by inserting after ‘‘under a State plan under

this title’’ the following: ‘‘(regardless of whether the services were furnished

on a fee-for-service basis or through a managed care entity)’’.

(2) EFFECTIVE DATE.—The amendments made by paragraph (1) apply to payments made for periods on or after January 1, 2001.

SEC. 502. NEW PROSPECTIVE PAYMENT SYSTEM FOR FEDERALLY-QUALIFIED HEALTH CENTERS AND RURAL HEALTH CLINICS.

(a) IN GENERAL.—Section 1902(a) (42 U.S.C. 1396a(a)) is amended—

(1) in paragraph (13)—

(A) in subparagraph (A), by adding ‘‘and’’ at the end;

(B) in subparagraph (B), by striking ‘‘and’’ at the end; and

(C) by striking subparagraph (C); and

(2) by inserting after paragraph (14) the following new paragraph:

‘‘(15) provide for payment for services described in clause (B) or (C) of section

1905(a)(2) under the plan in accordance with subsection (aa);’’.

(b) NEW PROSPECTIVE PAYMENT SYSTEM.—Section 1902 (42 U.S.C. 1396a) is

amended by adding at the end the following:

‘‘(aa) PAYMENT FOR SERVICES PROVIDED BY FEDERALLY-QUALIFIED HEALTH CEN- TERS AND RURAL HEALTH CLINICS.— ‘‘(1) IN GENERAL.—Beginning with fiscal year 2001 and each succeeding fiscal

year, the State plan shall provide for payment for services described in section

1905(a)(2)(C) furnished by a Federally-qualified health center and services described in section 1905(a)(2)(B) furnished by a rural health clinic in accordance

with the provisions of this subsection. The payment rate under this subsection

shall not vary based upon the site services are provided in the case of the same

center or clinic entity.

‘‘(2) FISCAL YEAR 2001.—Subject to paragraph (4), for services furnished during

fiscal year 2001, the State plan shall provide for payment for such services in

an amount (calculated on a per visit basis) that is equal to 100 percent of the

average of the costs of the center or clinic of furnishing such services during

fiscal years 1999 and 2000 which are reasonable and related to the cost of furnishing such services, or based on such other tests of reasonableness as the Secretary prescribes in regulations under section 1833(a)(3), or, in the case of servVerDate 11-MAY-2000 15:23 Oct 31, 2000 Jkt 089006 PO 00000 Frm 00024 Fmt 6659 Sfmt 6621 E:\HR\OC\HR1019P1.XXX pfrm04 PsN: HR1019P1
25

ices to which such regulations do not apply, the same methodology used under

section 1833(a)(3), adjusted to take into account any increase or decrease in the

scope of such services furnished by the center or clinic during fiscal year 2001.

‘‘(3) FISCAL YEAR 2002 AND SUCCEEDING FISCAL YEARS.—Subject to paragraph

(4), for services furnished during fiscal year 2002 or a succeeding fiscal year,

the State plan shall provide for payment for such services in an amount (calculated on a per visit basis) that is equal to the amount calculated for such

services under this subsection for the preceding fiscal year—

‘‘(A) increased by the percentage increase in the MEI (as defined in section 1842(i)(3)) applicable to primary care services (as defined in section

1842(i)(4)) for that fiscal year; and

‘‘(B) adjusted to take into account any increase or decrease in the scope

of such services furnished by the center or clinic during that fiscal year.

‘‘(4) ESTABLISHMENT OF INITIAL YEAR PAYMENT AMOUNT FOR NEW CENTERS OR

CLINICS.—In any case in which an entity first qualifies as a Federally-qualified

health center or rural health clinic after fiscal year 2000, the State plan shall

provide for payment for services described in section 1905(a)(2)(C) furnished by

the center or services described in section 1905(a)(2)(B) furnished by the clinic

in the first fiscal year in which the center or clinic so qualifies in an amount

(calculated on a per visit basis) that is equal to 100 percent of the costs of furnishing such services during such fiscal year based on the rates established

under this subsection for the fiscal year for other such centers or clinics located

in the same or adjacent area with a similar case load, service package, and case

mix or, in the absence of such a center or clinic, in accordance with the regulations and methodology referred to in paragraph (2) or based on such other tests

of reasonableness as the Secretary may specify. For each fiscal year following

the fiscal year in which the entity first qualifies as a Federally-qualified health

center or rural health clinic, the State plan shall provide for the payment

amount to be calculated in accordance with paragraph (3).

‘‘(5) ADMINISTRATION IN THE CASE OF MANAGED CARE.—In the case of services

furnished by a Federally-qualified health center or rural health clinic pursuant

to a contract between the center or clinic and a managed care entity (as defined

in section 1932(a)(1)(B)), the State plan shall provide for payment to the center

or clinic (at least quarterly) by the State of a supplemental payment equal to

the amount (if any) by which the amount determined under paragraphs (2), (3),

and (4) of this subsection exceeds the amount of the payments provided under

the contract.

‘‘(6) ALTERNATIVE PAYMENT METHODOLOGIES.—Notwithstanding any other provision of this section, the State plan may provide for payment in any fiscal year

to a Federally-qualified health center for services described in section

1905(a)(2)(C) or to a rural health clinic for services described in section

1905(a)(2)(B) in an amount which is determined under an alternative payment

methodology that—

‘‘(A) is agreed to by the State and the center or clinic; and

‘‘(B) results in payment to the center or clinic of an amount which is at

least equal to the amount otherwise required to be paid to the center or

clinic under this section.’’.

(c) CONFORMING AMENDMENTS.—

(1) Section 4712 of the Balanced Budget Act of 1997 (Public Law 105–33; 111

Stat. 508) is amended by striking subsection (c).

(2) Section 1915(b) (42 U.S.C. 1396n(b)) is amended by striking

‘‘1902(a)(13)(C)’’ and inserting ‘‘1902(a)(15), 1902(aa),’’.

(d) GAO STUDY OF FUTURE REBASING.—The Comptroller General of the United

States shall provide for a study on the need for, and how to, rebase or refine costs

for making payment under the medicaid program for services provided by Federallyqualified health centers and rural health clinics (as provided under the amendments

made by this section). The Comptroller General shall provide for submittal of a report on such study to the Congress by not later than 4 years after the date of the

enactment of this Act.

(e) EFFECTIVE DATE.—The amendments made by this section take effect on October 1, 2000, and apply to services furnished on or after such date.

SEC. 503. OPTIONAL COVERAGE OF LEGAL IMMIGRANTS UNDER THE MEDICAID PROGRAM.

(a) IN GENERAL.—Section 1903(v) (42 U.S.C. 1396b(v)) is amended—

(1) in paragraph (1), by striking ‘‘paragraph (2)’’ and inserting ‘‘paragraphs (2)

and (4)’’; and

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

‘‘(4)(A) A State may elect (in a plan amendment under this title) to provide medical assistance under this title, notwithstanding sections 401(a), 402(b), 403, and 421

26

of the Personal Responsibility and Work Opportunity Reconciliation Act of 1996, for

aliens who are lawfully residing in the United States (including battered aliens described in section 431(c) of such Act) and who are otherwise eligible for such assistance, within either or both of the following eligibility categories, but only if they

have lawfully resided in the United States for 2 years:

‘‘(i) PREGNANT WOMEN.—Women during pregnancy (and during the 60-day period beginning on the last day of the pregnancy).

‘‘(ii) CHILDREN.—Children (as defined under such plan), including optional

targeted low-income children described in section 1905(u)(2)(B).

‘‘(B) In the case of a State that has elected to provide medical assistance to a category of aliens under subparagraph (A), no debt shall accrue under an affidavit of

support against any sponsor of such an alien who has lawfully resided in the United

State for 2 years on the basis of provision of assistance to such category.’’.

(b) EFFECTIVE DATE.—The amendments made by subsection (a) take effect on October 1, 2000, and apply to medical assistance and child health assistance furnished

on or after such date.

SEC. 504. ADDITIONAL ENTITIES QUALIFIED TO DETERMINE MEDICAID PRESUMPTIVE ELIGIBILITY FOR LOW-INCOME CHILDREN.

(a) IN GENERAL.—Section 1920A(b)(3)(A)(i) (42 U.S.C. 1396r–1a(b)(3)(A)(i)) is

amended—

(1) by striking ‘‘or (II)’’ and inserting ‘‘, (II)’’; and

(2) by inserting ‘‘eligibility of a child for medical assistance under the State

plan under this title, or eligibility of a child for child health assistance under

the program funded under title XXI, (III) is an elementary school or secondary

school, as such terms are defined in section 14101 of the Elementary and Secondary Education Act of 1965 (20 U.S.C. 8801), an elementary or secondary

school operated or supported by the Bureau of Indian Affairs, a State or tribal

child support enforcement agency, a child care resource and referral agency, an

organization that is providing emergency food and shelter under a grant under

the Stewart B. McKinney Homeless Assistance Act, or a State or tribal office

or entity involved in enrollment in the program under this title, under part A

of title IV, under title XXI, or that determines eligibility for any assistance or

benefits provided under any program of public or assisted housing that receives

Federal funds, including the program under section 8 or any other section of

the United States Housing Act of 1937 (42 U.S.C. 1437 et seq.) or under the

Native American Housing Assistance and Self-Determination Act of 1996 (25

U.S.C. 4101 et seq.), or (IV) any other entity the State so deems, as approved

by the Secretary’’ before the semicolon.

(b) TECHNICAL AMENDMENTS.—Section 1920A (42 U.S.C. 1396r-1a) is amended—

(1) in subsection (b)(3)(A)(i), by striking ‘‘42 U.S.C. 9821’’ and inserting ‘‘42

U.S.C. 9831’’;

(2) in subsection (b)(3)(A)(ii), by striking ‘‘paragraph (1)(A)’’ and inserting

‘‘paragraph (2)’’; and

(3) in subsection (c)(2), in the matter preceding subparagraph (A), by striking

‘‘subsection (b)(1)(A)’’ and inserting ‘‘subsection (b)(2)’’.

(c) APPLICATION TO PRESUMPTIVE ELIGIBILITY FOR PREGNANT WOMEN UNDER MEDICAID.—Section 1920(b) (42 U.S.C. 1396r-1(b)) is amended by adding at the end after

and below paragraph (2) the following flush sentence:

‘‘The term ‘qualified provider’ includes a qualified entity as defined in section

1920A(b)(3).’’.

(d) APPLICATION UNDER TITLE XXI.—Section 2107(e)(1) (42 U.S.C. 1397gg(e)(1)) is

amended by adding at the end the following new subparagraph:

‘‘(D) Section 1920A (relating to presumptive eligibility).’’.

SEC. 505. IMPROVING WELFARE-TO-WORK TRANSITION.

(a) 1 YEAR EXTENSION.—Section 1925(f) (42 U.S.C. 1396r–6(f)) is amended by

striking ‘‘2001’’ and inserting ‘‘2002’’.

(b) SIMPLIFICATION OPTIONS.—

(1) STATE OPTION TO WAIVE REPORTING REQUIREMENTS.—Section 1925(b)(2) of

such Act (42 U.S.C. 1396r–6(b)(2)) is amended by adding at the end the following new subparagraph:

‘‘(C) STATE OPTION TO WAIVE REPORTING REQUIREMENTS.—A State may

elect to waive the reporting requirements under subparagraph (B) and, in

the case of such a waiver for purposes of notices required under subparagraph (A), to exclude from such notices any reference to any requirement

under subparagraph (B).’’.

(2) EXEMPTION FOR STATES COVERING NEEDY FAMILIES UP TO 185 PERCENT OF

POVERTY.—Section 1925 (42 U.S.C. 1396r–6) is amended—

27

(A) in each of subsections (a)(1) and (b)(1), by inserting ‘‘but subject to

subsection (g),’’ after ‘‘Notwithstanding any other provision of this title,’’;

and

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

‘‘(g) EXEMPTION FOR STATE COVERING NEEDY FAMILIES UP TO 185 PERCENT OF

POVERTY.— ‘‘(1) IN GENERAL.—At State option, the provisions of this section shall not

apply to a State that uses the authority under section 1931(b)(2)(C) to make

medical assistance available under the State plan under this title, at a minimum, to all individuals described in section 1931(b)(1) in families with gross

incomes (determined without regard to work-related child care expenses of such

individuals) at or below 185 percent of the income official poverty line (as defined by the Office of Management and Budget, and revised annually in accordance with section 673(2) of the Omnibus Budget Reconciliation Act of 1981) applicable to a family of the size involved.

‘‘(2) APPLICATION TO OTHER PROVISIONS OF THIS TITLE.—The State plan of a

State described in paragraph (1) shall be deemed to meet the requirements of

sections 1902(a)(10)(A)(i)(I) and 1902(e)(1).’’.

(3) EFFECTIVE DATE.—The amendments made by this subsection take effect

on October 1, 2000.

SEC. 506. MEDICAID COUNTY-ORGANIZED HEALTH SYSTEMS.

Section 9517(c)(3)(C) of the Comprehensive Omnibus Budget Reconciliation Act of

1985 is amended by striking ‘‘10 percent’’ and inserting ‘‘14 percent’’.

SEC. 507. MEDICAID RECOGNITION FOR SERVICES OF PHYSICIAN ASSISTANTS.

(a) IN GENERAL.—Section 1905(a) (42 U.S.C. 1396d(a)) is amended—

(1) by redesignating paragraphs (22) through (27) as paragraphs (23) through

(28), and

(2) by inserting after paragraph (21) the following new paragraph:

‘‘(22) services furnished by an physician assistant (as defined in section

1861(aa)(5)) which the assistant is legally authorized to perform under State

law and with the supervision of a physician;’’.

(b) CONFORMING AMENDMENTS.—(1) Section 1902(a)(10)(C)(iv) (42 U.S.C.

1396a(a)(10)(C)(iv)) is amended by striking ‘‘(24)’’ and inserting ‘‘(25)’’.

(2) Section 1929(e)(2)(A) (42 U.S.C. 1396t(e)(2)(A)) is amended by striking

‘‘1905(a)(23)’’ and inserting ‘‘1905(a)(24)’’.

(3) Section 1917(c)(1)(C)(ii) (42 U.S.C. 1396p(c)(1)(C)(ii)) is amended by striking

‘‘(22), or (24)’’ and inserting ‘‘(23), or (25)’’.

TITLE VI—STATE CHILDREN’S HEALTH

INSURANCE PROGRAM

SEC. 601. SPECIAL RULE FOR REDISTRIBUTION AND AVAILABILITY OF UNUSED FISCAL YEAR

1998 AND 1999 SCHIP ALLOTMENTS.

(a) CHANGE IN RULES FOR REDISTRIBUTION AND RETENTION OF UNUSED SCHIP

ALLOTMENTS FOR FISCAL YEARS 1998 AND 1999.—Section 2104 (42 U.S.C. 1397dd)

is amended by adding at the end the following new subsection:

‘‘(g) RULE FOR REDISTRIBUTION AND EXTENDED AVAILABILITY OF FISCAL YEARS

1998 AND 1999 ALLOTMENTS.—

‘‘(1) AMOUNT REDISTRIBUTED.—

‘‘(A) IN GENERAL.—In the case of a State that expends all of its allotment

under subsection (b) or (c) for fiscal year 1998 by the end of fiscal year

2000, or for fiscal year 1999 by the end of fiscal year 2001, the Secretary

shall redistribute to the State under subsection (f) (from the fiscal year

1998 or 1999 allotments of other States, respectively, as determined by the

application of paragraphs (2) and (3) with respect to the respective fiscal

year)) the following amount:

‘‘(i) STATE.—In the case of 1 of the 50 States or the District of Columbia, with respect to—

‘‘(I) the fiscal year 1998 allotment, the amount by which the

State’s expenditures under this title in fiscal years 1998, 1999, and

2000 exceed the State’s allotment for fiscal year 1998 under subsection (b); or

‘‘(II) the fiscal year 1999 allotment, the amount by which the

State’s expenditures under this title in fiscal years 1999, 2000, and

2001 exceed the State’s allotment for fiscal year 1999 under subsection (b).

28

‘‘(ii) TERRITORY.—In the case of a commonwealth or territory described in subsection (c)(3), an amount that bears the same ratio to

1.05 percent of the total amount described in paragraph (2)(B)(i)(I) as

the ratio of the commonwealth’s or territory’s fiscal year 1998 or 1999

allotment under subsection (c) (as the case may be) bears to the total

of all such allotments for such fiscal year under such subsection.

‘‘(B) EXPENDITURE RULES.—An amount redistributed to a State under this

paragraph with respect to fiscal year 1998 or 1999—

‘‘(i) shall not be included in the determination of the State’s allotment

for any fiscal year under this section;

‘‘(ii) notwithstanding subsection (e), shall remain available for expenditure by the State through the end of fiscal year 2002; and

‘‘(iii) shall be counted as being expended with respect to a fiscal year

allotment in accordance with applicable regulations of the Secretary.

‘‘(2) EXTENSION OF AVAILABILITY OF PORTION OF UNEXPENDED FISCAL YEARS

1998 AND 1999 ALLOTMENTS.—

‘‘(A) IN GENERAL.—Notwithstanding subsection (e):

‘‘(i) FISCAL YEAR 1998 ALLOTMENT.—Of the amounts allotted to a State

pursuant to this section for fiscal year 1998 that were not expended by

the State by the end of fiscal year 2000, the amount specified in subparagraph (B) for fiscal year 1998 for such State shall remain available

for expenditure by the State through the end of fiscal year 2002.

‘‘(ii) FISCAL YEAR 1999 ALLOTMENT.—Of the amounts allotted to a

State pursuant to this subsection for fiscal year 1999 that were not expended by the State by the end of fiscal year 2001, the amount specified in subparagraph (B) for fiscal year 1999 for such State shall remain available for expenditure by the State through the end of fiscal

year 2002.

‘‘(B) AMOUNT REMAINING AVAILABLE FOR EXPENDITURE.—The amount

specified in this subparagraph for a State for a fiscal year is equal to—

‘‘(i) the amount by which (I) the total amount available for redistribution under subsection (f) from the allotments for that fiscal year, exceeds (II) the total amounts redistributed under paragraph (1) for that

fiscal year; multiplied by

‘‘(ii) the ratio of the amount of such State’s unexpended allotment for

that fiscal year to the total amount described in clause (i)(I) for that

fiscal year.

‘‘(C) USE OF UP TO 10 PERCENT OF RETAINED 1998 ALLOTMENTS FOR OUTREACH ACTIVITIES.—Notwithstanding section 2105(c)(2)(A), with respect to

any State described in subparagraph (A)(i), the State may use up to 10 percent of the amount specified in subparagraph (B) for fiscal year 1998 for

expenditures for outreach activities approved by the Secretary.

‘‘(3) DETERMINATION OF AMOUNTS.—For purposes of calculating the amounts

described in paragraphs (1) and (2) relating to the allotment for fiscal year 1998

or fiscal year 1999, the Secretary shall use the amounts reported by the States

not later than November 30, 2000, or November 30, 2001, respectively, on

HCFA Form 64 or HCFA Form 21, as approved by the Secretary.’’.

(b) EFFECTIVE DATE.—The amendments made by this section shall take effect as

if included in the enactment of section 4901 of BBA (111 Stat. 552).

SEC. 602. OPTIONAL COVERAGE OF CERTAIN LEGAL IMMIGRANTS UNDER SCHIP.

(a) IN GENERAL.—Section 2107(e)(1) (42 U.S.C. 1397gg(e)(1)), as amended by section 504, is amended by adding at the end the following new subparagraph:

‘‘(E) Section 1903(v)(4) (relating to optional coverage of categories of lawfully residing alien children), but only if the State has elected to apply such

section to the category of children under title XIX.’’.

(b) EFFECTIVE DATE.—The amendment made by this section takes effect on October 1, 2000, and applies to medical assistance and child health assistance furnished

on or after such date.

TITLE VII—EXTENSION OF SPECIAL DIABETES

GRANT PROGRAMS

SEC. 701. EXTENSION OF JUVENILE AND INDIAN DIABETES GRANT PROGRAMS.

(a) JUVENILE DIABETES RESEARCH PROGRAM.—Section 330B of the Public Health

Service Act (42 U.S.C. 254c–2) is amended by adding at the end the following new

subsection:

29

‘‘(c) EXTENSION OF FUNDING.—There are hereby appropriated, from any amounts

in the Treasury not otherwise appropriated, for each of fiscal years 2003 through

2007, $50,000,000 for grants under this section, to remain available until expended.

Nothing in this subsection shall be construed as providing for such amounts to be

derived or deducted from appropriations made under section 2104(a) of the Social

Security Act.’’.

(b) INDIAN DIABETES GRANT PROGRAM.——Section 330C of the Public Health Service Act (42 U.S.C. 254c–3) is amended by adding at the end the following new subsection:

‘‘(d) EXTENSION OF FUNDING.—There are hereby appropriated, from any amounts

in the Treasury not otherwise appropriated, for each of fiscal years 2003 through

2007, $50,000,000 for grants under this section, to remain available until expended.

Nothing in this subsection shall be construed as providing for such amounts to be

derived or deducted from appropriations made under section 2104(a) of the Social

Security Act.’’.

(c) EXTENSION OF REPORTS ON GRANT PROGRAMS.—Section 4923(b) of BBA is

amended—

(1) in paragraph (1), by striking ‘‘an interim report’’ and inserting ‘‘interim

reports’’;

(2) in paragraph (1), by striking ‘‘, 2000’’ and inserting ‘‘in each of 2000, 2002,

and 2004’’; and

(3) in paragraph (2), by striking ‘‘2002’’ and inserting ‘‘2007’’.

PURPOSE AND SUMMARY

The purpose of this legislation is to improve and protect patient

access to Federal health care programs. The savings achieved

through changes to the Medicare and Medicaid programs enacted

as part of the Balanced Budget Act of 1997 were integral to balancing the budget. Since passage of that legislation, the Congressional Budget Office has estimated that the savings from the Medicare and Medicaid programs has exceeded the original targets, and

there is concern that beneficiaries in these programs may experience difficulty in accessing health services. This legislation seeks to

address many of these access concerns.

H. R. 5291 increases payments to providers under the Medicare

and Medicaid programs, improves the quality of benefits for beneficiaries, and adjusts the allocation formula under the State Children Health Insurance Program (SCHIP).

BACKGROUND AND NEED FOR LEGISLATION

In the Balanced Budget Act of 1997 (BBA ’97), the Committee

made difficult decisions in how best to address the concern of the

Nation that the Medicare program was facing financial ruin, and

changes needed to be made. Moving to a prospective payment system for hospital outpatient department services, skilled nursing facility services and home health services were just some of the

changes the Congressional Budget Office (CBO) projected would reduce Federal spending by $103 billion over 5 years, and create new

efficiencies within the Medicare program.

CBO continues to revise their estimates of spending in the Medicare program. Every revision they have released since passage of

BBA ’97 shows that spending is less than originally anticipated. In

addition, spending in fiscal year 1999 was actually less than it was

in fiscal year 1998.

BBA ’97 also made changes to reduce Federal spending in Medicaid. Last November, Congress responded to the low spending in

Medicare and Medicaid by refining the BBA ’97 and restoring nearly $16 billion over 5 years to the Medicare, Medicaid, and SCHIP

programs.

30

There are concerns that those changes were not enough. Given

the record surpluses realized in recent years, and based on testimony provided to the Committee on this issue, this legislation responds to those concerns.

HEARINGS

The Subcommittee on Health and Environment held a hearing on

July 19, 2000 entitled ‘‘BBA ’97: A Look at the Current Impact on

Patients and Providers,’’ which laid the foundation for the development of H.R. 5291, the Beneficiary Improvement and Protection

Act of 2000. The Subcommittee received testimony from: Dr. Gail

Wilensky of the Medicare Payment Advisory Commission

(MedPAC) and Dr. Bill Scanlon of the General Accounting Office on

work they have done analyzing the impact BBA ’97 has had on

Medicare, Medicaid and the State Children’s Health Insurance Program (SCHIP).

The Subcommittee also received testimony from patient and provider groups who discussed the impact the changes have had on

their ability to receive or deliver quality health care. Witnesses

consisted of Dr. Rowen K. Zetterman, American College of Gastroenterology; Ms. Marilyn Tavenner, HCA-The HealthCare Company;

Mr. Max Richtman, The National Committee to Preserve Social Security and Medicare; Ms. Karen Coughlin, Physicians Health Services, Inc.; Ms. Mary Lou Connolly, UCSD HomeCare; Mr. Daniel R.

Hawkins, Jr., National Association of Community Health Centers,

Inc.; and Ms. Juliet Hancock, The National Association for the Support of Long Term Care.

COMMITTEE CONSIDERATION

On September 26, 2000 Full Committee met in open markup session and ordered H.R. 5291 reported to the House, as amended, by

a voice vote.

COMMITTEE VOTES

Clause 3(b) of rule XIII of the Rules of the House of Representatives requires the Committee to list the record votes on the motion

to report legislation and amendments thereto. There were no

record votes taken in connection with ordering H.R. 5291 reported.

A motion by Mr. Bliley to order H.R. 5291 reported to the House,

with an amendment, was agreed to by a voice vote.

The following amendment was agreed to by a voice vote—

An amendment in the nature of a substitute by Mr. Bilirakis, No. 1, improving beneficiary access to Federal

health care benefits through changes to the Medicare,

Medicaid and SCHIP programs.

The following amendments were withdrawn—

An amendment to the amendment in the nature of a

substitute by Mrs. Wilson, No. 1a, giving States greater

flexibility to use SCHIP funds to cover children currently

not eligible and allowing States to expand some services.

An amendment to the amendment in the nature of a

substitute by Mr. Barton, No. 1b, requiring community

mental health centers to meet State licensing and certifiVerDate 11-MAY-2000 15:23 Oct 31, 2000 Jkt 089006 PO 00000 Frm 00030 Fmt 6659 Sfmt 6602 E:\HR\OC\HR1019P1.XXX pfrm04 PsN: HR1019P1
31

cation requirements as well as ensuring that such facilities

provide certain core services.

An amendment to the amendment in the nature of a

substitute by Mr. Strickland, No. 1c, allowing the clinical

training portion of clinical psychology graduate medical

education programs to be reimbursed under Medicare.

An amendment to the amendment in the nature of a

substitute by Mr. Engel, No. 1d, prohibiting HCFA from

issuing any new regulations that would modify the upper

limits test applied to Medicaid spending for plans approved before October 2, 2000.

An amendment to the amendment in the nature of a

substitute, by Mrs. Wilson, No. 1e, making improvements

to the Medicare+Choice program.

An amendment to the amendment in the nature of a

substitute, by Mr. Greenwood, No. 1f, placing a moratorium on any proposed or final regulation relating to the

Medicare upper payment limit test applied to State Medicaid spending for any approved State plan in place as of

the date of enactment and requiring the Secretary of

Health and Human Services to work with States to develop methods to ensure that Federal Medicaid funds are

spent on Medicaid eligible services for Medicaid eligible

beneficiaries.

An amendment to the amendment in the nature of a

substitute, by Mr. Rush, No. 1g, setting the formula for the

Medicaid upper payment limits for each class of facility in

a State.

An amendment to the amendment in the nature of a

substitute, by Mr. Stearns, No. 1h, making various

changes to how the Health Care Financing Administration

audits physician payments and other issues affecting physicians.

An amendment to the amendment in the nature of a

substitute, by Mr. Deutsch, No. 1i, providing for a

Medicare+Choice demonstration project to allow

Medicare+Choice plans to purchase home care services

from a caregiver through a home health referral agency.

COMMITTEE OVERSIGHT FINDINGS

Pursuant to clause 3(c)(1) of rule XIII of the Rules of the House

of Representatives, the Committee held a legislative hearing and

made findings that are reflected in this report.

COMMITTEE ON GOVERNMENT REFORM OVERSIGHT FINDINGS

Pursuant to clause 3(c)(4) of rule XIII of the Rules of the House

of Representatives, no oversight findings have been submitted to

the Committee by the Committee on Government Reform.

NEW BUDGET AUTHORITY, ENTITLEMENT AUTHORITY, AND TAX

EXPENDITURES

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

House of Representatives, the Committee finds that H.R. 5291, the

Beneficiary Improvement and Protection Act of 2000, would result

32

in new or increased budget authority, entitlement authority, or tax

expenditures or revenues consistent with the estimate submitted

by the Congressional Budget Office.

COMMITTEE COST ESTIMATE

The Committee adopts as its own the cost estimate prepared by

the Director of the Congressional Budget Office pursuant to section

402 of the Congressional Budget Act of 1974.

CONGRESSIONAL BUDGET OFFICE ESTIMATE

Pursuant to clause 3(c)(3) of rule XIII of the Rules of the House

of Representatives, the following is the cost estimate provided by

the Congressional Budget Office pursuant to section 402 of the

Congressional Budget Act of 1974:

U.S. CONGRESS,

CONGRESSIONAL BUDGET OFFICE,

Washington, DC, October 2, 2000.

Hon. TOM BLILEY,

Chairman, Committee on Commerce,

House of Representatives, Washington, DC.

DEAR MR. CHAIRMAN: At your request, the Congressional Budget

Office has prepared the attached table showing our preliminary estimate of the changes in direct spending that would result from enacting H.R. 5291, the Beneficiary Health Improvement Act, as ordered reported by the House Committee on Commerce on September 27, 2000. This estimate is based on draft legislative language and modifications discussed with staff.

CBO estimates that enacting the bill would increase direct

spending by $1.7 billion in 2001, $18 billion over the 2001–2005 period, and $55 billion over the 2001–2010 period. Because the bill

would affect direct spending, pay-as-you-go procedures would

apply.

I hope this information is helpful to you. The CBO staff contact

is Tom Bradley.

Sincerely,

STEVEN LIEBERMAN

(For Dan L. Crippen, Director).

Attachment.

CBO ESTIMATE OF DIRECT SPENDING IN H.R. 5291, THE BENEFICIARY HEALTH IMPROVEMENT ACT, AS ORDERED REPORTED BY THE HOUSE COMMITTEE 

COMMERCE ON SEPTEMBER 27, 2000 (BASED ON DRAFT LEGISLATIVE LANGUAGE AND MODIFICATIONS DISCUSSED WITH STAFF)

Outlays by fiscal year in billions of dollars—

2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2001–

Title I: Beneficiary Improvements ................................................................................................................ 0.3 0.4 0.5 0.7 0.9 1.2 1.3 1.5 1.7 2.0 2Title II: Other Medicare Part B Provisions ................................................................................................... 0.2 0.5 0.4 0.4 0.6 0.7 0.8 1.0 1.2 1.3 2Title III: Medicare Part A and B Provisions ................................................................................................. 0.1 0.7 0.3 0.1 0.2 0.2 0.2 0.3 0.3 0.3 1Title IV: Medicare+Choice Program Stabilization and Improvements ......................................................... 0.8 1.0 1.2 1.5 1.8 1.5 2.2 2.5 2.8 3.2 6Interaction: effect of fee-for-service provisions on Medicare+Choice payments ....................................... 0 0.3 0.3 0.3 0.5 0.6 0.8 1.0 1.2 1.5 1

Subtotal, Gross Medicare Spending ............................................................................................... 1.3 2.9 2.7 3.1 3.9 4.1 5.3 6.2 7.2 8.4 13

Part B Premiums .......................................................................................................................................... ¥0.2. ¥0.4 ¥0.3 ¥0.4 ¥0.5 ¥0.5 ¥0.7 ¥0.8 ¥0.9 ¥1.1 ¥1

Subtotal, Net Medicare Spending ................................................................................................... 1.2 2.5 2.3 2.7 3.4 3.6 4.6 5.4 6.3 7.3 12

Title V: Medicaid .......................................................................................................................................... 0.5 1.3 1.3 1.2 1.3 1.5 1.5 1.6 1.8 1.8 5Interaction: effect of Medicare provisions on federal Medicaid spending .................................................. (1) (1) (1) (1) 0.1 0.2 0.2 0.2 0.2 0.3 

Subtotal, federal Medicaid ............................................................................................................. 0.5 1.2 1.2 1.3 1.4 1.6 1.8 1.9 2.0 2.1 5

Title VI: State Children’s Health Insurance Program .................................................................................. (1) (1) (1) (1) (1) 0.1 (1) 0.1 0.1 (1) 0

Title VII: Extension of Special Diabetes Grant Programs ............................................................................ 0 0 (1) 0.1 0.1 0.1 0.1 0.1 (1) (1) 0

Total, Changes in Direct Spending ................................................................................................ 1.7 3.8 3.6 4.0 5.0 5.2 6.5 7.4 8.4 9.4 18

1 Costs or savings less than $50 million.

34

FEDERAL MANDATES STATEMENT

The estimate of Federal mandates prepared by the Director of

the Congressional Budget Office pursuant to section 423 of the Unfunded Mandates Reform Act was not timely submitted to the Committee. The Committee will forward such estimate to the House

when it is submitted to the Committee.

ADVISORY COMMITTEE STATEMENT

No advisory committees within the meaning of section 5(b) of the

Federal Advisory Committee Act were created by this legislation.

CONSTITUTIONAL AUTHORITY STATEMENT

Pursuant to clause 3(d)(1) of rule XIII of the Rules of the House

of Representatives, the Committee finds that the Constitutional authority for this legislation is provided in Article I, section 8, clause

3, which grants Congress the power to regulate commerce with foreign nations, among the several States, and with the Indian tribes.

APPLICABILITY TO LEGISLATIVE BRANCH

The Committee finds that the legislation does not relate to the

terms and conditions of employment or access to public services or

accommodations within the meaning of section 102(b)(3) of the Congressional Accountability Act.

SECTION-BY-SECTION ANALYSIS OF THE LEGISLATION

TITLE I—BENEFICIARY IMPROVEMENTS

Section 101. Improving availability of QMB/SLMB application

forms

Under current law, State Medicaid programs are required to pay

Medicare premiums and cost-sharing charges for Qualified Medicare Beneficiaries (QMBs). These are persons whose incomes are

below 100% of the poverty line and whose resources are below

$4,000 for an individual and $6,000 for a couple. State Medicaid

programs are also required to pay Part B premiums for Specified

Low-Income Medicare Beneficiaries (SLMBs). These are persons

otherwise meeting the QMB criteria except that their income is

above the QMB level. The SLMB level is 120% of poverty. Currently, Medicare beneficiaries must apply for QMB/SLMB benefits

at their local welfare/Medicaid office.

This section requires the Secretary of HHS to consult with States

and beneficiary groups within nine months of enactment to develop

a simplified application form for use in applying for assistance

under the QMB/SLMB programs. The form would be easily readable and uniform nationally. Beginning one year after enactment,

the Secretary would make the application forms available to the

Social Security Administrator for distribution through local Social

Security offices as well as to other new and existing sites as the

Secretary determined appropriate. Forms would be available to individuals upon request. Individuals would be permitted to apply for

assistance through QMB/SLMB programs using this simplified application form and would not be required to apply in person for

such assistance.

35

Beginning on January 1, 2004, individuals could go to local Social Security Offices to receive information about the QMB/SLMB

programs. These offices would notify persons who present themselves of the availability of QMB/SLMB application forms, make

forms available on request, assist individuals in filling out forms,

and upon request, submit them to the appropriate State agency for

processing.

The provision providing for the availability of applications in Social Security offices would be effective January 1, 2004. The provision requiring the streamlined application form and process would

take effect 1 year after the date of enactment, regardless of whether regulations had been issued. The Secretary would be required to

develop the application form not later than 9 months after enactment.

Section 102. Study on limitation on State payment for Medicare

cost-sharing affecting access to services for qualified Medicare

beneficiaries

Under current law, State Medicaid programs are required to pay

Medicare premiums and cost-sharing charges for QMBs. Medicaid’s

payment rates are frequently below those applicable under Medicare. In the 1997 BBA, Congress specified that a State Medicaid

program would not be required to pay any cost-sharing amounts for

QMBs to the extent such payment would result in a total payment

for the service in excess of the Medicaid level.

The provision requires the Secretary of HHS to conduct a study

to determine whether access to certain services (including mental

health services) has been affected by the payment limitation. The

Secretary is required to submit a report on the study to Congress

within one year of enactment. The report must include any recommendations for change in payment limits to assure appropriate

access to services.

This section is effective upon enactment.

Section 103. Election of periodic colonoscopy

BBA ’97 authorized coverage of, and established frequency limits

for, colorectal cancer screening tests. A covered test is any of the

following procedures furnished for the purpose of early detection of

colorectal cancer: (1) screening fecal-occult blood test (for persons

over 50, no more than annually); (2) screening flexible

sigmoidoscopy (for persons over 50, no more than one every 4

years); (3) screening colonoscopy for high-risk individuals (limited

to one every 2 years); and (4) other procedures as the Secretary

finds appropriate for the purpose of early detection of colorectal

cancer. The Secretary was required to publish, within 90 days of

enactment, a determination on the coverage of screening barium

enema. Under the regulation, barium enemas, as an alternative to

either a screening flexible sigmoidoscopy or a screening

colonoscopy, are covered in accordance with the same screening parameters established for those tests.

The provision permits an individual who is not at high risk to

elect to receive a screening colonoscopy instead of a screening

sigmoidoscopy. Payments could not be made for such procedures if

performed within 10 years of a previous screening colonoscopy or

within 4 years of a screening flexible sigmoidoscopy. This change

36

comports with the new American Cancer Society guidelines which

now include this option for average risk individuals. Further, the

New England Journal of Medicine recently reported that flexible

sigmoidoscopies are likely to miss diseased growths as much as

one-third of the time, so allowing beneficiaries the option of the

more thorough colonoscopy provides a more effective benefit.

This section is effective January 1, 2001.

Section 104. Waiver of 24-month waiting period for Medicare coverage of individuals disabled with amyotrophic lateral sclerosis

(ALS)

Currently, Medicare covers, after a 24-month waiting period, people under age 65 who are either receiving monthly Social Security

benefits on the basis of disability or receiving payments as disabled

Railroad Retirement System annuitants. Coverage begins with the

25th month of entitlement for disability cash benefits.

The provision waives the 24-month waiting period for an individual medically determined to have amyotrophic lateral sclerosis

(ALS). ALS often progresses at a rate that would make Medicare

coverage ineffective for this population if individuals were forced to

wait 24 months. This provision would ensure individuals with ALS

would be able to access medical treatment through Medicare immediately.

The waiver of the waiting period applies to benefits for months

beginning after the date of enactment.

Section 105. Elimination of time limitation on Medicare benefits for

immunosuppresive drugs

Under current law, Medicare will pay for drugs used in immunosuppressive therapy during the first 36 months following a Medicare-covered organ transplant. The Balanced Budget Refinement

Act of 1999 (BBRA ’99) provided for a temporary extension of the

current 36–month limit on immunosuppressive drugs for Medicare

beneficiaries otherwise exhausting their coverage in 2000–2004. In

each calendar year, there is to be an extension specified by the Secretary (as the number of months or partial months), applicable to

persons who exhaust their benefits in that calendar year. The increase for persons exhausting their benefits in 2000 is 8 months.

The minimum increase for persons exhausting their benefits in

2001 is 8 months. Total expenditures over the 5-year period are

limited to $150 million. The Secretary, in making the specification

of the number of additional months for 2002–2004 is required to

make the computation so that expenditures do not exceed this

limit.

The provision eliminates the time limitation on coverage of immunosuppressive drugs for Medicare beneficiaries and allows for

all Medicare beneficiaries to receive coverage for drugs to prevent

rejection of the donor organ following a Medicare-covered organ

transplant.

This provision applies to drugs furnished on or after enactment.

Section 106. Preservation of coverage of drugs and biologicals under

Part B of the Medicare program

Medicare law defines covered ‘‘medical and other health services’’

for purposes of coverage under Medicare Part B. Included in the

37

definition are ‘‘services and supplies (including drugs and

biologicals which cannot, as determined in accordance with regulations, be self- administered) furnished as incident to a physician’s

professional service * * *.’’ The Medicare Carrier’s Manual states

that whether a drug or biological is of a type which cannot be selfadministered is based on the usual method of administration of the

form of that drug or biological as furnished by the physician.

Individual Medicare carriers apply different policies when considering whether a drug or biological can or can not be self- administered. Some carriers base the determination on the typical means

of administration while others assess the individual patient’s ability to administer the drug. On August 13, 1997, the Health Care

Financing Administration (HCFA) issued a memorandum to Medicare carriers which was intended to clarify program policy. The

memorandum stated that the inability to self-administer was to be

based on the typical means of administration of the drug, not on

the individual patient’s ability to administer the drug.

As a result of this memorandum, certain patients, for example

patients with multiple sclerosis, no longer had Medicare coverage

for certain drugs. However, implementation of this policy directive

was halted for FY2000 by a provision in the Consolidated Appropriations Act (P.L. 106–113). The provision prohibits the use of any

funds to carry out the August 13, 1997 transmittal or to promulgate any regulation or other transmittal or policy directive that has

the effect of imposing (or clarifying the imposition of) a restriction

on the coverage of injectable drugs beyond those applied on the day

before issuance of the transmittal. HCFA issued a Program Memorandum in April 2000 which suspended application of the August

13, 1997 memorandum. It noted that each carrier or intermediary

must establish its own policies individually and can not establish

model policies as a group.

This section clarifies that carriers are to reimburse for selfinjectable drugs according to pre-August 1997 policy. This section

replaces the current phrase in section 1861(s)(2) relating to certain

drugs and biologicals administered incident to a physician’s professional service. The new language requires coverage of ‘‘drugs and

biologicals which are not usually self-administered by the patient.’’

The Committee intends that in determining whether a drug or biological is usually self-administered by the patient, HCFA should

only consider whether a majority of Medicare patients with the disease or condition actually administer the drug to themselves. In

carrying out this intent, HCFA should assume, as it did for many

years, that Medicare patients do not usually self-administer injections or infusions to themselves, while oral medications usually are

self-administered. HCFA should also continue to take into account

the circumstances under which the drug or biological is being administered and continue to cover products that are administered in

emergencies, for example, during which self-administered is not the

usual method of administration.

The Committee anticipates that HCFA will instruct its contractors not to rely on this section to exclude a drug or biological without making an explicit finding supported by evidence that it is usually administered to themselves by a majority of Medicare patients

who use it for the condition to which the exclusion relates.

38

This section applies to drugs and biologicals administered on or

after October 1, 2000.

Section 107. Demonstration of Medicare coverage of medical nutrition therapy

BBA ‘97 required the Secretary of HHS to request that the National Academy of Sciences analyze the expansion or modification

of preventive and other benefits provided to Medicare beneficiaries.

The Secretary was required to submit a report to Congress on specific findings related to several benefit categories. One category included in the required study was ‘‘nutrition therapy services, including parenteral and enteral nutrition and including the provision of such services by a registered dietitian.’’ The Academy’s

Committee on Nutrition Services for Medicare Beneficiaries, Food

and Nutrition Board, transmitted a report on nutrition therapy

early this year.

The report contained several key recommendations. The Committee recommended that nutrition therapy, upon referral from a

physician, should be a reimbursable Medicare benefit. It noted that

current evidence suggests that nutrition therapy is effective as part

of a comprehensive approach to the management and treatment of

many conditions affecting the Medicare population including

dyslipidemia, hypertension, heart failure, diabetes, and kidney failure. The Committee also noted that the registered dietician is currently the single identifiable group of health care professionals

with standardized education, clinical training, continuing education, and national credentialing requirements necessary to be directly reimbursed as a provider of nutrition therapy.

The provision establishes a demonstration program for Medicare

coverage of medical nutrition therapy services for beneficiaries in

the five States with the highest proportion of population who are

65 years of age or older.

Under the demonstration program, medical nutrition therapy

services are defined as nutritional diagnostic, therapy and counseling services for the purpose of disease management which are

furnished by a registered dietician or nutrition professional, pursuant to a referral by a physician. The term registered dietician or

nutrition professional means an individual who (1) has completed

a baccalaureate or higher degree with completion of academic requirements of a program in nutrition or dietetics; (2) has completed

at least 900 hours of supervised dietetics practice under the supervision of a registered dietitian or nutrition professional; and, (3) is

either licensed or certified as a dietician or nutrition professional

by the State in which the services are performed, or, in a State

which does not provide for such licensure or certification, meets criteria established by the Secretary. Persons licensed or certified as

dieticians or nutrition specialists on the date of enactment would

not be required to meet the training requirements under 1 and 2.

Under the demonstration, the provision specifies that the amount

paid for medical nutrition therapy services would equal 80% of the

lesser of the actual charge for the service or 85% of the amount

that would be paid under the physician fee schedule if such services were provided by a physician. Assignment would be required

for all claims. The Secretary is required to submit to Congress inVerDate 11-MAY-2000 15:23 Oct 31, 2000 Jkt 089006 PO 00000 Frm 00038 Fmt 6659 Sfmt 6602 E:\HR\OC\HR1019P1.XXX pfrm04 PsN: HR1019P1
39

terim reports on the demonstration project and a final report within six months of the conclusion of the project.

This section applies to services furnished on or after January 1,

2002.

TITLE II—OTHER MEDICARE PART B PROVISIONS

Subtitle A—Access to Technology

Section 201. Annual reports on national coverage determinations

The Medicare statute specifies the broad service categories paid

for under the program; these include inpatient and outpatient hospital services, physicians services, and other types of medical care.

In general, the law does not specify the types of medical treatments, procedures, or technologies covered. However, the law does

specifically exclude coverage for any items or services which ‘‘are

not reasonable and necessary for the diagnosis or treatment of illness or injury or to improve the functioning of a malformed body

member.’’ HCFA has generally interpreted the statute to preclude

payment for services that have not been proven safe and effective

by acceptable clinical evidence or that have not been generally accepted in the medical community. Experimental items are generally excluded.

Coverage decisions are made at both the national level by the

Health Care Financing Administration and at the local level by

Medicare intermediaries and carriers. Currently the majority of determinations are made at the local level. HCFA is currently in the

process of revising the process for making national coverage determinations.

The provision requires the Secretary of HHS to annually submit

to the Congress a report about national coverage decisions. The report sets forth a detailed compilation of the actual time periods

that were necessary to complete and fully implement any national

coverage determinations that were made the previous fiscal year

for items, services, or medical devices not previously covered under

Medicare. The report is to include (for each such item, device, or

service) a statement of the time taken by the Secretary to make the

necessary coverage, coding, and payment determinations, including

the time taken to complete each significant step in the process of

making such determinations. The report will be due by December

1 of each year (beginning in 2001). The report would be published

on the Medicare Internet site.

This section is made effective upon enactment.

Section 202. National limitation amount equal to 100 percent of national median for new clinical laboratory test technologies; fee

schedule for new clinical laboratory tests

Medicare currently pays for clinical laboratory services on the

basis of areawide fee schedules. The law sets a cap on the payment

amount for a test. BBA ’97 froze the fee schedule for the 1998–2002

period. It also lowered the cap from 76% of the median to 74% of

the median of all fee schedules for the test.

Under this section, the national limitation amount is set at 100%

of the median in the case of a test, performed after January 1,

40

2001, that the Secretary determined was a new test for which no

limitation amount had been previously established.

The Secretary also is required to establish a national uniform fee

schedule amount for new tests which are unique and unable to be

crosswalked with existing tests. By December 1 of each year (beginning in 2001), the Secretary is to publish in the Federal Register

an interim fee schedule amount for each new test which would

apply for the following year. The interim fee schedule amount for

each test is subject to a 60 day comment period. The Secretary

would review the comments and make appropriate adjustments. By

December 1 of each year (beginning in 2002), the Secretary must

publish in the Federal Register a fee schedule amount for each

such new test for which an interim amount was established; the

amount applies for the following year.

This section is effective upon enactment.

Section 203. Clarifying process and standards for determining eligibility of devices for pass-through payments under hospital outpatient PPS

BBRA ’99 provided that, for 2 to 3 years after the introduction

of a new device, the Secretary of HHS is required to provide additional payments for costs of certain ‘‘current innovative’’ devices,

drugs, and biologicals, and certain ‘‘new’’ high cost devices, drugs,

and biologicals used in hospital outpatient department care. These

payments are referred to as ‘‘pass-through payments’’ because they

would pass through the hospital outpatient PPS and be paid over

and above PPS payments. ‘‘Current’’ is defined as something for

which Medicare is paying under outpatient services on the first day

of the PPS; ‘‘new’’ is defined as something for which Medicare was

not paying on an outpatient basis on December 31, 1996.

A pass-through for the cost of current innovative products apply

to (1) orphan drugs; (2) certain cancer therapy drugs, biologicals,

and brachytherapy; and (3) radiopharmaceutical drugs and biological products.

A pass-through of costs for ‘‘new’’ medical devices, drugs, and

biologicals is required if the costs of those items is ‘‘not insignificant’’ in relation to the fee schedule amount payable for the service.

Pass-through payments are currently made on the basis of a

product’s brand-name.

This provision requires the Secretary, through public rulemaking

procedures, to establish criteria for defining special payment categories under the hospital outpatient PPS for new and certain current medical devices and to establish new categories for such medical devices. These payments are designated as ‘‘category-based

pass-through payments’’ as opposed to the current system based on

brand. In general, the payment period begins when the first such

payment is made for a device after implementation of categorybased pass-through payments.

This section is effective upon enactment.

Section 204. Access to new technologies applied to screening mammography to enhance breast cancer detection

Medicare currently limits payment for screening mammography

to $67.81 irrespective of what type of technology is used.

41

This provision allows the Secretary to increase the Medicare payment limit for screening mammographies by $15, if the Secretary

determines a new technology that enhances the detection of breast

cancer is being used.

Subtitle B—Provisions Relating to Physicians Services

Section 211. GAO study of gastrointestinal endoscopic services furnished in physicians’ offices and hospital outpatient department

services

Payments for physicians services are made on the basis of a fee

schedule which is intended to relate payments for a given service

to actual resources used. The fee schedule assigns relative values

to services; these values are the sum of three components—a physician work component, a practice expense component, and a malpractice expense component. Each component is adjusted for geographic variations in costs. The adjusted relative values are then

converted into a dollar payment amount by a conversion factor.

BBA ‘97 established a process for the development of new relative values for practice expenses. The new resource-based system

is being phased-in over 4 years beginning in 1999. For many services, there is a differential between the value assigned to practice

expenses for a service provided in a physicians office and that assigned when the service is provided in an institutional setting.

The provision requires the GAO to conduct a study on the appropriateness of furnishing gastrointestinal endoscopic services in physicians offices. The GAO is also required to review available scientific and clinical evidence about the safety of performing procedures in physicians offices and hospital outpatient departments.

The GAO is also required to assess whether the assigned practice

expense relative value units assigned for these services create an

incentive to furnish services in doctors offices, rather than in hospital outpatient departments. The GAO is further required to report on the implications for beneficiary access if Medicare did not

cover such services in physicians offices.

The GAO is required to submit the report to Congress, together

with any recommendations, by July 1, 2002.

This section is effective upon enactment.

Section 212. Treatment of certain physician pathology services

The final rule for the Medicare physician fee schedule issued November 2, 1999 required hospitals to bill for the technical component of pathology services furnished to its inpatients. Based on

comments received, HCFA decided to delay implementation of this

rebundling requirement until January 1, 2001, to allow hospitals

and independent laboratories sufficient time to negotiate arrangements.

Regulations implementing the hospital outpatient prospective

payment system require hospitals to provide directly or under arrangements all services furnished to hospital outpatients. If a specimen (e.g., tissue, blood, urine) is taken from a hospital outpatient,

the facility or technical component of the diagnostic test must be

billed by the hospital. Thus, independent laboratories cannot bill

for the technical component of pathology services furnished to outpatients. On August 11, 2000, HCFA issued a program memoVerDate 11-MAY-2000 15:23 Oct 31, 2000 Jkt 089006 PO 00000 Frm 00041 Fmt 6659 Sfmt 6602 E:\HR\OC\HR1019P1.XXX pfrm04 PsN: HR1019P1
42

randum (Transmittal No. AB–00–73) which delayed implementation of the rebundling requirement until January 1, 2001.

The provision grandfathers hospitals that have an arrangement

with an independent lab in effect as of July 22, 1999 under which

the lab was furnishing and directly billing the carrier (not the hospital) for a 2 year period. Labs working with these hospitals could

continue direct billing for the technical component of pathology

services provided to hospital inpatients and hospital outpatients.

The provision does not apply to services furnished to

Medicare+Choice enrollees.

The GAO will be required to analyze the types of hospitals that

are grandfathered under the provision and study the effects of the

direct billing provision on hospitals, laboratories, and Medicare

beneficiaries access to physician pathology services. The report is

due to Congress by July 1, 2002. It would include recommendations

on whether the grandfather provision should continue after the 2–

year period for either (or both) inpatient and outpatient hospital

services and whether the provision should be extended to other

hospitals with similar characteristics.

The direct billing provision would apply to services furnished

during the 2–year period beginning January 1, 2001. The report requirement is effective on enactment.

Section 213. Physician group practice demonstration

The provision requires the Secretary to conduct demonstration

projects to test, and if proven effective, expand the use of incentives

to health care groups participating under Medicare. These incentives include encouraging coordination of care furnished under

Medicare Parts A and B by institutional and other providers and

practitioners; encouraging investment in administrative structures

and processes encouraging efficient service delivery; and rewarding

physicians for improving health outcomes. For purposes of the demonstration, a health care group is a group of physicians organized,

at least in part, for the purpose of providing physicians services

under Medicare. As the Secretary finds appropriate, the group

could include a hospital or other entity that was affiliated with the

group and which would share in any bonus earned under the demonstration.

Groups participating in the demonstration agree to be paid on a

fee-for-service basis. They also agree that payment for all services

furnished to beneficiaries would be made to a single agency.

The Secretary specifies those patients to be considered within the

scope of the demonstration. The Secretary ensures that each beneficiary in a demonstration program would be notified of the incentives and of any waivers of coverage or payment rules under the

demonstration program.

The Secretary establishes for each group participating in a demonstration, a base expenditure amount and an expenditure target

(reflecting base expenditures adjusted for risk and expected growth

rates). The Secretary pays each group a bonus for each year equal

to a portion of the savings for the year relative to the target. In

addition, at such time as the Secretary had developed appropriate

criteria, the Secretary pays an additional bonus related to process

and outcome improvements. Total payments under demonstrations

43

could not exceed what the Secretary estimates would be paid in the

absence of the demonstration program.

The provision also specifies requirements for administration of

the demonstration program. These include: limiting beneficiary eligibility to fee-for-service enrollees; permitting the Secretary to limit

the scope of the program including limitation to a geographic area

(or areas) or to subgroup (or subgroups) of beneficiaries or entities;

voluntary receipt of services by beneficiaries; permitting the Secretary to enter into agreements with individuals and entities; establishment of performance standards by the Secretary; administrative review of decisions affecting individuals and entities furnishing services; and, Secretarial review of marketing material. Individuals or entities receiving payment under the program would

agree to accept such payment as payment in full, except for any deductible and coinsurance amount.

The Secretary is permitted to administer the demonstration program through a contract with a program administrator which could

be a Medicare intermediary or carrier or other entity with substantial experience in managing this type of program. Contracts are for

an initial term of 3 years and could be awarded noncompetitively.

The Secretary could make bonus payments to program administrators; the Secretary could also condition such payments on the

achievement of standards related to efficiency, improvement in

processes or outcomes of care, or other factors.

Entities with agreements to provide health services under the

demonstration and entities with program administration contracts

would be required to maintain adequate records and furnish such

reports as the Secretary may require. The provision places certain

limitations on judicial and administrative review of certain actions

and determinations relating to the demonstration. The provision

further requires periodic reports to Congress on the use of authorities under the demonstration program.

This section is effective upon enactment.

Section 214. Designation of separate category for interventional pain

management services

Payments for physicians services are made on the basis of a fee

schedule which is intended to relate payments for a given service

to actual resources used. The fee schedule assigns relative values

to services; these values are the sum of three components—a physician work component, a practice expense component, and a malpractice expense component. In making these calculations, the Secretary is required to determine, for each physicians service or class

of services, the percentage that is performed nationwide by physician in different specialties.

The provision specifies that for services provided on or after January 1, 2002, the Secretary will specify interventional pain management physicians as a separate category of physician specialists.

This section is effective upon enactment.

Section 215. Evaluation of enrollment procedures for medical

groups that retain independent contractor physicians

Medicare generally prohibits payments for services to be made to

anyone other than the person providing a service. One exception is

44

if the physician or other practitioner, as a condition of his or her

employment, is required to turn over the fee to his or her employer.

This section directs the Secretary of Health and Human Services

to evaluate the current Medicare enrollment process for medical

groups that retain independent contractor physicians with particular emphasis on hospital-based physicians, such as emergency

department staffing groups. The Secretary must review the increase of individual Medicare provider numbers issued and the possible Medicare program integrity vulnerabilities of the current

process; assess how program integrity could be enhanced by the enrollment of groups that retain independent contractor hospitalbased physicians; and develop suggested procedures for the enrollment of these groups.

The Secretary will submit the report to Congress one year after

the date of enactment.

This section is effective upon enactment.

Subtitle C—Other Services

Section 221. 3-year moratorium on SNF Part B consolidated billing

requirements

Under the consolidated billing requirement of BBA ’97, skilled

nursing facilities (SNFs) and all nursing homes that include a

Medicare-certified SNF component must submit to Medicare all

claims for all the services provided to their residents who are enrolled in traditional fee-for-service Medicare. Thus, the requirement

applies to claims on behalf of beneficiaries who are long-term care

residents of a nursing home that has a SNF component as well as

those who are residents in the SNF. This requirement is referred

to as ‘‘consolidated billing.’’ (The law includes a list of services that

are excluded from the consolidated billing requirement; excluded

providers may bill Medicare directly.) The consolidated billing requirement also pertains to Medicare covered services regardless of

whether the resident does or does not qualify for SNF care under

Medicare Part A. The requirement means that non-excluded service

or care providers who furnish covered services to SNF residents

may not bill Medicare directly, but must submit their claim to the

SNF for payment. If the item or service is covered by Medicare but

is not included in the SNF PPS, Medicare makes the payment to

the SNF, and the SNF is responsible for paying the provider.

The consolidated billing requirement went into effect in July

1998 (implementation of the SNF PPS) for some, but not all, SNF

patients. Consolidated billing has been implemented only for services to those SNF residents who are in a Medicare Part A covered

stay, and has not been implemented for Medicare Part B covered

services for beneficiaries who are SNF residents whose stay is not

covered under Medicare (which includes those who are long-term

care residents of the non-SNF component of the facility). When

HCFA is ready to expand implementation of consolidated billing it

will publish a notice in the Federal Register 90 days prior to implementation.

Under this provision, implementation of consolidated billing is

delayed until October 1, 2003, for Part B-covered services to SNF

residents who are not in a SNF stay that is covered by Medicare

Part A. The Comptroller General is required to submit a report to

45

Congress by October 1, 2002, regarding alternatives, if any, to consolidated billing for Part B items and services to ensure accountability by SNFs and accuracy in claims submitted for all services

and items provided to SNF residents under Part B.

Delay of consolidated billing is effective as if included with enactment of BBA ’97.

Section 222. Ambulatory Surgical Centers (ASCs)

Delay in Implementation of Prospective Payment System. From

the start of Medicare coverage of ASC services in 1982, Medicare

based payments to ASCs on a fee schedule. Starting January 1,

1995, the Secretary of HHS has been required to update ASC rates

every 5 years based on a survey of the actual audited costs incurred by a representative sample of ASCs for a representative

sample of procedures, and to increase annual payments in the intervening years by the CPI–U. (BBA ’97 modified the annual update amounts.)

On June 12, 1998, HCFA issued proposed rules which would

make major changes in Medicare payments to ASCs. The major

changes include replacing eight payment groupings with an ambulatory payment classification (APC) system comprised of 105 payment groups; updating underlying cost data using 1994 survey data

updated to the present; and making additions to and deletions from

the list of Medicare covered ASC procedures. Payments would

range from $53 to $2,107 and would be updated by the CPI–U annually on a calendar year basis. Final rules are scheduled for publication in November 2000 for implementation in April 2001. BBRA

’99 delayed the implementation by requiring a 3 year phase-in.

The Secretary would be prohibited from implementing the

changes to the APC system published on June 12, 1998 before January 1, 2002.

This section is effective upon enactment.

Extending Phase-In to 4 Years. BBRA ‘99 requires that, if the

Secretary implements new ASC rates based on the 1994 data (or

any rates based on pre-1999 Medicare cost survey data), those new

rates must be phased-in by basing payments one-third on the new

rates in the first year, two-thirds in the second year, and fully in

the third year.

This provision extends the phase-in of new ASC payment rates

based on pre-1999 survey data is extended to occur over 4 years

(one- fourth per year).

This section is effective upon enactment.

Deadline for Use of 1999 or Later Cost Surveys. This provision requires the Secretary by January 1, 2003, to incorporate data from

a 1999 Medicare cost survey or a subsequent cost survey for purposes of revising the ASC payment system.

This section is effective upon enactment.

Section 223. One-year extension of moratorium on therapy caps

BBA ‘97 established annual payment limits for all outpatient

therapy services provided by non-hospital providers. The limits applied to services provided by independent therapists as well as to

those provided by comprehensive outpatient rehabilitation facilities

(CORFs) and other rehabilitation agencies. The limits did not apply

to outpatient services provided by hospitals.

46

There were two per beneficiary limits. The first was a $1,500 per

beneficiary annual cap for all outpatient physical therapy services

and speech language pathology services. The second was a $1,500

per beneficiary annual cap for all outpatient occupational therapy

services. Beginning in 2002, the amount would increase by the

Medicare Economic Index (MEI).

BBRA ’99 suspended application of the therapy limits in 2000

and 2001. (In the absence of additional legislation, the caps would

be imposed again beginning in 2002.) During this time, the Secretary is required to conduct focused medical reviews of therapy

claims with emphasis on claims for services provided to residents

of SNFs. The Secretary is also required to study utilization patterns in 2000 compared to those in 1998 and 1999. The study

(which must be based on a statistically significant number of

claims) will look at nationwide patterns as well as patterns by region, types of setting, and diagnosis or condition. The Secretary is

required to report the results of this study to Congress by June 30,

2001, together with any legislative recommendations deemed appropriate.

The provision extends the moratorium on implementation of the

therapy cap, and the focused reviews, for 1 year.

This section is effective upon enactment.

Section 224. Revision of Medicare reimbursement for telehealth services

BBA ’97 provided for reimbursement from Medicare Part B for

professional consultation via telecommunications systems with physicians and practitioners for beneficiaries residing in rural areas.

The provision requires payments to be made no later than April

1, 2001, in accordance with revised payment procedures, for services that are provided on a telecommunications system by a practitioner or provider to an eligible beneficiary. Services covered under

the provision will include payments for professional consultations,

office visits, office psychiatry visits, including any service identified, as of July 1, 2000, by the following HCPCS codes: 99241–

99275, 99201–99215, 90804–90809, and 90862. The Secretary must

develop a process to determine what other services would be appropriate to be provided under telehealth and shall annually update

covered services through this process.

An eligible beneficiary would be a person residing in a designated health professional shortage area, a county that is not in

a metropolitan statistical area (MSA), an inner city area that is

medically underserved (effective January 1, 2002), or an area in

which there is a Federal telemedicine demonstration program. In

the case of any Federal telemedicine demonstration program in

Alaska or Hawaii, the term telecommunications system would include store-and-forward technologies that provide for asynchronous

transmission of health care information in single or multi-media

formats.

The provision requires the Secretary to make payments for telemedicine services in an amount equal to the amount that would

have been paid to the physician or practitioner if the service had

been furnished to the beneficiary without the use of a telecommunications system. It also eliminates the 75/25 percent fee splitting requirement.

47

A facility fee would be paid to the originating site. This fee would

equal $20 in 2001 and 2002, increased by the percentage increase

in the Medicare Economic Index (MEI) in future years. Payments

would be subject to beneficiary cost-sharing, however balance billing protections apply. Beginning April 1, 2001, an originating site

would be defined as: the physician’s or practitioner’s office, a critical access hospital, rural health clinic, or Federally qualified

health center. Beginning in January 1, 2002, the definition would

be expanded to include a hospital, skilled nursing facility, comprehensive outpatient rehabilitation facility, renal dialysis facility,

ambulatory surgical center, hospital or skilled nursing facility of

the Indian Health Service, or a community mental health center.

The provision specifies that nothing would be construed as requiring an eligible telehealth beneficiary to be presented by the

physician or practitioner at the originating site for the furnishing

of a service, unless it was determined medically necessary by the

physician or practitioner at the distant site.

The provision requires the Secretary to conduct a study to identify additional services that are appropriate for reimbursement.

The report, together with recommendations, would be transmitted

to Congress within 2 years of enactment.

The provision clarifies that the telecommunications provisions

should not be construed as preventing a home health agency from

providing a service, for which payment is made under the prospective payment system, via a telecommunications system.

This section is effective upon enactment.

Section 225. Payment for ambulance services

Payment for ambulance services provided by freestanding suppliers is currently based on reasonable charge screens. Hospital or

other provider-based ambulance services are paid on a reasonable

cost basis. Payment cannot exceed what would be paid to a freestanding supplier. The reasonable costs or charges cannot exceed

costs or charges recognized in a prior year, increased by the CPI–

U minus one percentage point.

BBA ’97 provided for the implementation of a fee schedule, effective January 1, 2000. The aggregate amount of payments in 2000

could not exceed what would otherwise be paid under the prior system. Increases in subsequent years are to equal the CPI increase,

except that there is a one percentage point reduction in 2001 and

2002.

Implementation of the fee schedule has been delayed until at

least January 1, 2001.

The provision eliminates the 1.0 percentage point reduction for

2001 and 2002 so that ambulance services will receive a full update

for CPI. The provision also specifies that any phase-in of the ambulance fee schedule shall provide, in any State in which suppliers

had not been paid a separate amount for all mileage, for full payment of the national mileage rate beginning with the effective date

of the fee schedule.

The provision requires the GAO to conduct a study of the costs

of providing ambulance services across the range of service levels.

Within 18 months of enactment, GAO is required to report to Congress on the study. The report includes any recommendations for

48

changes in methodology or payment levels necessary to fairly compensate suppliers and to ensure access for Medicare beneficiaries.

This section is effective upon enactment.

Section 226. Contrast enhanced diagnostic procedures under hospital prospective payment system

Currently, Medicare covers diagnostic scanning procedures used

in hospital outpatient departments, including procedures that require injection of agents that enhance the visibility of organs showing greater contrast among organs and organ parts. Under the outpatient PPS, coverage of certain agents used for contrasting is generally included in the PPS amount for the procedure for which contrast agents are used.

The Secretary is required to create under the hospital outpatient

department PPS additional groups of covered services that classify

separately those procedures that utilize contrast media from those

that do not. The provision is retroactive to the implementation of

the hospital outpatient department PPS (August 1, 2000). The provision also amends the definition of a drug to include contrast

agents.

This section is effective as if enacted as part of BBA ’97.

Section. 227. Increase from 55 percent to 80 percent the proportion

of hospital bad debt recognized

Currently, hospitals receive compensation from Medicare for certain portions of amounts they are unable to collect from beneficiaries for deductibles and coinsurance (applicable to both inpatient and outpatient department care). BBA ’97 established a

schedule under which the amount of a hospital’s bad debt Medicare

would recognize as an allowable cost would decline from 75% for

cost reporting periods beginning in FY1998 to 55% for cost reporting periods beginning in FY2000 and thereafter. Prior to BBA ’97,

hospitals received compensation for 100% of bad debt incurred.

This provision would reinstate the ability of hospitals to receive

compensation for bad debt. The provision would phase-in Medicare

payment for up to 80% of a hospital’s allowable costs in equal increments beginning in FY 2000 over 10 years.

Section 228. State accreditation of diabetes outpatient self-management training programs

BBA ’97 authorized coverage, effective July 1, 1998, for diabetes

outpatient self-management training services. These services are

defined as including educational and training services furnished to

an individual with diabetes by a certified provider in an outpatient

setting. Certified providers for these purposes are defined as physicians or other individuals or entities that, in addition to providing

diabetes self-management training services, provide other items or

services reimbursed by Medicare. Providers must meet quality

standards established by the Secretary. They are deemed to meet

the Secretary’s standards if they meet standards originally established by the National Diabetes Advisory Board and subsequently

revised by organizations who participated in the establishment of

standards of the Board, or if they are recognized by an organization

representing persons with diabetes, as meeting standards for furnishing such services.

49

The provision authorizes State accreditation of diabetes selfmanagement training programs, provided that the Secretary determined that the State program had established quality standards

that meet or exceed the national standards or the standards originally established by the National Diabetes Advisory Board, and

subsequently revised.

This section is effective upon enactment.

TITLE III—MEDICARE PART A AND B PROVISIONS

Section 301. Home health services

One-Year Delay in 15 Percent Reduction in Payment Rates under

the Medicare Prospective Payment System for Home Health Services. BBA ’97 required implementation of a home health care prospective payment system and specified that the prospective payment system (PPS) be designed so that in the first 12 months of

operation the aggregate amount of Medicare PPS payments would

equal the total payments that would have been paid under the interim payment system had it remained in effect that year but with

a 15% across-the-board reduction in Medicare payments to home

health agencies. The home health PPS was originally scheduled for

implementation in FY 1999 but was delayed until October 1, 2000

(FY 2001). BBRA ’99 delayed the 15% reduction until 12 months

after October 1, 2000 (thus the reduction would go into effect on

October 1, 2001), but it required the Secretary to report on the

need for a 15% or other reduction 6 months after implementation

of the PPS. (This report would be due by March 1, 2001.)

The provision requires that the aggregate amount of Medicare

payments to home health agencies in the second year of the PPS

(FY2002) must equal the aggregate payments in the first year of

the PPS, updated by the Market Basket Increase minus 1.1 percentage points. The 15% reduction to aggregate PPS amounts

would be delayed until October 1, 2002.

This section is effective upon enactment.

Treatment of Branch Offices of Home Health Agencies. Prior to

BBA ’97, home health agency (HHA) payments were based on the

HHA’s billing location. Thus, an agency headquartered in an urban

area would be paid according to rates for urban areas, even though

that agency had provided some of its billable visits through branch

offices serving rural communities. BBA ’97 required HHAs to submit payment claims on the basis of the location in which the service was provided. The home health PPS payments are based on the

location in which the care is furnished.

A home health agency may have both branch offices and

subunits. Subunits must meet the same conditions of participation

as the parent home health agency. These conditions of participation

include staffing and supervision standards. Branch offices do not

have to meet the conditions of participation independently of the

home health agency, and thus are not subject to the same staffing

and supervision requirements. For this reason, in order to ensure

that branch offices of HHAs are adequately supervised, HCFA regional offices have established ‘‘time and distance’’ restrictions on

how far a branch office may be from an agency’s main office. Typically, these restrictions specify that a branch office may be no farther than 60 miles or 60 minutes from the main office for that

50

HHA, although they vary in different areas. The branch office must

be easily accessible from the parent office in case of an emergency

as the branch office does not have the same skilled staff on site.

Under this provision, use of time and distance as the sole determinant of a home health agency’s branch office status is prohibited.

This section is effective upon enactment.

Consideration of Forms of Technology in Definition of Supervision. One component of the definition of a home health agency is

that it has policies governing the services it furnishes and provides

for supervision of such services by a physician or registered professional nurse.

This section requires the Secretary to include various forms of

technology in determining what constitutes ‘‘supervision’’ for purposes of an agency’s meeting the definition of a home health agency.

This section is effective upon enactment.

Clarification of the Definition of Homebound. To qualify for home

health care under Medicare an individual must be homebound or

‘‘confined to home.’’ A homebound individual is defined as one who

cannot leave home without a considerable and taxing effort and

only with the aid of devices such as a wheelchair, a walker, or

through use of special transportation. Absences from home may

occur infrequently for short periods of time for such purposes as to

receive medical treatment. Medicare law requires that a physician

certify that an individual’s medical condition confines him or her

to home. Currently, some regional home health intermediaries exclude individuals with Alzheimer’s from home care if they leave the

home for medical or therapeutic treatment at an adult day care

center.

This provision clarifies that approved absences from home include participation in an adult day care program licensed or certified by a State to furnish such services for therapeutic treatment

for Alzheimer’s disease or a related dementia. This would not

change the requirement the home health services must be provided

by a Medicare home health agency.

This provision is effective October 1, 2001.

One-Year Delay in Report. BBRA ’99 required the Secretary to

submit, within 6 months of implementation of the home health

PPS, a report to Congress on the need for a 15% or other reduction

in Medicare payments to home health agencies.

This section requires the Secretary to submit a report to Congress on the need for the 15% or other reduction no later than 18

months after implementation of the home health PPS.

This section is effective upon enactment.

Section 302. Advisory opinions

The Health Insurance Portability and Accountability Act of 1996

(HIPAA, P.L. 104–91) required the Department of Health and

Human Services, through the Office of the Inspector General (OIG)

in consultation with the Department of Justice, to issue advisory

opinions to outside parties who request guidance on the applicability of the anti-kickback statute, safe harbor provisions and other

OIG health care fraud and abuse sanctions. The authority to issue

this guidance expired on August 21, 2000. The OIG protects subVerDate 11-MAY-2000 15:23 Oct 31, 2000 Jkt 089006 PO 00000 Frm 00050 Fmt 6659 Sfmt 6602 E:\HR\OC\HR1019P1.XXX pfrm04 PsN: HR1019P1
51

missions of proprietary information to the extent possible under the

Freedom of Information Act (FOIA; 5 U.S.C § 552).

This section makes permanent the OIG’s authority to issue guidance. Any supporting documentation submitted as part of a request

for an advisory opinion will not be subject to FOIA.

Section 303. Hospital geographic reclassification for labor costs for

other PPS systems opinions

As part of Medicare’s prospective payment system for acute hospitals, a hospital may apply to the Medicare Geographic Classification Review Board (MGCRB) to be reclassified to a different area

for the purposes of using its wage index, its standardized amount,

or both. Although some of Medicare’s payment systems for other

provider types use the hospital wage index, reclassification decisions made by the MGCRB only apply to inpatient and outpatient

hospital PPS payments.

Under this section, MGCRB reclassification decisions to adjust

the hospital’s wage index in a fiscal year will apply to providerbased entities or distinct part units of that particular hospital paid

under the following payment systems: home health PPS, skilled

nursing facility PPS, inpatient rehabilitation hospital PPS, inpatient long term care hospital PPS, inpatient psychiatric hospital

PPS.

Section 304. Reclassification of a metropolitan statistical area for

the purposes of reimbursement under the Medicare program

As part of Medicare’s prospective payment system for acute hospitals, hospitals may apply to the Medicare Geographic Classification Review Board to be reclassified to a different area for the purposes of using its wage index, its standardized amount, or both.

Hospitals that are in or that are reclassified to metropolitan areas

(MSAs) with population of one million or more are considered to be

in large urban areas and receive payment based on a higher standardized amount. The labor-related amount of the standardized

amount is adjusted by the wage index value of the area the hospital is in or the area to which the hospital has been reclassified.

With respect to MGCRB wage index reclassifications, if the wage

data for the redesignated hospitals reduces the wage index value

of the area to which the hospitals are redesignated by 1 percentage

point or less, the original wage index value for the area (exclusive

of the wage data for the redesignated hospitals) applies to the redesignated hospitals. However, if the wage data for the redesignated hospitals reduced the wage index value of the area to which

the hospitals are redesignated by more than 1 percentage point,

the redesignated hospitals are subject to that combined wage index

value.

This provision establishes, for FY2001 and subsequently, hospitals in the Mansfield Ohio MSA are deemed to be located in the

Cleveland-Loraine-Elyria Ohio MSA, a large urban area. The reclassification made under the previous sentence is to be treated as

a MGCRB decision.

This section is effective beginning in fiscal year 2001.

52

Section 305. Making the Medicare dependent, small rural hospital

program permanent

Medicare dependent hospitals (MDHs) are small rural hospitals

that treat a relatively high proportion of Medicare patients. MDH’s

special payment status was phased out as of September 30, 1994

and then reinstated, on a modified basis by BBA ’97, starting on

October 1, 1997 through October 1, 2001. MDH classification was

extended to October 1, 2006 by BBRA ’99.

This provision makes the MDH program permanent. Conforming

amendments would permit hospitals to decline reclassification by

the Medicare Geographic Classification Review Board from a rural

to an urban area in order to maintain its MDH status.

This section is effective upon enactment.

Section 306. Option to base eligibility on discharges during any of

the 3 most recent audited cost reporting periods

Medicare dependent hospitals are small rural hospitals that treat

a relatively high proportion of Medicare patients. Generally, a

MDH is located in a rural area, has 100 beds or less, is not classified as a sole community hospital, and had a least 60% of its days

or discharges during FY 1987 attributable to Medicare Part A

beneficiaries.

This provision updates the MDH criteria to permit an otherwise

qualifying small rural hospital to be classified as an MDH if at

least 60% of its days or discharges were attributable to Medicare

Part A beneficiaries in any of the 3 most recently audited cost reporting periods.

This section is effective upon enactment.

Section 307. Identification and reduction of medical errors by peer

review organizations

Peer review organizations (PROs) now have certain statutory responsibilities to work with hospitals and other providers to improve

clinical outcomes through data collection and analysis. PROs also

address certain beneficiary complaints and work to prevent Medicare payment errors.

This provision gives PROs the authority to work with providers,

practitioner, and Medicare+Choice organizations to identify and reduce the incidence of medical errors and problems affecting patient

safety.

This section is effective January 1, 2001.

Section 308. GAO Report on Impact of the Emergency Medical

Treatment and Active Labor Act (EMTALA) on hospital emergency departments

The Emergency Medical Treatment and Active Labor Act

(EMTALA) requires that doctors on call at hospital emergency departments screen and stabilize patients who go to emergency departments for treatment. Physicians who refuse to treat emergency

department patients or fail to respond to hospital emergency department requests when on call face significant fines and are exposed to liability under EMTALA. There are concerns that the impact of EMTALA, as well as provisions in the Balanced Budget Act

of 1997, has led to many physicians covering emergency department calls in Phoenix, Arizona to resign from various hospitals’

53

medical staffs, thus raising concerns as to whether downtown Phoenix hospitals can keep their emergency departments open.

This provision would require the General Accounting Office to report to the Subcommittee on Health and Environment of the Committee on Commerce of the House of Representatives by May 1,

2001, on the effect of EMTALA on hospitals, emergency physicians,

and physicians covering emergency department calls, focusing on

those in Arizona and California.

TITLE IV—MEDICARE+CHOICE PROGRAM STABILIZATION

AND IMPROVEMENTS

Subtitle A—Payment Reforms

Section 401. Increasing minimum payment amount

Under current law, each county is subject to a floor amount, designed to raise payments in certain counties more quickly than

would otherwise occur. The minimum payment amount for aged

Medicare+Choice (M+C) enrollees is $401.61 for 2000 and will be

$415.01 for 2001. As required by law, each year this payment

amount is increased by a measure of the national growth percentage. In 2001, payments for M+C organizations will be set at the

floor amount in about one-third of all counties.

This section sets the minimum payment amount or floor payment

for aged enrollees in a Metropolitan Statistical Area with a population of more than 250,000 at $525 in 2001. For all other areas,

the minimum would be $475. This provision would not apply to

M+C private fee-for service plans.

Section 402. 3 Percent minimum percentage update in 2001

The minimum increase rule under current law protects counties

that would otherwise receive only a small (if any) increase. In 1998,

the minimum rate for any payment area was 102% of its 1997

AAPCC. For each subsequent year, it will be 102% of its annual

M+C per capita rate for the previous year. All plans are subject to

the same minimum increase.

This section allows plans to receive a 3.0% minimum update,

rather than the 2% minimum update for 2001.

Section 403. 10-year phase in of risk adjustment based on data from

all settings

M+C payments are risk adjusted to reflect variations in the cost

of providing health care among Medicare beneficiaries. For example, if sicker and older patients all sign up for one M+C plan, risk

adjustment is designed to compensate the plan for their above average health expenses.

BBA ’97 required the Secretary of HHS to develop a risk adjustment mechanism that uses variations in health status as well as

demographic factors to account for variations in costs. Beginning in

January 2000, the Health Care Financing Administration implemented a new risk adjustment mechanism built on 15 principal inpatient diagnostic cost groups (PIP–DCGs). Payments are adjusted

based on inpatient data using the PIP–DCG adjuster and demographic factors, so that this system accounts for both demographic

and health-status variations. Under this mechanism, the per capita

54

payment made to a plan for an enrollee is adjusted if that enrollee

had an inpatient stay during the previous year. Separate demographically-based payments are used for enrollees without a prior

hospitalization, newly eligible aged persons, newly eligible disabled

Medicare enrollees, and others without a medical history.

BBRA ’99 slowed down the implementation of the Secretary’s

proposed phase-in schedule of this system, through 2002. In 2000

and 2001, 10% of payments will include risk adjustment using the

PIP–DCG method and 90% will be based solely on the older demographic method. In 2002, up to 20% of the payments will be adjusted under the new system, with the remainder of the payment

based on adjustments under the old method. After 2002, the splits

are not set in law, although the Secretary originally planned to: (1)

base 80% of payments on the PIP–DCG system in 2003; and (2) develop a new risk adjustment system for 2004 and beyond that

would incorporate both inpatient and outpatient diagnoses.

This provision phases in a new risk adjustment method based on

data from substantially all settings gradually over 10 years, in onetenth increments, starting in 2004, or, if later, the first year in

which such data are used.

Section 404. Transition to revised Medicare+Choice payment rates

Under current law, M+C organizations which choose not to

renew their contract with HCFA or to reduce their service area

must notify HCFA in writing by July 1 of the year in which the

contract would end. (For example notification was due by July 3,

2000 (because July 1 fell on a Saturday) for contracts ending December 31, 2000.)

Under this section, within 2 weeks after the date of enactment

of the bill, the Secretary of Health and Human Services must announce revised M+C capitation rates for 2001, due to changes from

this legislation. Plans that previously provided notice of their intention to terminate contracts or reduce their service area for 2001

would have 4 weeks after enactment of this Act to rescind their notice and submit an ACR. Further, any M+C organization that

would receive higher capitation payments as a result of this bill

must submit revised ACR information within four weeks after the

date of enactment.

Subtitle B—Administrative Reforms

Section 411. Effectiveness of elections and changes of elections

The Balanced Budget Refinement Act changed BBA ’97 to specify

that any request to enroll in or disenroll from a M+C plan made

after the 10th of the month will not be effective until the first day

of the second calendar month thereafter.

This provision reverses that policy and returns to the policy in

effect with the BBA ’97, allowing individuals who enroll in an M+C

plan after the 10th day of the month to receive coverage beginning

on the first day of the next calendar month, effective January 1,

2001.

55

Section 412. Medicare+Choice Program compatibility with employer

or union group health plans

This section grants the Secretary authority to waive certain rules

that hinder the design of or offering of Medicare+Choice plans to

employers and labor organizations, thereby enabling employers and

their retirees to take advantage of the Medicare+Choice program.

Over the past few years, employers have increasingly relied on

health plans that participate in Medicare to meet their retirees’

health care needs. The growing participation in Medicare health

plans among employers and retirees reflects the attractiveness over

the fee-for-service Medicare program and traditional indemnity retiree health benefits.

Many employers have turned to Medicare+Choice as a way to

continue offering coverage to their retirees. Certain BBA rules related to enrollment effective dates and beneficiary information (e.g.,

all beneficiaries receive the same information), among others, have

made it more difficult for employers to offer Medicare+Choice plans

to their retirees.

Section 413. Uniform premium and benefit

This section allows the Secretary to waive the BBA ’97 rule that

Medicare+Choice organizations offer uniform benefits and premiums across a service area without regard to different payment

levels in the service area. BBA ’97 limited plans’ ability to continue

or begin serving lower-payment counties, just the opposite of the

BBA ’97 goal of expanded choice.

The Balanced Budget Act of 1997 required Medicare+Choice

plans to have a uniform benefit package and premium across a

service area. The Balanced Budget Act of 1999 modified this requirement and allowed plans to break their ACR into service areas

which could be as small as a county. Under current law, there is

no requirement that you provide the same premium and benefit

level in two different counties in your service area. However, plans

must submit a separate ACR for each segment. This provision

would allow plans to vary benefits across counties without submitting a separate ACR for each county. We note, however, that the

Health Care Financing Administration still has the the ability to

audit and monitor these situations to ensure that plans continue

to be accountable to the Medicare program and its beneficiaries.

This provision is effective upon enactment.

TITLE V—MEDICAID

Subtitle A—General Provisions

Section 501. DSH allotments

Continuation of Medicaid DSH Allotments at Fiscal Year 2000

Levels. Medicaid requires States to make disproportionate share

(DSH) payments to certain hospitals treating large numbers of lowincome and Medicaid patients. Within broad Federal guidelines,

States determine the formulas used to make payments to individual hospitals and to designate which hospitals qualify for payments. Those payments are matched by the Federal government at

the Federal medical assistance percentage (FMAP), the same percentage that applies to most other Medicaid payments for benefits.

56

Provisions were included in the Balanced Budget Act of 1997

that made graduated reductions in DSH spending over time. The

formula-based DSH allotments were replaced with specific DSH allotments for each State for FY1998 through 2002, with some high

DSH States (above 12%) taking reductions. After 2002, each State’s

allotment will be equal to its allotment for the previous year increased by the percentage change in the consumer price index for

the previous year. Each State’s DSH payments for FY2003 and beyond are limited to no more than 12% of spending for medical assistance for that year.

The Committee’s provision stops the reduction in allotments to

the high DSH States by freezing State-specific DSH allotments for

FY2001 at the FY2000 levels, and allow these allotments to grow

for inflation. For FY2001 and beyond, each State’s DSH allotment

would be equal to its allotment for the previous year increased by

the percentage change in the consumer price index for the previous

year, subject to a ceiling equal to 12% of that State’s total medical

assistance payments in that year.

Special Rule For Medicaid DSH Allotment for Extremely Low

DSH States. The Committee’s provision rebases Medicaid DSH allotments for extremely low DSH States.

In the case of a State where the total FY1999 Federal and State

DSH expenditures (as reported to HCFA on August 31, 2000) is

less than one percent of the State’s total medical assistance expenditures during that fiscal year, the DSH allotment for FY2001

must be increased to 1 percent of the State’s total amount of expenditures under their plan for such assistance during that fiscal

year. This new allotment becomes the State’s base allotment for

the purposes of applying section 501(a) in future years, and these

States would be allowed to grow at CPI–U with the rest of the

States. This provision does not apply to Hawaii and Tennessee,

which do not have DSH programs.

District of Columbia. The DSH allotment for the District of Colombia is set at $32 million for FY2000.

For the purpose of calculating the FY2001 allotment, the Committee’s provision would increase the FY2000 DSH allotment for

the District of Columbia to $49 million. This change is intended to

compensate for a technical error in calculating the District’s 1995

DSH allotment.

Contingent Allotment for Tennessee. Some States in the past obtained waivers of certain Medicaid provisions for a number of purposes including requiring Medicaid beneficiaries to enroll in managed care organizations (MCOs), or limiting MCO services to a specific population or geographic area or to expand the program to individuals who would not otherwise be eligible for Medicaid. These

renewable waivers are authorized under sections 1915(b), 1915(c),

or 1115 of the Medicaid law. These waivers are required to be

budget neutral so oftentimes, the States discontinued their regular

DSH programs and used Federal share DSH allotments to help offset the costs of the program expansions.

If Tennessee’s State-wide section 1115 Medicaid waiver program

is revoked or terminated, the Committee’s provision sets Tennessee’s FY2001 DSH allotment equal to $286,442,437 so that it

could re-institute a regular DSH program and resume DSH payments to hospitals.

57

Assuring Identification of Medicaid Managed Care Patients. Medicaid requires States to make disproportionate share (DSH) payments to certain hospitals treating large numbers of low-income

and Medicaid patients. Within broad Federal guidelines, States determine the formulas used to make payments to individual hospitals and to designate which hospitals qualify for payments. Those

payments are matched by the Federal government at the Federal

medical assistance percentage (FMAP), the same percentage that

applies to most other Medicaid payments for benefits.

States may provide disproportionate share payments to those

hospitals whose Medicaid inpatient utilization rate is at least one

standard deviation above the mean Medicaid inpatient utilization

rate for all hospitals receiving Medicaid payments in the State, and

must provide payments to those with a low-income utilization rate

above 25 percent. The Medicaid inpatient utilization rate is in part

based on the number of inpatient days attributable to Medicaid

beneficiaries. The low-income utilization rate includes the total revenues paid on behalf of Medicaid beneficiaries.

The Committee’s provision clarifies that Medicaid enrollees of

managed care organizations and primary care case management

organizations are to be included for the purposes of calculating the

Medicaid inpatient utilization rate and the low-income utilization

rate. With the move to managed care, the fee-for-service number by

itself is no longer an accurate representation of Medicaid utilization. The State must include in their MCO contracts information

that allows the State to determine which hospital services are provided to Medicaid beneficiaries through managed care. The Committee’s provision would also requires States to include a sponsorship code for the managed care entity on the Medicaid beneficiary’s

identification card.

This section is effective January 1, 2001.

Section 502. New prospective payment system for federally-qualified

health centers and rural health clinics

Under the Balanced Budget Act of 1997, Congress repealed the

requirement that States pay Federally Qualified Health Centers

(FQHCs) based on costs incurred in providing care (cost-based reimbursement). States now pay Federally Qualified Health Centers

and Rural Health Clinics (RHCs) a percentage of the facilities’ reasonable costs for providing services. This percentage decreases for

specified fiscal years—100% of costs for services furnished during

FY1998 and FY1999; 95% for FY2001 and FY2002; 90% for

FY2003; 85% for FY2004; and cost-based reimbursement will expire in 2005. Two special payment rules are applicable during

FY1998–FY2002. In the case of a contract between an FQHC or

RHC and a managed care organization (MCO), the MCO must pay

the FQHC or RHC at least as much as it would pay any other provider for similar services. States are required to make supplemental payments to the FQHCs and RHCs, equal to the difference

between the contracted amounts and the cost-based amounts.

The Committee’s provision creates a new Medicaid prospective

payment system for FQHCs and RHCs beginning in FY2001. An

average of the reasonable costs incurred in FY 1999 and 2000 will

form the base for prospective payments beginning in FY 2001 to

FQHCs and RHCs. This amount will take into account any increase

58

or decrease in the scope of services furnished. For entities first

qualifying as FQHCs or RHCs after 2000, the per visit payments

will begin in the first year that the center or clinic attains such

qualification and are to be based on 100% of the costs incurred during that year based on the rates established for similar centers or

clinics with similar caseloads in the same adjacent geographic area.

In the absence of such similar centers or clinics, the methodology

would be based on that used for developing rates for established

FQHCs or RHCs or a methodology established by the Secretary.

For subsequent fiscal years, per visit payments for all FQHCs

and RHCs are equal to amounts for the preceding fiscal year increased by the percentage increase or decrease in the Medicare

Economic Index applicable to primary care services for that fiscal

year, and adjusted for any increase in the scope of services furnished during that fiscal year. In managed care contracts, States

must make supplemental payments to the center or clinic equal to

the difference between contracted amounts and the prospective

payment system amounts. Those payments are to be paid on a

schedule mutually agreed to by the State and the FQHC or RHC.

Alternative payment methods are permitted only when payments

are at least equal to amounts otherwise provided.

The Committee’s provision also directs the Comptroller General

to provide for a study on how to rebase or refine cost payment

methods for the services of FQHCs and RHCs. The report is due

to Congress no later than 4 years after the date of enactment.

This section is effective October 1, 2000.

Section 503. Optional coverage of legal immigrants under the Medicaid program

For the purposes of determining alien eligibility for Federal benefits, the law recognizes two general categories of aliens: qualified

and non-qualified aliens. Qualified aliens include legal permanent

residents, refugees, aliens paroled into the United States for at

least 1 year, aliens granted asylum or related relief, certain abused

spouses and children and Cuban-Haitian entrants. Non-qualified

aliens are other non-citizens, including illegal aliens, aliens admitted for a temporary purpose, such as tourists and foreign students,

short-term parolees, asylum applicants, and various classes or

aliens granted temporary permission to remain.

In general, non-qualified aliens are not eligible for Federal medical assistance under title XIX except in the case of medical emergency.

In addition, States are required to cover certain categories of

aliens provided they meet the State’s financial and other eligibility

criteria. These groups include: (1) veterans or persons on active

military duty; (2) refugees, asylees, and Cuban and Haitian entrants for seven years after entry, and Amerasians for five years

after entry; (3) lawful permanent residents who can be credited

with 40 quarters of Social Security coverage; and (4) Canadian- and

Mexican-born immigrants of at least 50% North American Native

heritage. Legal immigrants who were receiving SSI (and related

Medicaid) as of August 22, 1996 continue to be eligible. In addition,

those who were here by August 22, 1996, and subsequently became

disabled are also eligible for SSI and related Medicaid.

59

Other lawfully residing aliens may become eligible for Medicaid

at State option subject to their State’s financial and other criteria,

for example, aliens residing in the United States before August 22,

1996. Those entering the United States after August 22, 1996 are

barred for 5 years from all but emergency medical assistance. After

5 years, they may become eligible for full Medicaid at State option.

Aliens entering with sponsors after December 19, 1997 are subject to the ‘‘deeming rule,’’ under which the sponsors’ income and

resources are deemed to be available to the immigrant in determining the immigrant’s financial eligibility for benefits until the

immigrant becomes a citizen or meets the 10-year work requirement or is credited with 40 quarters of work by SSA.

The Committee’s provision amends title XIX to allow States the

option of extending Medicaid coverage to pregnant women (during

pregnancy and for 60 days following birth) or children who would

not otherwise qualify under the 1996 welfare reform law provisions

pertaining to eligibility for lawfully residing illegal immigrants. To

qualify, the pregnant woman or children must meet all other Medicaid eligibility requirements and must have been lawfully residing

in the United States for at least 2 years. States could elect to apply

the new option to immigrant pregnant women, immigrant children,

or both.

In a State that elects to provide Medical assistance to pregnant

women and children under this provision, action may not be

brought under an affidavit of support against the sponsor of such

an alien on the basis of the medical care received. In a State that

elects this option, the provisions of the law that might restrict participation in Medicaid of immigrants who have lawfully resided in

the country for at least two years would cease to apply. Additionally, if a State chooses to cover these immigrants, sponsors would

not incur a debt for the cost of Medicaid benefits provided to immigrants under the election and sponsors would not be asked to repay

the value of the medical care received after the two year period had

been met. Under section 602, States electing to apply the new option to immigrant children in Medicaid would also be permitted to

extend coverage to them in SCHIP under the same terms.

This section is effective October 1, 2000.

Section 504. Additional entities qualified to determine Medicaid

presumptive eligibility for low-income children

Qualified Entities to Determine Presumptive Eligibility for LowIncome Children. Currently, States have the option of extending

what is known as ‘‘presumptive eligibility’’ to two categories of

Medicaid beneficiaries—pregnant women and children under 19

years of age. Presumptive eligibility allows such individuals whose

family income appears to be below the State’s Medicaid income

standards to enroll temporarily in Medicaid, until a final formal determination of eligibility is made. The primary purpose of this option is to make needed services immediately available to these

specified groups. Presumptive eligibility has been permitted for

pregnant women since 1986, and for children under 19 since 1997.

The law defines the entities permitted to make presumptive eligibility determinations. For children, qualified entities include Medicaid providers, or agencies authorized to determine eligibility for

Head Start programs, subsidized child care (under the Child Care

60

and Development Block Grant), or the Special Supplemental Food

Program for Women, Infants and Children (WIC).

For pregnant women, a qualified entity is a provider that: (1) is

eligible to receive payments under Medicaid, and provides services

of the types delivered by outpatient hospitals, Rural Health Clinics,

Federally Qualified Health Centers, or other clinics, and has been

designated by the State as being capable of making presumptive

eligibility determinations, and receives funds under the Consolidated Health Centers program or the Rural Health Outreach, Network Development and Telemedicine Grant, or the Maternal and

Child Health Services Block Grant Program, or the Health Services

for Urban Indians program; (2) participates in a program established under the Special Supplemental Food Program for Women,

Infants and Children (WIC) or the Commodity Supplemental Food

Program; (3) participates in a State perinatal program; or (4) is the

Indian Health Service or a health program or facility operated by

the tribe or tribal organization under the Indian Self Determination Act.

The Committee’s provision adds several new entities to the list

of those qualified to make Medicaid presumptive eligibility determinations for low-income children and pregnant women, including

(1) those authorized to determine eligibility for children under

Medicaid (title XIX) or the State Children’s Health Insurance Program (title XXI); (2) elementary or secondary schools as defined in

the Elementary and Secondary Education Act of 1965; (3) elementary or secondary schools operated or supported by the Bureau of

Indian Affairs; (4) State or tribal child support enforcement agencies; (5) child care resource and referral agencies; (6) organizations

providing emergency food and shelter under a grant through the

Stewart B. McKinney Homeless Assistance Act; (7) State or tribal

offices or entities involved in enrollment under Medicaid, the Temporary Assistance for Needy Families program (part A of title IV),

the State Children Health Insurance Program, or that determines

eligibility for assistance or benefits provided under any program of

public or assisted housing that receives Federal funds, including

the program under Section 8 or any other section of the United

States Housing Act of 1937 or under the Native American Housing

Assistance and Self-Determination Act of 1996; or (8) any other entity deemed by a State, as approved by the Secretary of Health and

Human Services (HHS).

The entities included in this provision are all locations that interact with individuals who may be potentially eligible for health insurance through Medicaid or SCHIP. These entities may have access to the family’s income information and could cross reference

State Medicaid and SCHIP income eligibility guidelines to determine whether or not the children or pregnant women would qualify

for health insurance based on income. This provision does not

change current law that requires the State to make the ultimate

eligibility determination.

This section is effective October 1, 2000.

Application of Presumptive Eligibility Provisions to the State

Children’s Health Insurance Program. States’ allotments under the

State Children’s Health Insurance Program (SCHIP; title XXI of

the Social Security Act) are made available to pay only the Federal

share of costs associated with separate (non-Medicaid) SCHIP proVerDate 11-MAY-2000 15:23 Oct 31, 2000 Jkt 089006 PO 00000 Frm 00060 Fmt 6659 Sfmt 6602 E:\HR\OC\HR1019P1.XXX pfrm04 PsN: HR1019P1
61

grams. The Federal share of costs associated with Medicaid expansions under SCHIP are paid for under Medicaid. State SCHIP allotments are reduced by the amounts paid under Medicaid for

SCHIP Medicaid expansion costs.

Medicaid’s presumptive eligibility option allows States to enroll

temporarily children whose family income appears to be below the

State’s applicable income standards, until a final formal determination of eligibility is made. Benefits provided during periods of presumptive eligibility to Medicaid children, both those presumed to

be eligible under regular Medicaid and those presumed to be eligible under SCHIP Medicaid expansions, are paid out of title XIX

and are counted against a State’s SCHIP allotment.

There is no express provision for the treatment of presumptive

eligibility under separate (non-Medicaid) SCHIP programs. However, the Secretary of Health and Human Services permits States

to develop an equivalent procedure for separate (non-Medicaid)

SCHIP programs. Expenditures associated with presumptive eligibility for children who are eventually determined to be ineligible

for Medicaid (under title XIX or under a Medicaid expansion under

SCHIP) or for a separate (non-Medicaid) SCHIP program are

counted against title XXI allotments under the health service initiatives option. Health service initiatives, direct purchase of services to provide child health assistance, outreach activities and other

reasonable costs to administer the program are treated as administrative expenses. All administrative expenses are subject to an

overall limit of 10% of total program spending per fiscal year.

The Committee’s provision would clarify States’ authority to conduct presumptive eligibility, as defined in title XIX and amended

by the previous provision, under separate (non-Medicaid) SCHIP

programs.

This section is effective October 1, 2000.

Section 505. Improving welfare-to-work transition under the Medicaid program

Eligibility for Temporary Assistance for Needy Families (TANF)

does not confer automatic Medicaid eligibility. Nonetheless, current

law preserves Medicaid entitlement for individuals who meet the

requirements for the former Aid to Families with Dependent Children (AFDC) programs that were in effect in States on July 16,

1996, even if they do not qualify for assistance under TANF. This

group was created to ensure that certain low-income families do

not lose their Medicaid eligibility as a result of welfare reform.

States are required to use the eligibility determination processes

that were already in place for AFDC and Medicaid, including the

same income and resource standards and other rules formerly used

to determine if a family’s income and composition made it eligible

for AFDC and Medicaid. States may modify their ‘‘pre-reform’’

AFDC income and resource standards as follows: (1) States may

lower their income eligibility standards, but not below those used

on May 1, 1988, (2) States may increase their income and resource

standards up to the percentage increase in the Consumer Price

Index (CPI), and (3) States may use less restrictive income and resource methodologies than those in effect on July 16, 1996.

Transitional medical assistance (TMA) under Medicaid was created to address the concern that the loss of Medicaid for individVerDate 11-MAY-2000 15:23 Oct 31, 2000 Jkt 089006 PO 00000 Frm 00061 Fmt 6659 Sfmt 6602 E:\HR\OC\HR1019P1.XXX pfrm04 PsN: HR1019P1
62

uals who successfully obtain employment would be a disincentive

to seeking and keeping jobs. States are required to continue Medicaid for 6 months for families included in the group (described

above) who received Medicaid in at least 3 of the last 6 months preceding the month in which the family lost Medicaid coverage due

to increased hours of employment, increased earnings of the caretaker relative, or the family member’s loss of one of the time limited earned income disregards. States must extend Medicaid coverage for an additional 6 months for families that were covered

during the entire first 6-month period, and are earning below 185%

of the Federal poverty line. The TMA provision will sunset at the

end of fiscal year 2001.

States must adhere to certain notification requirements for TMA.

During the initial 6-month extension period, at specified intervals,

States must notify qualifying families about: (1) their option for an

additional 6 months of Medicaid coverage, (2) the reporting requirements applicable to the initial extension period and the additional

extension period, (3) whether premiums are required for extended

assistance, including premiums required in the first 3 months of

the additional 6-month extension, and (4) other out-of-pocket expenses, benefits, reporting and payment procedures and any preexisting condition limitations, waiting periods, or other coverage

limitations imposed under any alternative coverage options offered.

During the additional 6-month extension period, States must notify

qualifying families about the reporting requirements applicable to

this period of extension and the amount of any premium required

for such extended assistance for the final 3 months of coverage.

To qualify for TMA, families must meet certain reporting requirements. Families receiving the initial 6 months of TMA must

report gross monthly earnings and the monthly costs of employment-related child care for months 1 through 3 of this period. Such

reporting is a condition for eligibility for the additional 6 months

of TMA. During the second 6 months of TMA, families must report

the same financial information for months 4 through 9. Thus, families who qualify for the full 12 months of TMA must report gross

earnings and employment-related child care costs for each of

months 1 through 9.

The Committee’s provision extends the sunset on the TMA provision by one year to fiscal year 2002. It also gives States the option

to waive reporting requirements for families qualifying for up to 12

months of TMA (and the corresponding obligation of States to notify families of these reporting requirements).

Individuals who are eligible for TMA are automatically eligible

for the first six months. The only requirement that beneficiaries

must meet during this period is to have a dependent child living

in the home. This provision would allow States the option to eliminate this reporting requirement during the first six months.

The provision gives States the option to eliminate the reporting

requirements laid out in the statute for the second six months as

well. The provision does not in any way alter the requirement that

families’ incomes do not exceed 185% of poverty. States must continue to ensure that families meet the income requirements to continue to be eligible. The provision in the Committee’s bill would

allow States the flexibility to look to the regular eligibility redetermination rules and procedures (rather than mandate that they folVerDate 11-MAY-2000 15:23 Oct 31, 2000 Jkt 089006 PO 00000 Frm 00062 Fmt 6659 Sfmt 6602 E:\HR\OC\HR1019P1.XXX pfrm04 PsN: HR1019P1
63

low the statutory requirements) to ensure that families continue to

meet the requirements for eligibility. For example, the Health Care

Financing Administration recently notified States of States’ ability

to do ex parte determinations using existing current information

that beneficiaries have filed for other programs to determine and

redetermine eligibility, rather than requiring individuals to present

in the State office at each interval. This provision will give States

more flexibility in managing their programs and alleviate burden

on beneficiaries as well.

Finally, the Committee’s provision makes TMA an option, rather

than a requirement, for the subset of States that already cover individuals in this group at or above 185% of poverty. States that are

already covering these individuals in their Medicaid program and

are meeting Medicaid eligibility requirements will be deemed to

have met the TMA requirements. The Committee believes this option is in keeping with its desire to reduce burdensome or overly

prescriptive requirements on States and beneficiaries without decreasing accountability or access.

This section is effective October 1, 2000.

Section 506. Medicaid county-organized health systems

Health insuring organizations (HIOs) are county-sponsored

health maintenance organizations which are currently providing

care to a limited number of beneficiaries in the California Medicaid

program. Currently, five HIOs operate in seven California counties.

These entities are exempt from certain Federal statutory requirements for Medicaid HMO contracts if the HIOs enroll no more than

10 percent of all Medicaid beneficiaries in these California counties

(not counting qualified Medicare beneficiaries.)

The committee’s provision allows the current exemption from

Medicaid HMO contracting requirements to continue to apply as

long as no more than 14% of all Medicaid beneficiaries in these

California counties are enrolled in those HIOs.

This provision is effective upon enactment of this legislation.

Section 507. Medicaid recognition for services of physician assistants

The Federal Medicaid statute lists services that qualify as Medicaid benefits. Federal matching payments are available toward the

cost of items on the list, if covered by State Medicaid programs.

States are required to cover certain of those listed items and may

choose to cover other items on the list. Congress recognized the

services of physician assistants for Medicare in the Balanced Budget Act of 1997. However, a parallel change was not made in Medicaid. Currently, all but three States cover the services of physician

assistants under Medicaid.

The Committee’s provision includes services provided by physician assistants as Medicaid recognized benefits as long as the services are provided under the supervision of a physician and are authorized under State law. The services of physician assistants

would be an optional Medicaid benefit.

This section is effective upon enactment.

64

TITLE VI—STATE CHILDREN’S HEALTH INSURANCE

PROGRAM

Section 601. Special rule for availability and redistribution of unused fiscal year 1998 and 1999 SCHIP allotments

Title XXI of the Social Security Act, the State Children’s Health

Insurance Program, authorizes and appropriates funds for SCHIP

for FY1998 through FY2007. To receive Federal funds, States must

submit a plan describing their program to the Health Care Financing Administration for approval. In order to access FY1998 allotments, States must have had such approval prior to October 1,

1999. Allotment of funds among the States is determined by a formula set in law. This formula is based on a combination of the

number of low-income children and low-income uninsured children

in the State, and includes a cost factor that represents the average

wages in the State compared to the national average.

SCHIP funds not drawn down from a State’s Federal allotment

by the end of each fiscal year continue to be available for 2 additional fiscal years, giving each State a total of 3 years to draw

down its allotment of Federal matching funds from a given year.

FY1998 allotments not spent by the end of FY2000 (as of September 30, 2000) and FY1999 funds not spent by the end of

FY2001 (as of September 30, 2001) will be redistributed by a method to be determined by the Secretary of Health and Human Services (HHS) to States that have fully expended their existing

FY1998 or FY1999 allotments respectively and are able to provide

required matching funds. Redistributed funds not spent by the end

of the fiscal year in which they are reallocated will officially expire

and return to the Federal Treasury.

Health service initiatives, direct purchase of services to provide

child health assistance, outreach activities and other reasonable

costs to administer the program are treated as administrative expenses. All administrative expenses are subject to an overall limit

of 10% of total program spending per fiscal year.

The Committee’s provision establishes a new method for distributing unspent FY1998 and FY1999 allotments to States and territories.

For FY1998, each State (and the District of Columbia) that uses

all its SCHIP allotment would receive from the pool of unspent

1998 funds, the amount of its expenditures in excess of its original

exhausted allotment. For FY1998, each territory (and commonwealth) that expends all its 1998 SCHIP allotment would receive

an amount that bears the same ratio to 1.05 percent of the total

amount available for redistribution (across all States and territories) as the ratio of its original allotment to the total FY1998 allotment for all territories. For such States and territories, the same

redistribution methods apply with respect to FY1999 funds. The

States which have exhausted their 1998 and/or 1999 allotments

would have two years to expend the funds which they receive

through this process.

For FY1998, each State that did not use all its SCHIP allotment

would receive an amount equal to the total amount of unspent

1998 funds, less the amounts distributed to States that fully exhausted their original allotments (described in the paragraph

above), multiplied by the ratio of its unspent original 1998 allotVerDate 11-MAY-2000 15:23 Oct 31, 2000 Jkt 089006 PO 00000 Frm 00064 Fmt 6659 Sfmt 6602 E:\HR\OC\HR1019P1.XXX pfrm04 PsN: HR1019P1
65

ment to the total amount of unspent 1998 funds. For such States,

the same redistribution methods apply with respect to FY1999

funds. The amount of unspent FY1998 and FY1999 funds provided

to these States that had not fully spent their allotments for these

years would remain available to them through the end of FY2002.

These States may use up to 10% of the retained FY1998 funds for

outreach activities, in addition to amounts spent under the 10% administration cap under current law. However, the States which

have already exhausted their 1998 and/or 1999 allotments will not

be able use 10% of this additional allotment for outreach.

To calculate the amounts available for redistribution in each formula described above, the Secretary will use amounts reported by

States not later than November 30 of the relevant fiscal year on

HCFA Form 64 or HCFA Form 21, as approved by the Secretary.

This section is effective upon enactment.

Section 602. Optional coverage of legal immigrants under SCHIP

For States choosing to provide health insurance coverage through

a Medicaid expansion under SCHIP, legal immigrant children are

subject to the same Medicaid restrictions as other legal immigrants. States that operate a separate State (non-Medicaid) SCHIP

program must cover those legal immigrant children who meet the

Federal definition of qualified alien and who are otherwise eligible.

These include: (1) all qualified alien children who were in the

United States before August 22, 1996; (2) refugees, asylees, and

certain Cuban, Haitian and Amerasian immigrants; (3) unmarried,

dependent children of veterans and active duty service members of

the Armed Forces; and (4) qualified alien children who enter the

United States on or after August 22, 1996 as lawful permanent

residents and who are in continuous residence for 5 years—before

5 years of continuous residence, qualified alien children are barred

from participation in SCHIP. States that operate separate State

programs also may cover battered immigrants as determined by

INS provided the qualified alien child is otherwise eligible for the

program.

In the case of qualified alien children entering with sponsors

after December 19, 1997, SCHIP coverage is subject to the ‘‘deeming rule,’’ under which the sponsors’ income and resources are

deemed to be available to the qualified alien child in determining

their eligibility for benefits until the child becomes a citizen or

meets the 10-year work requirement.

The Committee’s provision adds a new State option to SCHIP

that would allow States to expand health insurance coverage to

lawfully residing alien children who are otherwise eligible for

SCHIP and who have been lawfully residing in the United States

for 2 years. In a State that elects this option, the provisions of the

1996 welfare reform law that might restrict the participation in

SCHIP of immigrants who have lawfully resided in the country for

at least two years would cease to apply. In addition, if a State

chooses to cover these immigrants, sponsors would not incur a debt

for the cost of SCHIP benefits provided to immigrants under the

election and sponsors would not be asked to repay the value of the

medical care received after the two year period had been met. The

option to expand coverage to this group under SCHIP would only

66

be available to States that have opted to expand coverage to this

category of children under their Medicaid State plan.

This section is effective October 1, 2000.

TITLE VII—EXTENSION OF SPECIAL DIABETES GRANT

PROGRAMS

Section 701. Extension of juvenile and Indian diabetes grant programs

Juvenile Diabetes Research Program. The Balanced Budget Act of

1997 amended title III of the Public Health Service Act to create

a grant program under which the Secretary could make grants to

support prevention and treatment services of, and research relating

to, type 1 diabetes in children. Congress committed $150 million,

($30 million each year over 5 years FY1998 through FY2002), for

this program, with the funds being transferred from title XXI of

the Social Security Act (State Children’s Health Insurance Program) for these grants. This commitment was in addition to the annual appropriations for NIH.

The Committee’s provision extends appropriated funds from the

Treasury to be made available for diabetes grants, bringing the

total to $50 million each for FY2003 and FY2007. The funds will

remain available until expended. The funds may not be derived or

deducted from the State Children’s Health Insurance Program.

This section is effective upon enactment.

Indian Diabetes Grant Program. The Balanced Budget Act of

1997 amended title III of the Public Health Service Act to create

a grant program under which the Secretary could make grants to

support prevention and treatment services of diabetes in Indians.

These grants were to purchase services provided through one or

more of the following entities: the Indian Health Service, a tribal

Indian health program, and an urban Indian health program. Congress committed $150 million, ($30 million each year over 5 years

FY1998 through FY2002), for this program, with the funds being

transferred from Title XXI of the Social Security Act (State Children’s Health Insurance Program) for these grants.

The Committee’s provision extends appropriated funds available

from the Treasury for diabetes prevention and treatment programs

for Indians, bringing the total to $50 million each for FY2003 and

FY2007. The funds will remain available until expended. The funds

may not be derived or deducted from the State Children’s Health

Insurance Program.

This section is effective upon enactment.

Extension of Reports on Grant Programs. The Balanced Budget

Act of 1997 required that the Secretary conduct an evaluation of

the diabetes grant programs established under this section and report to the appropriate committees of Congress an interim report

on January 1, 2000, and a final report on January 1, 2002.

The Committee’s provision extends the interim report requirements to every two years, 2000, 2002, 2004, with a final report due

on January 1, 2007.

This section is effective upon enactment.

67

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,

existing law in which no change is proposed is shown in roman):

SOCIAL SECURITY ACT

* * * * * * *

TITLE II—FEDERAL OLD-AGE, SURVIVORS, AND DISABILITY

INSURANCE BENEFITS

* * * * * * *

ENTITLEMENT TO HOSPITAL INSURANCE BENEFITS

SEC. 226. (a) * * *

* * * * * * *

(h) For purposes of applying this section in the case of an individual medically determined to have amyotrophic lateral sclerosis

(ALS), the following special rules apply:

(1) Subsection (b) shall be applied as if there were no requirement for any entitlement to benefits, or status, for a period

longer than 1 month.

(2) The entitlement under such subsection shall begin with

the first month (rather than twenty-fifth month) of entitlement

or status.

(3) Subsection (f) shall not be applied.

* * * * * * *

ø(h)¿ (j) For entitlement to hospital insurance benefits in the

case of certain uninsured individuals, see section 103 of the Social

Security Amendments of 1965.

* * * * * * *

TITLE XI—GENERAL PROVISIONS, PEER REVIEW, AND

ADMINISTRATIVE SIMPLIFICATION

* * * * * * *

GUIDANCE REGARDING APPLICATION OF HEALTH CARE FRAUD AND

ABUSE SANCTIONS

SEC. 1128D. (a) * * *

* * * * * * *

(b) ADVISORY OPINIONS.— (1) * * *

* * * * * * *

(6) APPLICATION OF SUBSECTION.—This subsection shall

apply to requests for advisory opinions made on or after the

date which is 6 months after the date of enactment of this section øand before the date which is 4 years after such date of

enactment¿.

68

(7) NONDISCLOSURE OF REQUESTS AND SUPPORTING MATERIALS.—A request for an advisory opinion under this subsection

and any supporting written materials submitted by the party

requesting the opinion shall not be subject to disclosure under

section 552 of title 5, United States Code.

* * * * * * *

FUNCTIONS OF PEER REVIEW ORGANIZATIONS

SEC. 1154. (a) Any utilization and quality control peer review organization entering into a contract with the Secretary under this

part must perform the following functions:

(1) * * *

* * * * * * *

(12) The organization shall assist providers, practitioners,

and Medicare+Choice organizations in identifying and developing strategies to reduce the incidence of actual and potential

medical errors and problems related to patient safety affecting

individuals entitled to benefits under title XVIII. For the purposes of this part and title XVIII, the functions described in this

paragraph shall be treated as a review function.

* * * * * * *

TITLE XVIII—HEALTH INSURANCE FOR THE AGED AND

DISABLED

* * * * * * *

NOTICE OF MEDICARE BENEFITS; MEDICARE AND MEDIGAP

INFORMATION

SEC. 1804. (a) * * *

* * * * * * *

(d) AVAILABILITY OF APPLICATION FORMS FOR MEDICAL ASSISTANCE FOR MEDICARE COST-SHARING.—The Secretary shall make

available to the Commissioner of Social Security appropriate forms

for applying for medical assistance for medicare cost-sharing under

a State plan under title XIX. Such Commissioner, through local offices of the Social Security Administration shall—

(1) notify applicants and beneficiaries who present at a local

office orally of the availability of such forms and make such

forms available to such individuals upon request; and

(2) provide assistance to such individuals in completing such

forms and, upon request, in submitting such forms to the appropriate State agency.

* * * * * * *

PART A—HOSPITAL INSURANCE BENEFITS FOR THE AGED AND

DISABLED

* * * * * * *

69

CONDITIONS OF AND LIMITATIONS ON PAYMENT FOR SERVICES

Requirement of Requests and Certifications

SEC. 1814. (a) Except as provided in subsections (d) and (g) and

in section 1876, payment for services furnished an individual may

be made only to providers of services which are eligible therefor

under section 1866 and only if—

(1) * * *

* * * * * * *

To the extent provided by regulations, the certification and recertification requirements of paragraph (2) shall be deemed satisfied

where, at a later date, a physician, nurse practitioner, or clinical

nurse specialist (as the case may be) makes certification of the kind

provided in subparagraph (A), (B), (C), or (D) of paragraph (2)

(whichever would have applied), but only where such certification

is accompanied by such medical and other evidence as may be required by such regulations. With respect to the physician certification required by paragraph (2) for home health services furnished

to any individual by a home health agency (other than an agency

which is a governmental entity) and with respect to the establishment and review of a plan for such services, the Secretary shall

prescribe regulations which shall become effective no later than

July 1, 1981, and which prohibit a physician who has a significant

ownership interest in, or a significant financial or contractual relationship with, such home health agency from performing such certification and from establishing or reviewing such plan, except that

such prohibition shall not apply with respect to a home health

agency which is a sole community home health agency (as determined by the Secretary). For purposes of the preceding sentence,

service by a physician as an uncompensated officer or director of

a home health agency shall not constitute having a significant ownership interest in, or a significant financial or contractual relationship with, such agency. For purposes of paragraph (2)(C), an individual shall be considered to be ‘‘confined to his home’’ if the individual has a condition, due to an illness or injury, that restricts the

ability of the individual to leave his or her home except with the

assistance of another individual or the aid of a supportive device

(such as crutches, a cane, a wheelchair, or a walker), or if the individual has a condition such that leaving his or her home is medically contraindicated. While an individual does not have to be bedridden to be considered ‘‘confined to his home’’, the condition of the

individual should be such that there exists a normal inability to

leave home, that leaving home requires a considerable and taxing

effort by the individual, and that absences of the individual from

home are infrequent or of relatively short duration, or are attributable to the need to receive medical treatmentø.¿, including participating in an adult day care program licensed or certified by a

State, or accredited, to furnish adult day care services in the State

for the purposes of therapeutic treatment for Alzheimer’s disease or

a related dementia.

* * * * * * *

70

PART B—SUPPLEMENTARY MEDICAL INSURANCE BENEFITS FOR THE

AGED AND DISABLED

* * * * * * *

PAYMENT OF BENEFITS

SEC. 1833. (a) * * *

* * * * * * *

(g)(1) * * *

* * * * * * *

(4) This subsection shall not apply to expenses incurred with respect to services furnished during 2000 øand 2001¿, 2001, and

2002. (h)(1)(A) * * *

(B) øIn¿ Except for tests described in subparagraph (E), in the

case of clinical diagnostic laboratory tests performed by a physician

or by a laboratory (other than tests performed by a qualified hospital laboratory (as defined in subparagraph (D)) for outpatients of

such hospital), the fee schedules established under subparagraph

(A) shall be established on a regional, statewide, or carrier service

area basis (as the Secretary may determine to be appropriate) for

tests furnished on or after July 1, 1984.

* * * * * * *

(E) In the case of a clinical diagnostic laboratory test which is described by a new code in the Health Care Financing Administration

Common Procedure Coding System (commonly referred to as

‘‘HCPCS’’), for which the Secretary is not able to crosswalk with a

similar test with an established schedule amount, the Secretary

shall establish for purposes of subparagraph (A) a single fee schedule amount for all areas in the following manner:

(i) By not later than December 1 of each year, beginning with

2001, the Secretary shall cause to have published in the Federal

Register (which may include publication on an interim final

rule basis with a comment period) an interim fee schedule

amount for each such new test which shall apply for such new

tests furnished during the following year.

(ii) The interim fee schedule amount for each such new test

shall be subject to a comment period of 60 days. The Secretary

shall review comments and data received and make appropriate

adjustments to the fee schedule for each test applicable beginning with the following calendar year.

(iii) For years beginning with 2002, the Secretary shall also

cause to have published in the Federal Register by not later

than December 1 of the year prior to its application, the adjustments to the interim fee schedule amount described in clause

(ii) for each such new test for which an interim fee schedule

amount was established for a year, including adjustments to

such fee schedule amounts in response to comments.

(2)(A)(i) Except as provided in paragraph (4), the Secretary shall

set the fee schedules at 60 percent (or, in the case of a test performed by a qualified hospital laboratory (as defined in paragraph

(1)(D)) for outpatients of such hospital, 62 percent) of the prevailing

charge level determined pursuant to the third and fourth sentences

of section 1842(b)(3) for similar clinical diagnostic laboratory tests

71

for the applicable region, State, or area for the 12-month period beginning øJuly 1, 1984,¿ July 1, 1984. The fee schedules established

under the previous sentence and paragraph (1)(E)(3) shall be adjusted annually (to become effective on January 1 of each year) by

a percentage increase or decrease equal to the percentage increase

or decrease in the Consumer Price Index for All Urban Consumers

(United States city average), and subject to such other adjustments

as the Secretary determines are justified by technological changes.

* * * * * * *

(4)(A) * * *

(B) For purposes of subsections (a)(1)(D)(i) and (a)(2)(D)(i), the

limitation amount for a clinical diagnostic laboratory test

performed—

(i) * * *

* * * * * * *

(viii) after December 31, 1997, is equal to 74 percent of such

median (or 100 percent of such median in the case of a clinical

diagnostic laboratory test performed on or after January 1,

2001, that the Secretary determines is a new test for which no

limitation amount has previously been established under this

subparagraph).

* * * * * * *

(t) PROSPECTIVE PAYMENT SYSTEM FOR HOSPITAL OUTPATIENT

DEPARTMENT SERVICES.—

(1) * * *

* * * * * * *

(2) SYSTEM REQUIREMENTS.—Under the payment system—

(A) * * *

* * * * * * *

(E) the Secretary shall establish, in a budget neutral

manner, outlier adjustments under paragraph (5) and

transitional pass-through payments under paragraph (6)

and other adjustments as determined to be necessary to

ensure equitable payments, such as adjustments for certain classes of hospitals; øand¿

(F) the Secretary shall develop a method for controlling

unnecessary increases in the volume of covered OPD

servicesø.¿; and

(G) the Secretary shall create additional groups of covered OPD services that classify separately those procedures

that utilize contrast media from those that do not.

* * * * * * *

(6) TRANSITIONAL PASS-THROUGH FOR ADDITIONAL COSTS OF

INNOVATIVE MEDICAL DEVICES, DRUGS, AND BIOLOGICALS.— (A) IN GENERAL.—The Secretary shall provide for an additional payment under this paragraph for any of the following that are provided as part of a covered OPD service

(or group of services):

(i) * * *

* * * * * * *

72

(iv) NEW MEDICAL DEVICES, DRUGS, AND

BIOLOGICALS.—A medical device, drug, or biological not

described in clause (i), (ii), or (iii) if—

(I) * * *

(II) øthe cost of the device, drug, or biological¿

the cost of the drug or biological or the average

cost of the category of devices is not insignificant

in relation to the OPD fee schedule amount (as

calculated under paragraph (3)(D)) payable for the

service (or group of services) involved.

ø(B) LIMITED PERIOD OF PAYMENT.—The payment under

this paragraph with respect to a medical device, drug, or

biological shall only apply during a period of at least 2

years, but not more than 3 years, that begins—

ø(i) on the first date this subsection is implemented

in the case of a drug, biological, or device described in

clause (i), (ii), or (iii) of subparagraph (A) and in the

case of a device, drug, or biological described in subparagraph (A)(iv) and for which payment under this

part is made as an outpatient hospital service before

such first date; or

ø(ii) in the case of a device, drug, or biological described in subparagraph (A)(iv) not described in clause

(i), on the first date on which payment is made under

this part for the device, drug, or biological as an outpatient hospital service.¿

(B) USE OF CATEGORIES IN DETERMINING ELIGIBILITY OF

A DEVICE FOR PASS-THROUGH PAYMENTS.—The Secretary

shall determine whether a medical device meets the requirements of subparagraph (A)(iv) as follows:

(i) ESTABLISHMENT OF CATEGORIES.—The Secretary

shall establish categories of medical devices based on

type of medical device as follows:

(I) IN GENERAL.—The Secretary shall establish

criteria that will be used for creation of categories

through rulemaking (which may include use of an

interim final rule with comment period). Such categories shall be established in a manner such that

no medical device is described by more than one

category. Such criteria shall include a test of

whether the average cost of devices that would be

included in a category, as estimated by the Secretary, is not insignificant as described in paragraph (A)(iv)(II).

(II) INITIAL CATEGORIES.—The categories to be

applied as of the category-based pass-through implementation date specified pursuant to subclause

(V) shall be established in a manner such that

each medical device that meets the requirements of

clause (ii) or (iv) of subparagraph (A) as of such

date is included in a such a category. For purposes

of the preceding sentence, whether a medical device

meets the requirements of clause (ii) or (iv) of subparagraph (A) as of such date shall be determined

without regard to clause (ii) of this subparagraph

73

and on the basis of the program memoranda

issued before such date identifying medical devices

that meet such requirements.

(III) ADDING CATEGORIES.—The Secretary shall

promptly establish a new category of medical device under this clause for any medical device that

meets the requirements of subparagraph (A)(iv)

and for which none of the categories in effect or

that were previously in effect (as described in subparagraph (C)(iii)) is appropriate. The Secretary

shall only establish a new category for a medical

device that is described by a category that was previously in effect if the Secretary determines, in accord with criteria established under subclause (I)

of this clause, that the device represents a significant advance in medical technology that is expected to significantly improve the treatment of

Medicare beneficiaries.

(IV) DELETING CATEGORIES.—The Secretary

shall delete a category at the close of the period for

which the category is in effect (as described in subparagraph (C)(iii)).

(V) CATEGORY-BASED PASS-THROUGH IMPLEMENTATION DATE.—For purposes of this subparagraph

and subparagraph (C), the ‘‘category-based passthrough implementation date’’ is a date specified

by the Secretary as of which the categories established under this clause are first used for purposes

of clause (ii)(I). Such date may not be later than

July 1, 2000.

(ii) REQUIREMENTS TREATED AS MET.—A medical device shall be treated as meeting the requirements of

subparagraph (A)(iv) if—

(I) the device is described by a category established under clause (i), and

(II) an application under section 515 of the Federal Food, Drug, and Cosmetic Act has been approved with respect to the device, or the device has

been cleared for market under section 510(k) of

such Act, or the device is exempt from the requirements of section 510(k) of such Act pursuant to

subsection (l) or (m) of section 510 of such Act or

section 520(g) of such Act, without an additional

requirement for application or prior approval.–––

(C) LIMITED PERIOD OF PAYMENT.—

(i) DRUGS AND BIOLOGICALS.—The payment under

this paragraph with respect to a drug or biological

shall only apply during a period of at least 2 years, but

not more than 3 years, that begins—

(I) on the first date this subsection is implemented in the case of a drug or biological described in clause (i), (ii), or (iii) of subparagraph

(A) and in the case of a drug or biological described in subparagraph (A)(iv) and for which payVerDate 11-MAY-2000 15:23 Oct 31, 2000 Jkt 089006 PO 00000 Frm 00073 Fmt 6659 Sfmt 6603 E:\HR\OC\HR1019P1.XXX pfrm04 PsN: HR1019P1
74

ment under this part is made as an outpatient hospital service before such first date; or

(II) in the case of a drug or biological described

in subparagraph (A)(iv) not described in subclause

(I), on the first date on which payment is made

under this part for the drug or biological as an

outpatient hospital service.

(ii) MEDICAL DEVICES.—Except as provided in clause

(iv), payment shall be made under this paragraph with

respect to a medical device only if such device—

(I) is described by a category of medical devices

established under subparagraph (B)(i); and

(II) is provided as part of a service (or group of

services) paid for under this subsection and provided during the period for which such category is

in effect (as described in clause (iii)).

(iii) PERIOD FOR WHICH CATEGORY IS IN EFFECT.— For purposes of this subparagraph and subparagraph

(B), a category of medical devices established under

subparagraph (B)(i) shall be in effect for a period of at

least 2 years, but not more than 3 years, that begins—

(I) in the case of a category established under

subparagraph (B)(i)(II), on the first date on which

payment was made under this paragraph for any

device described by such category (including payments made during the period before the categorybased pass-through implementation date); and

(II) in the case of a category established under

subparagraph (B)(i)(III), on the first date on which

payment is made under this paragraph for any

medical device that is described by such category.

(iv) PAYMENTS MADE BEFORE CATEGORY-BASED PASS- THROUGH IMPLEMENTATION DATE.— (I) in the case of a medical device provided as

part of a service (or group of services) paid for

under this subsection and provided during the period beginning on the first date on which the system under this subsection is implemented and ending on (and including) the day before the categorybased pass-through implementation date specified

pursuant to subparagraph (B)(i)(V), payment shall

be made in accordance with the provisions of this

paragraph as in effect on the day before the date

of the enactment of this subparagraph; and

(II) notwithstanding subclause (I), the Secretary

shall make payments under this paragraph during

the period beginning one month after the date of

enactment of the Beneficiary Improvement and

Protection Act of 2000 and ending on the same

ending date in subclause (I) with respect to any

medical device that is not included in a program

memorandum referred to in subparagraph

(B)(i)(II) but that is substantially similar (other

than with respect to the restriction in subparagraph (A)(iv)(I)) to devices that are so included

75

and that the Secretary determines is likely to be

described by a initial category established under

such subparagraph.

ø(C)¿ (D) AMOUNT OF ADDITIONAL PAYMENT.—Subject to

øsubparagraph (D)(iii)¿ subparagraph (E)(iii), the amount

of the payment under this paragraph with respect to a device, drug, or biological provided as part of a covered OPD

service is—

(i) * * *

* * * * * * *

ø(D)¿ (E) LIMIT ON AGGREGATE ANNUAL ADJUSTMENT.—

(i) IN GENERAL.—The total of the additional payments made under this paragraph for covered OPD

services furnished in a year (as estimated by the Secretary before the beginning of the year) may not exceed the applicable percentage (specified in clause (ii))

of the total program payments estimated to be made

under this subsection for all covered OPD services furnished in that year. If this paragraph is first applied

to less than a full year, the previous sentence shall

apply only to the portion of such year.

* * * * * * *

(12) LIMITATION ON REVIEW.—There shall be no administrative or judicial review under section 1869, 1878, or otherwise

of—

(A) * * *

* * * * * * *

(E) the determination of the fixed multiple, or a fixed

dollar cutoff amount, the marginal cost of care, or applicable percentage under paragraph (5) or the determination of

insignificance of cost, the duration of the øadditional payments (consistent with paragraph (6)(B))¿ additional payments, the determination and deletion of initial and new

categories (consistent with subparagraphs (B) and (C) of

paragraph (6)), the portion of the medicare OPD fee schedule amount associated with particular devices, drugs, or

biologicals, and the application of any pro rata reduction

under paragraph (6).

* * * * * * *

SPECIAL PAYMENT RULES FOR PARTICULAR ITEMS AND SERVICES

SEC. 1834. (a) * * *

* * * * * * *

(c) PAYMENTS AND STANDARDS FOR SCREENING MAMMOGRAPHY.— (1) * * *

* * * * * * *

(3) LIMIT.—

(A) $55, INDEXED.—Except as provided by the Secretary

under øsubparagraph (B)¿ subparagraphs (B) and (D), the

limit established under this paragraph—

(i) * * *

76

(ii) for screening mammography performed in a subsequent year is the limit established under this paragraph for the preceding year (taking into account, if

applicable, subparagraph (D)) increased by the percentage increase in the MEI for that subsequent year.

(B) øREDUCTION OF¿ REVISIONS TO LIMIT.—The Secretary shall review from time to time the appropriateness

of the amount of the limit established under this paragraph. The Secretary may, with respect to screening mammography performed in a year after 1992 or new technologies described in paragraph (1)(D), increase or reduce

the amount of such limit as it applies nationally or in any

area to the amount that the Secretary estimates is required to assure that screening mammography of an appropriate quality is readily and conveniently available during the year.

* * * * * * *

(D) INCREASE IN PAYMENT LIMIT FOR NEW TECHNOLOGIES.—In the case of new technologies applied to

screening mammography performed beginning in 2001 and

determined by the Secretary to enhance the detection of

breast cancer, the limit applied under this paragraph for

2001 shall be increased by $15.

* * * * * * *

(d) FREQUENCY LIMITS AND PAYMENT FOR COLORECTAL CANCER

SCREENING TESTS.—

(1) * * *

* * * * * * *

(2) SCREENING FLEXIBLE SIGMOIDOSCOPIES.—

(A) * * *

* * * * * * *

(E) FREQUENCY LIMIT.—No payment may be made under

this part for a colorectal cancer screening test consisting of

a screening flexible sigmoidoscopy—

(i) if the individual is under 50 years of age; øor¿

(ii) if the procedure is performed within the 47

months after a previous screening flexible

sigmoidoscopyø.¿; or

(iii) if the procedure is performed within 119 months

after a screening colonoscopy under paragraph (4).

(3) SCREENING COLONOSCOPY FOR INDIVIDUALS AT HIGH RISK

FOR COLORECTAL CANCER.—

(A) FEE SCHEDULE.—With respect to colorectal cancer

screening test consisting of a screening colonoscopy for individuals at high risk for colorectal cancer (as defined in

section 1861(pp)(2)) and for individuals making the election described in paragraph (4), payment under section

1848 shall be consistent with payment amounts under

such section for similar or related services.

* * * * * * *

(E) FREQUENCY LIMIT.—No payment may be made under

this part for a colorectal cancer screening test consisting of

77

a screening colonoscopy for individuals at high risk for

colorectal cancer if the procedure is performed within the

23 months after a previous screening colonoscopy. No payment may be made under this part for a colorectal cancer

screening test consisting of a screening colonoscopy for individuals making the election described in paragraph (4) if

the procedure is performed within the 119 months after a

previous screening colonoscopy or within 47 months after a

screening flexible sigmoidoscopy.

(4) ELECTION OF SCREENING COLONOSCOPY FOR INDIVIDUALS

NOT AT HIGH RISK OF COLORECTAL CANCER INSTEAD OF SCREENING SIGMOIDOSCOPY.—An individual who is not at high risk of

colorectal cancer may elect to receive a screening colonoscopy instead of a screening sigmoidoscopy.

* * * * * * *

(l) ESTABLISHMENT OF FEE SCHEDULE FOR AMBULANCE SERVICES.—

(1) * * *

(2) CONSIDERATIONS.—In establishing such fee schedule, the

Secretary shall—

(A) * * *

* * * * * * *

(E) phase in the application of the payment rates under

the fee schedule in an efficient and fair manner, except

that such phase-in shall provide for full payment of any

national mileage rate beginning with the effective date of

the fee schedule for ambulance services provided by suppliers in any State who were not paid a separate amount

for all mileage prior to the implementation of the fee schedule.

(3) SAVINGS.—In establishing such fee schedule, the Secretary shall—

(A) ensure that the aggregate amount of payments made

for ambulance services under this part during 2000 does

not exceed the aggregate amount of payments which would

have been made for such services under this part during

such year if the amendments made by section 4531(a) of

the Balanced Budget Act of 1997 continued in effect, except that in making such determination the Secretary

shall assume an update in such payments for 2002 equal

to percentage increase in the consumer price index for all

urban consumers (U.S. city average) for the 12-month period ending with June of the previous year øreduced in the

case of 2001 and 2002 by 1.0 percentage points¿; and

(B) set the payment amounts provided under the fee

schedule for services furnished in 2001 and each subsequent year at amounts equal to the payment amounts

under the fee schedule for services furnished during the

previous year, increased by the percentage increase in the

consumer price index for all urban consumers (U.S. city

average) for the 12-month period ending with June of the

78

previous year øreduced in the case of 2001 and 2002 by 1.0

percentage points¿.

* * * * * * *

PROCEDURE FOR PAYMENT OF CLAIMS OF PROVIDERS OF SERVICES

SEC. 1835. (a) Except as provided in subsections (b), (c), and (e),

payment for services described in section 1832(a)(2) furnished an

individual may be made only to providers of services which are eligible therefor under section 1866(a), and only if—

(1) * * *

* * * * * * *

To the extent provided by regulations, the certification and recertification requirements of paragraph (2) shall be deemed satisfied

where, at a later date, a physician makes a certification of the kind

provided in subparagraph (A) or (B) of paragraph (2) (whichever

would have applied), but only where such certification is accompanied by such medical and other evidence as may be required by

such regulations. With respect to the physician certification required by paragraph (2) for home health services furnished to any

individual by a home health agency (other than an agency which

is a governmental entity) and with respect to the establishment

and review of a plan for such services, the Secretary shall prescribe

regulations which shall become effective no later than July 1, 1981,

and which prohibit a physician who has a significant ownership interest in, or a significant financial or contractual relationship with,

such home health agency from performing such certification and

from establishing or reviewing such plan, except that such prohibition shall not apply with respect to a home health agency which

is a sole community home health agency (as determined by the Secretary). For purposes of the preceding sentence, service by a physician as an uncompensated officer or director of a home health agency shall not constitute having a significant ownership interest in,

or a significant financial or contractual relationship with, such

agency. For purposes of paragraph (2)(A), an individual shall be

considered to be ‘‘confined to his home’’ if the individual has a condition, due to an illness or injury, that restricts the ability of the

individual to leave his or her home except with the assistance of

another individual or the aid of a supportive device (such as crutches, a cane, a wheelchair, or a walker), or if the individual has a

condition such that leaving his or her home is medically contraindicated. While an individual does not have to be bedridden to be

considered ‘‘confined to his home’’, the condition of the individual

should be such that there exists a normal inability to leave home,

that leaving home requires a considerable and taxing effort by the

individual, and that absences of the individual from home are infrequent or of relatively short duration, or are attributable to the

need to receive medical treatmentø.¿, including participating in an

adult day care program licensed or certified by a State, or accredited to furnish adult day care services in the State, to furnish adult

day care services in the State for the purposes of therapeutic treatment for Alzheimer’s disease or a related dementia.

* * * * * * *

79

ENROLLMENT PERIODS

SEC. 1837. (a) * * *

* * * * * * *

(j) In applying this section in the case of an individual who is entitled to benefits under part A pursuant to the operation of section

226(h), the following special rules apply:

(1) The initial enrollment period under subsection (d) shall

begin on the first day of the first month in which the individual

satisfies the requirement of section 1836(1).

(2) In applying subsection (g)(1), the initial enrollment period

shall begin on the first day of the first month of entitlement to

disability insurance benefits referred to in such subsection.

* * * * * * *

USE OF CARRIERS FOR ADMINISTRATION OF BENEFITS

SEC. 1842. (a) * * *

* * * * * * *

(b)(1) * * *

* * * * * * *

(6) No payment under this part for a service provided to any individual shall (except as provided in section 1870) be made to anyone other than such individual or (pursuant to an assignment described in subparagraph (B)(ii) of paragraph (3)) the physician or

other person who provided the service, except that (A) payment

may be made (i) to the employer of such physician or other person

if such physician or other person is required as a condition of his

employment to turn over his fee for such service to his employer,

or (ii) (where the service was provided in a hospital, critical access

hospital, clinic, or other facility) to the facility in which the service

was provided if there is a contractual arrangement between such

physician or other person and such facility under which such facility submits the bill for such service, (B) payment may be made to

an entity (i) which provides coverage of the services under a health

benefits plan, but only to the extent that payment is not made

under this part, (ii) which has paid the person who provided the

service an amount (including the amount payable under this part)

which that person has accepted as payment in full for the service,

and (iii) to which the individual has agreed in writing that payment may be made under this part, (C) in the case of services described in clause (i) of section 1861(s)(2)(K), payment shall be made

to either (i) the employer of the physician assistant involved, or (ii)

with respect to a physician assistant who was the owner of a rural

health clinic (as described in section 1861(aa)(2)) for a continuous

period beginning prior to the date of the enactment of the Balanced

Budget Act of 1997 and ending on the date that the Secretary determines such rural health clinic no longer meets the requirements

of section 1861(aa)(2), for such services provided before January 1,

2003, payment may be made directly to the physician assistant; (D)

payment may be made to a physician for physicians’ services (and

services furnished incident to such services) furnished by a second

physician to patients of the first physician if (i) the first physician

is unavailable to provide the services; (ii) the services are furnished

80

pursuant to an arrangement between the two physicians that (I) is

informal and reciprocal, or (II) involves per diem or other fee-fortime compensation for such services; (iii) the services are not provided by the second physician over a continuous period of more

than 60 days; and (iv) the claim form submitted to the carrier for

such services includes the second physician’s unique identifier (provided under the system established under subsection (r)) and indicates that the claim meets the requirements of this subparagraph

for payment to the first physician, (E) in the case of an item or

service (other than services described in section 1888(e)(2)(A)(ii))

furnished to an individual (on or after October 1, 2003) who (at the

time the item or service is furnished) is a resident of a skilled nursing facility or of a part of a facility that includes a skilled nursing

facility (as determined under regulations), payment shall be made

to the facility (without regard to whether or not the item or service

was furnished by the facility, by others under arrangement with

them made by the facility, under any other contracting or consulting arrangement, or otherwise), and (F) in the case of home

health services (including medical supplies described in section

1861(m)(5), but excluding durable medical equipment to the extent

provided for in such section) furnished to an individual who (at the

time the item or service is furnished) is under a plan of care of a

home health agency, payment shall be made to the agency (without

regard to whether or not the item or service was furnished by the

agency, by others under arrangement with them made by the agency, or when any other contracting or consulting arrangement, or

otherwise). No payment which under the preceding sentence may

be made directly to the physician or other person providing the

service involved (pursuant to an assignment described in subparagraph (B)(ii) of paragraph (3)) shall be made to anyone else under

a reassignment or power of attorney (except to an employer or facility as described in clause (A) of such sentence); but nothing in this

subsection shall be construed (i) to prevent the making of such a

payment in accordance with an assignment from the individual to

whom the service was provided or a reassignment from the physician or other person providing such service if such assignment or

reassignment is made to a governmental agency or entity or is established by or pursuant to the order of a court of competent jurisdiction, or (ii) to preclude an agent of the physician or other person

providing the service from receiving any such payment if (but only

if) such agent does so pursuant to an agency agreement under

which the compensation to be paid to the agent for his services for

or in connection with the billing or collection of payments due such

physician or other person under this title is unrelated (directly or

indirectly) to the amount of such payments or the billings therefor,

and is not dependent upon the actual collection of any such payment. For purposes of subparagraph (C) of the first sentence of this

paragraph, an employment relationship may include any independent contractor arrangement, and employer status shall be determined in accordance with the law of the State in which the services described in such clause are performed.

* * * * * * *

81

PART C—MEDICARE+CHOICE PROGRAM

ELIGIBILITY, ELECTION, AND ENROLLMENT

SEC. 1851. (a) * * *

* * * * * * *

(f) EFFECTIVENESS OF ELECTIONS AND CHANGES OF ELECTIONS.—

(1) * * *

(2) DURING CONTINUOUS OPEN ENROLLMENT PERIODS.—An

election or change of coverage made under subsection (e)(2)

shall take effect with the first day of the first calendar month

following the date on which the election or change is ømade,

except that if such election or change is made after the 10th

day of any calendar month, then the election or change shall

not take effect until the first day of the second calendar month

following the date on which the election or change is made.¿

made.

* * * * * * *

PAYMENTS TO MEDICARE+CHOICE ORGANIZATIONS

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

(1) * * *

* * * * * * *

(3) ESTABLISHMENT OF RISK ADJUSTMENT FACTORS.—

(A) * * *

* * * * * * *

(C) INITIAL IMPLEMENTATION.—

(i) * * *

(ii) PHASE-IN.—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

2001; øand¿

(II) not more than 20 percent of such capitation

rate in 2002ø.¿;

and, beginning in 2004, insofar as such risk adjustment is based on data from substantially all settings,

the methodology shall be phased in equal increments

over a 10-year period, beginning with 2004 or (if later)

the first year in which such data are used.

* * * * * * *

(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 for a contract year

consisting of a calendar year, is equal to the largest of the

amounts specified in the following subparagraph (A), (B), or

(C):

82

(A) * * *

* * * * * * *

(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).

ø(ii) For a succeeding year¿ (ii)(I) Subject to subclause (II), for a succeeding year, the minimum

amount specified in this clause (or clause (i)) for the

preceding year increased by the national per capita

Medicare+Choice growth percentage, described in

paragraph (6)(A) for that succeeding year.

(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).

(C) MINIMUM PERCENTAGE INCREASE.— (i) * * *

(ii) For a subsequent year, 102 percent (or 103 percent in the case of 2001) of the annual

Medicare+Choice capitation rate under this paragraph

for the area for the previous year.

* * * * * * *

PREMIUMS

SEC. 1854. (a) * * *

* * * * * * *

(c) UNIFORM PREMIUM.—The Medicare+Choice monthly basic and

supplemental beneficiary premium, the Medicare+Choice monthly

MSA premium charged under subsection (b) of a Medicare+Choice

organization under this part may not vary among individuals enrolled in the plan, except across counties as approved by the Secretary.

* * * * * * *

(f) REQUIREMENT FOR ADDITIONAL BENEFITS.—

(1) REQUIREMENT.—

(A) * * *

* * * * * * *

(D) UNIFORM APPLICATION.—This paragraph shall be applied uniformly for all enrollees for a plan, except across

counties as approved by the Secretary.

* * * * * * *

CONTRACTS WITH MEDICARE+CHOICE ORGANIZATIONS

SEC. 1857. (a) * * *

* * * * * * *

(i) M+C PROGRAM COMPATIBILITY WITH EMPLOYER OR UNION

GROUP HEALTH PLANS.—To facilitate the offering of

Medicare+Choice plans under contracts between Medicare+Choice

83

organizations and employers, labor organizations, or the trustees of

a fund established by 1 or more employers or labor organizations

(or combination thereof) to furnish benefits to the entity’s employees,

former employees (or combination thereof) or members or former

members (or combination thereof) of the labor organizations, the

Secretary may waive or modify requirements that hinder the design

of, the offering of, or the enrollment in such Medicare+Choice plans.

* * * * * * *

PART D—MISCELLANEOUS PROVISIONS

DEFINITIONS OF SERVICES, INSTITUTIONS, ETC.

SEC. 1861. For purposes of this title—

Spell of Illness

(a) * * *

* * * * * * *

Medical and Other Health Services

(s) The term ‘‘medical and other health services’’ means any of

the following items or services:

(1) physicians’ services;

(2)(A) services and supplies ø(including drugs and biologicals

which cannot, as determined in accordance with regulations, be

self-administered)¿ (including drugs and biologicals which are

not usually self-administered by the patient) furnished as an incident to a physician’s professional service, of kinds which are

commonly furnished in physicians’ offices and are commonly either rendered without charge or included in the physicians’

bills;

(B) hospital services ø(including drugs and biologicals which

cannot, as determined in accordance with regulations, be selfadministered)¿ (including drugs and biologicals which are not

usually self-administered by the patient) incident to physicians’

services rendered to outpatients and partial hospitalization

services incident to such services;

* * * * * * *

(J) prescription drugs used in immunosuppressive therapy

furnished, to an individual who receives an organ transplant

for which payment is made under this titleø, but only in the

case of drugs furnished—

ø(i) before 1995, within 12 months after the date of the

transplant procedure,

ø(ii) during 1995, within 18 months after the date of the

transplant procedure,

ø(iii) during 1996, within 24 months after the date of the

transplant procedure,

ø(iv) during 1997, within 30 months after the date of the

transplant procedure, and

ø(v) during any year after 1997, within 36 months after

the date of the transplant procedureplus such additional

84

number of months (if any) provided under section

1832(b)¿;

* * * * * * *

Drugs and Biologicals

(t)(1) The term ‘‘drugs’’ and the term ‘‘biologicals’’, except for purposes of subsection (m)(5) and paragraph (2), include only such

drugs (including contrast agents) and biologicals, respectively, as

are included (or approved for inclusion) in the United States Pharmacopoeia, the National Formulary, or the United States Homeopathic Pharmacopoeia, or in New Drugs or Accepted Dental Remedies (except for any drugs and biologicals unfavorably evaluated

therein), or as are approved by the pharmacy and drug therapeutics committee (or equivalent committee) of the medical staff of

the hospital furnishing such drugs and biologicals for use in such

hospital.

* * * * * * *

Reasonable Cost

(v)(1)(A) * * *

* * * * * * *

(T) In determining such reasonable costs for hospitals, no reduction in copayments under section 1833(t)(5)(B) shall be treated as

a bad debt and the amount of bad debts otherwise treated as allowable costs which are attributable to the deductibles and coinsurance amounts under this title shall be reduced—

(i) * * *

(ii) for cost reporting periods beginning during fiscal year

1999, by 40 percent of such amount otherwise allowable, øand¿

(iii) for cost reporting periods beginning during øa subsequent fiscal year¿ fiscal year 2000, by 45 percent of such

amount otherwise allowableø.¿;

(iv) for cost reporting periods beginning during fiscal year

2001 and each subsequent fiscal year (before fiscal year 2011),

by the percent specified in clause (iii) or this clause for the preceding fiscal year reduced by 2.5 percentage points, of such

amount otherwise allowable; and

(v) for cost reporting periods beginning during fiscal year

2011 or a subsequent fiscal year, by 20 percent of such amount

otherwise allowable.

* * * * * * *

Screening Mammography

(jj) The term ‘‘screening mammography’’ means a radiologic procedure provided to a woman for the purpose of early detection of

breast cancer and includes a physician’s interpretation of the results of the procedure, as well as new technology applied to such

a procedure that the Secretary determines enhances the detection of

breast cancer.

* * * * * * *

85

Colorectal Cancer Screening Tests

(pp)(1) The term ‘‘colorectal cancer screening test’’ means any of

the following procedures furnished to an individual for the purpose

of early detection of colorectal cancer:

(A) * * *

* * * * * * *

(C) In the case of an individual at high risk for colorectal

cancer and in the case of an individual making the election described in section 1834(d)(4), screening colonoscopy.

* * * * * * *

Diabetes Outpatient Self-Management Training Services

(qq)(1) * * *

(2) In øparagraph (1)—¿ paragraph (1):

(A) øa ‘‘certified provider’’¿ A ‘‘certified provider’’ is a physician, or other individual or entity designated by the Secretary,

that, in addition to providing diabetes outpatient self-management training services, provides other items or services for

which payment may be made under this titleø; and¿. (B) øa physician, or such other individual¿ (i) A physician,

or such other individual or entity, meets the quality standards

described in this paragraph if the physician, or individual or

entity, meets quality standards established by the Secretary,

except that the physician or other individual or entity shall be

deemed to have met such standards if the physician or other

individual or entity (I) meets applicable standards originally

established by the National Diabetes Advisory Board and subsequently revised by organizations who participated in the establishment of standards by such Board, or (II) is recognized

by an organization that represents individuals (including individuals under this title) with diabetes, or by a program described in clause (ii), as meeting standards for furnishing the

services.

(ii) Notwithstanding any reference to ‘‘a national accreditation body’’ in section 1865(b), for purposes of clause (i), a program described in this clause is a program operated by a State

for the purposes of accrediting diabetes self-management training programs, if the Secretary determines that such State program has established quality standards that meet or exceed the

standards established by the Secretary under clause (i) or the

standards originally established by the National Diabetes Advisory Board and subsequently revised as described in clause (i).

* * * * * * *

EXCLUSIONS FROM COVERAGE AND MEDICARE AS SECONDARY PAYER

SEC. 1862. (a) Notwithstanding any other provision of this title,

no payment may be made under part A or part B for any expenses

incurred for items or services—

(1) * * *

* * * * * * *

ø(18) which are covered skilled nursing facility services described in section 1888(e)(2)(A)(i) and which are furnished to

86

an individual who is a resident of a skilled nursing facility or

of a part of a facility that includes a skilled nursing facility (as

determined under regulations), by an entity other than the

skilled nursing facility, unless the services are furnished under

arrangements (as defined in section 1861(w)(1)) with the entity

made by the skilled nursing facility;¿

(18) which are covered skilled nursing facility services described in section 1888(e)(2)(A)(i) and which are furnished to an

individual who is a resident—

(A) of a skilled nursing facility in the case of a resident

who is in a stay covered under part A; or

(B) of a skilled nursing facility or of a part of a facility

that includes a skilled nursing facility (as determined

under regulations) for services furnished on or after October 1, 2003, in the case of a resident who is not in a stay

covered under such part,

by an entity other than the skilled nursing facility, unless the

services are furnished under arrangements (as defined in section 1861(w)(1)) with the entity made by the skilled nursing facility;

* * * * * * *

AGREEMENTS WITH PROVIDERS OF SERVICES

SEC. 1866. (a)(1) Any provider of services (except a fund designated for purposes of section 1814(g) and section 1835(e)) shall be

qualified to participate under this title and shall be eligible for payments under this title if it files with the Secretary an agreement—

(A) * * *

* * * * * * *

(H)(i) * * *

(ii) in the case of skilled nursing facilities which provide covered skilled nursing facility services—

(I) that are furnished to an individual who is a resident

of the skilled nursing facility in the case of a resident who

is in a stay covered under part A, and for services furnished on or after October 1, 2003, in the case of a resident

who is not in a stay covered under such part, and

* * * * * * *

DEMONSTRATION OF APPLICATION OF PHYSICIAN VOLUME INCREASES

TO GROUP PRACTICES

SEC. 1866A. (a) DEMONSTRATION PROGRAM AUTHORIZED.—

(1) IN GENERAL.—The Secretary shall conduct demonstration

projects to test and, if proven effective, expand the use of incentives to health care groups participating in the program under

this title that—

(A) encourage coordination of the care furnished to individuals under the programs under parts A and B by institutional and other providers, practitioners, and suppliers of

health care items and services;

(B) encourage investment in administrative structures

and processes to ensure efficient service delivery; and

(C) reward physicians for improving health outcomes.

87

(2) ADMINISTRATION BY CONTRACT.—Except as otherwise specifically provided, the Secretary may administer the program

under this section in accordance with section 1866B.

(3) DEFINITIONS.—For purposes of this section, terms have the

following meanings:

(A) PHYSICIAN.—Except as the Secretary may otherwise

provide, the term ‘‘physician’’ means any individual who

furnishes services which may be paid for as physicians’

services under this title .

(B) HEALTH CARE GROUP.—The term ‘‘health care group’’

means a group of physicians (as defined in subparagraph

(A)) organized at least in part for the purpose of providing

physicians’ services under this title. As the Secretary finds

appropriate, a health care group may include a hospital

and any other individual or entity furnishing items or services for which payment may be made under this title that

is affiliated with the health care group under an arrangement structured so that such individual or entity participates in a demonstration under this section and will share

in any bonus earned under subsection (d).

(b) ELIGIBILITY CRITERIA.— (1) IN GENERAL.—The Secretary is authorized to establish criteria for health care groups eligible to participate in a demonstration under this section, including criteria relating to

numbers of health care professionals in, and of patients served

by, the group, scope of services provided, and quality of care.

(2) PAYMENT METHOD.—A health care group participating in

the demonstration under this section shall agree with respect to

services furnished to beneficiaries within the scope of the demonstration (as determined under subsection (c))—

(A) to be paid on a fee-for-service basis; and

(B) that payment with respect to all such services furnished by members of the health care group to such beneficiaries shall (where determined appropriate by the Secretary) be made to a single entity.

(3) DATA REPORTING.—A health care group participating in a

demonstration under this section shall report to the Secretary

such data, at such times and in such format as the Secretary

require, for purposes of monitoring and evaluation of the demonstration under this section.

(c) PATIENTS WITHIN SCOPE OF DEMONSTRATION.—

(1) IN GENERAL.—The Secretary shall specify, in accordance

with this subsection, the criteria for identifying those patients

of a health care group who shall be considered within the scope

of the demonstration under this section for purposes of application of subsection (d) and for assessment of the effectiveness of

the group in achieving the objectives of this section.

(2) OTHER CRITERIA.—The Secretary may establish additional

criteria for inclusion of beneficiaries within a demonstration

under this section, which may include frequency of contact with

physicians in the group or other factors or criteria that the Secretary finds to be appropriate.

(3) NOTICE REQUIREMENTS.—In the case of each beneficiary

determined to be within the scope of a demonstration under this

section with respect to a specific health care group, the SecVerDate 11-MAY-2000 15:23 Oct 31, 2000 Jkt 089006 PO 00000 Frm 00087 Fmt 6659 Sfmt 6603 E:\HR\OC\HR1019P1.XXX pfrm04 PsN: HR1019P1
88

retary shall ensure that such beneficiary is notified of the incentives, and of any waivers of coverage or payment rules, applicable to such group under such demonstration.

(d) INCENTIVES.— (1) PERFORMANCE TARGET.—The Secretary shall establish for

each health care group participating in a demonstration under

this section—

(A) a base expenditure amount, equal to the average total

payments under parts A and B for patients served by the

health care group on a fee-for-service basis in a base period

determined by the Secretary; and

(B) an annual per capita expenditure target for patients

determined to be within the scope of the demonstration, reflecting the base expenditure amount adjusted for risk and

expected growth rates.

(2) INCENTIVE BONUS.—The Secretary shall pay to each participating health care group (subject to paragraph (4)) a bonus

for each year under the demonstration equal to a portion of the

Medicare savings realized for such year relative to the performance target.

(3) ADDITIONAL BONUS FOR PROCESS AND OUTCOME IMPROVEMENTS.—At such time as the Secretary has established appropriate criteria based on evidence the Secretary determines to be

sufficient, the Secretary shall also pay to a participating health

care group (subject to paragraph (4)) an additional bonus for

a year, equal to such portion as the Secretary may designate of

the saving to the program under this title resulting from process

improvements made by and patient outcome improvements attributable to activities of the group.

(4) LIMITATION.—The Secretary shall limit bonus payments

under this section as necessary to ensure that the aggregate expenditures under this title (inclusive of bonus payments) with

respect to patients within the scope of the demonstration do not

exceed the amount which the Secretary estimates would be expended if the demonstration projects under this section were not

implemented.

PROVISIONS FOR ADMINISTRATION OF DEMONSTRATION PROGRAM

SEC. 1866B. (a) GENERAL ADMINISTRATIVE AUTHORITY.—

(1) BENEFICIARY ELIGIBILITY.—Except as otherwise provided

by the Secretary, an individual shall only be eligible to receive

benefits under the program under section 1866A (in this section

referred to as the ‘‘demonstration program’’) if such

individual—

(A) is enrolled in under the program under part B and

entitled to benefits under part A; and

(B) is not enrolled in a Medicare+Choice plan under part

C, an eligible organization under a contract under section

1876 (or a similar organization operating under a demonstration project authority), an organization with an

agreement under section 1833(a)(1)(A), or a PACE program

under section 1894.

(2) SECRETARY’S DISCRETION AS TO SCOPE OF PROGRAM.—The

Secretary may limit the implementation of the demonstration

program to—

89

(A) a geographic area (or areas) that the Secretary designates for purposes of the program, based upon such criteria as the Secretary finds appropriate;

(B) a subgroup (or subgroups) of beneficiaries or individuals and entities furnishing items or services (otherwise eligible to participate in the program), selected on the basis

of the number of such participants that the Secretary finds

consistent with the effective and efficient implementation of

the program;

(C) an element (or elements) of the program that the Secretary determines to be suitable for implementation; or

(D) any combination of any of the limits described in subparagraphs (A) through (C).

(3) VOLUNTARY RECEIPT OF ITEMS AND SERVICES.—Items and

services shall be furnished to an individual under the demonstration program only at the individual’s election.

(4) AGREEMENTS.—The Secretary is authorized to enter into

agreements with individuals and entities to furnish health care

items and services to beneficiaries under the demonstration program.

(5) PROGRAM STANDARDS AND CRITERIA.—The Secretary shall

establish performance standards for the demonstration program

including, as applicable, standards for quality of health care

items and services, cost-effectiveness, beneficiary satisfaction,

and such other factors as the Secretary finds appropriate. The

eligibility of individuals or entities for the initial award, continuation, and renewal of agreements to provide health care

items and services under the program shall be conditioned, at

a minimum, on performance that meets or exceeds such standards.

(6) ADMINISTRATIVE REVIEW OF DECISIONS AFFECTING INDI- VIDUALS AND ENTITIES FURNISHING SERVICES.—An individual

or entity furnishing services under the demonstration program

shall be entitled to a review by the program administrator (or,

if the Secretary has not contracted with a program administrator, by the Secretary) of a decision not to enter into, or to terminate, or not to renew, an agreement with the entity to provide

health care items or services under the program.

(7) SECRETARY’S REVIEW OF MARKETING MATERIALS.—An

agreement with an individual or entity furnishing services

under the demonstration program shall require the individual

or entity to guarantee that it will not distribute materials marketing items or services under the program without the Secretary’s prior review and approval;

(8) PAYMENT IN FULL.—

(A) IN GENERAL.—Except as provided in subparagraph

(B), an individual or entity receiving payment from the Secretary under a contract or agreement under the demonstration program shall agree to accept such payment as payment in full, and such payment shall be in lieu of any payments to which the individual or entity would otherwise be

entitled under this title.

(B) COLLECTION OF DEDUCTIBLES AND COINSURANCE.—

Such individual or entity may collect any applicable deductible or coinsurance amount from a beneficiary.

90

(b) CONTRACTS FOR PROGRAM ADMINISTRATION.— (1) IN GENERAL.—The Secretary may administer the demonstration program through a contract with a program administrator in accordance with the provisions of this subsection.

(2) SCOPE OF PROGRAM ADMINISTRATOR CONTRACTS.—The

Secretary may enter into such contracts for a limited geographic

area, or on a regional or national basis.

(3) ELIGIBLE CONTRACTORS.—The Secretary may contract for

the administration of the program with—

(A) an entity that, under a contract under section 1816

or 1842, determines the amount of and makes payments for

health care items and services furnished under this title; or

(B) any other entity with substantial experience in managing the type of program concerned.

(4) CONTRACT AWARD, DURATION, AND RENEWAL.— (A) IN GENERAL.—A contract under this subsection shall

be for an initial term of up to three years, renewable for additional terms of up to three years.

(B) NONCOMPETITIVE AWARD AND RENEWAL FOR ENTITIES

ADMINISTERING PART A OR PART B PAYMENTS.—The Secretary may enter or renew a contract under this subsection

with an entity described in paragraph (3)(A) without regard to the requirements of section 5 of title 41, United

States Code.

(5) APPLICABILITY OF FEDERAL ACQUISITION REGULATION.— The Federal Acquisition Regulation shall apply to program administration contracts under this subsection.

(6) PERFORMANCE STANDARDS.—The Secretary shall establish

performance standards for the program administrator including, as applicable, standards for the quality and cost-effectiveness of the program administered, and such other factors as the

Secretary finds appropriate. The eligibility of entities for the

initial award, continuation, and renewal of program administration contracts shall be conditioned, at a minimum, on performance that meets or exceeds such standards.

(7) FUNCTIONS OF PROGRAM ADMINISTRATOR.—A program administrator shall perform any or all of the following functions,

as specified by the Secretary:

(A) AGREEMENTS WITH ENTITIES FURNISHING HEALTH

CARE ITEMS AND SERVICES.—Determine the qualifications of

entities seeking to enter or renew agreements to provide

services under the program, and as appropriate enter or

renew (or refuse to enter or renew) such agreements on behalf of the Secretary.

(B) ESTABLISHMENT OF PAYMENT RATES.—Negotiate or

otherwise establish, subject to the Secretary’s approval, payment rates for covered health care items and services.

(C) PAYMENT OF CLAIMS OR FEES.—Administer payments

for health care items or services furnished under the program.

(D) PAYMENT OF BONUSES.—Using such guidelines as the

Secretary shall establish, and subject to the approval of the

Secretary, make bonus payments as described in subsection

(c)(2)(A)(ii) to entities furnishing items or services for which

payment may be made under the program.

91

(E) OVERSIGHT.—Monitor the compliance of individuals

and entities with agreements under the program with the

conditions of participation.

(F) ADMINISTRATIVE REVIEW.—Conduct reviews of adverse determinations specified in subsection (a)(6).

(G) REVIEW OF MARKETING MATERIALS.—Conduct a review of marketing materials proposed by an entity furnishing services under the program.

(H) ADDITIONAL FUNCTIONS.—Perform such other functions as the Secretary may specify.

(8) LIMITATION OF LIABILITY.—The provisions of section

1157(b) shall apply with respect to activities of contractors and

their officers, employees, and agents under a contract under this

subsection.

(9) INFORMATION SHARING.—Notwithstanding section 1106

and section 552a of title 5, United States Code, the Secretary

is authorized to disclose to an entity with a program administration contract under this subsection such information (including medical information) on individuals receiving health care

items and services under the program as the entity may require

to carry out its responsibilities under the contract.

(c) RULES APPLICABLE TO BOTH PROGRAM AGREEMENTS AND PRO- GRAM ADMINISTRATION CONTRACTS.— (1) RECORDS, REPORTS, AND AUDITS.—The Secretary is authorized to require entities with agreements to provide health

care items or services under the demonstration program, and

entities with program administration contracts under subsection (b), to maintain adequate records, to afford the Secretary access to such records (including for audit purposes), and

to furnish such reports and other materials (including audited

financial statements and performance data) as the Secretary

may require for purposes of implementation, oversight, and

evaluation of the program and of individuals’ and entities’ effectiveness in performance of such agreements or contracts.

(2) BONUSES.—Notwithstanding any other provision of law,

but subject to subparagraph (B)(ii), the Secretary may make

bonus payments under the program from the Federal Health Insurance Trust Fund and the Federal Supplementary Medical

Insurance Trust Fund in amounts that do not exceed the

amounts authorized under the program in accordance with the

following:

(A) PAYMENTS TO PROGRAM ADMINISTRATORS.—The Secretary may make bonus payments under the program to

program administrators.

(B) PAYMENTS TO ENTITIES FURNISHING SERVICES.—

(i) IN GENERAL.—Subject to clause (ii), the Secretary

may make bonus payments to individuals or entities

furnishing items or services for which payment may be

made under the program, or may authorize the program administrator to make such bonus payments in

accordance with such guidelines as the Secretary shall

establish and subject to the Secretary’s approval.

(ii) LIMITATIONS.—The Secretary may condition such

payments on the achievement of such standards related

to efficiency, improvement in processes or outcomes of

92

care, or such other factors as the Secretary determines

to be appropriate.

(3) ANTIDISCRIMINATION LIMITATION.—The Secretary shall

not enter into an agreement with an entity to provide health

care items or services under the program, or with an entity to

administer the program, unless such entity guarantees that it

will not deny, limit, or condition the coverage or provision of

benefits under the program, for individuals eligible to be enrolled under such program, based on any health status-related

factor described in section 2702(a)(1) of the Public Health Service Act.

(d) LIMITATIONS ON JUDICIAL REVIEW.—The following actions and

determinations with respect to the demonstration program shall not

be subject to review by a judicial or administrative tribunal:

(1) Limiting the implementation of the program under subsection (a)(2).

(2) Establishment of program participation standards under

subsection (a)(5) or the denial or termination of, or refusal to

renew, an agreement with an entity to provide health care items

and services under the program.

(3) Establishment of program administration contract performance standards under subsection (b)(6), the refusal to

renew a program administration contract, or the noncompetitive

award or renewal of a program administration contract under

subsection (b)(4)(B).

(5) Establishment of payment rates, through negotiation or

otherwise, under a program agreement or a program administration contract.

(6) A determination with respect to the program (where specifically authorized by the program authority or by subsection

(c)(2))—

(A) as to whether cost savings have been achieved, and

the amount of savings; or

(B) as to whether, to whom, and in what amounts bonuses will be paid.

(e) APPLICATION LIMITED TO PARTS A AND B.—None of the provisions of this section or of the demonstration program shall apply to

the programs under part C.

(f) REPORTS TO CONGRESS.—Not later than two years after the

date of enactment of this section, and biennially thereafter for six

years, the Secretary shall report to the Congress on the use of authorities under the demonstration program. Each report shall address the impact of the use of those authorities on expenditures, access, and quality under the programs under this title.

* * * * * * *

MEDICARE COVERAGE FOR END STAGE RENAL DISEASE PATIENTS

SEC. 1881. (a) * * *

* * * * * * *

(b)(1) * * *

* * * * * * *

(7) The Secretary shall provide by regulation for a method (or

methods) for determining prospectively the amounts of payments to

93

be made for dialysis services furnished by providers of services and

renal dialysis facilities to individuals in a facility and to such individuals at home. Such method (or methods) shall provide for the

prospective determination of a rate (or rates) for each mode of care

based on a single composite weighted formula (which takes into account the mix of patients who receive dialysis services at a facility

or at home and the relative costs of providing such services in such

settings) for hospital-based facilities and such a single composite

weighted formula for other renal dialysis facilities, or based on

such other method or combination of methods which differentiate

between hospital-based facilities and other renal dialysis facilities

and which the Secretary determines, after detailed analysis, will

more effectively encourage the more efficient delivery of dialysis

services and will provide greater incentives for increased use of

home dialysis than through the single composite weighted formulas. The amount of a payment made under any method other

than a method based on a single composite weighted formula may

not exceed the amount (or, in the case of continuous cycling peritoneal dialysis, 130 percent of the amount) of the median payment

that would have been made under the formula for hospital-based

facilities. The Secretary shall provide for such exceptions to such

methods as may be warranted by unusual circumstances (including

the special circumstances of sole facilities located in isolated, rural

areas and of pediatric facilities). Each application for such an exception shall be deemed to be approved unless the Secretary disapproves it by not later than 60 working days after the date the

application is filed. The Secretary may provide that such method

will serve in lieu of any target reimbursement rate that would otherwise be established under paragraph (6). The Secretary shall reduce the amount of each composite rate payment under this paragraph for each treatment by 50 cents (subject to such adjustments

as may be required to reflect modes of dialysis other than hemodialysis) and provide for payment of such amount to the organizations (designated under subsection (c)(1)(A)) for such organizations’

necessary and proper administrative costs incurred in carrying out

the responsibilities described in subsection (c)(2). The Secretary

shall provide that amounts paid under the previous sentence shall

be distributed to the organizations described in subsection (c)(1)(A)

to ensure equitable treatment of all such network organizations.

The Secretary in distributing any such payments to network organizations shall take into account—

(A) * * *

* * * * * * *

The Secretary shall increase the amount of each composite rate

payment for dialysis services furnished during 2000 by 1.2 percent

above such composite rate payment amounts for such services furnished on December 31, 1999, and for such services furnished on

or after January 1, ø2001, by 1.2 percent¿ 2000, by 2.4 percent

above such composite rate payment amounts for such services furnished on December 31, 2000.

* * * * * * *

94

PAYMENT TO HOSPITALS FOR INPATIENT HOSPITAL SERVICES

SEC. 1886. (a) * * *

* * * * * * *

(b)(1) * * *

* * * * * * *

(3)(A) * * *

* * * * * * *

(D) For cost reporting periods ending on or before September 30,

1994, and for cost reporting periods beginning on or after October

1, 1997, øand before October 1, 2006,¿ in the case of a hospital that

is a medicare-dependent, small rural hospital (as defined in subsection (d)(5)(G)), the term ‘‘target amount’’ means—

(i) * * *

* * * * * * *

(iv) with respect to discharges occurring during fiscal year

1998 øthrough fiscal year 2005,¿ or any subsequent fiscal year,

the target amount for the preceding year increased by the applicable percentage increase under subparagraph (B)(iv).

* * * * * * *

(d)(1) * * *

* * * * * * *

(5)(A) * * *

* * * * * * *

(G)(i) For any cost reporting period beginning on or after April

1, 1990, and before October 1, 1994, or discharges occurring on or

after October 1, 1997, øand before October 1, 2006,¿ in the case of

a subsection (d) hospital which is a medicare-dependent, small

rural hospital, payment under paragraph (1)(A) shall be equal to

the sum of the amount determined under clause (ii) and the

amount determined under paragraph (1)(A)(iii).

(ii) The amount determined under this clause is—

(I) * * *

(II) for discharges occurring during any subsequent cost reporting period (or portion thereof) and before October 1, 1994,

or discharges occurring on or after October 1, 1997, øand before October 1, 2006,¿ 50 percent of the amount by which the

hospital’s target amount for the cost reporting period (as defined in subsection (b)(3)(D)) exceeds the amount determined

under paragraph (1)(A)(iii).

* * * * * * *

(iv) The term ‘‘medicare-dependent, small rural hospital’’ means,

with respect to any cost reporting period to which clause (i) applies,

any hospital—

(I) * * *

* * * * * * *

(IV) for which not less than 60 percent of its inpatient days

or discharges during the cost reporting period beginning in fiscal year 1987, or any of the 3 most recent audited cost reporting

95

periods, were attributable to inpatients entitled to benefits

under part A.

* * * * * * *

PROSPECTIVE PAYMENT FOR HOME HEALTH SERVICES

SEC. 1895. (a) * * *

(b) SYSTEM OF PROSPECTIVE PAYMENT FOR HOME HEALTH SERV- ICES.—(1) * * *

* * * * * * *

(3) PAYMENT BASIS.—

(A) INITIAL BASIS.—

(i) IN GENERAL.—Under such system the Secretary

shall provide for computation of a standard prospective payment amount (or amounts) as follows:

(I) Such amount (or amounts) shall initially be

based on the most current audited cost report

data available to the Secretary and shall be computed in a manner so that the total amounts payable under the system for the 12-month period beginning on the date the Secretary implements the

system shall be equal to the total amount that

would have been made if the system had not been

in effect.

(II) For the 12-month period beginning after the

period described in subclause (I), such amount (or

amounts) shall be equal to the amount (or

amounts) determined under subclause (I), updated

under subparagraph (B).

ø(II)¿ (III) For periods beginning after the period described in subclause ø(I)¿ (II), such amount

(or amounts) shall be equal to the amount (or

amounts) that would have been determined under

subclause (I) that would have been made for fiscal

year 2001 if the system had not been in effect and

if section 1861(v)(1)(L)(ix) had not been enacted

but if the reduction in limits described in clause

(ii) had been in effect, updated under subparagraph (B).

* * * * * * *

TITLE XIX—GRANTS TO STATES FOR MEDICAL ASSISTANCE

PROGRAMS

* * * * * * *

STATE PLANS FOR MEDICAL ASSISTANCE

SEC. 1902. (a) A State plan for medical assistance must—

(1) * * *

* * * * * * *

(8) provide that all individuals wishing to make application

for medical assistance under the plan shall have opportunity to

do soø, and that¿ permit individuals to apply for and obtain

96

medical assistance for medicare cost-sharing using the simplified uniform application form developed under section

1905(p)(5), make available such forms to such individuals, permit such individuals to apply for such assistance by mail (and,

at the State option, by telephone or other electronic means) and

not require them to apply in person, and provide that such assistance shall be furnished with reasonable promptness to all

eligible individuals and provide application forms for medical

assistance for medicare cost-sharing under the plan to the Secretary in order to make them available through Federal offices

under section 1804(d) within the State;

* * * * * * *

(10) provide—

(A) * * *

* * * * * * *

(C) that if medical assistance is included for any group

of individuals described in section 1905(a) who are not described in subparagraph (A) or (E), then—

(i) * * *

* * * * * * *

(iv) if such medical assistance includes services in

institutions for mental diseases or in an intermediate

care facility for the mentally retarded (or both) for any

such group, it also must include for all groups covered

at least the care and services listed in paragraphs (1)

through (5) and (17) of section 1905(a) or the care and

services listed in any 7 of the paragraphs numbered

(1) through ø(24)¿ (25) of such section;

* * * * * * *

(13) provide—

(A) for a public process for determination of rates of payment under the plan for hospital services, nursing facility

services, and services of intermediate care facilities for the

mentally retarded under which—

(i) * * *

* * * * * * *

(iv) in the case of hospitals, such rates take into account (in a manner consistent with section 1923) the

situation of hospitals which serve a disproportionate

number of low-income patients with special needs; and

(B) for payment for hospice care in amounts no lower

than the amounts, using the same methodology, used

under part A of title XVIII and for payment of amounts

under section 1905(o)(3); except that in the case of hospice

care which is furnished to an individual who is a resident

of a nursing facility or intermediate care facility for the

mentally retarded, and who would be eligible under the

plan for nursing facility services or services in an intermediate care facility for the mentally retarded if he had

not elected to receive hospice care, there shall be paid an

additional amount, to take into account the room and

board furnished by the facility, equal to at least 95 percent

97

of the rate that would have been paid by the State under

the plan for facility services in that facility for that individual; øand¿

ø(C)(i) for payment for services described in clause (B) or

(C) of section 1905(a)(2) under the plan, of 100 percent (or

95 percent for services furnished during fiscal year 2000,

fiscal year 2001, or fiscal year 2002, 90 percent for services

furnished during fiscal year 2003, or 85 percent for services furnished during fiscal year 2004) of costs which are

reasonable and related to the cost of furnishing such services or based on such other tests of reasonableness, as the

Secretary prescribes in regulations under section

1833(a)(3), or, in the case of services to which those regulations do not apply, on the same methodology used under

section 1833(a)(3) and (ii) in carrying out clause (i) in the

case of services furnished by a Federally-qualified health

center or a rural health clinic pursuant to a contract between the center and an organization under section

1903(m), for payment to the center or clinic at least quarterly by the State of a supplemental payment equal to the

amount (if any) by which the amount determined under

clause (i) exceeds the amount of the payments provided

under such contract;¿

* * * * * * *

(15) provide for payment for services described in clause (B)

or (C) of section 1905(a)(2) under the plan in accordance with

subsection (aa);

* * * * * * *

(aa) PAYMENT FOR SERVICES PROVIDED BY FEDERALLY-QUALIFIED

HEALTH CENTERS AND RURAL HEALTH CLINICS.— (1) IN GENERAL.—Beginning with fiscal year 2001 and each

succeeding fiscal year, the State plan shall provide for payment

for services described in section 1905(a)(2)(C) furnished by a

Federally-qualified health center and services described in section 1905(a)(2)(B) furnished by a rural health clinic in accordance with the provisions of this subsection. The payment rate

under this subsection shall not vary based upon the site services

are provided in the case of the same center or clinic entity.

(2) FISCAL YEAR 2001.—Subject to paragraph (4), for services

furnished during fiscal year 2001, the State plan shall provide

for payment for such services in an amount (calculated on a per

visit basis) that is equal to 100 percent of the average of the

costs of the center or clinic of furnishing such services during

fiscal years 1999 and 2000 which are reasonable and related to

the cost of furnishing such services, or based on such other tests

of reasonableness as the Secretary prescribes in regulations

under section 1833(a)(3), or, in the case of services to which

such regulations do not apply, the same methodology used

under section 1833(a)(3), adjusted to take into account any increase or decrease in the scope of such services furnished by the

center or clinic during fiscal year 2001.

(3) FISCAL YEAR 2002 AND SUCCEEDING FISCAL YEARS.—Subject to paragraph (4), for services furnished during fiscal year

2002 or a succeeding fiscal year, the State plan shall provide

98

for payment for such services in an amount (calculated on a per

visit basis) that is equal to the amount calculated for such services under this subsection for the preceding fiscal year—

(A) increased by the percentage increase in the MEI (as

defined in section 1842(i)(3)) applicable to primary care

services (as defined in section 1842(i)(4)) for that fiscal

year; and

(B) adjusted to take into account any increase or decrease

in the scope of such services furnished by the center or clinic during that fiscal year.

(4) ESTABLISHMENT OF INITIAL YEAR PAYMENT AMOUNT FOR

NEW CENTERS OR CLINICS.—In any case in which an entity first

qualifies as a Federally-qualified health center or rural health

clinic after fiscal year 2000, the State plan shall provide for

payment for services described in section 1905(a)(2)(C) furnished by the center or services described in section

1905(a)(2)(B) furnished by the clinic in the first fiscal year in

which the center or clinic so qualifies in an amount (calculated

on a per visit basis) that is equal to 100 percent of the costs of

furnishing such services during such fiscal year based on the

rates established under this subsection for the fiscal year for

other such centers or clinics located in the same or adjacent

area with a similar case load, service package, and case mix or,

in the absence of such a center or clinic, in accordance with the

regulations and methodology referred to in paragraph (2) or

based on such other tests of reasonableness as the Secretary

may specify. For each fiscal year following the fiscal year in

which the entity first qualifies as a Federally-qualified health

center or rural health clinic, the State plan shall provide for the

payment amount to be calculated in accordance with paragraph

(3).

(5) ADMINISTRATION IN THE CASE OF MANAGED CARE.—In the

case of services furnished by a Federally-qualified health center

or rural health clinic pursuant to a contract between the center

or clinic and a managed care entity (as defined in section

1932(a)(1)(B)), the State plan shall provide for payment to the

center or clinic (at least quarterly) by the State of a supplemental payment equal to the amount (if any) by which the

amount determined under paragraphs (2), (3), and (4) of this

subsection exceeds the amount of the payments provided under

the contract.

(6) ALTERNATIVE PAYMENT METHODOLOGIES.—Notwithstanding any other provision of this section, the State plan may

provide for payment in any fiscal year to a Federally-qualified

health center for services described in section 1905(a)(2)(C) or

to a rural health clinic for services described in section

1905(a)(2)(B) in an amount which is determined under an alternative payment methodology that—

(A) is agreed to by the State and the center or clinic; and

(B) results in payment to the center or clinic of an

amount which is at least equal to the amount otherwise required to be paid to the center or clinic under this section.

* * * * * * *

99

PAYMENT TO STATES

SEC. 1903. (a) * * *

* * * * * * *

(v)(1) Notwithstanding the preceding provisions of this section,

except as provided in øparagraph (2)¿ paragraphs (2) and (4), no

payment may be made to a State under this section for medical assistance furnished to an alien who is not lawfully admitted for permanent residence or otherwise permanently residing in the United

States under color of law.

* * * * * * *

(4)(A) A State may elect (in a plan amendment under this title)

to provide medical assistance under this title, notwithstanding sections 401(a), 402(b), 403, and 421 of the Personal Responsibility

and Work Opportunity Reconciliation Act of 1996, for aliens who

are lawfully residing in the United States (including battered aliens

described in section 431(c) of such Act) and who are otherwise eligible for such assistance, within either or both of the following eligibility categories, but only if they have lawfully resided in the United

States for 2 years:

(i) PREGNANT WOMEN.—Women during pregnancy (and during the 60-day period beginning on the last day of the pregnancy).

(ii) CHILDREN.—Children (as defined under such plan), including optional targeted low-income children described in section 1905(u)(2)(B).

(B) In the case of a State that has elected to provide medical assistance to a category of aliens under subparagraph (A), no debt

shall accrue under an affidavit of support against any sponsor of

such an alien who has lawfully resided in the United States for 2

years on the basis of provision of assistance to such category.

* * * * * * *

DEFINITIONS

SEC. 1905. For purposes of this title—

(a) The term ‘‘medical assistance’’ means payment of part or all

of the cost of the following care and services (if provided in or after

the third month before the month in which the recipient makes application for assistance or, in the case of medicare cost-sharing with

respect to a qualified medicare beneficiary described in subsection

(p)(1), if provided after the month in which the individual becomes

such a beneficiary) for individuals, and, with respect to physicians’

or dentists’ services, at the option of the State, to individuals (other

than individuals with respect to whom there is being paid, or who

are eligible, or would be eligible if they were not in a medical institution, to have paid with respect to them a State supplementary

payment and are eligible for medical assistance equal in amount,

duration, and scope to the medical assistance made available to individuals described in section 1902(a)(10)(A)) not receiving aid or

assistance under any plan of the State approved under title I, X,

XIV, or XVI, or part A of title IV, and with respect to whom supplemental security income benefits are not being paid under title XVI,

who are—

100

(i) * * *

* * * * * * *

but whose income and resources are insufficient to meet all of such

cost—

(1) inpatient hospital services (other than services in an institution for mental diseases);

* * * * * * *

(22) services furnished by a physician assistant (as defined in

section 1861(aa)(5)) which the assistant is legally authorized to

perform under State law and with the supervision of a physician;

ø(22)¿ (23) home and community care (to the extent allowed

and as defined in section 1929) for functionally disabled elderly

individuals;

ø(23)¿ (24) community supported living arrangements services (to the extent allowed and as defined in section 1930);

ø(24)¿ (25) personal care services furnished to an individual

who is not an inpatient or resident of a hospital, nursing facility, intermediate care facility for the mentally retarded, or institution for mental disease that are (A) authorized for the individual by a physician in accordance with a plan of treatment

or (at the option of the State) otherwise authorized for the individual in accordance with a service plan approved by the State,

(B) provided by an individual who is qualified to provide such

services and who is not a member of the individual’s family,

and (C) furnished in a home or other location;

ø(25)¿ (26) primary care case management services (as defined in subsection (t));

ø(26)¿ (27) services furnished under a PACE program under

section 1934 to PACE program eligible individuals enrolled

under the program under such section; and

ø(27)¿ (28) any other medical care, and any other type of remedial care recognized under State law, specified by the Secretary,

* * * * * * *

(p)(1) * * *

* * * * * * *

(5)(A) The Secretary shall develop a simplified application form

for use by individuals (including both qualified medicare beneficiaries and specified low-income medicare beneficiaries) in applying for medical assistance for medicare cost-sharing under this title.

Such form shall be easily readable by applicants and uniform nationally.

(B) In developing such form, the Secretary shall consult with beneficiary groups and the States.

(C) The Secretary shall make such application forms available—

(i) to the Commissioner of Social Security for distribution

through local social security offices;

(ii) at such other sites at the Secretary determines appropriate; and

(iii) to persons upon request.

* * * * * * *

101

PROVISIONS RESPECTING INAPPLICABILITY AND WAIVER OF CERTAIN

REQUIREMENTS OF THIS TITLE

SEC. 1915. (a) * * *

* * * * * * *

(b) The Secretary, to the extent he finds it to be cost-effective and

efficient and not inconsistent with the purposes of this title, may

waive such requirements of section 1902 (other than subsection (s))

(other than sections ø1902(a)(13)(C)¿ 1902(a)(15), 1902(aa), and

1902(a)(10)(A) insofar as it requires provision of the care and services described in section 1905(a)(2)(C)) as may be necessary for a

State—

(1) * * *

* * * * * * *

LIENS, ADJUSTMENTS AND RECOVERIES, AND TRANSFERS OF ASSETS

SEC. 1917. (a) * * *

* * * * * * *

(c)(1)(A) * * *

* * * * * * *

(C)(i) * * *

* * * * * * *

(ii) The services described in this subparagraph with respect to

a noninstitutionalized individual are services (not including any

services described in clause (i)) that are described in paragraph (7),

ø(22), or (24)¿ (23), or (25) of section 1905(a), and, at the option of

a State, other long-term care services for which medical assistance

is otherwise available under the State plan to individuals requiring

long-term care.

* * * * * * *

PRESUMPTIVE ELIGIBILITY FOR PREGNANT WOMEN

SEC. 1920. (a) * * *

(b) For purposes of this section—

(1) * * *

* * * * * * *

(2) the term ‘‘qualified provider’’ means any provider that—

(A) * * *

* * * * * * *

The term ‘‘qualified provider’’ includes a qualified entity as defined

in section 1920A(b)(3).

* * * * * * *

PRESUMPTIVE ELIGIBILITY FOR CHILDREN

SEC. 1920A. (a) * * *

(b) For purposes of this section:

(1) * * *

* * * * * * *

102

(3)(A) Subject to subparagraph (B), the term ‘‘qualified entity’’ means any entity that—

(i)(I) is eligible for payments under a State plan approved under this title and provides items and services described in subsection (a) øor (II)¿, (II) is authorized to determine eligibility of a child to participate in a Head Start

program under the Head Start Act (ø42 U.S.C. 9821¿ 42

U.S.C. 9831 et seq.), eligibility of a child to receive child

care services for which financial assistance is provided

under the Child Care and Development Block Grant Act of

1990 (42 U.S.C. 9858 et seq.), eligibility of an infant or

child to receive assistance under the special supplemental

nutrition program for women, infants, and children (WIC)

under section 17 of the Child Nutrition Act of 1966 (42

U.S.C. 1786) eligibility of a child for medical assistance

under the State plan under this title, or eligibility of a

child for child health assistance under the program funded

under title XXI, (III) is an elementary school or secondary

school, as such terms are defined in section 14101 of the Elementary and Secondary Education Act of 1965 (20 U.S.C.

8801), an elementary or secondary school operated or supported by the Bureau of Indian Affairs, a State or tribal

child support enforcement agency, a child care resource and

referral agency, an organization that is providing emergency food and shelter under a grant under the Stewart B.

McKinney Homeless Assistance Act, or a State or tribal office or entity involved in enrollment in the program under

this title, under part A of title IV, under title XXI, or that

determines eligibility for any assistance or benefits provided under any program of public or assisted housing that

receives Federal funds, including the program under section 8 or any other section of the United States Housing Act

of 1937 (42 U.S.C. 1437 et seq.) or under the Native American Housing Assistance and Self-Determination Act of

1996 (25 U.S.C. 4101 et seq.), or (IV) any other entity the

State so deems, as approved by the Secretary; and

(ii) is determined by the State agency to be capable of

making determinations of the type described in øparagraph (1)(A)¿ paragraph (2).

* * * * * * *

ADJUSTMENT IN PAYMENT FOR INPATIENT HOSPITAL SERVICES

FURNISHED BY DISPROPORTIONATE SHARE HOSPITALS

SEC. 1923. (a) IMPLEMENTATION OF REQUIREMENT.— (1) * * *

* * * * * * *

(2)(A) * * *

* * * * * * *

(D) A State plan under this title shall not be considered to

meet the requirements of section 1902(a)(13)(A)(iv) (insofar as

it requires payments to hospitals to take into account the situation of hospitals that serve a disproportionate number of lowincome patients with special needs), as of October 1, 1998, unVerDate 11-MAY-2000 15:23 Oct 31, 2000 Jkt 089006 PO 00000 Frm 00102 Fmt 6659 Sfmt 6601 E:\HR\OC\HR1019P1.XXX pfrm04 PsN: HR1019P1
103

less the State has submitted to the Secretary by such date a

description of the methodology used by the State to identify

and to make payments to disproportionate share hospitals, including children’s hospitals, on the basis of the proportion of

low-income and medicaid patients (including such patients who

receive benefits through a managed care entity) served by such

hospitals. The State shall provide an annual report to the Secretary describing the disproportionate share payments to each

such disproportionate share hospital.

* * * * * * *

(b) HOSPITALS DEEMED DISPROPORTIONATE SHARE.— (1) * * *

* * * * * * *

(2) For purposes of paragraph (1)(A), the term ‘‘medicaid inpatient utilization rate’’ means, for a hospital, a fraction (expressed as a percentage), the numerator of which is the hospital’s number of inpatient days attributable to patients who

(for such days) were eligible for medical assistance under a

State plan approved under this title in a period (regardless of

whether they receive benefits on a fee-for-service basis or

through a managed care entity), and the denominator of which

is the total number of the hospital’s inpatient days in that period. In this paragraph, the term ‘‘inpatient day’’ includes each

day in which an individual (including a newborn) is an inpatient in the hospital, whether or not the individual is in a specialized ward and whether or not the individual remains in the

hospital for lack of suitable placement elsewhere.

(3) For purposes of paragraph (1)(B), the term ‘‘low-income

utilization rate’’ means, for a hospital, the sum of—

(A) the fraction (expressed as a percentage)—

(i) the numerator of which is the sum (for a period)

of (I) the total revenues paid the hospital for patient

services under a State plan under this title (regardless

of whether the services were furnished on a fee-for-service basis or through a managed care entity) and (II)

the amount of the cash subsidies for patient services

received directly from State and local governments,

and

* * * * * * *

(f) LIMITATION ON FEDERAL FINANCIAL PARTICIPATION.— (1) * * *

(2) STATE DSH ALLOTMENTS FOR FISCAL YEARS 1998 THROUGH

ø2002¿ 2000.—The DSH allotment for a State for each fiscal

year during the period beginning with fiscal year 1998 and

ending with fiscal year ø2002¿ 2000 is determined in accordance with the following table:

State or District

DSH Allotment (in millions of dollars)

FY 98 FY 99 FY 00 øFY 01¿ øFY 02¿

Alabama 293 269 248 ø246¿ ø246¿

Alaska 10 10 10 ø9¿ ø9¿

Arizona 81 81 81 ø81¿ ø81¿

Arkansas 2 2 2 ø2¿ ø2¿

104

State or District

DSH Allotment (in millions of dollars)

FY 98 FY 99 FY 00 øFY 01¿ øFY 02¿

California 1,085 1,068 986 ø931¿ ø877¿

Colorado 93 85 79 ø74¿ ø74¿

Connecticut 200 194 164 ø160¿ ø160¿

Delaware 4 4 4 ø4¿ ø4¿

District of Columbia 23 23 ø32¿ 49 ø32¿ ø32¿

Florida 207 203 197 ø188¿ ø160¿

Georgia 253 248 241 ø228¿ ø215¿

Hawaii 0 0 0 ø0¿ ø0¿

Idaho 1 1 1 ø1¿ ø1¿

Illinois 203 199 193 ø182¿ ø172¿

Indiana 201 197 191 ø181¿ ø171¿

Iowa 8 8 8 ø8¿ ø8¿

Kansas 51 49 42 ø36¿ ø33¿

Kentucky 137 134 130 ø123¿ ø116¿

Louisiana 880 795 713 ø658¿ ø631¿

Maine 103 99 84 ø84¿ ø84¿

Maryland 72 70 68 ø64¿ ø61¿

Massachusetts 288 282 273 ø259¿ ø244¿

Michigan 249 244 237 ø224¿ ø212¿

Minnesota 16 33 ø33¿ ø33¿

Mississippi 143 141 136 ø129¿ ø122¿

Missouri 436 423 379 ø379¿ ø379¿

Montana 0.2 0.2 0.2 ø0.2¿ ø0.2¿

Nebraska 5 5 5 ø5¿ ø5¿

Nevada 37 37 37 ø37¿ ø37¿

New Hampshire 140 136 130 ø130¿ ø130¿

New Jersey 600 582 515 ø515¿ ø515¿

New Mexico 5 9 ø9¿ ø9¿

New York 1,512 1,482 1,436 ø1,361¿ ø1,285¿

North Carolina 278 272 264 ø250¿ ø236¿

North Dakota 1 1 1 ø1¿ ø1¿

Ohio 382 374 363 ø344¿ ø325¿

Oklahoma 16 16 16 ø16¿ ø16¿

Oregon 20 20 20 ø20¿ ø20¿

Pennsylvania 529 518 502 ø476¿ ø449¿

Rhode Island 62 60 58 ø55¿ ø52¿

South Carolina 313 303 262 ø262¿ ø262¿

South Dakota 1 1 1 ø1¿ ø1¿

Tennessee 0 0 0 ø0¿ ø0¿

Texas 979 950 806 ø765¿ ø765¿

Utah 3 3 3 ø3¿ ø3¿

Vermont 18 18 18 ø18¿ ø18¿

Virginia 70 68 66 ø63¿ ø59¿

Washington 174 171 166 ø157¿ ø148¿

West Virginia 64 63 61 ø58¿ ø54¿

Wisconsin 7 7 7 ø7¿ ø7¿

Wyoming 0 30 0.1 ø0.1¿ ø0.1¿

(3) STATE DSH ALLOTMENTS FOR FISCAL YEAR ø2003¿ 2001 AND

THEREAFTER.—

(A) IN GENERAL.—The DSH allotment for any State for

fiscal year ø2003¿ 2001 and each succeeding fiscal year is

equal to the DSH allotment for the State for the preceding

fiscal year under paragraph (2) øor this paragraph¿, this

paragraph, or paragraph (4), increased, subject to øsubparagraph (B)¿ subparagraphs (B) and (C), by the percentage change in the consumer price index for all urban consumers (all items; U.S. city average), for the previous fiscal

year.

* * * * * * *

105

(C) SPECIAL RULE FOR EXTREMELY LOW DSH STATES.—In

the case of a State in which the total expenditures under

the State plan (including Federal and State shares) for disproportionate share hospital adjustments under this section

for fiscal year 1999, as reported to the Administrator of the

Health Care Financing Administration as of August 31,

2000, is greater than 0 but less than 1 percent of the State’s

total amount of expenditures under the State plan for medical assistance during the fiscal year, the DSH allotment

for fiscal year 2001 shall be increased to 1 percent of the

State’s total amount of expenditures under such plan for

such assistance during such fiscal year. In subsequent fiscal years, such increased allotment is subject to an increase

for inflation as provided in subparagraph (A).

* * * * * * *

EXTENSION OF ELIGIBILITY FOR MEDICAL ASSISTANCE

SEC. 1925. (a) INITIAL 6-MONTH EXTENSION.—

(1) REQUIREMENT.—Notwithstanding any other provision of

this title, but subject to subsection (g), each State plan approved under this title must provide that each family which

was receiving aid pursuant to a plan of the State approved

under part A of title IV in at least 3 of the 6 months immediately preceding the month in which such family becomes ineligible for such aid, because of hours of, or income from, employment of the caretaker relative (as defined in subsection (e))

or because of section 402(a)(8)(B)(ii)(II) (providing for a timelimited earned income disregard), shall, subject to paragraph

(3) and without any reapplication for benefits under the plan,

remain eligible for assistance under the plan approved under

this title during the immediately succeeding 6-month period in

accordance with this subsection.

* * * * * * *

(b) ADDITIONAL 6-MONTH EXTENSION.—

(1) REQUIREMENT.—Notwithstanding any other provision of

this title, but subject to subsection (g), each State plan approved under this title shall provide that the State shall offer

to each family, which has received assistance during the entire

6-month period under subsection (a) and which meets the requirement of paragraph (2)(B)(i), in the last month of the period the option of extending coverage under this subsection for

the succeeding 6-month period, subject to paragraph (3).

(2) NOTICE AND REPORTING REQUIREMENTS.—

(A) * * *

* * * * * * *

(C) STATE OPTION TO WAIVE REPORTING REQUIRE- MENTS.—A State may elect to waive the reporting requirements under subparagraph (B) and, in the case of such a

waiver for purposes of notices required under subparagraph

(A), to exclude from such notices any reference to any requirement under subparagraph (B).

* * * * * * *

106

(f) SUNSET.—This section shall not apply with respect to families

that cease to be eligible for aid under part A of title IV after September 30, ø2001¿ 2002. (g) EXEMPTION FOR STATE COVERING NEEDY FAMILIES UP TO 185

PERCENT OF POVERTY.— (1) IN GENERAL.—At State option, the provisions of this section shall not apply to a State that uses the authority under section 1931(b)(2)(C) to make medical assistance available under

the State plan under this title, at a minimum, to all individuals described in section 1931(b)(1) in families with gross incomes (determined without regard to work-related child care expenses of such individuals) at or below 185 percent of the income official poverty line (as defined by the Office of Management and Budget, and revised annually in accordance with section 673(2) of the Omnibus Budget Reconciliation Act of 1981)

applicable to a family of the size involved.

(2) APPLICATION TO OTHER PROVISIONS OF THIS TITLE.—The

State plan of a State described in paragraph (1) shall be

deemed to meet the requirements of sections 1902(a)(10)(A)(i)(I)

and 1902(e)(1).

* * * * * * *

HOME AND COMMUNITY CARE FOR FUNCTIONALLY DISABLED ELDERLY

INDIVIDUALS

SEC. 1929. (a) * * *

* * * * * * *

(e) CEILING ON PAYMENT AMOUNTS AND MAINTENANCE OF EF- FORT.—

(1) * * *

* * * * * * *

(2) MAINTENANCE OF EFFORT.—

(A) ANNUAL REPORTS.—As a condition for the receipt of

payment under section 1903(a) with respect to medical assistance provided by a State for home and community care

(other than a waiver under section 1915(c) and other than

home health care services described in section 1905(a)(7)

and personal care services specified under regulations

under section ø1905(a)(23)¿ 1905(a)(24)), the State shall

report to the Secretary, with respect to each Federal fiscal

year (beginning with fiscal year 1990) and in a format developed or approved by the Secretary, the amount of funds

obligated by the State with respect to the provision of

home and community care to the functionally disabled elderly in that fiscal year.

* * * * * * *

PROVISIONS RELATING TO MANAGED CARE

SEC. 1932. (a) * * *

* * * * * * *

(g) IDENTIFICATION OF PATIENTS FOR PURPOSES OF MAKING DSH

PAYMENTS.—Each contract with a managed care entity under secVerDate 11-MAY-2000 15:23 Oct 31, 2000 Jkt 089006 PO 00000 Frm 00106 Fmt 6659 Sfmt 6603 E:\HR\OC\HR1019P1.XXX pfrm04 PsN: HR1019P1
107

tion 1903(m) or under section 1905(t)(3) shall require the entity

either—

(1) to report to the State information necessary to determine

the hospital services provided under the contract (and the identity of hospitals providing such services) for purposes of applying sections 1886(d)(5)(F) and 1923; or

(2) to include a sponsorship code in the identification card

issued to individuals covered under this title in order that a

hospital may identify a patient as being entitled to benefits

under this title.

* * * * * * *

TITLE XXI—STATE CHILDREN’S HEALTH INSURANCE

PROGRAM

* * * * * * *

SEC. 2104. ALLOTMENTS.

(a) * * *

* * * * * * *

(g) RULE FOR REDISTRIBUTION AND EXTENDED AVAILABILITY OF

FISCAL YEARS 1998 AND 1999 ALLOTMENTS.— (1) AMOUNT REDISTRIBUTED.— (A) IN GENERAL.—In the case of a State that expends all

of its allotment under subsection (b) or (c) for fiscal year

1998 by the end of fiscal year 2000, or for fiscal year 1999

by the end of fiscal year 2001, the Secretary shall redistribute to the State under subsection (f) (from the fiscal

year 1998 or 1999 allotments of other States, respectively,

as determined by the application of paragraphs (2) and (3)

with respect to the respective fiscal year)) the following

amount:

(i) STATE.—In the case of 1 of the 50 States or the

District of Columbia, with respect to—

(I) the fiscal year 1998 allotment, the amount by

which the State’s expenditures under this title in

fiscal years 1998, 1999, and 2000 exceed the

State’s allotment for fiscal year 1998 under subsection (b); or

(II) the fiscal year 1999 allotment, the amount

by which the State’s expenditures under this title

in fiscal years 1999, 2000, and 2001 exceed the

State’s allotment for fiscal year 1999 under subsection (b).

(ii) TERRITORY.—In the case of a commonwealth or

territory described in subsection (c)(3), an amount that

bears the same ratio to 1.05 percent of the total

amount described in paragraph (2)(B)(i)(I) as the ratio

of the commonwealth’s or territory’s fiscal year 1998

or 1999 allotment under subsection (c) (as the case

may be) bears to the total of all such allotments for

such fiscal year under such subsection.

(B) EXPENDITURE RULES.—An amount redistributed to a

State under this paragraph with respect to fiscal year 1998

or 1999—

108

(i) shall not be included in the determination of the

State’s allotment for any fiscal year under this section;

(ii) notwithstanding subsection (e), shall remain

available for expenditure by the State through the end

of fiscal year 2002; and

(iii) shall be counted as being expended with respect

to a fiscal year allotment in accordance with applicable regulations of the Secretary.

(2) EXTENSION OF AVAILABILITY OF PORTION OF UNEXPENDED

FISCAL YEARS 1998 AND 1999 ALLOTMENTS.—

(A) IN GENERAL.—Notwithstanding subsection (e):

(i) FISCAL YEAR 1998 ALLOTMENT.—Of the amounts

allotted to a State pursuant to this section for fiscal

year 1998 that were not expended by the State by the

end of fiscal year 2000, the amount specified in subparagraph (B) for fiscal year 1998 for such State shall

remain available for expenditure by the State through

the end of fiscal year 2002.

(ii) FISCAL YEAR 1999 ALLOTMENT.—Of the amounts

allotted to a State pursuant to this subsection for fiscal year 1999 that were not expended by the State by

the end of fiscal year 2001, the amount specified in

subparagraph (B) for fiscal year 1999 for such State

shall remain available for expenditure by the State

through the end of fiscal year 2002.

(B) AMOUNT REMAINING AVAILABLE FOR EXPENDITURE.—

The amount specified in this subparagraph for a State for

a fiscal year is equal to—

(i) the amount by which (I) the total amount available for redistribution under subsection (f) from the allotments for that fiscal year, exceeds (II) the total

amounts redistributed under paragraph (1) for that

fiscal year; multiplied by

(ii) the ratio of the amount of such State’s unexpended allotment for that fiscal year to the total

amount described in clause (i)(I) for that fiscal year.

(C) USE OF UP TO 10 PERCENT OF RETAINED 1998 ALLOTMENTS FOR OUTREACH ACTIVITIES.—Notwithstanding section 2105(c)(2)(A), with respect to any State described in

subparagraph (A)(i), the State may use up to 10 percent of

the amount specified in subparagraph (B) for fiscal year

1998 for expenditures for outreach activities approved by

the Secretary.

(3) DETERMINATION OF AMOUNTS.—For purposes of calculating the amounts described in paragraphs (1) and (2) relating

to the allotment for fiscal year 1998 or fiscal year 1999, the

Secretary shall use the amounts reported by the States not

later than November 30, 2000, or November 30, 2001, respectively, on HCFA Form 64 or HCFA Form 21, as approved by

the Secretary.

* * * * * * *

109

SEC. 2107. STRATEGIC OBJECTIVES AND PERFORMANCE GOALS; PLAN

ADMINISTRATION.

(a) * * *

* * * * * * *

(e) APPLICATION OF CERTAIN GENERAL PROVISIONS.—The following sections of this Act shall apply to States under this title in

the same manner as they apply to a State under title XIX:

(1) TITLE XIX PROVISIONS.— (A) * * *

* * * * * * *

(D) Section 1920A (relating to presumptive eligibility).’’.

(E) Section 1903(v)(4) (relating to optional coverage of

categories of lawfully residing alien children), but only if

the State has elected to apply such section to the category

of children under title XIX.

MEDICARE, MEDICAID, AND SCHIP BALANCED BUDGET

REFINEMENT ACT OF 1999

* * * * * * *

TITLE II—PROVISIONS RELATING TO

PART B

* * * * * * *

Subtitle C—Other Services

SEC. 221. REVISION OF PROVISIONS RELATING TO THERAPY SERVICES.

(a) 2-YEAR MORATORIUM ON CAPS.— (1) * * *

* * * * * * *

(2) FOCUSED MEDICAL REVIEWS OF CLAIMS DURING MORATORIUM PERIOD.—During years in which paragraph (4) of section

1833(g) of the Social Security Act (42 U.S.C. 1395l(g)) applies

ø(under the amendment made by paragraph (1)(B))¿, the Secretary of Health and Human Services shall conduct focused

medical reviews of claims for reimbursement for services described in paragraph (1) or (3) of such section, with an emphasis on such claims for services that are provided to residents

of skilled nursing facilities.

* * * * * * *

SEC. 226. PHASE-IN OF PPS FOR AMBULATORY SURGICAL CENTERS.

If the Secretary of Health and Human Services implements a revised prospective payment system for services of ambulatory surgical facilities under section 1833(i) of the Social Security Act (42

U.S.C. 1395l(i)), prior to incorporating data from the 1999 Medicare

cost survey or a subsequent cost survey, such system shall be implemented in a manner so that—

110

ø(1) in the first year of its implementation, only a proportion

(specified by the Secretary and not to exceed 1⁄3) of the payment for such services shall be made in accordance with such

system and the remainder shall be made in accordance with

current regulations; and

ø(2) in the following year a proportion (specified by the Secretary and not to exceed 2⁄3) of the payment for such services

shall be made under such system and the remainder shall be

made in accordance with current regulations.¿

(1) in the first year of its implementation, only a proportion

(specified by the Secretary and not to exceed 1⁄4) of the payment

for such services shall be made in accordance with such system

and the remainder shall be made in accordance with current

regulations; and

(2) in each of the following 2 years a proportion (specified by

the Secretary and not to exceed 1⁄2, and 3⁄4, respectively) of the

payment for such services shall be made under such system and

the remainder shall be made in accordance with current regulations.

By not later than January 1, 2003, the Secretary shall incorporate

data from a 1999 Medicare cost survey or a subsequent cost survey

for purposes of implementing or revising such system.

* * * * * * *

TITLE III—PROVISIONS RELATING TO

PARTS A AND B

Subtitle A—Home Health Services

* * * * * * *

SEC. 302. DELAY IN APPLICATION OF 15 PERCENT REDUCTION IN PAYMENT RATES FOR HOME HEALTH SERVICES UNTIL ONE

YEAR AFTER IMPLEMENTATION OF PROSPECTIVE PAYMENT SYSTEM.

(a) * * *

* * * * * * *

(c) REPORT.—Not later than the date that is øsix¿ 18 months

after the date the Secretary of Health and Human Services implements the prospective payment system for home health services

under section 1895 of the Social Security Act (42 U.S.C. 1395fff),

the Secretary shall submit to Congress a report analyzing the need

for the 15 percent reduction under subsection (b)(3)(A)(ii) of such

section, or for any reduction, in the computation of the base payment amounts under the prospective payment system for home

health services established under such section.

* * * * * * *

BALANCED BUDGET ACT OF 1997

* * * * * * *

111

TITLE IV—MEDICARE, MEDICAID, AND

CHILDREN’S HEALTH PROVISIONS

* * * * * * *

Subtitle C—Rural Initiatives

* * * * * * *

SEC. 4206. MEDICARE REIMBURSEMENT FOR TELEHEALTH SERVICES.

ø(a) IN GENERAL.—Not later than January 1, 1999, the Secretary

of Health and Human Services shall make payments from the Federal Supplementary Medical Insurance Trust Fund under part B of

title XVIII of the Social Security Act (42 U.S.C. 1395j et seq.) in

accordance with the methodology described in subsection (b) for

professional consultation via telecommunications systems with a

physician (as defined in section 1861(r) of such Act (42 U.S.C.

1395x(r)) or a practitioner (described in section 1842(b)(18)(C) of

such Act (42 U.S.C. 1395u(b)(18)(C)) furnishing a service for which

payment may be made under such part to a beneficiary under the

medicare program residing in a county in a rural area (as defined

in section 1886(d)(2)(D) of such Act (42 U.S.C. 1395ww(d)(2)(D)))

that is designated as a health professional shortage area under section 332(a)(1)(A) of the Public Health Service Act (42 U.S.C.

254e(a)(1)(A)), notwithstanding that the individual physician or

practitioner providing the professional consultation is not at the

same location as the physician or practitioner furnishing the service to that beneficiary.

ø(b) METHODOLOGY FOR DETERMINING AMOUNT OF PAYMENTS.— Taking into account the findings of the report required under section 192 of the Health Insurance Portability and Accountability Act

of 1996 (Public Law 104–191; 110 Stat. 1988), the findings of the

report required under paragraph (c), and any other findings related

to the clinical efficacy and cost-effectiveness of telehealth applications, the Secretary shall establish a methodology for determining

the amount of payments made under subsection (a) within the following parameters:

ø(1) The payment shall shared between the referring physician or practitioner and the consulting physician or practitioner. The amount of such payment shall not be greater than

the current fee schedule of the consulting physician or practitioner for the health care services provided.

ø(2) The payment shall not include any reimbursement for

any telephone line charges or any facility fees, and a beneficiary may not be billed for any such charges or fees.

ø(3) The payment shall be made subject to the coinsurance

and deductible requirements under subsections (a)(1) and (b) of

section 1833 of the Social Security Act (42 U.S.C. 1395l).

ø(4) The payment differential of section 1848(a)(3) of such

Act (42 U.S.C. 1395w–4(a)(3)) shall apply to services furnished

by non-participating physicians. The provisions of section

1848(g) of such Act (42 U.S.C. 1395w–4(g)) and section

1842(b)(18) of such Act (42 U.S.C. 1395u(b)(18)) shall apply.

Payment for such service shall be increased annually by the

112

update factor for physicians’ services determined under section

1848(d) of such Act (42 U.S.C. 1395w–4(d)).

ø(c) SUPPLEMENTAL REPORT.—Not later than January 1, 1999,

the Secretary shall submit a report to Congress which shall contain

a detailed analysis of—

ø(1) how telemedicine and telehealth systems are expanding

access to health care services;

ø(2) the clinical efficacy and cost-effectiveness of telemedicine

and telehealth applications;

ø(3) the quality of telemedicine and telehealth services delivered; and

ø(4) the reasonable cost of telecommunications charges incurred in practicing telemedicine and telehealth in rural, frontier, and underserved areas.

ø(d) EXPANSION OF TELEHEALTH SERVICES FOR CERTAIN MEDICARE BENEFICIARIES.—

ø(1) IN GENERAL.—Not later than January 1, 1999, the Secretary shall submit a report to Congress that examines the

possibility of making payments from the Federal Supplementary Medical Insurance Trust Fund under part B of title

XVIII of the Social Security Act (42 U.S.C. 1395j et seq.) for

professional consultation via telecommunications systems with

such a physician or practitioner furnishing a service for which

payment may be made under such part to a beneficiary described in paragraph (2), notwithstanding that the individual

physician or practitioner providing the professional consultation is not at the same location as the physician or practitioner

furnishing the service to that beneficiary.

ø(2) BENEFICIARY DESCRIBED.—A beneficiary described in

this paragraph is a beneficiary under the medicare program

under title XVIII of the Social Security Act (42 U.S.C. 1395 et

seq.) who does not reside in a rural area (as so defined) that

is designated as a health professional shortage area under section 332(a)(1)(A) of the Public Health Service Act (42 U.S.C.

254e(a)(1)(A)), who is homebound or nursing homebound, and

for whom being transferred for health care services imposes a

serious hardship.

ø(3) REPORT.—The report described in paragraph (1) shall

contain a detailed statement of the potential costs and savings

to the medicare program of making the payments described in

that paragraph using various reimbursement schemes.¿

(a) TELEHEALTH SERVICES REIMBURSED.—

(1) IN GENERAL.—Not later than April 1, 2001, the Secretary

of Health and Human Services shall make payments from the

Federal Supplementary Medical Insurance Trust Fund in accordance with the methodology described in subsection (b) for

services for which payment may be made under part B of title

XVIII of the Social Security Act (42 U.S.C. 1395j et seq.) that

are furnished via a telecommunications system by a physician

or practitioner to an eligible telehealth beneficiary.

(2) USE OF STORE-AND-FORWARD TECHNOLOGIES.—For purposes of paragraph (1), in the case of any Federal telemedicine

demonstration program in Alaska or Hawaii, the term ‘‘telecommunications system’’ includes store-and-forward techVerDate 11-MAY-2000 15:23 Oct 31, 2000 Jkt 089006 PO 00000 Frm 00112 Fmt 6659 Sfmt 6603 E:\HR\OC\HR1019P1.XXX pfrm04 PsN: HR1019P1
113

nologies that provide for the asynchronous transmission of

health care information in single or multimedia formats.

(b) METHODOLOGY FOR DETERMINING AMOUNT OF PAYMENTS.— (1) IN GENERAL.—The Secretary shall make payment under

this section as follows:

(A) Subject to subparagraph (B), with respect to a physician or practitioner located at a distant site that furnishes

a service to an eligible medicare beneficiary under subsection (a), an amount equal to the amount that such physician or practitioner would have been paid had the service

been furnished without the use of a telecommunications

system.

(B) With respect to an originating site, a facility fee equal

to—

(i) for 2001 (beginning with April 1, 2001) and 2002, $20; and

(ii) for a subsequent year, the facility fee under this

subsection for the previous year increased by the percentage increase in the MEI (as defined in section

1842(i)(3)) for such subsequent year.

(2) APPLICATION OF PART B COINSURANCE AND DEDUCTIBLE.— Any payment made under this section shall be subject to the coinsurance and deductible requirements under subsections (a)(1)

and (b) of section 1833 of the Social Security Act (42 U.S.C.

1395l).

(3) APPLICATION OF NONPARTICIPATING PHYSICIAN PAYMENT

DIFFERENTIAL AND BALANCE BILLING LIMITS.—The payment differential of section 1848(a)(3) of such Act (42 U.S.C. 1395w–

4(a)(3)) shall apply to services furnished by non-participating

physicians. The provisions of section 1848(g) of such Act (42

U.S.C. 1395w–4(g)) and section 1842(b)(18) of such Act (42

U.S.C. 1395u(b)(18)) shall apply. Payment for such service shall

be increased annually by the update factor for physicians’ services determined under section 1848(d) of such Act (42 U.S.C.

1395w–4(d)).

(c) TELEPRESENTER NOT REQUIRED.—Nothing in this section

shall be construed as requiring an eligible telehealth beneficiary to

be presented by a physician or practitioner at the originating site for

the furnishing of a service via a telecommunications system, unless

it is medically necessary as determined by the physician or practitioner at the distant site.

(d) COVERAGE OF ADDITIONAL SERVICES.—

(1) STUDY AND REPORT ON ADDITIONAL SERVICES.—

(A) STUDY.—The Secretary of Health and Human Services shall conduct a study to identify services in addition

to those described in subsection (a)(1) that are appropriate

for payment under this section.

(B) REPORT.—Not later than 2 years after the date of enactment of this Act, the Secretary shall submit to Congress

a report on the study conducted under subparagraph (A) together with such recommendations for legislation that the

Secretary determines are appropriate.

(2) IN GENERAL.—The Secretary shall provide for payment

under this section for services identified in paragraph (1).

(e) CONSTRUCTION RELATING TO HOME HEALTH SERVICES.—

114

(1) IN GENERAL.—Nothing in this section or in section 1895

of the Social Security Act (42 U.S.C. 1395fff) shall be construed

as preventing a home health agency furnishing a home health

unit of service for which payment is made under the prospective

payment system established in such section from furnishing the

service via a telecommunications system.

(2) LIMITATION.—The Secretary shall not consider a home

health service provided in the manner described in paragraph

(1) to be a home health visit for purposes of—

(A) determining the amount of payment to be made under

such prospective payment system; or

(B) any requirement relating to the certification of a physician required under section 1814(a)(2)(C) or section

1835(a)(2)(A) of such Act (42 U.S.C. 1395f(a)(2)(C),

1395n(a)(2)(A)).

(3) CONSTRUCTION.—Nothing in this section shall be construed as waiving the requirement for a physician certification

under section 1814(a)(2)(C) or section 1835(a)(2)(A) of such Act

(42 U.S.C. 1395f(a)(2)(C), 1395n(a)(2)(A)) for the payment for

home health services, whether or not furnished via a telecommunications system.

(f) COVERAGE OF ITEMS AND SERVICES.—

(1) IN GENERAL.—Subject to paragraph (2), payment for items

and services provided pursuant to subsection (a) shall include

payment for professional consultations, office visits, office psychiatry services, including any service identified as of July 1,

2000, by HCPCS codes 99241–99275, 99201–99215, 90804–

90809, and 90862, and any additional item or service specified

by the Secretary.

(2) YEARLY UPDATE.—The Secretary shall provide a process

that provides, on at least an annual basis, for the review and

revision of services (and HCPCS codes) to those specified in

paragraph (1) for authorized payment under subsection (a).

(g) DEFINITIONS.—In this section:

(1) ELIGIBLE TELEHEALTH BENEFICIARY.—The term ‘‘eligible

telehealth beneficiary’’ means an individual enrolled under part

B of title XVIII of the Social Security Act (42 U.S.C. 1395j et

seq.) that receives a service originating—

(A) in an area that is designated as a health professional

shortage area under section 332(a)(1)(A) of the Public

Health Service Act (42 U.S.C. 254e(a)(1)(A));

(B) in a county that is not included in a Metropolitan

Statistical Area;

(C) effective January 1, 2002, in an inner-city area that

is medically underserved (as defined in section 330(b)(3) of

the Public Health Service Act (42 U.S.C. 254b(b)(3))); or

(D) in a service which originated in a facility which participates in a Federal telemedicine demonstration project.

(2) PHYSICIAN.—The term ‘‘physician’’ has the meaning given

that term in section 1861(r) of the Social Security Act (42

U.S.C. 1395x(r))

(3) PRACTITIONER.—The term ‘‘practitioner’’ means a practitioner described in section 1842(b)(18)(C) of the Social Security

Act (42 U.S.C. 1395u(b)(18)(C)).

115

(4) DISTANT SITE.—The term ‘‘distant site’’ means the site at

which the physician or practitioner is located at the time the

service is provided via a telecommunications system.

(5) ORIGINATING SITE.—

(A) IN GENERAL.—The term ‘‘originating site’’ means any

site described in subparagraph (B) at which the eligible

telehealth beneficiary is located at the time the service is

furnished via a telecommunications system.

(B) SITES DESCRIBED.—The sites described in this subparagraph are as follows:

(i) On or after April 1, 2001—

(I) the office of a physician or a practitioner,

(II) a critical access hospital (as defined in section 1861(mm)(1) of the Social Security Act (42

U.S.C. 1395x(mm)(1))),

(III) a rural health clinic (as defined in section

1861(aa)(2) of such Act (42 U.S.C. 1395x(aa)(2))),

and

(IV) a Federally qualified health center (as defined in section 1861(aa)(4) of such Act (42 U.S.C.

1395x(aa)(4))).

(ii) On or after January 1, 2002—

(I) a hospital (as defined in section 1861(e) of

such Act (42 U.S.C. 1395x(e))),

(II) a skilled nursing facility (as defined in section 1861(j) of such Act (42 U.S.C. 1395x(j))),

(III) a comprehensive outpatient rehabilitation

facility (as defined in section 1861(cc)(2) of such

Act (42 U.S.C. 1395x(cc)(2))),

(IV) a renal dialysis facility (described in section

1881(b)(1) of such Act (42 U.S.C. 1395rr(b)(1))),

(V) an ambulatory surgical center (described in

section 1833(i)(1)(A) of such Act (42 U.S.C.

1395l(i)(1)(A))),

(VI) a hospital or skilled nursing facility of the

Indian Health Service (under section 1880 of such

Act (42 U.S.C. 1395qq)), and

(VII) a community mental health center (as defined in section 1861(ff)(3)(B) of such Act (42

U.S.C. 1395x(ff)(3)(B))).

(6) FEDERAL SUPPLEMENTARY MEDICAL INSURANCE TRUST

FUND.—The term ‘‘Federal Supplementary Medical Insurance

Trust Fund’’ means the trust fund established under section

1841 of the Social Security Act (42 U.S.C. 1395t).

* * * * * * *

Subtitle H—Medicaid

* * * * * * *

CHAPTER 2—FLEXIBILITY IN PAYMENT OF PROVIDERS

* * * * * * *

116

SEC. 4712. PAYMENT FOR CENTER AND CLINIC SERVICES.

(a) * * *

* * * * * * *

ø(c) END OF TRANSITIONAL PAYMENT RULES.—Effective for services furnished on or after October 1, 2003—

ø(1) subparagraph (C) of section 1902(a)(13) (42 U.S.C.

1396a(a)(13)), as so redesignated, is repealed, and

ø(2) clause (ix) of section 1903(m)(2)(A) (42 U.S.C.

1396b(m)(2)(A)) is repealed.¿

* * * * * * *

Subtitle J—State Children’s Health

Insurance Program

* * * * * * *

CHAPTER 3—DIABETES GRANT PROGRAMS

* * * * * * *

SEC. 4923. REPORT ON DIABETES GRANT PROGRAMS.

(a) * * *

(b) REPORTS.—The Secretary shall submit to the appropriate

committees of Congress—

(1) øan interim report¿ interim reports on the evaluation conducted under subsection (a) not later than January 1ø, 2000¿

in each of 2000, 2002, and 2004, and

(2) a final report on such evaluation not later than January

1, ø2002¿ 2007.

* * * * * * *

SECTION 13501 OF THE OMNIBUS BUDGET

RECONCILIATION ACT OF 1993

SEC. 13501. PAYMENTS FOR PPS HOSPITALS.

(a) * * *

* * * * * * *

(e) EXTENSION FOR MEDICARE-DEPENDENT, SMALL RURAL HOSPITALS.—

(1) * * *

* * * * * * *

(2) PERMITTING HOSPITALS TO DECLINE RECLASSIFICATION.—If

any hospital fails to qualify as a medicare-dependent, small

rural hospital under section 1886(d)(5)(G)(i) of the Social Security Act as a result of a decision by the Medicare Geographic

Classification Review Board under section 1886(d)(10) of such

Act to reclassify the hospital as being located in an urban area

for fiscal year 1993, fiscal year 1994, fiscal year 1998, fiscal

year 1999, øor fiscal year 2000 through fiscal year 2005¿ fiscal

year 2000, or any subsequent fiscal year, the Secretary of

Health and Human Services shall—

117

(A) * * *

* * * * * * *

SECTION 9517 OF THE CONSOLIDATED OMNIBUS

BUDGET RECONCILIATION ACT OF 1985

SEC. 9517. MODIFYING APPLICATION OF MEDICAID HMO PROVISIONS

FOR CERTAIN HEALTH CENTERS.

(a) * * *

* * * * * * *

(c) HEALTH INSURING ORGANIZATIONS.—(1)***

* * * * * * *

(3)(A) Subject to subparagraph (C), in the case of up to 3 health

insuring organizations which are described in subparagraph (B),

which first become operational on or after January 1, 1986, and

which are designated by the Governor, and approved by the Legislature, of California, the amendments made by paragraph (1) shall

not apply.

* * * * * * *

(C) Subparagraph (A) shall not apply with respect to any period

for which the Secretary of Health and Human Services determines

that the number of medicaid beneficiaries enrolled with health insuring organizations described in subparagraph (B) exceeds ø10¿

14 percent of the number of such beneficiaries in the State of California.

* * * * * * *

PUBLIC HEALTH SERVICE ACT

* * * * * * *

TITLE III—GENERAL POWERS AND DUTIES OF PUBLIC

HEALTH SERVICE

* * * * * * *

PART D—PRIMARY HEALTH CARE

Subpart I—Health Centers

* * * * * * *

SEC. 330B. SPECIAL DIABETES PROGRAMS FOR TYPE I DIABETES.

(a) * * *

* * * * * * *

(c) EXTENSION OF FUNDING.—There are hereby appropriated, from

any amounts in the Treasury not otherwise appropriated, for each

of fiscal years 2003 through 2007, $50,000,000 for grants under this

section, to remain available until expended. Nothing in this subsection shall be construed as providing for such amounts to be derived or deducted from appropriations made under section 2104(a)

of the Social Security Act.

118

SEC. 330C. SPECIAL DIABETES PROGRAMS FOR INDIANS.

(a) * * *

* * * * * * *

(d) EXTENSION OF FUNDING.—There are hereby appropriated,

from any amounts in the Treasury not otherwise appropriated, for

each of fiscal years 2003 through 2007, $50,000,000 for grants

under this section, to remain available until expended. Nothing in

this subsection shall be construed as providing for such amounts to

be derived or deducted from appropriations made under section

2104(a) of the Social Security Act.

* * * * * * *

Æ